Purchase Contract - McAfee Associates Inc. and Interactive Distributed Systems Software GmbH
TRANSLATION FROM GERMAN ORIGINAL
PURCHASE CONTRACT
ENTERED INTO ON THE DAY MENTIONED BELOW
BY AND BETWEEN
MCAFEE ASSOCIATES, INC.
2710 WALSH AVENUE
SANTA CLARA, CA 95051, USA
(HEREINAFTER REFERRED TO AS "MCAFEE"),
AS BUYER, ON THE ONE HAND,
AND
INTERACTIVE DISTRIBUTED SYSTEMS SOFTWARE GMBH
GERSTNERSTRA(BETA)E 20
4020 LINZ, AUSTRIA,
(HEREINAFTER REFERRED TO AS "IDS"),
AS SELLER, ON THE OTHER HAND,
AS FOLLOWS:
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1. SUBJECT MATTER OF THE CONTRACT: COMPLETE SYSTEM
1.1 The subject matter of this Contract shall be the purchase of any
and all rights, in the scope as stipulated in this Contract, in the
software "Remote Desktop", with regard to which a diskette
(including binaries) and a "User Manual" have been handed over for
documentation purposes, Exhibit ./1, including any and all rights
as well as the contracts and agreements connected therewith as
listed in Exhibit ./2. Such contracts and agreements shall be
transferred to McAfee only insofar as any consent by the other
contracting party that may be required could be secured; otherwise,
item 1.3 shall be applicable.
1.2 In this context, IDS shall have the following obligations, unless
further obligations are stipulated in this Contract or in the
Exhibits hereto:
- IDS shall adapt "Remote Desktop" by taking the measures
described in Exhibit ./3, and ship "Remote Desktop" in the
binary/executable form electronically to McAfee on the day of
signing of this Contract;
- IDS shall supply the source code of the software on diskette
and as hardcopy;
- IDS shall supply the "User Manual" for "Remote Desktop" in the
English language on diskette and as hardcopy.
Furthermore, IDS undertakes to make it possible for McAfee, upon
request, to inspect and make copies of,
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any and all documents relevant to "Remote Desktop" that are in the
hands of IDS.
IDS hereby assigns to McAfee the rights in accordance with Exhibit
./2.
IDS agrees to assist McAfee to evidence this assignment as
necessary to comply with the local laws of any country at the
reasonable request of McAfee and always at the cost of McAfee. IDS
will execute all documents McAfee may reasonably request for such
purposes at the cost of McAfee.
1.3 IDS shall use its best efforts to obtain a consent of its
respective contracting party for the transfer of the contracts and
agreements mentioned in Exhibit ./2. If IDS is not successful in
these efforts, McAfee shall enter into such contracts and
agreements vis-a-vis IDS only, whereby the parties agree to keep
each other mutually fully informed during the entire life of said
contracts and agreements. IDS agrees to exercise any rights and
fulfill any obligations under said contracts and agreements only
upon instructions of McAfee if timely issued. The contracting
parties agree already now that IDS will terminate those contracts
and agreements as soon as possible. For the implementation of this
provision McAfee will allow IDS to use the offices, free of charge,
that McAfee will establish for its Austrian employees.
2. CONDITIONS FOR THE EFFECTIVENESS OF THE CONTRACT
2.1 Concurrently with this Contract or thereafter the following
additional contracts and agreements shall be signed:
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a) agreement between those persons who have developed, or
contributed to the development of, "Remote Desktop", FIM and
IDS (Exhibit ./4);
b) consultancy and managing director's contract between Gerhard
Eschelbeck and McAfee (Exhibit ./5);
c) letter agreement between "Forschungsinstitut fur
Mikroprozessorentechnik" ("FIM") and McAfee (Exhibit ./6);
d) consultancy and employment contracts between Andreas
Schlemmer and Peter Blaimschein and McAfee (Exhibits ./7 and
./8).
McAfee shall have the right to withdraw from this Contract on or
before July 15, 1996, 4.00 p.m. IDS shall also be entitled to
withdraw from this Contract on or before July 15, 1996, 4.00 p.m.
If either party withdraws from this Contract, neither party will
have any further obligations to the other, except for the secrecy
obligation.
2.2 McAfee shall have the right to retroactively terminate this
Contract and to change it into a license agreement for the
subject-matter software as per Exhibit ./9 with an exclusive right
for 12 months, such agreement to be valid for an unlimited period
of time, if McAfee, on or before December 30, 1996, at the latest,
has not been furnished written confirmation by Mr. Eschelbeck in
the wording of Exhibit ./10, signed before a notary public, that he
is available for employment as per
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Exhibit ./5. McAfee shall exercise said right by January 15, 1997,
at the latest.
3. DESIGNATION OF THE DEVELOPERS
McAfee will recognize in the "About Box", "Help System" and in the
documentation, Gerhard Eschelbeck, Andreas Schlemmer, Peter
Blaimschein, Johannes Mayr and Paul Bacsik as developers of "Remote
Desktop" based on original work while at Johannes Kepler University
of Linz.
4. RIGHT OF FIRST REFUSAL / COMMERCIAL EXPLOITATION
Until July 1, 1998, prior to forming a contract with an interested
third party on the commercial use of any development made by IDS,
IDS shall be obligated to offer McAfee to enter into such a
contract on the commercial use identical to that contemplated to be
executed with the interested third party. In such a case, McAfee
shall have 4 weeks to inform IDS whether McAfee wishes to exercise
its right to enter into such contract.
5. PRICE AND TERMS OF PAYMENT
5.1 The purchase price for the subject matter of the Contract shall be
USD 1,800,000.00 (one million eight hundred thousand US dollars).
5.2 The purchase price shall be due and payable as follows:
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a) an amount of USD 850,000.00 (eight hundred and fifty thousand US
dollars) shall be paid by bank remittance concurrently with
delivery of the source code, both on a diskette and as hard copy,
the user manual in English, both on diskette and as hard copy;
b) the remaining balance of USD 950,000.00 (nine hundred and fifty
thousand US dollars) shall be paid into the trust account of
McAfee's legal counsel, i.e. Heller, Lober, Bahn & Partners, of
Seilergasse 16, 1010 Vienna, Austria (account no. 570-311-985 with
Bank Austria AG, bank routing code BLZ 20151) as soon as the
conditions in item 2.1 have been met, which fact will be confirmed
to IDS upon delivery of the source code as per item 5.2 a). Such
trust money shall be invested on market conditions for call
deposits.
5.3 The trustee is herewith irrevocably authorized and ordered to
proceed with the trust money of USD 950,000.00 (nine hundred and
fifty thousand US dollars) as follows:
a) As soon as Mr. Eschelbeck furnishes written confirmation in the
wording of Exhibit ./10, signed before a notary public, to the
legal counsel of McAfee, Heller, Lober, Bahn & Partners, attorneys
at law, the trustee shall pay IDS part of the trust money in the
amount of USD 770,000.00 (seven hundred and seventy thousand US
dollars), payment to be made within eight days by remittance to an
account with an Austrian credit institution to be designated by
IDS.
b) If the confirmation in the wording of Exhibit ./10, signed by Mr.
Eschelbeck before a notary public, is
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not furnished on or before December 30, 1996 and if McAfee, as a
result thereof, terminates the Contract retroactively by registered
letter to McAfee as per item 2.2 hereof, the trustee shall pay back
to McAfee the entire trust money plus accrued interest as soon as
the trustee has received said written notice of termination and
proof of its dispatch to IDS.
c) If the trustee has not received proof of the written notice of
termination with retroactive effect as per item 2.2 on or before
January 15, 1997, at the latest, the trust money in the amount of
USD 770,000.00 (seven hundred and seventy thousand US dollars) plus
interest that may have accrued shall be paid automatically to an
account with an Austrian credit institution to be designated by
IDS, payment to be made on or before January 31, 1997.
d) This trust obligation exists irrespective of the legal fate of this
Contract. It shall apply in particular in case of invalidity,
voidance or dissolution of this Contract or individual provisions
hereof and may not be challenged on the grounds of error or
material change in the basis of the underlying transactions.
e) The retention money in the amount of 10 % of the total purchase
price, i.e. an amount of USD 180,000.00 (one hundred and eighty
thousand US dollars) plus accrued interest shall be paid to IDS
within 13 months after the entry into effect of the Contract as per
item 16, payment to be made by remittance to an account with an
Austrian credit institution to be designated by IDS, provided that
McAfee has not raised claims vis-a-vis IDS in court by that date
under or in connection with this
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Contract, with proof thereof being furnished to the trustee by
submission of a copy of the complaint showing the receipt stamp of
the court. In the event that such claims are asserted in court, the
right of retention shall apply only in the amount of the claims and
only until the final closure of the court proceedings;
subsequently, the procedure shall be as ordered by court.
5.4 The purchase price is a fixed price.
5.5 Concerning the license agreement mentioned in item 2.2, the
contracting parties agree that the license fee shall total 5 % of
the proceeds received by McAfee from the sale of the subject-matter
software. The USD 850,000.00 (eight hundred and fifty thousand US
dollars) received by IDS under sec. 5.2 a) is a non-refundable
prepaid royalty on such license fee, i.e. the amount need not be
paid back, irrespective of McAfee's income from the sale of "Remote
Desktop", which will be deemed paid to IDS after fulfillment of the
obligations set forth in item 5.2 a).
6. PROHIBITION OF ASSIGNMENT
IDS shall not be permitted to assign this Contract or all or any of
its obligations or rights hereunder.
7. NUMBER OF COUNTERPARTS, DURATION OF THE CONTRACT
7.1 This Contract is executed in two counterparts; after signature,
the parties shall receive one counterpart each.
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7.2 After complete fulfillment of the Contract by McAfee and IDS, the
provisions concerning the secrecy obligation shall remain in full
force and effect.
8. PERFORMANCE BY IDS
The entire subject matter of the Contract shall be delivered by IDS
as set forth in item 5.2 a) of this Contract.
9. FREEDOM FROM THIRD-PARTY RIGHTS, WARRANTIES
9.1 After careful examination, IDS represents that, to the best of its
knowledge, no trademarks, patents or copyrights have been violated
in the development and distribution of the subject-matter software.
As regards other rights, IDS expressly represents to McAfee that
the subject matter of the Contract does not encroach upon
third-party rights and that any and all permits and consents
required from any third party for the operation of the subject
matter of the Contract have been obtained and will remain in full
force and effect for the entire period of use of the subject matter
of the Contract.
9.2 IDS owns all rights, title and interest in "Remote Desktop", free
and clear from any and all restrictions, obligations, claims of
third parties, and encumbrances (including without limitation
distribution rights), except for those listed in Exhibit ./11 and
those mentioned in Section III of Exhibit ./4 relating to the
rights of FIM to use versions 1.4, 1.5 and 2.0 for scientific
purposes and for operating the FIM computers; FIM and IDS
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have provided financial compensation to persons who were engaged in
the development of "Remote Desktop"; IDS shall indemnify and hold
McAfee harmless for any claims raised in this respect.
9.3 Exhibit ./12 contains a list of all licenses and other agreements
with third parties relating to any software, technology, know-how,
or processes that IDS is licensed or otherwise authorized by such
third parties to use, market, distribute or incorporate into
"Remote Desktop" (such software, technology, know-how and processes
are collectively referred to as the "third party technology").
9.4 Except for the rights listed in Exhibit ./11, IDS has not granted
any third party any right to use, manufacture, reproduce,
distribute, market or exploit "Remote Desktop" or any adaptations,
translations, or derivative works based on "Remote Desktop" or any
portion thereof. Except with respect to the rights of third parties
to the third party technology (Exhibit ./12), no third party has
any right to use, manufacture, reproduce, distribute, market or
exploit any works or materials of which "Remote Desktop" is a
"derivative work".
9.5 To the best of IDS's knowledge, no person involved in the
development of "Remote Desktop" is in violation of any term of any
employment contract, patent disclosure agreement or any other
contract or agreement relating to the relationship of any such
person with IDS or, to the best of IDS's knowledge, any other
party.
9.6 If a claim is raised or threatened to be raised against McAfee on
the grounds of an infringement of intellectual or industrial
property rights of third
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parties as a result of using a part of the subject matter of the
Contract and if IDS has violated any warranty obligation in this
respect, or regarding claims raised by Microsoft as disclosed
(Exhibit ./13), IDS shall reimburse McAfee for all its costs and
damages and, upon request, shall support McAfee as an intervening
third party, provided that IDS has been informed without delay by
McAfee that such third-party claim has been raised and had the
opportunity to participate comprehensively and decisively in all
measures to defend the claim and, if applicable, has agreed to
settle the claim amicably.
9.7 Furthermore, IDS makes the following warranties:
a) IDS shall use its best efforts to enable all persons who were
engaged in the development of "Remote Desktop" or whose
employers, at McAfee's request, are filing for a patent to
transfer the respective patent to McAfee by way of a legal
transaction and shall make any and all filings and statements
that may be necessary;
b) to the best of its knowledge, after careful examination, there
are no legal actions pending or threatened concerning "Remote
Desktop" other than those listed in Exhibit ./13;
c) to the best of its knowledge, after careful examination, no
claims have been raised vis-a-vis IDS in connection with
"Remote Desktop" other than those listed in Exhibit ./13;
d) any and all contracts and agreements which shall be
transferred to McAfee according to item 1.1 and Exhibit ./11
of this Contract have not yet
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expired and shall remain in full force and effect; IDS has no
information whatsoever that the parties to such contracts or
agreements intend to terminate and/or do not comply with such
contracts or agreements; IDS is not in default under the
contracts and agreements listed in Exhibit ./11;
e) the legal use of "Remote Desktop" by McAfee does not interfere
with or infringe upon any rights of third parties, including
without limitation industrial property rights (as regards
trademarks, patents and copyrights, to the best of IDS's
knowledge), except for those listed in Exhibit ./11;
f) the execution and the delivery of this Contract and the
ancillary documents by IDS do not, and the consummation of the
transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, result in a breach
of, constitute a default (with or without notice or lapse of
time, or both) under or violation of, (i) any judgment, order,
decree, rule, law or regulation of any court or governmental
authority, foreign or domestic, or (ii) any provision of any
agreement, instrument or understanding to which IDS is a party
or by which IDS or any of its properties or assets is bound or
affected, nor will such actions give to any other person or
entity any interests or rights of any kind, including rights
of termination, acceleration or cancellation, in or with
respect to any of the purchased assets. No consent of any
third party or any governmental authority is required to be
obtained on the part of IDS to permit the consummation of the
transactions
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contemplated by this Contract or the ancillary documents.
9.8 The warranties are not limited in time; claims arising therefrom
shall be enforced by legal action within 12 months after knowledge
of a defect. The warranties set forth in item 9.7 b, c, d, and f
shall apply only for the time of the signing and on the date of
payment of USD 850,000.00. This does not preclude claims by McAfee
under these warranties at a later stage, whereby for these claims a
warranty period of 12 months is agreed upon.
9.9 IDS makes no further warranties apart from those specified herein.
In particular, IDS does not warrant any particular quality or
features of the subject-matter software. IDS shall be liable under
the rules on damages and in case of voidance on the grounds of
error solely for gross negligence and intent. Furthermore, IDS does
not warrant compliance with US export regulations by the software
used and does not assume any other liability in this respect.
10. DOCUMENTATION
The documentation will be handed over in accordance with item 1.2.
The user manual shall be prepared in English.
11. SECRECY
The parties to the Contract shall keep secret, and shall not make
any use whatsoever of, any information disclosed in connection with
the negotiations and the execution of this Contract,
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except for information which is in the public domain or has been
received from third parties. After signing of this Contract, either
party may issue a press release disclosing the general nature of
the Contract but may not disclose the specific terms except as
required to disclose by law.
12. PARTIAL VALIDITY
If individual provisions of this Contract are or become invalid,
the remaining provisions of the Contract shall not be affected
thereby. The parties to the Contract shall cooperate to agree on an
alternative provision that comes as close as possible to the
invalid provision.
13. WRITTEN FORM
Amendments to and modifications of this Contract shall only be
valid if made in writing. This shall also apply to the departure
from the formal requirement of the written form.
14. INTEGRAL PARTS
Any and all Exhibits hereto shall constitute integral parts of the
Contract.
15. TRANSFER OF RIGHTS AND DUTIES UNDER THE CONTRACT
McAfee shall be entitled, following the signing of this Contract,
to transfer all its rights and
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obligations under this Contract in their entirety to a group
company.
16. EFFECTIVE DATE OF THE PURCHASE TRANSACTION
The purchase transaction contemplated herein shall enter into legal
force and effect on June 30, 1996.
17. JURISDICTION AND APPLICABLE LAW, GENERAL PROVISIONS
17.1 In the event of disputes arising from this Contract, the court
having subject-matter jurisdiction in Vienna shall have exclusive
jurisdiction.
17.2 The Contract shall be governed by Austrian law.
17.3 It is expressly agreed that the Austrian industrial standards ONORM
A2050 and A2060, as well as the United Nations Convention on
Contracts for the International Sale of Goods shall not apply.
17.4 In addition, the general terms and conditions, if any, of the
parties to the Contract shall not be applicable.
17.5 Each party shall bear the costs incurred by it in connection with
the signing of the Contract, in particular the costs of its own
legal counsel and tax advisors. Furthermore, each party shall bear
any and all taxes imposed on or levied against it in connection
with the income from the sale of the subject-matter software.
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McAfee Associates, Inc. Interactive Distributed
Systems Software GmbH