CONSULTING AND SUPPORT AGREEMENT
This agreement (the "Agreement") is entered into as of the 22nd day of
February, 2000 (the "Effective Date"), by and between Netdotworks, Corp., a Utah
corporation ("Provider"), and WordCruncher Internet Technologies Inc., a Nevada
corporation ("WordCruncher").
Recitals
A. Whereas, WordCruncher has developed and will soon an Internet
website at xxx.xxxxx.xxx wherein it will provide a searchable business portal
dedicated to news, data and services of importance to business professionals;
and
B. Whereas, Provider is a full service network systems consulting firm
with experience in network architectural design, multi-platform database
administration, network security, networks audits, Web site administration and
project management; and
C. Whereas, WordCruncher desires to engage Provider to perform certain
consulting and support services, and Provider desires to provide such services,
in accordance with the terms and conditions of this Agreement; and
D. Whereas, Provider and WordCruncher desire to set forth in writing
their mutual intent and understanding of the scope and terms of such engagement.
Agreement
Now, therefore, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings, unless the context otherwise requires. Certain other terms are defined
elsewhere in this Agreement.
1.1 "Access Terminals" mean the computer terminals located at
_____________ Draper, Utah (the "Access Terminals Site") and connected to the
System through the frame Relay.
1.2 "Agreement" means this Consulting and Support Agreement
between Provider and WordCruncher, as amended from time to time.
1.3 "Code" means all computer programming code (both object
and source, unless otherwise specified) and application program interfaces
associated with the System, as modified or enhanced from time to time by
WordCruncher, including, without limitation, all interfaces, navigational
devices, menu structures or arrangements, icons, help, operational instructions,
commands, syntax, hyper-text markup language, design, templates the literal and
non-literal expressions of ideas that operate, cause, create, direct,
manipulate, access or otherwise affect the Content whether created or licensed
from third parties by WordCruncher including, without limitation, any
copyrights, trade secrets and other intellectual or industrial property rights
therein.
1.4 "Content" means all text, graphics, animation, audio
and/or digital video components and other online materials and services included
on xxxxx.xxx, but does not include the Code.
1.5 "End-User(s)" means any person or entity that accesses
xxxxx.xxx or uses the services therein.
1.6 "Frame Relay" means the data-packet switching service used
by WordCruncher to transmit data between the System and the Access Terminals.
1.7 "Intellectual Property Right(s)" means any patent,
copyright, trademark, trade secret, trade dress, mask work, right of attribution
or integrity or other intellectual or industrial property rights or proprietary
rights arising under the laws of any jurisdiction (including, without
limitation, all claims and causes of action for infringement, misappropriation
or violation thereof and all rights in any registrations and renewals).
1.8 "Launch Date" means the first day that xxxxx.xxx provided
services become available on the Internet to End Users.
1.9 "Services" means any and all services provided by Provider
under Section 2 of this
Agreement.
1.10 "xxxxx.xxx: means the WordCruncher owned Internet site,
namely xxx.xxxxx.xxx.
1.11 "System" means all application server hardware devices
and software owned, rented or licensed by WordCruncher, used to operate
xxxxx.xxx and located at the data center of Qwest Communications International
Inc. _____________, California (the "Data Center Site"). The System does not
include the Access Terminals and the Frame Relay.
2. Scope of Services. On the terms and subject to the conditions set
forth in this Agreement, Provider shall provide to WordCruncher the following
services (collectively, the "Services"):
2.1 Obtaining Familiarity. Provider shall at least three weeks
prior to the Launch Date, provide two senior employees of Provider to be
available at the Access Terminals Site to develop a familiarity with the System
and the procedures WordCruncher has established relating to the System. These
two senior employees are billable at a rate of $10,000 per month each. Any
amount payable to Provider under this Section 2.1 shall be prorated during any
month in which this Agreement is not in effect for the entire month.
2.2 Database and Web Server Support. From and after one week
prior to the Launch Date, Provider shall (a) proactively monitor the System to
identify situations that could cause downtime of the Systems and to respond to
those issues to maintain the availability of the System for all End Users, (b)
seek ways to improve performance and reliability of the System through
optimization of the System, (c) monitor the backend connectivity between the
database, application, Web and search servers of the System to verify that the
entire process is functioning and providing the required resources for the
operation of the System, (d) monitor backups of the Content and verify the
backups' integrity through regular testing, (e) administer, and update as
reasonably necessary, a disaster recovery plan for the System and (f) assist
WordCruncher managers, developers and programmers with the implementation of
modifications to the System and the establishment of proper quality control
requirements to be met before such modifications are made.
2.2.1 Level of Support. From and after one week prior
to the Launch Date, Provider shall provide at all times of every day a database
server administrator and Web site administrator at the Access Terminals Site and
a security consultant on an as needed basis to provide the Services set forth in
Section 2.2.
2.2.2 Logs and Manuals. Provider shall keep detailed
logs of resolution steps taken by Provider to remedy any failure, or events that
could potentially create failure, of the System. Provider shall maintain and
update a manual relating to the Services set forth in Section 2.2.
3. WordCruncher's Responsibilities. WordCruncher shall, to the extent
reasonably necessary for Provider to fulfill its responsibilities under this
Agreement and at no charge to Provider, (a) provide reasonable cooperation and
assistance to Provider, (b) be responsible for all costs associated with
maintaining and upgrading the System, Access Terminals and Frame Relay, (c)
provide and be responsible for all costs associated with the Access Terminals
Site, including, but not limited to, security for such site (d) furnish
information requested by Provider, including, but not limited to, the Code, (e)
provide reasonable access to WordCruncher personnel, and (f) keep Provider
reasonably informed of the date on which WordCruncher believes the Launch Date
will occur. Any delays attributable to WordCruncher's failure to respond to
reasonable requests by Provider shall extend any and all deadlines set forth in
this Agreement for an amount of time equal to WordCruncher's delay and/or
release Provider from its obligations hereunder to the extent that Provider is
affected by such delay or failure of WordCruncher.
4. Payments.
4.1 Payment for the Services and Reimbursements. The amount to
be paid to Provider for all of the Services during the Initial Term (as
hereinafter defined) shall be $90,000 per month (with first months payment due
upon execution of the Agreement) payable on the fifteenth (15th) day of each
month during the Initial Term. In the event that WordCruncher elects to extend
the term of this Agreement for an additional two hundred forty days in
accordance with Section 5.1(a), the amount to be paid to Provider for all of the
Services during such extended period shall be $85,000 per month during the first
four months of the Extended Period (as hereinafter defined) and $80,000 per
month during the fifth month of the Extended Period through the end of the
Extended Period. In the event that WordCruncher elects to extend the term of
this Agreement on a month to month basis in accordance with Section 5.1(b), the
amount to be paid to Provider for all of the Services during such extended
period shall be $90,000 per month during the first two months of the Month to
Month Period (as hereinafter defined) and $80,000 per month during the third
month of the Month to Month Period through February 22, 2001. Any amount payable
to Provider under this Section 4.1 shall be prorated during any month in which
this Agreement is not in effect for the entire month. WordCruncher shall
reimburse Provider for actual, reasonable out-of-pocket expenses, including
travel expenses, incurred by Provider in furtherance of its obligations under
this Agreement. Without limiting the generality of the foregoing, WordCruncher
shall reimburse Provider for all expenses Provider incurs to travel to the Data
Center Site. WordCruncher shall pay such reimbursements within thirty days after
Provider has submitted to WordCruncher an invoice therefor.
4.2 Payment Terms. All payments required to be made by
WordCruncher hereunder shall be in U.S. currency. In the event of a payment
dispute between the parties hereto, WordCruncher agrees to pay any and all sums
due to Provider not in dispute without prejudice to WordCruncher's legal rights.
The fees to be paid by WordCruncher hereunder are exclusive of any and all
sales, use or other taxes or charges levied or imposed on Provider, resulting
from this Agreement or any part thereof.
5. Term and Termination.
5.1 Initial Term. This Agreement shall remain in full force
and effect for a period of one hundred twenty days form the date Provider first
provides full time support in accordance with section 2.2 and 2.2.1 above (the
"Initial Term"). WordCruncher may terminate this Agreement with or without cause
at the end of the Initial Term upon thirty days written notice to Provider prior
to the end of the Initial Term.
5.2 Option to Extend. In the event WordCruncher does not elect
to terminate this Agreement at the end of the Initial Term in accordance with
Section 5.1, WordCruncher shall have the option to extend the term of this
Agreement in full force and effect (a) for a period of an additional two hundred
forty days from the end of the Initial Term (the "Extended Term"); provided that
this Agreement may be terminated during the Extended Term in accordance with
Section 5.3 or (b) on a month to month basis until February 22, 2001 (the "Month
to Month Period").
5.3 Termination. During the Extended Term, either party may
deliver to the other party a written "Notice of Default" in the event that the
other party has breached any material provision hereunder. Such Notice of
Default must prominently contain the following sentences in capital letters:
"THIS IS A FORMAL NOTICE OF A BREACH OF CONTRACT. FAILURE TO CURE SUCH BREACH
WILL HAVE SIGNIFICANT LEGAL CONSEQUENCES." A party that has received a Notice of
Default shall have twenty days to cure the alleged breach (and, if the
defaulting party shall have commenced actions in good faith to cure such
defaults which are not susceptible of being cured during such twenty-day period,
such period shall be extended (but not in excess of twenty additional days)
while such party continues such actions to cure (the "Cure Period"). If such
party fails to cure the breach within the Cure Period, as long as such default
shall be continuing, the non-defaulting party shall have the right to either (a)
suspend its performance or payment obligations under this Agreement, (b) seek an
order of specific performance, (c) seek an award of compensatory damages, and/or
(d) terminate the Agreement.
6. Confidential Information.
6.1 Nondisclosure. If either party acquired Confidential
Information of the other, such receiving party shall maintain the
confidentiality of the disclosing party's Confidential information, shall use
such Confidential Information only for the purposes for which it is furnished
and shall not reproduce or copy it in whole or in party except for uses as
authorized in this Agreement. Without limiting the generality of the foregoing,
neither party shall use the Confidential information of the other party to
solicit the other party's customers or to otherwise compete unfairly with the
other party. Confidential Information shall mean all information of the
disclosing party which it treats as confidential or proprietary. Confidential
Information shall not include information which is or hereafter becomes
generally available to others without restriction or which is obtained by the
receiving party without violating the disclosing party's rights under this
Section 6 or any other obligation of confidentiality. The terms and conditions
of this Agreement and the Code shall constitute Confidential Information.
Provider and WordCruncher shall cooperate to request confidential treatment as
may be mutually agreed by them with respect to certain terms of this agreement
and the transactions contemplated hereby in any filing with the Securities and
Exchange Commission. Any other government authority or any securities exchange
or stock market.
6.2 Duration. With respect to all Confidential Information,
the parties' rights and obligations under this Section 6 shall remain in full
force and effect following the termination of this Agreement.
6.3 Ownership. All materials and records which constitute
Confidential Information, other than copies of this Agreement, shall be and
remain the property of, and belong exclusively to, the disclosing party, and the
receiving party agrees either to surrender possession of and turn over or to
destroy certify to the other party the destruction of all such Confidential
Information which it may possess or control upon request of the disclosing party
or upon the termination of this Agreement.
6.4 Injunctive Relief. The parties acknowledge and agree that,
in the event of a breach or threatened breach by any party of any provision of
this Section 6, the other party will have no adequate remedy in money or damages
and, accordingly, shall be entitled to an injunction against such breach.
However, no specification in this Section 6 of a specific legal or equitable
remedy shall be construed as a waiver or prohibition against any other legal or
equitable remedies in the event of a breach of this Section 6 of this Agreement.
6.5 Legal Obligation to Disclose. Each party shall be released
from its obligations under this Section 6 with respect to information which such
party is required to disclose to others pursuant to obligations imposed by law,
rule or regulation or securities exchange or stock market rule; provided,
however, that prior to any such required disclosure, such party shall, to the
extent practicable, provide written notice and consult with the other party.
7. Representations and Warranties.
7.1 General. Each party represents and warrants to the other
party that: (a) it has the right and power to perform its obligations and (b)
its performance under this Agreement will not violate any agreement or
obligation between it and a third party or any applicable law or regulation, and
does not now or will not in the future infringe upon or violate any Intellectual
Property Right or other proprietary or non-proprietary right of any third party.
7.2 Quality; Conformity. Provider warrants that each of the
Services will (a) be completed in a good and workmanlike manner consistent with
the requirements of and in accordance with standards customary in the industry
and (b) be completed by duly qualified and skilled personnel of Provider with
qualifications no less favorable than those set forth in Exhibit A hereto.
7.3 WordCruncher's Ownership Rights. WordCruncher warrants
that it owns all right, title and interest in and to the System and the Code and
any other programs, systems, data or materials provided to Provider hereunder,
unless expressly stated otherwise in Exhibit B hereto.
7.4 No Warranties. Provider makes no express or implied
warranties, including but not limited to, implied warranties of merchantability
and fitness for a particular purpose with respect to the services rendered by
its personnel or the results obtained from their work. Any of the services
provided by provider pursuant to this agreement are provided "As is" without
warranty of any kind. The entire risk as to such services is assumed by
WordCruncher. Provider disclaims all warranties either expressed or implied with
respect to the services including, but not limited to implied warranties of
merchantability, fitness for a particular purpose.
8. Limitation of Liability. In no event shall Provider be responsible
for any special, incidental, direct, indirect, punitive, reliance or
consequential damages, whether foreseeable or not, arising under this Agreement
or from any breach or partial breach of the provisions of this Agreement or
occasioned by any defect in the Services, delay in availability of the Services,
failure of the Services, interruptions or outages of the System, Frame Relay,
Access Terminals or any other cause whatsoever or rising out of any act or
omission by Provider, as applicable, its employees, servants and/or agents,
including but not limited to, damage or loss of data, property or equipment,
loss of profits or revenue, cost of capital, cost of replacement services, or
claims of End Users and other customers for service interruptions or
transmission problems.
9. Force Majeure. Neither party shall be liable for any delay or
failure to perform its obligations under this Agreement, where such delay or
failure results from any cause beyond such party's reasonable control including,
without limitation, any (a) act of God (fire, storm, floods, earthquakes, etc.),
(b) civil disturbances, (c) mechanical, electronic or communications failure, or
(d) disruption of telecommunications, power or other essential services;
provided that it gives the other party written notice thereof promptly and, in
any event within fifteen days of discovery thereof and uses its best efforts to
cure the delay if such party is responsible to cure such delay. Notwithstanding
the foregoing, either party may terminate this Agreement upon written notice to
the other party in the event such failure to performance continues unremedied
for a period of thirty days in the aggregate.
10. General.
10.1 Amendments. Any term of this Agreement may be amended and
the observance of any term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the parties.
10.2 Waivers. The failure of a party hereto at any time or
times to require performance of any provision hereof shall in no manner affect
its right at a later time to enforce the same unless the same is waived in
writing. No waiver by a party of any condition or any breach of any term,
covenant, representation or warranty contained in this Agreement shall be
effective unless in writing, and no waiver or any one or more instances shall be
deemed to be a further or continuing waiver of any such condition or breach in
other instances or a waiver of any other condition or breach of any other term,
covenant, representation or warranty. A valid waiver is limited to the specific
situation for which it was given.
10.3 Assignment. This Agreement may not be assigned, or
otherwise transferred, in whole or in part, by either party without the prior
written consent of the other party. Any attempted assignment in violation of the
foregoing will be void.
10.4 Interpretation. This Agreement has been negotiated by the
parties and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party.
10.5 Counterparts. This Agreement may be executed in two or
more counterparts, and each counterpart will be deemed an original, but all
counterparts together will constitute a single instrument.
10.6 Choice of Law; Venue. This Agreement will be governed by
and construed in accordance with the laws of the State of Utah, without regard
to principles of conflicts of law. Each party hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of any state or federal
court sitting in Salt Lake City, Utah over any suit, action or proceeding
arising out of or relating to this Agreement.
10.7 Headings. The headings contained in this Agreement are
for the purposes of convenience only and are not intended to define or limit the
contents of this Agreement.
10.8 Independent Contractors. The parties are independent
contractors and neither party is an employee, agent, servant, representative,
partner or joint venturer of the other. Neither party has the right or ability
to bind the other to any agreement with a third party or to incur any obligation
or liability on behalf of the other party without the other party's written
consent. WordCruncher shall have no direction or control of Provider, or any
person employed by or contracted for by Provider, except in the results to be
obtained.
10.9 Notices. Any notice or other communication must be in
writing, and either actually delivered (including delivery by facsimile, telex,
courier or similar means) or deposited in the United States mail in registered
or certified form, return receipt requested, postage prepaid, addressed to the
receiving party at the address stated below or to another address as such party
may indicate by notice in accordance with this Section 10.9. Notice will be
effective on the date that it is delivered or, if sent by mail in accordance
with this Section 10.9, five days after the date of mailing.
For Provider: Netdotworks, Corp.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Facsimile: 000-000-0000
For WordCruncher: WordCruncher Internet Technologies Inc.
000 X. 00000 X. Xxxxx X
Xxxxxx, XX 00000
Facsimile: 000-000-0000
10.10 Severance. Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is found to violate
a law, it will be severed from the rest of the Agreement and ignored.
10.11 Survival of Terms. Regardless of the circumstances of
termination or expiration of this Agreement or portion thereof, the provisions
of Section 6 ("Confidential Information"), 7 ("Representations and Warranties"),
8 ("Limitation of Liability") 10 ("General") will survive the termination or
expiration and continue according to their terms.
10.12 Time. Whenever reference is made in this Agreement to
"days," the reference means calendar days, not business days, unless otherwise
specified.
10.13 Attorneys' Fees. If any party hereto brings an action or
proceeding for the declaration of the rights of the parties hereunder, for
injunctive relief, or for an alleged breach or default of, or any other action
arising out of this Agreement or the transactions contemplated hereby, the
prevailing party in any such action shall be entitled to an award of reasonable
attorneys' fees and any court costs incurred in such action or proceeding, in
addition to any other damages or relief awarded, regardless of whether such
action proceeds to final judgment.
10.14 Entire Agreement. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and
mergers all prior written or oral communications, understandings, and agreements
with respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives, to be effective as of the Effective Date stated
above.
NETDOTWORKS, CORP.
By: /s/ Xxxx Xxxxx
-------------------------
Name: Xxxx Xxxxx
Title: Principle Partner
WORDCRUNCHER INTERNET TECHNOLOGIES INC.
By: /s/ M. Xxxxxx Xxxx
------------------------
Name: M. Xxxxxx Xxxx
Title: President and CEO
