Xxxxxxxxxxx.xxx
Commercial Server License Agreement
Xxxxxxxxxxx.xxx ("Xxxxxxxxxxx.xxx") is in the business of developing,
marketing and distributing visual chat software, including the visual chat
software known as The Palace*. xXxxxxxxx.xxx ("iChargeit") is in the business
of providing online ecommerce websites. iChargeit desires to receive, and
Xxxxxxxxxxx.xxx desires to grant, a license for iChargeit to use
Xxxxxxxxxxx.xxx's proprietary The Palace* software. The parties therefore
agree as follows:
Section 1. Definitions
1.1 The Palace means: The Palace*, Xxxxxxxxxxx.xxx's proprietary trademark.
1.2 The Palace Client means: The Palace* Client Software, in object code
form, as described in Exhibit A to this Agreement.
1.3 The Palace Commercial Server means: The version of The Palace server
software, in object code form, that is designed for and contains special
elements for commercial customers, as identified in Exhibit A to this
Agreement.
1.4 The Palace Software Products means: The Palace Client and The Commercial
Server, collectively.
1.5 User means: an individual using The Palace Client to gain access to The
Palace Commercial Server.
Section 2. Licenses
2.1 License. Subject to the terms and conditions of this Agreement,
Xxxxxxxxxxx.xxx hereby grants to iChargeit a nonexclusive, royalty bearing,
non-assignable, nontransferable license to use The Palace Commercial Server.
2.2 Delivery of Copies. The method of delivery of copies of The Palace
Commercial Server from Xxxxxxxxxxx.xxx to iChargeit shall be by download of
copies from The Palace web site. The iChargeit will obtain a registration
number for The Palace Commercial Server directly from Xxxxxxxxxxx.xxx.
2.3 Upgrades. Xxxxxxxxxxx.xxx may, in its sole discretion, provide iChargeit
with updated, enhanced or revised versions of The Palace Commercial Server
from time to time. Within thirty (30) days of receipt of any such updated,
enhanced or revised version from Xxxxxxxxxxx.xxx, iChargeit will cease using
all previous versions of The Palace Commercial Server and use instead the
upgraded version.
2.4 Trademark License. Xxxxxxxxxxx.xxx grants to iChargeit a nonexclusive,
non-assignable, and nontransferable right to use The Palace-TM- on and in
the promotion and advertising of the iChargeit. Further, this license is
conditional upon iChargeit's compliance with the requirements of
section 3.3 below. iChargeit agrees to ensure that its use of The Palace will
meet the highest levels of quality and integrity, will not be unlawful, and
will not interfere with Xxxxxxxxxxx.xxx's rights in The Palace.
2.5 No Reverse Engineering. iChargeit agrees not to reverse engineer,
reverse compile, or otherwise disassemble The Palace Software Products.
iChargeit may not use, reproduce, sublicense, distribute or dispose of any of
The Palace Software Products, in whole or in part, other than as permitted
under this Agreement.
2.6 Exclusive Use of The Palace Client. iChargeit agrees to use only The
Palace Client software to access The Palace Commercial Server. No other
client software may be created or used to access The Palace Commercial Server.
Section 3. Intellectual Property Ownership/Labeling
3.1 Xxxxxxxxxxx.xxx Ownership. iChargeit agrees that this license does not
grant any title or other right of ownership to The Palace Software Products,
or title, license or other right of ownership to The Palace or any
Xxxxxxxxxxx.xxx trademark or work. iChargeit acknowledges that The Palace
Software Products and The Palace-TM-, and the intellectual property
contained therein, are proprietary to Xxxxxxxxxxx.xxx.
3.2 Copyright Notice. iChargeit shall not remove any copyright notices or
proprietary or other legends or notices contained on or within The Palace
Software Products, and iChargeit shall conspicuously display the copyright
notice, "-C- [insert date] Xxxxxxxxxxx.xxx" on iChargeit's The Palace web
sites, and on any copy of The Palace Commercial Server used by iChargeit.
3.3 Trademark Notice. Where iChargeit makes reference to The Palace,
iChargeit shall state: "The Palace is a registered trademark of
Xxxxxxxxxxx.xxx and is being used with express permission of its owner."
iChargeit agrees to comply with trademark guidelines that Xxxxxxxxxxx.xxx
may, from time to time, issue concerning the reproduction, use and placement
of The Palace or other Xxxxxxxxxxx.xxx marks by Xxxxxxxxxxx.xxx's licensees.
Section 4. Proper Use of Software
Licensee will not use The Palace Commercial Server or The Palace Client to
transmit or receive illegal or pornographic material, to commit tortious
acts, or to violate the legal rights of any person. Licensee will comply with
the provisions and requirements of The Digital Millennium Copyright Act, 17
U.S.C.Section.512et seq., and all other laws which govern and limit the legal
liability of Internet service providers and publishers. Licensee will not
unlawfully use any copyrighted work, trade secret, trademark, logo, or
likeness of any person in connection with The Palace Commercial Server or The
Palace Client, or in the Licensee Site.
Section 5. Joint Promotion; Revenue Sharing
The parties have discussed and agreed to execute the joint promotional,
marketing and/or revenue sharing activities set forth in Exhibit B to this
Agreement.
Section 6. Payments
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6.1 License Fee and Royalties. In consideration of the licenses granted
under this Agreement, and the other obligations herein, iChargeit will pay to
Xxxxxxxxxxx.xxx the payments set forth on Exhibit C.
6.2 Records. iChargeit shall keep accurate records of all operations
affecting payments hereunder, and shall permit Xxxxxxxxxxx.xxx or its duly
authorized agent to inspect all such records and to make copies of or
extracts from such recoreds during regular business hours throughout the term
of this Agreement and for a reasonable period of not less than 3 months
thereafter.
6.3 Payments. Not later than the last day of each January and July,
iChargeit shall furnish to Xxxxxxxxxxx.xxx a written statement of all amounts
due pursuant to Sec. 5 and Exhibit B.
Section 7. Support
7.1 Subject to Section 7.3, Xxxxxxxxxxx.xxx will, at no additional charge,
provide first level support (i.e., direct support) for The Palace Commercial
Server to the iChargeit. This support will be provided to iChargeit for a
period of one (1) year from the effective date (the "initial term"). The
parties agree that, in order for Xxxxxxxxxxx.xxx to continue providing
support after the initial term, the parties must enter into a separate
support or revenue sharing agreement.
7.2 Xxxxxxxxxxx.xxx will, at no additional charge, provide first level
support (i.e., direct support) via email for end Users, except that support
for User issues relating uniquely to the iChargeit will be provided by
iChargeit.
7.3 The parties agree that, for support requiring Xxxxxxxxxxx.xxx to
actually develop site content or code for integration, a separate consulting
agreement for one or more of our customer consultants to work with iChargeit
to plan, design, and integrate iChargeit's site must be negotiated and
entered into by the parties. Xxxxxxxxxxx.xxx charges $ 150.00/hr for
consulting time plus regular expenses.
Section 8. Right to Independent Development, Advertising
Nothing in this Agreement is intended to limit in any way the right of either
party to develop products independently, and to do business with other
parties. iChargeit understands that advertising is a method of generating
revenue for Xxxxxxxxxxx.xxx, and that Xxxxxxxxxxx.xxx will be conducting
advertising on The Palace Client which will be viewed by the Users.
Section 9. Disclaimers of Warranty and Indemnity
9.1 Xxxxxxxxxxx.xxx licenses The Palace Commercial Server to iChargeit
hereunder solely on an "As Is" basis. Xxxxxxxxxxx.xxx MAKES NO WARRANTIES
WHATSOEVER, EITHER EXPRESS OR IMPLIED, REGARDING THE PALACE SOFTWARE
PRODUCTS, INCLUDING WARRANTIES WITH RESPECT TO THEIR MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE.
9.2 Subject to the limitations set forth in Section 10, Xxxxxxxxxxx.xxx
hereby indemnifies iChargeit, its officers, directors, agents and
representatives for third party claims that The Palace Software Products are
not owned by Xxxxxxxxxxx.xxx, provided that: (i) iChargeit must promptly give
Xxxxxxxxxxx.xxx notice in writing of any such claim or action and permit
Xxxxxxxxxxx.xxx,
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through counsel of its choice, to answer and defend such claim or action;
(ii) iChargeit must provide Xxxxxxxxxxx.xxx information, assistance and
authority, at Xxxxxxxxxxx.xxx's expense, to enable Xxxxxxxxxxx.xxx to defend
such claim or action; and (iii) Xxxxxxxxxxx.xxx will not be responsible for
any settlement made by iChargeit without Xxxxxxxxxxx.xxx's written
permission. If Xxxxxxxxxxx.xxx receives notice of an alleged copyright or
trade secret infringement, or if iChargeit's use of one or more of The Palace
Software Products shall be prevented by permanent injunction for reasons of
copyright or trade secret infringement, Xxxxxxxxxxx.xxx may, at its sole
option and expense, procure for Licensee the right to continued use of The
Palace Software Products as provided hereunder, or modify The Palace Software
Products such that it is no longer infringing, or replace The Palace Software
Products with software of comparable functional capability.
9.3 Xxxxxxxxxxx.xxx shall have no liability under this Section 9 for any
claim or suit to the extent that any alleged infringement is based upon: (i)
the combination, operation, or use of The Palace Software Products with
devices, parts, or software not supplied by Xxxxxxxxxxx.xxx, (ii)
modifications made to The Palace Software Products other than those made by
Xxxxxxxxxxx.xxx or in accordance with Xxxxxxxxxxx.xxx's written instructions,
or (iii) use of The Palace Software Products other than as permitted under
this Agreement or in a manner for which they were not intended.
9.4 Xxxxxxxxxxx.xxx is not responsible for statements and/or content that
are published by iChargeit or Users utilizing The Palace Software Products.
Accordingly, Xxxxxxxxxxx.xxx shall have no liability under this Section 9 or
otherwise for any claim or suit, including costs, damages, and attorney fees,
to the extent that iChargeit is held liable to a third party for copyright
infringement, tort, defamation, unfair business practice, or criminal or
other wrongful act by virtue of publication by Users of any material
utilizing The Palace Software Products.
9.5 Indemnity for Improper Use. iChargeit shall indemnify Xxxxxxxxxxx.xxx
against any claim or liability arising out of any improper use The Palace
Server or The Palace Client as described in Section 4 above. iChargeit shall
reimburse Xxxxxxxxxxx.xxx for the costs and reasonable expenses (including
attorney's fees) incurred by Xxxxxxxxxxx.xxx in connection with any claim of
improper use of The Palace Commercial Server by iChargeit and/or its
employees, agents, representatives and users.
Section 10. Limitation of Liability
Except for indemnification for infringement as and only to the extent
provided in Section 9 of this Agreement, in no event will Xxxxxxxxxxx.xxx be
liable to iChargeit for incidental, indirect, special, or consequential
damages resulting from the use, sale or distribution of The Palace Software
Products and/or any other products, whether under a theory of contract,
warranty, tort, products liability or otherwise. In no event will the parties
be liable to each other, on any theory of tort, indemnity, infringement,
breach of contract, warranty, or equity, for damages in excess of the amounts
paid to Xxxxxxxxxxx.xxx hereunder during the initial term of this Agreement.
Section 11. Effective Date; Term
The effective date of this Agreement is the date on which the latter
signature was made to this document in the space indicated for signature
below. This Agreement will continue in force for one (1) year from the
effective date (the "initial term"). Following the initial term, this
Agreement will be automatically renewed each year, unless notice of
non-renewal is provided by one party to the
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other within ninety (90) days prior to the date of the expiration of the
one-year term (the "anniversary date"). If one party or both parties provide
notice of non-renewal, this Agreement will terminate on the anniversary date.
Either party may terminate this Agreement without cause at any time with a
written notice of termination provided with sixty (60) days notice.
Section 12. Breach and Termination
If any breach of this Agreement by either party continues after thirty (30)
days from the date of first written notice of such breach, the other party
may terminate this Agreement immediately by second written notice. The rights
of the parties under this clause are in addition to any other rights and
remedies provided by law or under this Agreement.
Section 13. Effect of Termination; Return of Xxxxxxxxxxx.xxx Programs
Upon expiration or termination of this Agreement, iChargeit shall promptly
return to Xxxxxxxxxxx.xxx all originals and copies of The Palace Commercial
Server which are in its possession in hard copy or CD or in any other media
or form, and iChargeit will stop any further use of The Palace Commercial
Server. iChargeit is not obligated however, to recall copies of The Palace
Client used by its employees, customers, or other Users. The terms and
conditions of sections 2.5, 3.1, 9, 10, and 14 will survive any expiration or
termination of this Agreement.
Section 14. General
14.1 Complete Understanding. This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof. Any amendment of
any provision of this Agreement will be effective only if in writing and
signed by both the parties.
14.2 Assignment. iChargeit may not assign this Agreement, nor may iChargeit
transfer the rights granted hereunder without the prior written consent of a
duly authorized representative of Xxxxxxxxxxx.xxx except to successor entity
as the result of sale, merger, or consolidation. Xxxxxxxxxxx.xxx may assign
this Agreement, in whole or in part.
14.3 Disclaimer of Agency. This Agreement will not be construed as creating
an agency, partnership, joint venture or any other form of legal association
between the parties, and iChargeit will not represent to the contrary,
whether expressly, by implication, by appearance or otherwise. The parties
are solely responsible for all of their own expenses incurred in exercising
their respective rights and complying with the terms and conditions of this
Agreement.
14.4 Waiver. Any delay by Xxxxxxxxxxx.xxx hereunder and/or any failure by
Xxxxxxxxxxx.xxx to exercise any right hereunder will not be effective as a
waiver unless expressly made in writing, signed by Xxxxxxxxxxx.xxx. Any
express waiver by Xxxxxxxxxxx.xxx of any right hereunder shall not be deemed
to be a waiver of any other or subsequent right.
14.5 Notices. All notices, demands or other communications with legal effect
under this Agreement shall be in writing. Any notices required under or
permitted under this Agreement shall be provided by First Class, Express
Mail, or Certified Mail, with the effective date the date of postmark or
express mail marked mailing, and shall be delivered to the following persons
at the addresses indicated:
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For Xxxxxxxxxxx.xxx:
Xxxxxxxxxxx.xxx
c/o Xxxxxxx Xxxxxxx
Manager, Business Development
00000 X. Xx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
For iChargeit:
14.6 Governing Law. This Agreement will be governed by the laws of the State
of California. Disputes arising out of this Agreement will be resolved by
binding confidential arbitration under the Commercial Arbitration Rules of
the American Arbitration Association, with the venue of the arbitration in
the County of Santa Clara, California, excepting disputes involving copyright
infringement, including any third party infringement liability, in order to
preserve Xxxxxxxxxxx.xxx's ability to obtain immediate injunctive relief.
XXXXXXXXXXX.XXX XXXXXXXXX.XXX
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx Xxxxx 5/15/99
---------------------------------- ----------------------------------
(SIGNATURE) (DATE) (SIGNATURE) (DATE)
Xxxxxxx X. Xxxxxxx Xxxxx Xxxxx
---------------------------------- ----------------------------------
(PRINTED NAME) (PRINTED NAME)
Director of Business Development CEO
---------------------------------- ----------------------------------
(TITLE) (TITLE)
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EXHIBIT A
THE PALACE SOFTWARE PRODUCTS
I) The Palace Commercial Servers.
These models are The Palace server software for commercial applications.
Included with these models of server software are the following special
elements: Instant Palace* (Xxxxxxxxxxx.xxx's Java client) and Palace
Presents* (Xxxxxxxxxxx.xxx's event management module).
There are four user capacity levels of this server:
a) The Palace Commercial Server, 100 simultaneous users
b) The Palace Commercial Server, 250 simultaneous users
c) The Palace Commercial Server, 500 simultaneous users
d) The Palace Commercial Server, 1000 simultaneous users
These servers are available for the following operating systems:
a.) Unix Sun Solaris 2.5+
b.) Unix DEC Alpha OSF/1 3.2+
c.) Unix Redhat Linux 4.0+ (x86)
d.) Windows NT Service Pack 3+
II) The Palace Client.
The Palace client software, which is either installed on client systems as a
standalone application or an Instant Palace Java applet downloaded to the end
users' Java-enabled web browser to interoperate with any of The Palace
Commercial Servers or The Palace Personal Servers.
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EXHIBIT B
JOINT MARKETING AND REVENUE SHARING ACTIVITIES
Xxxxxxxxxxx.xxx agrees to:
a.) Pay iChargeit an amount equal to 30% of net revenue generated through
advertisement sales to Palace server site traffic, payable quarterly.
Advertisments are served by Xxxxxxxxxxx.xxx to users of The Palace Client
software. Electric Comunities will track the advertisments being served to
Palace Client users who are visiting the iChargeit Palace Server. Net revenue
is determined by reducing the gross revenue to Xxxxxxxxxxx.xxx (which already
reflects any ad rep firm fees, if applicable) by the cost of serving ads,
which this agreement sets as $2 CPM. (For example, if Xxxxxxxxxxx.xxx sells
ads, at $20 CPM, which are delivered to users as they visit the iChargeit
Palace Server, $2 goes to the cost of the serving the ad. Of the remaining
$18 CPM, 30% of this will be paid to iChargeit.)
b.) Grant iChargeit the right to sell advertisment banner impressions from
any unsold inventory of advertisements being served by Xxxxxxxxxxx.xxx to The
Palace users.
c.) Grant iChargeit the right to refuse any advertisers from being served to
The Palace users visiting the iChargeit Palace server. iChargeit acknowledges
that Xxxxxxxxxxx.xxx's business is based on advertisement sales and agrees to
exercise this right within reasonable limits. iChargeit will provide
Xxxxxxxxxxx.xxx with a list of specific disallowed advertisers to faciliate
this clause. Xxxxxxxxxxx.xxx will remove any already-running ads within 5
business days of a written request to do so from iChargeit.
d.) Provide a listing of iChargeit's The Palace Server on The Palace
Directory Page of The Palace website.
iChargeit agrees to:
a.) Pay Xxxxxxxxxxx.xxx an amount equal to $2 CPM plus 30% of net revenue
generated through advertisement sales to Palace server site traffic, payable
quarterly. (For example, if iChargeit sells ads, at $20 CPM, which
Xxxxxxxxxxx.xxx serves to Users of The Palace Client software as they visit
the iChargeit Palace Server or to any other Palace, $2 is paid to
Xxxxxxxxxxx.xxx to cover the cost of the serving the ad. Of the remaining $18
CPM, 30% of this will be paid to Xxxxxxxxxxx.xxx.)
b.) Promote the download of The Palace Standalone Client software on each of
its websites that has a reference to The Palace Server operated by iChargeit.
c.) Use the following URL whenever linking to the download or registration
site for The Palace Standalone Client software:
xxxx://xxx.xxxxxxxxx.xxx/xxx/xxxxxxxxx/
d.) Use The Palace as its sole chat technology.
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EXHIBIT C
PAYMENT SCHEDULE
The cost of this server license is:
100 User The Palace Commercial Server $ 5,000.00
This license gives iChargeit the right to purchase a license upgrade within
90 (ninety) days of the effective date of this license, as defined in Section
11, at the following upgrade licensing fees:
250 User The Palace Commercial Server $ 4,000
500 User The Palace Commercial Server $ 6,500
1000 User The Palace Commercial Server $ 12,000
2500 User Configuration $ 24,000
5000 User Configuration $ 35,000
After 90 days, the cost of upgrades will follow Xxxxxxxxxxx.xxx's standard
upgrade licensing policy:
250 User The Palace Commercial Server $ 5,000
500 User The Palace Commercial Server $ 10,000
1000 User The Palace Commercial Server $ 15,000
2500 User Configuration $ 35,000
5000 User Configuration $ 40,000
Xxxxxxxxxxx.xxx will create a customized version of The Palace Client
software, in PC, Mac 68k, and Mac PowerPC formats. There is no additional
cost to iChargeit for this service. This customization, the details of which
are to be determined and agreed upon by the both parties, may include:
- Custom Default Entry Palace
- Custom Bookmarks
- Custom Graphics and Sounds
- Custom Registration URL Link for tracking of The Palace client user
registrations
- Custom Palace prop file
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