Preview
FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK – COMMERCIAL DIVISION
––––––––––––––––––––––––––––––––– X
INTELLICENE INC., Index No.:
Plaintiff, Hon. _____________________
-against- SUMMONS
CYCLOPS TECHNOLOGIES, INC. d/b/a “PLATESMART”
Defendant.
––––––––––––––––––––––––––––––––– X
To the above-named Defendants:
YOU ARE HEREBY SUMMONED to answer the complaint in the above-entitled
action and to serve a copy of your answer on the Plaintiff’s counsel within TWENTY (20) days
after service of the Summons, exclusive of the day of service (or within THIRTY (30) days after
the service is complete if this summons is not personally delivered to you within the State of
New York). In case of your failure to appear or answer, judgment will be taken against you by
default for the relief demanded in the complaint. The basis of venue is Plaintiff’s designation of
and residence in Suffolk County.
Dated: Melville, New York COUNSEL FOR PLAINTIFF
April 22, 2024
By:
_____________________
Robert A. Basile
35 Pinelawn Road, Suite 204
Melville, NY 11747
Defendant’s Address: 610-225-8303
Cyclops Technologies, Inc. d/b/a PlateSmart
640 Booker Creek Blvd., Suite 465
Oldsmar, Florida 34677
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK – COMMERCIAL DIVISION
––––––––––––––––––––––––––––––––– X
INTELLICENE INC., : Index No.:
Plaintiff, : Hon.
:
-against- : COMPLAINT
CYCLOPS TECHNOLOGIES, INC. d/b/a “PLATESMART” :
:
Defendant.
––––––––––––––––––––––––––––––––– X
Plaintiff, INTELLICENE INC., by its undersigned legal counsel, as and for its Complaint
against Defendant, CYCLOPS TECHNOLOGIES, INC. d/b/a “PLATESMART”, respectfully
alleges as follows:
INTRODUCTION
1. Plaintiff commences this action for breach of contract and breach of the duty of
good faith and fair dealing seeking, among other things, permanent injunctive relief, specific
performance of contract, and corresponding declaratory judgement against Defendant.
2. Plaintiff simultaneously moves for emergency temporary injunction to maintain the
status quo pending resolution of the foregoing on the merits. Within the past ninety (90) days,
Defendant provided constructive notice of intent to terminate the parties’ agreement effective June
6, 2024 at the end of the prepaid annual maintenance and support period.
3. The conduct of Defendant warrants the issuance of a preliminary and permanent
injunction, as well as temporary restraining order pending the hearing on the preliminary
injunction, pursuant to CPLR §§ 6301 and 6313, as well as declaration pursuant to CPLR §3001.
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JURISDICTION AND VENUE
4. Jurisdiction in this action is based on New York's Civil Practice Law and Rules
("CPLR") Sections §§ 301; 302(a)(1); and/or 302(a)(3)(i).
5. Venue for this action is proper in the County of Suffolk pursuant to CPLR Section
§§ 503(a) and 509. Plaintiff resides in County of Suffolk.
6. Assignment to the Commercial Division is proper. 22 NYCRR 202.70(b)(1).
PARTIES
7. Plaintiff Intellicene Inc. (“Plaintiff” or “Intellicene”) is a Delaware corporation
with principal place of business in Melville, New York.
8. Intellicene was acquired on or about December 1, 2022 by Volaris Group Inc., 1 a
subsidiary of Constellation Software Inc. (TSX:CSU), by asset sale of the Situational Intelligence
Solutions business unit of Cognyte Software 2 which spun-off 3 from Verint Systems
(NASDAQ:VRNT) in February 2021. 4
9. Intellicene offers intelligent software solutions for security operations that that help
protect people, property, and vital operations for 400+ customers worldwide including airports,
safe cities, and critical enterprise users.
10. Cyclops Technologies, Inc. d/b/a PlateSmart (“Defendant” or “PlateSmart”) is a
Florida corporation located in Oldsmar, Florida.
1
Intellicene Brand Launches After Completion of Acquisition by Volaris Group
2
Intellicene Brand Launches After Completion of Acquisition by Volaris Group | Yahoo! Finance
3
Verint completes Cognyte software spin-off | Seeking Alpha
4
Verint Announces Record Date and Distribution Date for Spin-Off of Cognyte Software Ltd., Verint’s Cyber
Intelligence Solutions Business | Business Wire
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11. Upon information and belief, PlateSmart regularly transacts business in New York
by, among other things, contracting to provide software, maintenance, support, and related services
in New York to Plaintiff and other customers such New York state agencies.
12. When this Complaint alleges that Defendant did any act, it means that Defendant
performed or participated in the act or its officers, predecessors- or successors-in- interest, agents,
partners, trustees, and/or employees performed or participated (or intentionally refrained from) the
act on behalf of and under the authority of the Defendant.
STATEMENT OF FACTS
PlateSmart’s Mission-Critical ARES-ALPR Software
13. Defendant offers automatic license plate recognition (“ALPR”) software called
Analytic Recognition Enterprise Solutions – ARES. 5
14. Defendant markets the newest version of ARES as follows: “ARES 3.0 offers
almost unlimited scalability, making it ideal whether monitoring three cameras or 3000. As
always, the software integrates with top video management systems (VMS)…offering customers
enhanced functionality via ARES ALPR.” 6 [emphasis added]
15. Regarding ARES: “Fighting crime is a key application for PlateSmart ARES 3.0
software. That’s why it integrates seamlessly with NCIC and state Fusion Center databases.” 7
5
ARES Advanced ALPR Analytics Solution – PlateSmart Technologies
6
Id.
7
Id.
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The Agreement is Valid and Enforceable
16. Plaintiff and Defendant (“Parties”) executed a Reseller Agreement on May 30,
2018 (“Agreement”). With the expectation of a long-term partnership, Defendant agreed to
“Perpetual Business Model Pricing” which provided Plaintiff the right to sub-license per-camera
licenses of Defendant’s “ARES Essential” (Ex. A). 8
17. Plaintiff paid Defendant all amounts owed under the Agreement most recently on
or about July 13, 2023 in the total amount of $45,158.12 (“Annual Support Fee Amount”) for
annual maintenance renewal through June 6, 2024 (Ex. B):
18. Upon information and belief, the new version of ARES 3 made generally available
to customers fixes known security vulnerabilities within ARES reported by Plaintiff and its end
users to Defendant.
8
All citations to “Ex.” are to the exhibits attached to the accompanying Affirmation of Robert A. Basile
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19. Defendant has refused to provide the new version of ARES 3, mischaracterized the
Agreement as being limited to ARES 2, and now demands that Plaintiff migrate to a new product
on a new platform presumably pursuant to a new agreement.
20. Defendant recently indicated (upon rejection of Plaintiff’s renewal payment) an
intent to end maintenance and support for ARES on June 6, 2024 but never provided written notice
as required by the Agreement.
21. Defendant’s alleged end of support for ARES should require Defendant to deliver
the new version of ARES 3 per the Agreement.
22. Defendant’s refusal to perform (i.e. to provide the contracted-for update to ARES
3) impacts not only the Plaintiff but also an entire supply chain of its end users.
23. At least one of Plaintiff’s largest end users has communicated its intent to terminate
its contract with Plaintiff if ARES is not updated to ARES 3 by June 2024.
FIRST CAUSE OF ACTION
(BREACH OF CONTRACT)
24. The Agreement is a valid, binding, and enforceable contract.
25. The Agreement unambiguously requires Defendant to provide Plaintiff and its End
Users with the new version ARES 3.0 and up to five (5) years post termination
maintenance/support for ARES renewable at Plaintiff’s and its End User’s option.
26. Plaintiff performed its obligations under the Agreement by payment of all amounts
owed to Defendant up to June 2024 (Ex. B). Plaintiff attempted to pay for renewal pursuant to the
Agreement, however, Defendant instead proposed a new contract (Ex. C).
27. Defendant is capable but has refused to perform under the Agreement.
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28. Specifically, Defendant has breached and continues to breach under the Agreement,
among other things, by: (1) withholding the generally available ARES 3 update in contravention
of the Agreement; (2) failing to rectify the known security vulnerabilities in ARES despite notice
from Plaintiff pursuant to the Agreement and actual knowledge that ARES does not conform to
the relevant documentation; (3) demanding and negotiating for 950% fee increase during the
ongoing term of the Agreement that explicitly entitles Plaintiff and End Users to renew annual
maintenance and support for ARES (inclusive of updates, upgrades, and new versions) in return
for payment of annual Support Fee equal to fourteen percent (14%) of the License Fee; (4) failing
to provide written notice of termination or otherwise communicate its purported intention to end-
of-life support for ARES until past the 90-day non-renewal window exercisable by only Plaintiff;
(5) purporting to end-of-life support for ARES while refusing to deliver update to ARES 3 new
version; and (6) failing to acknowledge its obligation to accept the Annual Support Fee Amount
for up to five (5) years post termination.
29. Plaintiff and its End Users will suffer irreparable harm for which no adequate
remedy at law exists and for which monetary relief is wholly insufficient.
30. The amount of damages that Plaintiff and its End Users may suffer due to
exploitation of the ARES security vulnerability is incapable of quantification with any certainty.
31. The amount of damages, loss of good will, and damage to customer relationships
that Plaintiff will specifically suffer is imminent, existential, incapable of quantification, and not
remedied by monetary damages.
32. By reason of the foregoing, Plaintiff seeks declaratory judgement that Defendant
has breached the Agreement, order of specific performance, and such other relief set forth herein.
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33. In the alternative and solely to maintain a potentially meritorious claim that may
ripen absent award of preliminary injunction and/or pending trial, Plaintiff seeks indemnification
and/or declaratory judgment that Plaintiff be held harmless under section 11 (Indemnification) of
the parties’ Agreement for Company’s breach of its obligations under Schedule G (Information
Security Requirement).
SECOND CAUSE OF ACTION
(BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING)
34. Plaintiff repeats and realleges the above allegations as if fully set forth herein.
35. The Agreement is a valid, binding, and enforceable contract.
36. Defendant owed and continues to owe Plaintiff a duty of good faith and fair dealing
under the Agreement.
37. Plaintiff performed its obligations under the Agreement in good faith.
38. Defendant breached its duty of good faith and fair dealing, among other things, by:
(1) never properly communicating any actual intent to end-of-life support for ARES and/or
otherwise properly address its obligation to provide five (5) years of post-termination ARES
support; (2) advertising the availability and benefits of, while simultaneously refusing to offer or
even quote in writing, ARES 3 to Plaintiff and instead quoting an entirely different product (i.e.
“PBP” or “PBP 3”); (3) orally quoting the ARES 3 new version at the exact same price as PBP;
(4) engaging in an ongoing scheme to deprive Plaintiff of the benefit of its bargain by
mischaracterizing ARES 3 as something other than a new version of the ARES software in direct
contradiction of Defendant’s public advertisements; (5) withholding its contracted-for
performance to exploit the existence of security flaws in the outdated ARES in attempt to extract
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excessive fees from Plaintiff; and (6) otherwise refusing to provide Plaintiff and its End Users with
the generally available release of ARES 3 in return for the Support Fee required by the Agreement.
39. Plaintiff has been deprived of the benefits of the Agreement due to Defendant’s
breach.
40. By reason of the foregoing, Plaintiff seeks the relief set forth herein.
THIRD CAUSE OF ACTION
(DECLARATORY JUDGEMENT)
41. Plaintiff repeats and incorporates by reference each and every allegation in the
Complaint as if fully set forth herein.
42. Absent interim injunctive relief by June 2024, Defendant’s refusal to acknowledge
the Agreement’s effectiveness and purported intent to end-of-life of ARES without advance
written notice will result in Intellicene being held in breach of its agreements with End Users and
will result in key End Users altogether cancelling their contracts with Intellicene given that such
end users cannot utilize end-of-life software.
43. A justiciable controversy exists between the parties because Plaintiff is entitled to
ARES updates, upgrades, and new versions along with 5-years post-termination support but
Defendant disputes Plaintiff’s entitlement in contradictory fashion by: (i) not acknowledging the
Agreement’s effectiveness; (ii) mischaracterizing the scope of the Agreement as limited to “ARES
2”; (iii) telling Plaintiff the true path forward is a new product (Ex. C).
44. Pursuant to CPLR 3001, Plaintiff seeks a declaration that: (i) the Agreement
remains in effect; (ii) Defendant’s failure to provide ARES 3 constitutes breach of the Agreement;
(iii) Defendant’s purported end-of-life of ARES constitutes breach of the Agreement; (iv)
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Defendant must provide five (5) years of post-termination ARES support in return for Plaintiff’s
payment of the annual Support Fee; (v) any further attempts by Defendant to quote PBP or
otherwise not quote ARES 3 (along with renewal of ARES support) shall constitute further breach
of the Agreement by Defendant.
FOURTH CAUSE OF ACTION
(TORTIOUS INTERFERENCE WITH PROSPECTIVE BUSINESS RELATIONS)
45. Plaintiff repeats and incorporates by reference each and every allegation in the
Complaint as if fully set forth herein.
46. The actions of Defendant constitute tortious interference with the prospective
contractual and business relationships of Plaintiff customers, employees, and other third parties
causing Plaintiff to suffer sever and continuing harm and damage.
47. The actions of Defendant were accomplished by wrongful, dishonest, unfair, and
other improper means.
48. As a result of Defendant’s conduct, Plaintiff will sustain damages pending a hearing
in an amount to be ultimately determined at trial but in no event less than $200,000.
[SPACE INTENTIONALLY OMITTED]
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REQUEST FOR RELIEF
WHEREFORE, Plaintiff requests that this Court enter a judgment for relief as follows:
a. temporary restraining order, preliminary injunction, and permanent injunction and
judgment in favor of Plaintiff restraining Defendants from: (i) dishonoring its contractual
obligations and commitments under the Agreement, (ii) denying Plaintiff (and its end
users) benefit of their perpetual license and entitlement to updates, upgrades, and all new
versions and major releases up to ARES 3.0; (iii) charging more than the Annual Support
Fee Amount equal to fourteen percent (14%) of the ARES License Fee; and (iv) denying
Plaintiff (and its end users) right to renew maintenance and support for ARES for up to
five (5) years post-termination in return for payment of the Annual Support Fee Amount.
b. a declaratory judgment in favor of Plaintiff that: (i) Agreement is valid, enforceable, and
renewed through at least June 5, 2025; (ii) any withholding of new versions and major
releases of ARES including ARES 3.0 is a breach of the Agreement; (iii) charging more
than the Annual Support Fee Amount equal to fourteen percent (14%) of the ARES
License Fee is a breach of the Agreement; (iv) denying Plaintiff (and its end users) right
to renew maintenance and support for ARES for up to five (5) years post-termination in
return for payment of the Annual Support Fee Amount is a breach of the Agreement; and
(v) Defendant is obligated to accept Plaintiff’s payment of the Annual Support Fee
Amount and continue its support of ARES by no later than June 2024, and/or (vi) such
other declarations in regards to the Parties’ respective obligations under the Agreement as
the Court deems just and proper;
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c. an order in favor of Plaintiff ordering specific performance and such other relief on the
Agreement deemed just and proper for breach of contract and Plaintiff’s remaining cause
of action such as breach of the covenant of good faith and fair dealing;
d. a judgement awarding Plaintiff its costs, reasonable documented expenses, and
disbursements incurred in this action; and
e. such other and further relief as the Court deems just and proper.
Dated: Melville, New York Respectfully submitted,
April 22, 2024
COUNSEL FOR PLAINTIFF
By:
_____________________
Robert A. Basile
35 Pinelawn Road, Suite 204
Melville, NY 11747
610-225-8303
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FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK – COMMERCIAL DIVISION ––––––––––––––––––––––––––––––––– X INTELLICENE INC., Index No.: Plaintiff, Hon. _____________________ -against- SUMMONS CYCLOPS TECHNOLOGIES, INC. d/b/a “PLATESMART” Defendant. ––––––––––––––––––––––––––––––––– X To the above-named Defendants: YOU ARE HEREBY SUMMONED to answer the complaint in the above-entitled action and to serve a copy of your answer on the Plaintiff’s counsel within TWENTY (20) days after service of the Summons, exclusive of the day of service (or within THIRTY (30) days after the service is complete if this summons is not personally delivered to you within the State of New York). In case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint. The basis of venue is Plaintiff’s designation of and residence in Suffolk County. Dated: Melville, New York COUNSEL FOR PLAINTIFF April 22, 2024 By: _____________________ Robert A. Basile 35 Pinelawn Road, Suite 204 Melville, NY 11747 Defendant’s Address: 610-225-8303 Cyclops Technologies, Inc. d/b/a PlateSmart 640 Booker Creek Blvd., Suite 465 Oldsmar, Florida 34677 1 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK – COMMERCIAL DIVISION ––––––––––––––––––––––––––––––––– X INTELLICENE INC., : Index No.: Plaintiff, : Hon. : -against- : COMPLAINT CYCLOPS TECHNOLOGIES, INC. d/b/a “PLATESMART” : : Defendant. ––––––––––––––––––––––––––––––––– X Plaintiff, INTELLICENE INC., by its undersigned legal counsel, as and for its Complaint against Defendant, CYCLOPS TECHNOLOGIES, INC. d/b/a “PLATESMART”, respectfully alleges as follows: INTRODUCTION 1. Plaintiff commences this action for breach of contract and breach of the duty of good faith and fair dealing seeking, among other things, permanent injunctive relief, specific performance of contract, and corresponding declaratory judgement against Defendant. 2. Plaintiff simultaneously moves for emergency temporary injunction to maintain the status quo pending resolution of the foregoing on the merits. Within the past ninety (90) days, Defendant provided constructive notice of intent to terminate the parties’ agreement effective June 6, 2024 at the end of the prepaid annual maintenance and support period. 3. The conduct of Defendant warrants the issuance of a preliminary and permanent injunction, as well as temporary restraining order pending the hearing on the preliminary injunction, pursuant to CPLR §§ 6301 and 6313, as well as declaration pursuant to CPLR §3001. 2 2 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 JURISDICTION AND VENUE 4. Jurisdiction in this action is based on New York's Civil Practice Law and Rules ("CPLR") Sections §§ 301; 302(a)(1); and/or 302(a)(3)(i). 5. Venue for this action is proper in the County of Suffolk pursuant to CPLR Section §§ 503(a) and 509. Plaintiff resides in County of Suffolk. 6. Assignment to the Commercial Division is proper. 22 NYCRR 202.70(b)(1). PARTIES 7. Plaintiff Intellicene Inc. (“Plaintiff” or “Intellicene”) is a Delaware corporation with principal place of business in Melville, New York. 8. Intellicene was acquired on or about December 1, 2022 by Volaris Group Inc., 1 a subsidiary of Constellation Software Inc. (TSX:CSU), by asset sale of the Situational Intelligence Solutions business unit of Cognyte Software 2 which spun-off 3 from Verint Systems (NASDAQ:VRNT) in February 2021. 4 9. Intellicene offers intelligent software solutions for security operations that that help protect people, property, and vital operations for 400+ customers worldwide including airports, safe cities, and critical enterprise users. 10. Cyclops Technologies, Inc. d/b/a PlateSmart (“Defendant” or “PlateSmart”) is a Florida corporation located in Oldsmar, Florida. 1 Intellicene Brand Launches After Completion of Acquisition by Volaris Group 2 Intellicene Brand Launches After Completion of Acquisition by Volaris Group | Yahoo! Finance 3 Verint completes Cognyte software spin-off | Seeking Alpha 4 Verint Announces Record Date and Distribution Date for Spin-Off of Cognyte Software Ltd., Verint’s Cyber Intelligence Solutions Business | Business Wire 3 3 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 11. Upon information and belief, PlateSmart regularly transacts business in New York by, among other things, contracting to provide software, maintenance, support, and related services in New York to Plaintiff and other customers such New York state agencies. 12. When this Complaint alleges that Defendant did any act, it means that Defendant performed or participated in the act or its officers, predecessors- or successors-in- interest, agents, partners, trustees, and/or employees performed or participated (or intentionally refrained from) the act on behalf of and under the authority of the Defendant. STATEMENT OF FACTS PlateSmart’s Mission-Critical ARES-ALPR Software 13. Defendant offers automatic license plate recognition (“ALPR”) software called Analytic Recognition Enterprise Solutions – ARES. 5 14. Defendant markets the newest version of ARES as follows: “ARES 3.0 offers almost unlimited scalability, making it ideal whether monitoring three cameras or 3000. As always, the software integrates with top video management systems (VMS)…offering customers enhanced functionality via ARES ALPR.” 6 [emphasis added] 15. Regarding ARES: “Fighting crime is a key application for PlateSmart ARES 3.0 software. That’s why it integrates seamlessly with NCIC and state Fusion Center databases.” 7 5 ARES Advanced ALPR Analytics Solution – PlateSmart Technologies 6 Id. 7 Id. 4 4 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 The Agreement is Valid and Enforceable 16. Plaintiff and Defendant (“Parties”) executed a Reseller Agreement on May 30, 2018 (“Agreement”). With the expectation of a long-term partnership, Defendant agreed to “Perpetual Business Model Pricing” which provided Plaintiff the right to sub-license per-camera licenses of Defendant’s “ARES Essential” (Ex. A). 8 17. Plaintiff paid Defendant all amounts owed under the Agreement most recently on or about July 13, 2023 in the total amount of $45,158.12 (“Annual Support Fee Amount”) for annual maintenance renewal through June 6, 2024 (Ex. B): 18. Upon information and belief, the new version of ARES 3 made generally available to customers fixes known security vulnerabilities within ARES reported by Plaintiff and its end users to Defendant. 8 All citations to “Ex.” are to the exhibits attached to the accompanying Affirmation of Robert A. Basile 5 5 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 19. Defendant has refused to provide the new version of ARES 3, mischaracterized the Agreement as being limited to ARES 2, and now demands that Plaintiff migrate to a new product on a new platform presumably pursuant to a new agreement. 20. Defendant recently indicated (upon rejection of Plaintiff’s renewal payment) an intent to end maintenance and support for ARES on June 6, 2024 but never provided written notice as required by the Agreement. 21. Defendant’s alleged end of support for ARES should require Defendant to deliver the new version of ARES 3 per the Agreement. 22. Defendant’s refusal to perform (i.e. to provide the contracted-for update to ARES 3) impacts not only the Plaintiff but also an entire supply chain of its end users. 23. At least one of Plaintiff’s largest end users has communicated its intent to terminate its contract with Plaintiff if ARES is not updated to ARES 3 by June 2024. FIRST CAUSE OF ACTION (BREACH OF CONTRACT) 24. The Agreement is a valid, binding, and enforceable contract. 25. The Agreement unambiguously requires Defendant to provide Plaintiff and its End Users with the new version ARES 3.0 and up to five (5) years post termination maintenance/support for ARES renewable at Plaintiff’s and its End User’s option. 26. Plaintiff performed its obligations under the Agreement by payment of all amounts owed to Defendant up to June 2024 (Ex. B). Plaintiff attempted to pay for renewal pursuant to the Agreement, however, Defendant instead proposed a new contract (Ex. C). 27. Defendant is capable but has refused to perform under the Agreement. 6 6 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 28. Specifically, Defendant has breached and continues to breach under the Agreement, among other things, by: (1) withholding the generally available ARES 3 update in contravention of the Agreement; (2) failing to rectify the known security vulnerabilities in ARES despite notice from Plaintiff pursuant to the Agreement and actual knowledge that ARES does not conform to the relevant documentation; (3) demanding and negotiating for 950% fee increase during the ongoing term of the Agreement that explicitly entitles Plaintiff and End Users to renew annual maintenance and support for ARES (inclusive of updates, upgrades, and new versions) in return for payment of annual Support Fee equal to fourteen percent (14%) of the License Fee; (4) failing to provide written notice of termination or otherwise communicate its purported intention to end- of-life support for ARES until past the 90-day non-renewal window exercisable by only Plaintiff; (5) purporting to end-of-life support for ARES while refusing to deliver update to ARES 3 new version; and (6) failing to acknowledge its obligation to accept the Annual Support Fee Amount for up to five (5) years post termination. 29. Plaintiff and its End Users will suffer irreparable harm for which no adequate remedy at law exists and for which monetary relief is wholly insufficient. 30. The amount of damages that Plaintiff and its End Users may suffer due to exploitation of the ARES security vulnerability is incapable of quantification with any certainty. 31. The amount of damages, loss of good will, and damage to customer relationships that Plaintiff will specifically suffer is imminent, existential, incapable of quantification, and not remedied by monetary damages. 32. By reason of the foregoing, Plaintiff seeks declaratory judgement that Defendant has breached the Agreement, order of specific performance, and such other relief set forth herein. 7 7 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 33. In the alternative and solely to maintain a potentially meritorious claim that may ripen absent award of preliminary injunction and/or pending trial, Plaintiff seeks indemnification and/or declaratory judgment that Plaintiff be held harmless under section 11 (Indemnification) of the parties’ Agreement for Company’s breach of its obligations under Schedule G (Information Security Requirement). SECOND CAUSE OF ACTION (BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING) 34. Plaintiff repeats and realleges the above allegations as if fully set forth herein. 35. The Agreement is a valid, binding, and enforceable contract. 36. Defendant owed and continues to owe Plaintiff a duty of good faith and fair dealing under the Agreement. 37. Plaintiff performed its obligations under the Agreement in good faith. 38. Defendant breached its duty of good faith and fair dealing, among other things, by: (1) never properly communicating any actual intent to end-of-life support for ARES and/or otherwise properly address its obligation to provide five (5) years of post-termination ARES support; (2) advertising the availability and benefits of, while simultaneously refusing to offer or even quote in writing, ARES 3 to Plaintiff and instead quoting an entirely different product (i.e. “PBP” or “PBP 3”); (3) orally quoting the ARES 3 new version at the exact same price as PBP; (4) engaging in an ongoing scheme to deprive Plaintiff of the benefit of its bargain by mischaracterizing ARES 3 as something other than a new version of the ARES software in direct contradiction of Defendant’s public advertisements; (5) withholding its contracted-for performance to exploit the existence of security flaws in the outdated ARES in attempt to extract 8 8 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 excessive fees from Plaintiff; and (6) otherwise refusing to provide Plaintiff and its End Users with the generally available release of ARES 3 in return for the Support Fee required by the Agreement. 39. Plaintiff has been deprived of the benefits of the Agreement due to Defendant’s breach. 40. By reason of the foregoing, Plaintiff seeks the relief set forth herein. THIRD CAUSE OF ACTION (DECLARATORY JUDGEMENT) 41. Plaintiff repeats and incorporates by reference each and every allegation in the Complaint as if fully set forth herein. 42. Absent interim injunctive relief by June 2024, Defendant’s refusal to acknowledge the Agreement’s effectiveness and purported intent to end-of-life of ARES without advance written notice will result in Intellicene being held in breach of its agreements with End Users and will result in key End Users altogether cancelling their contracts with Intellicene given that such end users cannot utilize end-of-life software. 43. A justiciable controversy exists between the parties because Plaintiff is entitled to ARES updates, upgrades, and new versions along with 5-years post-termination support but Defendant disputes Plaintiff’s entitlement in contradictory fashion by: (i) not acknowledging the Agreement’s effectiveness; (ii) mischaracterizing the scope of the Agreement as limited to “ARES 2”; (iii) telling Plaintiff the true path forward is a new product (Ex. C). 44. Pursuant to CPLR 3001, Plaintiff seeks a declaration that: (i) the Agreement remains in effect; (ii) Defendant’s failure to provide ARES 3 constitutes breach of the Agreement; (iii) Defendant’s purported end-of-life of ARES constitutes breach of the Agreement; (iv) 9 9 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 Defendant must provide five (5) years of post-termination ARES support in return for Plaintiff’s payment of the annual Support Fee; (v) any further attempts by Defendant to quote PBP or otherwise not quote ARES 3 (along with renewal of ARES support) shall constitute further breach of the Agreement by Defendant. FOURTH CAUSE OF ACTION (TORTIOUS INTERFERENCE WITH PROSPECTIVE BUSINESS RELATIONS) 45. Plaintiff repeats and incorporates by reference each and every allegation in the Complaint as if fully set forth herein. 46. The actions of Defendant constitute tortious interference with the prospective contractual and business relationships of Plaintiff customers, employees, and other third parties causing Plaintiff to suffer sever and continuing harm and damage. 47. The actions of Defendant were accomplished by wrongful, dishonest, unfair, and other improper means. 48. As a result of Defendant’s conduct, Plaintiff will sustain damages pending a hearing in an amount to be ultimately determined at trial but in no event less than $200,000. [SPACE INTENTIONALLY OMITTED] 10 10 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 REQUEST FOR RELIEF WHEREFORE, Plaintiff requests that this Court enter a judgment for relief as follows: a. temporary restraining order, preliminary injunction, and permanent injunction and judgment in favor of Plaintiff restraining Defendants from: (i) dishonoring its contractual obligations and commitments under the Agreement, (ii) denying Plaintiff (and its end users) benefit of their perpetual license and entitlement to updates, upgrades, and all new versions and major releases up to ARES 3.0; (iii) charging more than the Annual Support Fee Amount equal to fourteen percent (14%) of the ARES License Fee; and (iv) denying Plaintiff (and its end users) right to renew maintenance and support for ARES for up to five (5) years post-termination in return for payment of the Annual Support Fee Amount. b. a declaratory judgment in favor of Plaintiff that: (i) Agreement is valid, enforceable, and renewed through at least June 5, 2025; (ii) any withholding of new versions and major releases of ARES including ARES 3.0 is a breach of the Agreement; (iii) charging more than the Annual Support Fee Amount equal to fourteen percent (14%) of the ARES License Fee is a breach of the Agreement; (iv) denying Plaintiff (and its end users) right to renew maintenance and support for ARES for up to five (5) years post-termination in return for payment of the Annual Support Fee Amount is a breach of the Agreement; and (v) Defendant is obligated to accept Plaintiff’s payment of the Annual Support Fee Amount and continue its support of ARES by no later than June 2024, and/or (vi) such other declarations in regards to the Parties’ respective obligations under the Agreement as the Court deems just and proper; 11 11 of 12 FILED: SUFFOLK COUNTY CLERK 04/22/2024 03:46 PM INDEX NO. 610246/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/22/2024 c. an order in favor of Plaintiff ordering specific performance and such other relief on the Agreement deemed just and proper for breach of contract and Plaintiff’s remaining cause of action such as breach of the covenant of good faith and fair dealing; d. a judgement awarding Plaintiff its costs, reasonable documented expenses, and disbursements incurred in this action; and e. such other and further relief as the Court deems just and proper. Dated: Melville, New York Respectfully submitted, April 22, 2024 COUNSEL FOR PLAINTIFF By: _____________________ Robert A. Basile 35 Pinelawn Road, Suite 204 Melville, NY 11747 610-225-8303 12 12 of 12