EXHIBIT 10.32
SOFTWARE TRANSFER AGREEMENT
This SOFTWARE TRANSFER AGREEMENT (this “
Agreement ”) is entered into as of January 26
th
, 2005, (the “
Effective Date ”) by and between A VATECH S OLUTIONS , I NC ., a Delaware corporation with
offices at 10715 Red Run Blvd., Suite 101, Owings Mills, Maryland
21117 USA (“ Avatech ”), and Autodesk, Inc., a
Delaware corporation with its principal office at 111 McInnis
Parkway, San Rafael, California 94903 (“ Autodesk
”) (Avatech and Autodesk each, a “ Party
;” together, the “ Parties ”).
RECITALS
WHEREAS, Avatech desires to transfer to
Autodesk, and Autodesk desires to receive from Avatech, ownership
of certain quality assurance software and cycle time reduction
product for the design automation industry , including all patents,
copyrights, trade secrets and other intellectual property rights
therein and thereto;
NOW, THEREFORE, in consideration of the
foregoing and of the mutual promises contained in this Agreement,
the Parties hereby agree as follows:
AGREEMENT
ARTICLE I
DEFINITIONS AND CONSTRUCTION
1.1. Capitalized Terms . The
following capitalized terms shall have the meanings set forth
below:
(a) “ Confidential
Information ” has the meaning set forth in Section
5.1.
(b) Derivative Work ”
has the meaning ascribed to it under the United States Copyright
Law, Title 17 U.S.C. Sec. 101 et. seq. , as the same may be
amended from time to time.
(c) “ Intellectual Property
Rights ” means any or all of the following which are
owned by Avatech and all rights in, arising out of, or associated
with throughout the world: (i) all United States and foreign
patents and applications therefor, including provisional
applications, and all reissues, divisions, renewals, extensions,
continuations and continuations-in-part thereof (“
Patents ”); (ii) all rights (other than Patents) in
inventions (whether patentable or not), invention disclosures,
improvements, trade secrets, proprietary information, know-how,
technology and technical data (“ Trade Secrets
”); and (iii) all copyrights, copyright registrations and
applications therefor and all other rights corresponding thereto
throughout the world (“ Copyrights
”).
(d) “ Prior Grantee
” means those third parties who have been granted a license
to, or otherwise have a right, to the Transferred
Software.
(e) “ Software ”
means any and all computer software, documentation and code,
including assemblers, applets, compilers, source code, source code
listings, object code, data (including image and sound data),
design tools and user interfaces, in any form or format, however
fixed.
(f) “ Third Party
Software ” means any Software that is a component of, or
necessary to compile, the Transferred Software and that is either
not owned by Avatech to which Avatech is restricted from
transferring ownership to Autodesk.
(g) “ Transferred
Intellectual Property Rights ” means all Intellectual
Property Rights in and to the Transferred Software.
(h) “ Transferred
Software ” means the Software known as the software and
related materials as more particularly described in Exhibit
A .
1.2 Construction . For
purposes of this Agreement, whenever the context
requires:
(a) the singular number will include
the plural, and vice versa; the masculine gender will include the
feminine and neuter genders; the feminine gender will include the
masculine and neuter genders; and the neuter gender will include
the masculine and feminine genders;
(b) any rule of construction to the
effect that ambiguities are to be resolved against the drafting
Party will not be applied in the construction or interpretation of
this Agreement;
(c) the words “include”
and “including” and variations thereof, will not be
deemed to be terms of limitation, but rather will be deemed to be
followed by the words “without limitation;”
(d) except as otherwise indicated,
all references in this Agreement to “Sections” and
“Exhibits” are intended to refer to Sections of this
Agreement and Exhibits to this Agreement; and
(e) the headings in this Agreement
are for convenience of reference only, will not be deemed to be a
part of this Agreement, and will not be referred to in connection
with the construction or interpretation of this
Agreement.
ARTICLE II
SOFTWARE TRANSFER AND DELIVERY
2.1 Assignment . Avatech
hereby irrevocably grants, conveys and assigns to Autodesk, by
execution hereof, all of its worldwide right title and interest in
and to the Transferred Software and Transferred Intellectual
Property Rights, to be held and enjoyed by Autodesk and its
successors and assigns. Avatech further irrevocably grants, conveys
and assigns to Autodesk, by execution hereof, all of its worldwide
right, title and interest in and to any and all causes of action
and rights of recovery for past infringement or misappropriation of
the Transferred Intellectual Property Rights, to be held and
enjoyed by Autodesk and its successors and assigns. Autodesk hereby
accepts the foregoing grants, conveyances and
assignments.
2.2 Further Assurances . On
and after the date of this Agreement, the Avatech will, without
charge and promptly upon request by Autodesk, as may be requested
by Autodesk in order to effect and perfect the grants, conveyances
and assignments contained herein or to enable Autodesk to obtain
the full benefits of this Agreement and the transactions
contemplated hereby, (i) deliver to Autodesk records, data or other
documents relating to the Transferred Intellectual Property Rights
that are in Avatech’s possession, (ii) execute and deliver
assignments, licenses, consents, documents or further instruments
of transfer, including without limitation the short form assignment
in Exhibit E , and (iii) take other reasonable actions,
render other assistance and execute other documents. Avatech will
also assist Autodesk in filing and prosecuting United States and
foreign patent applications claiming the Transferred Intellectual
Property Rights at the Autodesk’s expense.
2.3 Exclusive Ownership .
Without limiting the foregoing, Autodesk will have the exclusive
right to commercialize, prepare and sell products based upon,
license, sublicense, prepare derivative works from, and otherwise
use and exploit the Transferred Software and Transferred
Intellectual Property Rights. Avatech hereby waives any and all
moral rights, including any right to identification of authorship
or limitation on subsequent modification, that Avatech (or its
employees, agents or consultants) has or may have in any
Transferred Software or Transferred Intellectual Property
Rights.
2.4 Power of Attorney .
Avatech hereby irrevocably designates and appoints Autodesk and its
duly authorized officers and agents as its agents and
attorneys-in-fact, to act in its behalf and instead of Avatech, to
execute and file any such application, and to do all other lawfully
permitted acts to further the prosecution and issuance of
Intellectual Property Rights provided for herein with the same
legal force and effect as if executed by Avatech. This power of
attorney shall be deemed coupled with an interest and shall be
irrevocable.
2.5 Delivery . On the
Effective Date, Avatech shall deliver to Autodesk:
(a) the Transferred Software via FTP
(File Transfer Protocol) download, as more particularly described
in Exhibit A ;
(b) an affirmation for Software
Product Purchase by Electronic Transfer as set forth in Exhibit
D ; and
(c) an Assignment of Copyright as
set forth in Exhibit E .
2.6 No Assumed Liabilities .
The Parties agree that Autodesk shall not assume any liabilities
associated with the Transferred Software or the Transferred
Intellectual Property Rights that arose prior to or on the
Effective Date, regardless of whether any such liabilities are
determined or asserted after the Effective Date.
ARTICLE III
PAYMENTS
3.1 Payment Terms . Autodesk
will provide cash consideration to Avatech. Payments shall be made
by wire transfer within twenty-four (24) hours of the due date in
immediately available funds to the account designated by
Avatech.
3.2 Payment . On the
Effective Date, Autodesk shall pay to Avatech One Million and Nine
Hundred Thousand Dollars ($1,900,000.00) in full and complete
consideration for the Transferred Intellectual Property Rights and
the Transferred Software (the “ Purchase Price
”).
3.3 Taxes .
(a) Payment of Taxes .
Avatech shall be solely responsible for the payment of, and shall
pay when due and indemnify Autodesk against, all applicable federal
and state taxes, including any sales, use, excise or transfer taxes
and other taxes associated with payments to Avatech under this
Agreement (except for taxes assessed on Autodesk’s net
income). The Parties shall cooperate and take all reasonable steps
to reduce any transfer taxes associated with the transactions
contemplated hereby.
(b) Post-Closing Tax
Covenants .
(i) In the case of any personal
property taxes (or other similar taxes) attributable to the
Transferred Software, Avatech shall be responsible for tax returns
which cover the taxable period through and until the Effective Date
and, subject to the provisions of Section 3.3(b)(ii) Autodesk shall
be responsible for tax returns relating to the taxable period from
the Effective Date forward.
(ii) To the extent relevant to the
Transferred Software, each Party shall (i) provide the other with
such assistance as may reasonably be required in connection with
the preparation of any tax return and the conduct of any audit or
other examination by any taxing authority or in connection with
judicial or administrative proceedings relating to any liability
for taxes; and (ii) retain and provide the other with all records
or other information that may be relevant to the preparation of any
tax returns, or the conduct of any audit or examination, or other
proceeding relating to taxes. Avatech shall retain all documents,
including prior years’ tax returns, supporting work schedules
and other records or information with respect to all applicable tax
returns and shall not destroy or otherwise dispose of any such
records for six (6) years after the Effective Date without the
prior written consent of Autodesk.
ARTICLE IV
NON-COMPETE AND EXCLUSIVITY
4.1 Covenant . Commencing on
the Effective Date and for two (2) years thereafter, Avatech shall
not engage in developing on behalf of any other person or entity
product functionality that competes with any of the features or
functions of the Transferred Software. The Parties agree that such
covenant is necessary to protect Autodesk’s Trade Secrets in
and to the Transferred Software and the value of Autodesk’s
investment in the Transferred Software.
4.2 Separate Covenants . The
covenants contained in Sections 4.1 will be construed as a series
of separate covenants, one for each county, city, state and country
of the geographic scope. If, in any judicial proceeding, a court
refuses to enforce any of such separate covenants (or any part
thereof), then such unenforceable covenant (or such part) will be
eliminated from this Agreement to the extent necessary
to permit the remaining separate covenants (or
portions thereof) to be enforced. In the event that the provisions
of Sections 4.1 are deemed to exceed the time, geographic or scope
limitations permitted by applicable law, then such provisions will
be reformed to the maximum time, geographic or scope limitations,
as the case may be, permitted by applicable laws.
ARTICLE V
CONFIDENTIAL INFORMATION
5.1 Disclosure . For purposes
of this Agreement, “ Confidential Information ”
means any proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research, business plans
or models, product plans, products, services, computer software and
code, developments, inventions, processes, formulas, technology,
designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed by
Autodesk either directly or indirectly in writing, orally or by
drawings or inspection of parts or equipment or owned by Autodesk
even though not delivered by Autodesk. It is understood that all
Confidential Information is and shall remain the sole property of
Autodesk, and Avatech shall have no interest therein. Upon
Autodesk’s request, Avatech shall promptly return to Autodesk
all such tangible Confidential Information.
5.2 Exclusions .
Notwithstanding the provisions of Section 5.1, Confidential
Information shall exclude information that Avatech can demonstrate:
(i) was independently developed by Avatech without any use of
Autodesk’s Confidential Information or by Avatech’s
employees or other agents (or independent contractors hired by
Avatech) who have not been exposed to Autodesk’s Confidential
Information (provided that this clause does not limit the terms of
Article 4); (ii) becomes known to Avatech, without restriction,
from a source other than Autodesk (or Autodesk Confidential
Information) that had a right to disclose it without breach of this
Agreement; or (iii) was in the public domain at the time it was
disclosed or enters the public domain through no act or omission of
Avatech.
5.3 Transferred Software .
Notwithstanding anything in Sections 5.1 and 5.2, the Transferred
Software and any other non-public information regarding the
Intellectual Property Rights shall be deemed Confidential
Information of Autodesk.
5.4 Confidentiality
Obligation . Avatech may use Autodesk Confidential Information
solely to fulfill its obligations to Autodesk in connection with
this Agreement. Avatech shall treat as confidential and not
disclose to any third party any of Autodesk’s Confidential
Information and shall not use such Confidential Information for its
own benefit. Without limiting the foregoing, Avatech shall use at
least the same degree of care which it uses to prevent the
disclosure of its own confidential information of like importance,
but in no event with less than reasonable care, to prevent the
disclosure of Autodesk’s Confidential Information. Avatech
further agrees to take all reasonable precautions to prevent any
unauthorized disclosure or use of any Autodesk Confidential
Information.
5.5 Confidentiality of
Agreement . Each Party agrees that the terms and conditions,
but not the existence, of this Agreement shall be treated as
Autodesk’s Confidential Information and that no reference to
the terms and conditions of this Agreement or to activities
pertaining thereto may be made in any form of public or commercial
advertising without the prior written consent of Autodesk;
provided , however , that Avatech may disclose the
terms and conditions of this Agreement: (i) to its legal counsel;
(ii) as required by any court or other governmental body; or (ii)
as otherwise required by law.
5.6 Remedies . Unauthorized
use by Avatech of Autodesk’s Confidential Information will
diminish
