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EXHIBIT 10.04
REVENUE SHARING AGREEMENT
This Revenue Sharing Agreement (the "Agreement") is made and entered
into as of this 18th day of February, 2000 (the "Effective Date"), by and
between Summus, Ltd., a Delaware corporation ("Licensor"), and High Speed Net
Solutions, Inc., a Florida corporation ("Customer"), with reference to the
following facts and circumstances:
A. Licensor has developed certain software programs and anticipates developing
certain software programs and will promote licensing of such Licensed Software
as described in the Software License Agreement executed simultaneously with this
Agreement.
B. Licensor and Customer envision a close working relationship with respect to
Licensor's software such that Customer anticipates regularly: (i) acting as a
beta-version user of Licensor's software; (ii) providing prospective licensees
for Licensor's software; and (iii) providing references for or demonstrations of
Licensor's software. Licensor desires to create an incentive for Customer to
participate in these activities and as such Customer desires that Licensor share
with Customer revenues received from third party users of Licensor's software
and pay Customer for certain agency activities.
C. Therefore, to effect these incentives, Licensor and Customer have entered
into this Agreement simultaneously with executing the Software License
Agreement, and Customer desires to receive such payments and revenue sharing in
consideration for Customer's efforts on behalf of Licensor and on the terms and
conditions contained in this Agreement.
NOW THEREFORE, based on the above premises and in consideration of the
mutual covenants and agreements contained herein, the parties agree as follows:
1. DEFINITIONS.
As used herein, the following terms, when used in the singular, plural,
or possessive form shall have the respective meanings set forth below:
1.1 "Agency Payment" shall have the meaning given in Section 2.2 of
this Agreement.
1.2 "Licensed Software" shall have the meaning given in the Software
License Agreement executed simultaneously with this Agreement.
1.3 "Quarterly Period" shall mean each calendar quarter (i.e., a period
of three (3) consecutive calendar months commencing on January 1, April 1, July
1 or October 1 of each year) during the term of this Agreement, with the
exception of the first Quarterly Period, which shall commence on the Effective
Date and end on the last day of that calendar quarter. The last Quarterly Period
shall end on the date of expiration or termination of this Agreement, thereby
possibly comprising fewer than three (3) months.
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1.4 "Related Agreements" shall mean agreements between Licensor and
Customer related to or incorporated by the MLA and agreements based on either
Licensor or Customer's rights and obligations under the MLA, including, but not
limited to, the Letter Agreement incorporated by the MLA and any agreements
relating to or arising from business with Samsung or its affiliates.
1.5 "Revenue Sharing Payment" shall have the meaning given in Section
2.1 of this Agreement.
1.6 "Samsung Payment" shall have the meaning given in Section 2.3 of
this Agreement.
2. LICENSOR PAYMENTS TO CUSTOMER.
2.1 REVENUE SHARING. During the term of this Agreement, Licensor shall
pay to Customer twenty percent (20%) of all revenue received by Licensor in
connection with (i) licensing of the Licensed Software, or of the product
functionality contained in the Licensed Software, for creation and/or delivery
of Rich Media Content, for service bureau use or (ii) use by Licensor or any
affiliate of Licensor of the Licenseed Software, or the product functionality
contained in the Licensed Software, for the creation and/or delivery of Rich
Media content for service bureau use by Licensor or any affiliate of Licensor
("Revenue Sharing Payment"). For this purpose, "service bureau use" shall mean
use to provide Designated Activities (as defined in the Software License
Agreement) to or for the benefit of a licensee's unaffiliated customers;
provided, however, that service bureau use shall not include use by enterprise
licensees. An "enterprise licensee" is a licensed entity that provides the
Designated Activities on a not-for-profit basis in furtherance of the entity's
promotional goals, or those of its affiliates, and does not include the
circumstance where an entity provides the Designated Activities for an
unaffiliated third party. "Service bureau use" includes circumstances where a
licensee the Designated Activities through use of the Licensed Software, unless
the licensee and the outsource services provider are part of the same
wholly-owned corporate group. For the purpose of this Section 2.1, "affiliate"
is a person or entity that directly or indirectly controls, is controlled by, or
is under common control with a specified person.
2.2 AGENCY PAYMENTS. During the term of this Agreement, upon Customer
identifying to Licensor a qualified prospect that subsequently becomes a new
customer of Licensor within one year of such identification, Licensor shall pay
to Customer fifteen percent (15%) of all revenue received by Licensor until the
end of the first year of revenue receipts for such new customer (the "Agency
Payment"). The first year of revenue receipts shall be the time period beginning
on the date when Licensor signs an agreement with such new customer, and ending
on the first anniversary of such date.
2.3 SAMSUNG PAYMENTS. During the term of this Agreement, Licensor shall
pay to Customer the percentage, as given in the table below for progressive
years under this Agreement, of all revenues accruing to Licensor, excluding
non-recurring expenses, from business activity arising from Samsung or its
affiliates, including but not limited to, license fees, maintenance fees,
support fees, and royalties (the "Samsung Payment").
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YEAR PERCENTAGE PAID TO CUSTOMER
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1 Fifty Percent (50%)
2 Fifty Percent (50%)
3 Forty Percent (40%)
4 through 6 Twenty Percent (20%)
2.4 QUARTERLY RECONCILIATION. Licensor shall reconcile accounts each
Quarterly Period and shall pay the Revenue Sharing Payment, Agency Payment, and
Samsung Payment within one month following the end of the Quarterly Period. [TO
FACILITATE TRANSACTING SUCH PAYMENTS, LICENSOR SHALL KEEP ACCOUNTING RECORDS
ACCORDING TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO DOCUMENT ALL REVENUES
OF LICENSOR AND TO ALLOCATE GROSS REVENUES AMONG REVENUES GENERATED WITH THE
LICENSED SOFTWARE AND OTHER GROSS REVENUES.] Customer or its authorized agent or
representative shall have the right, at its expense and upon at least forty-five
(45) business days written notice to Licensor and during Licensor's normal
business hours and no more often than once during any twelve (12) month period,
to enter Licensor's premises for purposes of auditing all books of account,
documents, records, papers, and files, whether in printed or electronic form,
relating to Licensor's revenues from the Licensed Software, and Licensor shall
make all such items available to Customer or its authorized agent or
representative for that purpose. If such audit reveals that sufficient payments
have not been paid by Licensor, then Licensor shall pay any additional amount
found to be owed to Customer. Customer shall bear the expense of any such audit
unless such audit reveals that the payments actually paid by Customer in any
twelve (12) month period are less than what should have been paid to Customer by
an amount greater than five percent (5%) of the amount actually paid, in which
event the costs of such audit shall be borne by Licensor.
3. TERMINATION OF MLA AND RELATED AGREEMENTS.
3.1 TERMINATION OF PRIOR AGREEMENTS. By this Agreement and the Software
License Agreement, Licensor and Customer specifically terminate the MLA and the
Related Agreements.
4. LIMITATION OF LIABILITY.
4.1 EXCLUDED LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY , ITS AFFILIATES OR ANY THIRD PARTY BENEFICIARY FOR CONSEQUENTIAL DAMAGES
OF ANY KIND (INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS INTERRUPTION, OR LOSS OF BUSINESS INFORMATION), REGARDLESS OF WHETHER
THE PARTY LIABLE OR ALLEGEDLY LIABLE WAS ADVISED, HAD REASON TO KNOW, OR IN FACT
KNEW OF THE POSSIBILITY THEREOF.
5. CONFIDENTIALITY. This Article 5 sets forth the procedures by which
information regarded as confidential by one party hereto (a "Disclosing Party")
may be disclosed to the other party hereto (the "Receiving Party").
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5.1 GENERAL REQUIREMENTS AND EXCLUSIONS. During the term of this
Agreement and at all times thereafter, the parties will not, except as permitted
by the terms of this Agreements, disclose or use, either for itself or for the
benefit of any third party (whether in competition with Licensor or Customer or
otherwise), any confidential information of the other party or its business or
affairs, nor will any party assist any person or entity other than the
Disclosing Party to secure any benefit from such confidential information. Any
oral, written, graphic, or electronically transmitted information not generally
available to the public shall be construed as confidential for purposes of this
Agreement, which information shall include, without limitation, information
relating to a Disclosing Party's products, processes, techniques, technology,
formulas, research data, passwords, passcodes, user identification numbers,
e-mail addresses, programming methods, know-how, trade secrets, customers and
suppliers, information relating to sales and profits, other financial data, and
the terms and conditions of this Agreements. All such information shall be
collectively referred to herein as "Confidential Information." The provisions of
this paragraph, however, shall not prevent the Receiving Party from use or
disclosure of information (i) as necessary in the ordinary course of such
party's performance under this Agreement, (ii) that is in the public domain
(other than information in the public domain as a result of a violation of this
Agreement by the Receiving Party), (iii) that the Receiving Party can
demonstrate that it acquired outside of its affiliation with the disclosing
Party from a third party in rightful possession of such information and who was
not prohibited from disclosing such information, or (iv) disclosure of which is
required by law or court order. In the event that the Receiving Party is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose Confidential Information, the Receiving Party will
notify the Disclosing Party promptly of such request or requirement so that the
Disclosing Party may seek an appropriate protective order, and if, in the
absence of a protective order, the Receiving Party is, on the advice of counsel,
compelled to disclose any Confidential Information to any tribunal or else stand
liable for contempt, the Receiving Party may disclose Confidential Information
to such tribunal; provided, however, that the Receiving Party shall use its best
efforts to obtain an order or other assurance that confidential treatment will
be accorded to such portion of the Confidential Information required to be
disclosed. Customer shall be entitled to file this Agreement as an exhibit to
one or more filings with the SEC, as recommended by its counsel, in which case
Customer shall consult with Licensor concerning the redaction of terms of this
Agreement under a confidentiality request associated with such filing, but the
implementation of any such redaction shall be at the SEC's discretion. The
obligation of confidentiality stated above shall survive termination of this
Agreement.
6. TERM AND TERMINATION.
6.1 TERM. This Agreement shall become effective as of the Effective
Date hereof and shall continue in force until the Termination, for any reason,
of the software license agreement executed of even date herewith.
6.2 DEFAULT. Subject to the dispute resolution procedures set forth in
Exhibit 0, the non-defaulting party shall be entitled to terminate this
Agreement at any time prior to the expiration of its term upon written notice to
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the defaulting party if the defaulting party breaches any material obligation
hereunder, which breach continues or remains uncured for a period of thirty (30)
days after receipt of written notice from the non-defaulting party, unless such
breach cannot by its nature be cured, in which event the defaulting party shall
be deemed in default hereof upon the occurrence of such breach.
7. GENERAL PROVISIONS.
7.1 CONSTRUCTION AND VALIDITY; DISPUTE RESOLUTION. This Agreement shall
be construed and enforced in accordance with the laws of the State of North
Carolina (including its Uniform Commercial Code), but without giving effect to
its laws or rules relating to conflicts of laws or to the United Nations
Convention on Contracts for the International Sale of Goods. In the event of any
conflict or inconsistency between the provisions of this Agreement and the
provisions of any Exhibit annexed hereto or any document referred to in this
Agreement or in any Exhibit hereto, the provisions of this Agreement shall
prevail and govern its interpretation and construction. In the event of any
dispute or controversy arising under or in connection with this Agreement, the
dispute resolution procedures set forth in an exhibit to the Software License
Agreement shall be followed. Pending resolution of any such dispute or
controversy, both parties will continue their performance under this Agreement
including but not limited to the payment of all amounts due to the other party
that are not in dispute (provided that Customer may make such payments under
protest, reserving any rights it may have to seek reimbursement from Licensor).
7.2 ATTORNEYS' FEES. In the event of any dispute, controversy,
litigation or other proceedings (including proceedings in bankruptcy) concerning
or related to this Agreement, the prevailing party shall be entitled to
reimbursement of all of its costs, including reasonable attorney and expert
witnesses fees and costs (including the reasonable value of the services of
in-house counsel), and court or arbitration fees and costs.
7.3 VENUE. Any dispute or controversy arising under or in connection
with this Agreement shall be settled in Wake County, North Carolina. The parties
hereby generally submit to the in personam jurisdiction of the Superior Court of
the State of North Carolina and the Federal District Court for the Eastern
District of North Carolina.
7.4 NO JOINT VENTURE. Nothing contained in this Agreement shall be
construed as creating a joint venture, partnership or employment relationship
among the parties hereto nor shall any party have the right, power or authority
to create any obligation or duty, express or implied, on behalf of any other
party.
7.5 ASSIGNMENT. Neither party hereto shall assign any of its rights
under this Agreement nor delegate its duties hereunder to another person or
legal entity without the prior written consent of the other party, which consent
shall not be unreasonably withheld. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their respective trustees, successors,
permitted assigns and legal representatives.
7.6 NON-WAIVER. A failure of any party hereto to exercise any right
given to it hereunder, or to insist upon strict compliance by another party of
any obligation hereunder, shall not constitute a waiver of the first party's
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right to exercise such a right, or to exact compliance with the terms
hereof. Moreover, waiver by any party of a particular default by another party
shall not be deemed a continuing waiver so as to impair the aggrieved party's
rights in respect to any subsequent default of the same or a different nature.
7.7 CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used in this Agreement are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
7.8 SURVIVAL. Any terms or conditions of this Agreement which by their
express terms extend beyond termination or expiration of this Agreement or which
by their nature should so extend shall survive and continue in full force and
effect after any termination or expiration of this Agreement.
7.9 AUTHORIZATION. Customer and Licensor represent that all necessary
corporate proceedings have been taken by each party to authorize the
transactions contemplated by this Agreement and that this Agreement has been
executed by a duly-authorized representative of each party and upon such
execution shall constitute a valid and binding Agreement.
7.10 NOTICES. All notices or other communications that shall or may be
given pursuant to this Agreement, shall be in writing, in English, shall be sent
by certified or registered air mail with postage prepaid, return receipt
requested, by facsimile, telex or cable communication, or by hand delivery. Such
communications shall be deemed given and received upon confirmation of receipt,
if sent by facsimile, telex, or cable communication; or upon delivery if hand
delivered; or upon receipt of mailing, if sent by certified or registered mail,
and shall be addressed to the parties to such addresses as the parties may
designate in writing from time to time.
7.11 INVALIDITY. Should any of the non-material provisions of this
Agreement, or portions thereof, be found invalid by any court of competent
jurisdiction, the remainder of this Agreement shall nonetheless remain in full
force and effect.
7.12 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.13 ENTIRE AGREEMENT. This Agreement and the Master Agreement,
Software License Agreement and Software Maintenance Agreement contain the full
understanding of the parties and supersedes all prior or contemporaneous
agreements and understandings, written or oral, between the parties with respect
to the subject matter hereof; and there are no representations, warranties,
agreements or understandings other than those expressly contained herein. No
alteration, modification, variation or waiver of this Agreement, or any of the
provisions hereof shall be effective unless executed by both parties in writing.
(The remainder of this page is left intentionally blank.)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the dates indicated below.
SUMMUS, LTD. ("LICENSOR") HIGH SPEED NET SOLUTIONS, INC. ("CUSTOMER")
By: /s/ Xx. Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxx
(Signature) (Signature)
Date: March 13, 2000 Date: February 18, 2000
Name: Xx. Xxxxx Xxxxxxx Name: Xxxxxx X. Xxx
Title: CEO Title: Acting President and CEO,
Executive Vice President
