1
Exhibit 10.7
AGREEMENT
The following Agreement is hereby concluded by and between
BLAXXUN INTERACTIVE AG
Xxxxxxxxxxx Xxxxxxx 00-00
00000 Xxxxxx
- hereinafter called "blaxxun" or "manufacturer" -
and
INFOMATEC MEDIA AG
Steinerne Furt 76
86167 Augsburg
- hereinafter called "Infomatec Media AG" or VAR Partner -
2
1. PRELIMINARY REMARKS
blaxxun has special software products and developers with particular experience
in the area of 3D worlds. Infomatec Media AG is currently preparing projects in
which software and development services, such as are available at blaxxun, are
needed to a large extent.
2. ACCEPTANCE OF DEVELOPMENT SERVICES
Infomatec Media AG hereby undertakes to accept development services in the
amount of 500 man-days at $1000 each by 12/31/2000.
In this way, development services in the area of 3D worlds and adaptations of
blaxxun software to the planned projects of Infomatec Media AG are to be
provided.
3. USE OF THE BLAXXUN SOFTWARE
(1)Infomatec Media AG needs special client software for the realization of the
projects currently being prepared by it. In the view of Infomatec Media AG,
blaxxun has a suitable product (blaxxun Community Platform plus Development
Kit).
(2)Infomatec Media AG hereby undertakes in a binding manner to use the software
of blaxxun in the realization of the current project at [**](1) (preparation
of an on-line trading system with Virtual Community), and to acquire the
necessary licenses from blaxxun for this purpose.
(3)Infomatec Media AG hereby further undertakes to accept blaxxun licenses for
all other projects in which Virtual Communities are prepared and the software
of blaxxun can be used according to the particular project specifications.
(4) For currently ongoing and future projects, licenses shall be accepted from
blaxxun for the following amounts:
licenses valued at $ 0.5 million by July 31, 2000,
additional licenses valued at $ 1.5 million by July 31, 2001,
additional licenses valued at $ 3 million by July 31, 2002.
In the event that use of the blaxxun software in the projects of Infomatec Media
AG is not possible according to performance certificates or project
specifications, the acceptance quantities according to paragraph 4 of this
Agreement may be adjusted accordingly.
--------
(1) [**] Indicates that information has been omitted and filed separately
with the Commission pursuant to a request for confidential
treatment.
3
4. BUYBACK OPTION
(1)Infomatec Media AG has acquired a share in blaxxun interactive, with
registered office in San Francisco (USA), through a separate agreement (Stock
Purchase Agreement dated February 25, 2000).
(2)It is hereby agreed by and between blaxxun interactive, Inc. and Infomatec
Media AG that blaxxun interactive, Inc. shall be entitled to buy back its
shares from Infomatec Media AG under the following conditions:
- If Infomatec Media AG does not accept licenses valued at $ 0.5 million
by July 31, 2000 in accordance with No. 3 paragraph 4 of this
Agreement, then blaxxun interactive, Inc. shall have the right to buy
back 10% of the shares at a price of $ 11.80 per share. This right
shall expire at the end of the day on August 30, 2000.
- If Infomatec Media AG does not accept additional licenses valued at $
1.5 million by July 31, 2001 in accordance with No. 3 paragraph 4 of
this Agreement, then blaxxun interactive, Inc. shall have the right to
buy back 30% of the shares at a price of $ 11.80 per share. This right
shall expire at the end of the day on August 30, 2001.
- If Infomatec Media AG does not accept additional licenses valued at $ 3
million by July 31, 2002 in accordance with No. 3 paragraph 4 of this
Agreement, then blaxxun interactive, Inc. shall have the right to buy
back 60% of the shares at a price of $ 11.80 per share. This right
shall expire at the end of the day on August 30, 2002.
The amount which blaxxun interactive, Inc. must pay to Infomatec Media AG in the
event of exercise of a buyback right shall be increased by an amount of 5% per
year starting on February 25, 2000, as well as by the costs demonstrated by
Infomatec Media AG for acquisition of the shares in blaxxun interactive, Inc.
5. VAR AGREEMENT
For the acquisition of licenses, the conclusion of a separate VAR Agreement is
hereby stipulated. In it, in particular the details of the strategic partnership
pursued, the details of the transfer of rights, and the details of the
collaboration in the area of sales shall be regulated.
6. PERPETUATION OF SOFTWARE ON LINUX
Because of the strategic partnership with Infomatec Media AG to support its
Linux-based technology, blaxxun will aim for a platform-crossing (and thus also
a Linux) client solution and will make it the subject matter of the next major
product release. blaxxun assumes that a release date within a period of [**](2)
from the date of conclusion of this Agreement can be expected.
--------
(2) [**] Indicates that information has been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
4
blaxxun sees this as a chance to expand its license business to the Linux worlds
and so it will not charge anything separately for this development expense.
Infomatec Media AG shall be given an opportunity to propose specific
requirements and to collaborate closely in the product test phase.
7. CONFIDENTIALITY
(1)The parties are hereby obligated to keep strictly secret all information
which they receive in connection with performance of the intended
collaboration and which is of a technical, financial or otherwise commercial
nature, as well as which relate to the composition, manufacture, application,
marketing, product service, raw material purchasing sources, product
customers or other details of the business operation of the parties
(hereinafter "information") and not to pass it on to third parties. In
addition, the parties are prohibited from using the information for purposes
other than those expressly mentioned in this Agreement. The confidentiality
agreement contained in this paragraph is not applicable to information which
the parties have obtained from third parties in a legally permissible manner
or which is public knowledge. The passing on of information to persons
legally bound to maintain confidentiality (banks, accountants, etc.) is not
detrimental.
(2)The parties shall see to it that their employees, representatives, or other
persons who have access to the information are subject to the same
confidentiality obligations as are set forth in the foregoing paragraph (1).
(3)Each party which violates one or more of the obligations mentioned in the
aforementioned paragraphs (1) and (2) shall be obligated to pay to the party
damaged by the corresponding violation of duty for each individual case an
amount of EUR 50,000.00 as a minimum damage compensation. The right of the
affected party to demand compensation for further damage suffered due to the
violation of duty shall remain unaffected.
(4)Both parties are aware that, according to Section 12 and following of the
Securities Act, the status of a primary insider may be applicable and the
aforementioned law must be observed.
8. NOTIFICATIONS
(1)Notifications which may or which must occur according to this Memorandum of
Understanding shall be sent to the addresses mentioned on the title page of
this Memorandum of Understanding.
(2)The parties shall inform one another mutually without delay about any
changes which occur with respect to their addresses or communications
systems.
5
9. APPLICABLE LAW AND JURISDICTION
(1)This Agreement and all obligations resulting therefrom, including possible
damage compensation claims, shall be entirely subject to the laws of the
Federal Republic of Germany.
(2)The exclusive place of jurisdiction for any disputes which may arise from
this Agreement shall be Munich. The plaintiff shall also be entitled,
moreover, to file a complaint with the competent courts for the registered
office of the respondent.
Munich, Augsburg,
February 25, 2000 February 25, 2000
-- --
[signature] [signature]
blaxxun interactive AG Infomatec Media AG
Munich,
February __, 2000
[signature]
blaxxun interactive, Inc.
