Joint Cooperation and Master Services Agreement - Networks Associates Inc. and McAfee.com
JOINT COOPERATION AND MASTER SERVICES AGREEMENT
This JOINT COOPERATION AND MASTER SERVICES AGREEMENT (this "Agreement")
is made and entered into this 1st day of January, 1999 (the "Effective Date"),
by and between Networks Associates, Inc., a corporation organized and existing
under the laws of the State of Delaware, and having its principal place of
business at 3965 Freedom Circle, Santa Clara, CA 95054, (hereinafter referred to
as "NAI"), and McAfee.com, a corporation organized and existing under the laws
of the State of Delaware and having its principal place of business at 3965
Freedom Circle, Santa Clara, CA 95054 ("McAfee.com").
RECITALS
WHEREAS, the parties have determined to separate McAfee.com, formerly a
wholly-owned subsidiary of NAI, into a separate, publicly traded company, and
WHEREAS, the parties desire that McAfee.com and NAI provide each other
with certain technology services on an ongoing basis.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING AND THE MUTUAL
COVENANTS AND AGREEMENTS CONTAINED HEREIN, THE PARTIES HERETO HEREBY AGREE AS
FOLLOWS:
SECTION 1
DEFINITIONS; STRUCTURE OF AGREEMENT
1.1 Definitions. For the purpose of this Agreement, the following
capitalized terms shall have the following meanings:
(a) "Additional Services" shall have the meaning set forth in
Section 1.2.
(b) "Confidential Information" means all documents,
disclosures and written or oral statements disclosed by a
party (the "Disclosing Party" ) to the other party (the
"Receiving Party") shall be deemed "Confidential
Information" unless clearly marked otherwise or if the
information in such documents, disclosures or statements
is non-confidential pursuant to Section 8 below. Except as
provided herein, "Confidential Information" shall include,
without limitation, proprietary, technical, marketing,
operating, performance, cost, business pricing policies,
programs, inventions, discoveries, trade secrets,
techniques, processes, computer programming techniques,
and all record bearing media containing or disclosing such
information and techniques disclosed pursuant to this
Agreement. Any source code or unlinked object files or
modules disclosed by the Disclosing Party to the Receiving
Party shall be deemed "Confidential Information" unless it
is clearly and in writing marked as "Non-Confidential."
<PAGE> 2
(c) "Impracticable" shall have the meaning set forth in
Section 5.1.
(d) "Providing Company" shall mean, with respect to any
particular Service, the party or its Subsidiaries
identified on the applicable Schedule 1 as the party to
provide such Service.
(e) "Receiving Company" shall mean, with respect to any
particular Service, the party or its Subsidiaries
identified on the applicable Schedule 1 as the party to
receive such Service.
(f) "System" shall mean the software, hardware, data store or
maintenance and support components or portions of such
components of a set of information technology assets
identified in the applicable Statement of Work attached
hereto.
(g) "Technology Cross License Agreement" shall mean that
certain Technology Cross License Agreement between the
parties of even date herewith.
1.2 Agreement Structure. This Agreement is a master agreement for
various services. The Agreement consists of this base agreement containing the
basic terms which shall govern the overall relationship between the parties and
the following schedules (the "SCHEDULES") which outline the terms upon which the
Providing Company shall render specific services (the "SERVICES") to the
Receiving Company and which Schedules are integrated herein by this reference:
Schedule A: [Hosting Services]
Additional Schedules for additional Services ("Additional Services")
may be added to this Agreement after the Effective Date by the mutual agreement
of the parties hereto, which agreement will be evidenced by mutual execution of
a Schedule which references this Agreement. Each additional Schedule for new
Services shall be subject to the terms and conditions of this Agreement. IN THE
EVENT OF A CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND A SCHEDULE, THE
TERMS OF THE SCHEDULE SHALL SUPERSEDE THE CONFLICTING PROVISIONS CONTAINED IN
THIS BASE AGREEMENT.
Any Schedule may be amended by the mutual agreement of the parties
hereto, which amendment shall be memorialized in a revised Schedule (the
"REVISED SCHEDULE") executed by the Parties.
1.3 Statements of Work. There may be multiple projects under any
one Schedule, the details of which shall be outlined in one or more Exhibits to
such Schedule (each, a "STATEMENT OF WORK"). Each such Statement of Work shall
reference this Agreement, shall be executed by the both of the Parties; and
shall be subject to the terms and conditions of this Agreement.
SECTION 2
Services
2.1 Services Generally. Except as otherwise provided herein,
during the term of this Agreement, Providing Company shall provide or cause to
be provided to Receiving Company the services described in the Schedules
attached hereto. The service described on a single Statement of Work shall be
referred to herein as a "Service". Collectively, the services described on all
the Statements of Work shall be referred herein as "Services".
<PAGE> 3
2.2 AVERT Services. During the term of the Technology Cross
License Agreement, and at no additional cost to McAfee.com, NAI shall cause
NAI's anti-virus emergency response team ("AVERT") to provide information,
research and development services to McAfee.com equivalent in all material
respects to those afforded NAI including, without limitation, all available
notice, research, solutions furnished by AVERT to NAI with respect to AVERT Data
(defined below). Furthermore, NAI shall, and shall cause AVERT to mention, in
any public announcement made by NAI or AVERT with respect to AVERT Data, both
NAI and McAfee.com as potential sources of virus information and solutions. For
purposes of the foregoing, "AVERT Data" means all information regarding computer
viruses and all available research and solution furnished by AVERT to NAI with
respect to any NAI product to which McAfee.com has a license pursuant to the
Technology Cross License Agreement or to any McAfee.com product to which NAI has
a license pursuant to the Technology Cross License Agreement.
SECTION 3
COMPENSATION.
3.1 Charges for Services. Receiving Company shall pay Providing
Company the charges, if any, set forth on the Statement of Work for each of the
Services listed therein. The parties shall use good faith efforts to discuss any
situation in which the actual charge for a Service is reasonably expected to
exceed the estimated charge, if any, set forth on a Statement of Work for a
particular Service, provided, however, that any charges incurred in excess of
any such estimate shall not justify stopping the provision of, or payment for,
Services under this Agreement.
3.2 Payment Terms. Providing Company shall bill Receiving Company
monthly for all charges pursuant to this Agreement. Such bills shall be
accompanied by reasonable documentation or other reasonable explanation
supporting such charges. Receiving Company shall pay Providing Company for all
Services provided hereunder within thirty (30) days after receipt of an invoice
therefor. Invoices for Services provided hereunder shall be sent monthly by the
Providing Company unless otherwise agreed in a Statement of Work.
3.3 Pricing Adjustments. In the event of a tax audit adjustment
relating to the pricing of any or all Services provided pursuant to this
Agreement in which it is determined by a taxing authority that any of the
charges, individually or in combination, did not result in an arm's-length
payment, as determined under any applicable arm's-length standards, then the
parties, including a Providing Company subcontractor providing or receiving
Services hereunder, may agree to make corresponding adjustments to the charges
in question for such period to the extent necessary to achieve arm's-length
pricing. Any adjustment made pursuant to this Section 3.4 shall be reflected in
the parties, official books and records, and the resulting overpayment or
underpayment shall create an obligation to be paid in the manner specified in
Section 3.2.
SECTION 4
General Obligations; Standard of Care.
4.1 Performance Metrics: Providing Company. Specific performance
metrics for the Providing Company for a specific Service may be set forth in the
corresponding Statement of Work. Where none is set forth, the Providing Company
shall use reasonable efforts to provide Services in accordance with its
policies, procedures and practices then in effect and shall exercise the same
care and skill as it exercises in performing similar services for itself.
4.2 Disclaimer of Warranties. PROVIDING COMPANY MAKES NO
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE
IMPLIED
<PAGE> 4
WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE SERVICES PROVIDED BY IT HEREUNDER.
4.3 Performance Metrics: Receiving Company. Receiving Company
shall use reasonable efforts, in connection with receiving Services, to follow
the policies, procedures and practices in effect before the date hereof
including providing information and documentation sufficient for Providing
Company to perform the Services as they were performed before the date hereof
and making available, as reasonably requested by the Providing Company,
sufficient resources and timely decisions, approvals and acceptances in order
that Providing Company may accomplish its obligations hereunder in a timely
manner.
4.4 Transitional Nature of Services; Changes. The parties
acknowledge the transitional nature of the Services and that Providing Company
may make changes from time to time in the manner of performing the Services if
Providing Company is making similar changes in performing similar services for
itself and if Providing Company furnishes to Receiving Company reasonable notice
regarding such changes. Notwithstanding the foregoing, for a period of eighteen
(18) months from the Effective Date, Providing Company will not make any
material change to Systems affecting Receiving Company without first providing
thirty (30) days prior written notice and obtaining Receiving Company's prior
written consent, which consent shall not be unreasonably withheld or delayed.
4.5 Responsibility for Errors; Delays. Providing Company's sole
responsibility to Receiving Company:
(a) for errors or omissions in Services, shall be to furnish
correct information, payment and/or adjustment in the Services, at no additional
cost or expense to Receiving Company; provided, Receiving Company must promptly
advise Providing Company of any such error or omission of which it becomes aware
after having used reasonable efforts to detect any such errors or omissions;
(b) for failure to deliver any Service because of
Impracticability, shall be to use reasonable efforts to make the Services
available and/or to resume performing the Services as promptly as reasonably
practicable.
4.6 Good Faith Cooperation; Consents. The parties will use good
faith efforts to cooperate with each other in all matters relating to the
provision and receipt of Services. Such cooperation shall include exchanging
information, providing electronic access to Systems used in connection with
Services, performing true-ups and adjustments and obtaining all third party
consents, licenses, sublicenses or approvals necessary to permit each party to
perform its obligations hereunder (including without limitation, rights to use
third party software needed for the performance of Services). The costs of
obtaining such third party consents, licenses, sublicenses or approvals shall be
borne by the Receiving Company. The parties will maintain documentation
supporting the information contained in the Statements of Work and cooperate
with each other in making such information available as needed in the event of a
tax audit, whether in the United States or any other country.
4.7 Alternatives. If Providing Company reasonably believes it is
unable to provide any Service because of a failure to obtain necessary consents,
licenses, sublicenses or approvals pursuant to Section 4.6 or because of
Impracticability, the parties shall cooperate to determine the best alternative
approach. Until such alternative approach is found or the problem otherwise
resolved to the satisfaction of the parties, the Providing Company shall use
reasonable efforts to continue providing the Service or, in the case of Systems,
to support the function to which the System relates or permit Receiving Company
to have access to the
<PAGE> 5
System so Receiving Company can support the function itself. To the extent an
agreed upon alternative approach requires payment above and beyond that which is
included in the Providing Company's charge for the Service in question, the
parties shall share equally in making any such payment unless they otherwise
agree in writing.
SECTION 5
Certain Limitations.
5.1 Impracticability. Providing Company shall not be required to
provide any Service to the extent the performance of such Service becomes
"Impracticable" as a result of a cause or causes outside the reasonable control
of Providing Company including unfeasible technological requirements, or to the
extent the performance of such Services would require Providing Company to
violate any applicable laws, rules or regulations or would result in the breach
of any software license or other applicable contract.
5.2 Additional Resources. Except as provided in a Statement of
Work for a specific Service, in providing the Services, Providing Company shall
not be obligated to: (i) hire any additional employees; (ii) maintain the
employment of any specific employee; (iii) purchase, lease or license any
additional equipment or software; or (iv) pay any costs related to the transfer
or conversion of Receiving Company's data to Receiving Company or any alternate
supplier of Services.
SECTION 6
TERM; TERMINATION
6.1 Term. The term of this Agreement shall commence on the
Effective Date and shall remain in effect in for a period of three (3) years
unless earlier terminated under this Section 6. The duration of any Services
pursuant to a Statement of Work may be set forth in such Statement. This
Agreement may be extended by the parties in writing either in whole or with
respect to one or more of the Services, provided, however, that such extension
shall only apply to the Services for which the Agreement was extended. The
parties shall be deemed to have extended this Agreement with respect to a
specific Service if the Statement of Work for such Service specifies a
completion date beyond the aforementioned Expiration Date. The parties may agree
on an earlier expiration date respecting a specific Service by specifying such
date on the Schedule 1 for that Service. Services shall be provided up to and
including the date set forth in the applicable Statement of Work, subject to
earlier termination as provided herein.
6.2 Termination. In addition, subject to the provisions of Section
11 below, either party may terminate this Agreement with respect to a specific
Service if the other party materially breaches a material provision with regard
to that particular Service and does cure such breach (or take reasonable steps
required under the circumstances to not cure such breach going forward) within
sixty (60) business days after being given notice of the breach; provided,
however, that the non-terminating party may request that the parties engage in a
dispute resolution negotiation as specified in Section 11 below prior to
termination for breach.
6.3 Survival. The following sections will survive any termination
or expiration of this Agreement: 1, 2.3, 4.2, 6.3, 6.4, 7, 8.2, 9, 10, 11 and
12. Notwithstanding the foregoing, in the event of any termination with respect
to one or more, but less than all Services, this Agreement shall continue in
full force and effect with respect to any Services not terminated hereby.
<PAGE> 6
6.4 User Ids, Passwords. The parties shall use good faith efforts
at the termination or expiration of this Agreement or any specific Service
hereto, to ensure that all applicable user IDs and passwords are canceled and
that any applicable data pertaining solely to the other parties are deleted or
removed from Systems.
6.5 Subcontractors. Providing Company may engage a "Subcontractor"
to perform all or any portion of Providing Company's duties under this
Agreement, provided that any such Subcontractor agrees in writing to be bound by
confidentiality obligations at least as protective as the terms of Section 10
regarding confidentiality below, and provided further that Providing Company
remains responsible for the performance of such Subcontractor. As used in this
Agreement, "Subcontractor" will mean any individual, partnership, corporation,
firm, association, unincorporated organization, joint venture, trust or other
entity engaged to perform hereunder.
SECTION 7
Indemnification.
7.1 Indemnification. Each party will indemnify and hold harmless
the other party and its directors, officers, employees and agents from any
claims, losses, attorneys' fees, damages, liabilities, costs, expenses, or suits
for bodily injury to any person (including employees or agents), physical damage
to or loss of tangible property arising out of or resulting from any act or
omission of the other party, its employees, agents or subcontractors arising
from the performance of this Agreement; provided the indemnified party provides
the indemnifying party with (i) prompt written notice of any such claim; (ii)
reasonable cooperation in the defense of such claim (at the indemnifying party's
sole expense) and (ii) sole control of the defense or settlement of any such
claim. In no event, however, will either party be responsible for the sole
negligence of the other party.
7.2 Infringement Defense. To the extent Providing Company delivers
or licenses any intellectual property to Receiving Company in performance of
this Agreement, Providing Company's duty to defend Receiving Company against all
claims incurred by Receiving Company based upon infringement of a third party
patent or other intellectual property right shall be in accordance with the
Technology Cross License Agreement.
SECTION 8
Intellectual Property
8.1 Software Deliverables. Unless otherwise agreed by the parties
under a separate license or technology agreement, if Providing Company supplies
Receiving Company with a deliverable that in whole or in part consists of
software, firmware, or other computer code (referred to as a "Software
Deliverable"), such Software Deliverables will be supplied in object code form
only and will be subject to the Technology Cross License Agreement.
8.2 Ownership. This Agreement and the performance of this
Agreement will not affect the ownership of any copyrights or other intellectual
property rights existing prior to the Effective Date. Neither party will gain,
by virtue of this Agreement, any rights of ownership of copyrights, patents,
trade secrets, trademarks or any other intellectual property rights owned by the
other. Providing Company will own all
<PAGE> 7
copyrights, patents, trade secrets, trademarks and other intellectual property
rights subsisting in the Software Deliverables and other works developed by
Providing Company for purposes of this Agreement.
SECTION 9
Confidentiality
9.1 Confidential Information. Except as expressly provided herein,
the parties agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose except for the
purposes contemplated by this Agreement any Confidential Information furnished
to it by the disclosing party hereto, except that to the extent that it can be
established by the receiving party by written proof that such Confidential
Information: was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(a) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(b) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
(c) was subsequently lawfully disclosed to the receiving party
by a person other than a party hereto.
9.2 Permitted Use and Disclosures. Each party hereto may use or
disclose information disclosed to it by the other party to the extent such use
or disclosure is reasonably necessary in complying with applicable law or
governmental regulations, or exercising its rights hereunder to develop or
commercialize the products licensed pursuant to the Technology Cross License
Agreement, provided that if a party is required to make any such disclosure of
another party's confidential information, other than pursuant to a
confidentiality agreement, it will give reasonable advance notice to the latter
party of such disclosure and, will use its best efforts to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise).
9.3 Confidential Terms. Except as expressly provided herein, each
party agrees not to disclose any terms of this Agreement to any third party
without the consent of the other party; provided, disclosures may be made as
required by securities or other applicable laws, or to actual or prospective
corporate partners, or to a party's accountants, attorneys and other
professional advisors.
SECTION 10
Limitation of Liability.
10.1 Exclusion of Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT
OR THE USE OR DISTRIBUTION OF LICENSED SOFTWARE BY NAI OR ANY THIRD PARTY,
WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), INDEMNITY,
PRODUCT LIABILITY OR OTHERWISE.
<PAGE> 8
10.2 Total Liability. EXCEPT WITH RESPECT TO DAMAGES ARISING OUT OF
SECTION 8, OR SECTION 9, IN NO EVENT SHALL EITHER PARTY'S LIABILITY EXCEED THE
TOTAL AMOUNT PAID BY BOTH PARTIES UNDER THIS AGREEMENT.
SECTION 11
Dispute Resolution.
Dispute Resolution. If the parties are unable to resolve any dispute,
controversy or claim arising out of this Agreement, either McAfee.com or NAI
may, by written notice to the other, first have such dispute referred to the
Chief Financial Officer (or equivalent), or such officer's agent who is fully
empowered to act on such officer's behalf, of each party for attempted
resolution by good faith negotiations within five (5) business days after such
notice is received. If not resolved within such five (5) business day period,
the parties shall escalate the dispute to their respective Chief Operating
Officer (or equivalent), or such officer's agent who is fully empowered to act
on such officer's behalf, for resolution within fifteen (15) business days after
expiration of the initial five (5) day period. Unless otherwise mutually agreed,
the negotiations between the designated officers shall be conducted by face to
face meetings within the time periods stated above. If the parties are unable to
resolve such dispute in accordance with the aforementioned procedure or within
such twenty (20) business day period (total), either party shall have the right
to pursue settlement in a court of law consistent with Section 12.1 herein.
SECTION 12
Miscellaneous.
12.1 Governing Law. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with the laws of the state of California, without reference to
conflicts of laws principles.
12.2 Independent Contractors. The relationship of NAI and
McAfee.com established by this Agreement is that of independent contractors, and
nothing contained in this Agreement shall be construed to (i) give either party
the power to direct and control the day-to-day activities of the other, (ii)
constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint undertaking, or (iii) allow either party to create or
assume any obligation on behalf of the other party for any purpose whatsoever.
Except as expressly set forth herein, all financial and other obligations
associated with each party's activities hereunder shall be the sole
responsibility of such party.
12.3 Notices. All notices between NAI and McAfee.com shall be in
writing and delivered by hand or by certified mail, return receipt requested,
addressed to McAfee.com or NAI at the respective addresses set forth below, and
shall be effective upon receipt. Any person entitled to notice hereunder may
change its address by giving written notice to all others entitled to notice.
Notices to NAI will be addressed to:
3965 Freedom Circle
Santa Clara, CA 95054
Attn: VP of Legal Affairs
<PAGE> 9
Notices to McAfee.com will be addressed to:
Attn: General Counsel
12.4 Force Majeure. Failure on the part of either party hereto to
meet any of the terms and conditions contained herein because of any
governmental restriction, strike or major labor disturbance, war, revolution,
riot, earthquake, fire, or flood shall not constitute a breach of this Agreement
and shall excuse the party involved from any action by the other party hereto,
based upon the said failure to perform.
12.5 Waiver; Entire Agreement; Partial Invalidity. In the event
either party shall at any time waive any of its rights under this Agreement or
waive the performance by the other party of any of its obligations hereunder,
such waiver shall not be construed as a continuing waiver of the same rights or
obligations or a waiver of any other rights or obligations. This Agreement
(which includes the Schedules and Exhibits hereto) constitutes the entire
agreement between the parties as to the subject matter hereof and merges and
supersedes all prior discussions between the parties as to the subject matter
hereof. This Agreement may not be changed or terminated except by a written
amendment signed by both parties. Any provision of this Agreement that shall be
or is determined to be invalid shall be ineffective, but such invalidity shall
not affect the remaining provisions hereof. The titles to the paragraphs hereof
are for convenience only and have no substantive effect. This Agreement has been
prepared jointly by the parties and shall not be construed against one party as
the draftsman thereof.
12.6 Non-Assignability and Binding Effect. Neither party shall,
without the prior written consent of the other party, transfer or assign this
Agreement in whole or in part, whether by operation of law or otherwise, to any
third party (including affiliated companies) without the prior written consent
of the other party. Any purported transfer or assignment without such consent
shall be void ab initio. Subject to the foregoing, this Agreement will inure to
the benefit of the parties and their permitted successors and assigns.
12.7 Injunctive Relief. McAfee.com acknowledges that its failure to
perform any of the material terms or conditions of this Agreement shall result
in immediate and irreparable damage to NAI. McAfee.com also acknowledges that
there may be no adequate remedy at law for such failure and that, in the event
thereof, NAI shall be entitled to equitable relief in the nature of an
injunction and to all other available relief, at law or in equity.
12.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same agreement.
12.9 Compliance with Laws. In exercising their rights under this
Agreement, the parties shall fully comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under this
Agreement.
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.
McAfee.com Network Associates, Inc.
By: /s/ SRIVATS SAMPATH By: /s/ PRABHAT GOYAL
------------------------------ --------------------------------
Name: Srivats Sampath Name: Prabhat Goyal
Title: Chief Executive Officer Title: Chief Financial Officer
<PAGE> 11
SCHEDULE A
Hosting Services
McAfee.com shall use commercially reasonable efforts to provide
sufficient technical services to maintain the NAI website located at www.nai.com
and/or any successor site agreed to by the parties in a manner substantially
similar to those services McAfee.com provides itself in the maintenance and
support of its websites.
NAI shall pay McAfee.com a fee for such services in an amount equal to
ten percent (10%) the total of McAfee.com's total Technology Costs, as set forth
in McAfee.com quarterly financial statements, plus a ten percent (10%) service
charge.
McAfee.com shall provide such services from January 1 , 1999 until
December 31, 2000 unless otherwise agreed in writing by the parties.