LICENSE AND DISTRIBUTION AGREEMENT
This License and Distribution Agreement ("Agreement) is made and entered into
this 30th day of March, 1999 ("Effective Date"), by and between NETOPIA, INC., a
Delaware corporation, with offices at 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, XX
00000 ("Netopia"), and Nettaxi Online Communities, Inc., a Delaware corporation,
with offices at 0000 X. Xxxxxx Xxx.,
Xxxxxxxx, XX. 00000 ("Distributor").
The parties agree as follows;
1.LICENSE GRANT
----------------
Netopia grants to Distributor, and Distributor accepts from Netopia, a
royalty-bearing, nonexclusive license right:
(a) to use the site server software object code for Netopia's "Netopia
Virtual Office" product and the related template software development toolset
(the "Server Product") to host end users of the Product;
(b) to use, reproduce, manufacture, and display a Distributor-branded
version of the client software object code of Netopia's Netopia Virtual Office"
product and the related product documentation (the client object code and
related documentation being referred to herein as the "Product"); and
(c) to promote. distribute, license and otherwise market, host, maintain
and support the Product to and for end users only, under the terms of Netopia's
end user license agreement, in conjunction with the sale of Distributor's
internet-related products and services.
All rights not expressly granted are reserved by Netopia and its licensors.
Provided that Distributor shall have paid all amounts due for the annual
maintenance fee as provided in Section 2(d), Distributor's license shall extend
to all updates, revisions and new releases of the Server Product and the Product
made generally available by Netopia to its customers during the term of this
Agreement. Subject to the provisions of Section 3(a), such updates, revisions
and new releases shall be provided to Distributor with no increase in license
fee payments.
Distributor will offer a minimum of two Product services to Distributor's end
users, including the following:
Distributor's will offer without charge to end users a Product "Lite" service
that will consist of only the Product home
Page, contact page, and the picture upload functionality.
Distributor will offer to end users on a subscription cost basis a minimum of
one Product service that will consist of the
Product "Lite" service plus the added Product functionality included with the
Product site server.
2. PRICE AND PAYMENT
-----------------------
(a) Distributor agrees to pay a one time, non-refundable license fee
in the amount of $95,000 with respect to (i) the Server Product to be used by
Distributor to host end users of the Product, and (ii) the hosting by
Distributor of an unlimited number of active sites of the Product being used by
Distributor's end users. Distributor agrees to pay such license fee as follows:
(i) $35,000 within thirty (30) days after the Effective Date, (ii) $30,000
within sixty (60) days after the Effective Date, and (iii) the remaining
$30,000 within ninety (90) days after the Effective Date.
(b) Distributor further agrees to pay Netopia an on-going monthly
royalty as set forth below with respect to all end user customers subscribing
for Product services (excluding no charge subscribers to the Product "Lite"
service):
Aggregate Monthly Subscribers Royalty Due Netopia
------------------------------- ---------------------
0-5,000 $ 6.00
5,001-10,000 $ 5.00
10,001-20,000 $ 4.50
20,001-50,000 $ 3.75
50,001-100,000 $ 3.00
100.001+ $ 2.25
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(c) Notwithstanding the expiration or earlier termination of this
Agreement, Distributor agrees to pay Netopia the royalty set forth above for so
long as Distributor continues to host end user customers using the Product.
(d) Netopia agrees to pay Distributor a monthly promotional fee as set
forth below with respect to all end user customers subscribing for Product
services (excluding no charge subscribers to the Product "Lite" service):
Aggregate Monthly Subscribers Promotional Fee Due Distributor
------------------------------- ----------------------------------
0-5,000 $ 2.00
5,001-10,000 $ 1.75
10,001-20,000 $ 1.50
20,001-50,000 $ 1.25
50,001-100,000 $ 1.00
100,001+ $ 0.75
(e) Notwithstanding the expiration or earlier termination of this
Agreement, Netopia agrees to pay Distributor this promotional expense for so
long as Distributor continues to host end user customers using the Product.
(f) If at the end of the first year of this Agreement. if less than 10,000
of Distributor's end user customers are subscribing for the Product services
(excluding no charge subscribers to the Product "Lite" service), Distributor
agrees to pay Netopia an additional license fee according to the schedule set
forth below:
Aggregate Product Service Web Sites at End of First Year Additional License
--------------------------------------------------------- ------------------
Fee for Year Two
-------------------
0-2,500 $ 95,000
2,501-5,000 $ 75,000
5,001-7,500 $ 55,000
7,501-10,000 $ 40,000
10,000+ $ 0.00
(g) Distributor further agrees to pay Netopia an annual maintenance fee
in the amount of $15,000. The maintenance fee shall be payable within thirty
(30) after the Effective Date and thereafter on each anniversary of the
Effective Date Notwithstanding the expiration or earlier termination of this
Agreement, and provided that Netopia makes maintenance services generally
available to its customers, Netopia shall continue to provide Distributor all
updates, revisions and new releases of the Server Product and the Product for so
long as Distributor pays the maintenance fee.
(h) Within fifteen (15) days after the end of each calendar quarter,
Distributor will send to Netopia (i) a report setting forth the number of active
sites of the Product being hosted for Distributor's end users during the
previous calendar quarter; and (ii) a computation and payment of royalties.
Distributor may deduct from the royalty payment the amount otherwise payable by
Netopia pursuant to Section 2(d) with respect to the quarterly reporting period.
(i) Distributor agrees that it will maintain records regarding all sites of
the Product it has hosted. Distributor further agrees that it will permit
Netopia to have access, upon fifteen (15) days advance written notice, at a
mutually agreed time during Distributor's normal business hours, to audit
Distributor's records and books of account for the purpose of determining
whether the appropriate royalties have been paid. Such audits may not be
required more than once every twelve (12) months unless a prior audit has
revealed a discrepancy, and shall be conducted by a firm of certified public
accountants chosen by Netopia. If the accountants' report reveals a discrepancy,
within thirty (30) days Distributor will pay Netopia any amount determined to be
owing. Netopia will pay the cost of each audit, provided that if the audit
determines that Distributor has underpaid supplemental royalties owing to
Netopia then Distributor will pay Netopia the direct third party costs of the
audit.
(j) Except for taxes on Netopia's income, Distributor agrees to pay
any and all sale, use, value added, withholding, excise and similar taxes on
payments under this Agreement, as well as all insurance and shipping charges.
(k) Except as expressly agreed otherwise by the parties in writing, each
party will bear all of its own expenses arising from its performance of its
obligations and exercise of its rights under this Agreement, including without
limitation, the costs of occupancy, facilities, hosting hardware, work space,
utilities, payroll, management, clerical, reproduction services, supplies,
overhead, marketing and like expenses.
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3. UPGRADES, DELIVERY AND WARRANTY
--------------------------------------
(a) Promptly after execution of this Agreement, Netopia shall deliver to
Distributor an electronic master copy of the Server Product and the Product.
Thereafter, provided that Distributor shall have paid the annual maintenance
fee, Netopia shall deliver to Distributor without additional charge any and all
updates, revisions and new releases of the Server Product and the Product at
such time that Netopia makes such new releases available generally to its
customers.
(b) Netopia warrants that for ninety (90) days following delivery, unless
modified by Distributor, the Server Product and the Product will perform
substantially the functions described in the related documentation provided by
Netopia. Netopia does not warrant that the Server Product and the Product will
meet Distributor's or any end user customers' specific requirements or that its
operation will be uninterrupted or error-free. Netopia expressly is not
responsible for any problems, including any problem which otherwise would be a
breach of warranty, caused by (i) changes in computer hardware or computer
operating systems; (ii) accident, abuse, or misapplication.
(c) Netopia's entire liability and Distributor's sole remedy under the
foregoing warranty during the ninety (90) day warranty period is that Netopia,
at its sole and exclusive option, shall either use commercially reasonable
efforts to correct any reported material deviation, replace the Server Product
and the Product with a functionally comparable program, or refund all license
fees paid, in which case this Agreement and the license granted hereunder shall
terminate immediately, and Netopia shall have no further obligations to
Distributor.
4. INDEMNIFICATION FOR INFRINGEMENT
--------------------------------------
(a) Netopia represents and warrants that: (i) the Server Product and
the Product do not infringe any patent or copyright or violate the trade secret
or other proprietary rights of any third party; (ii) Netopia or Netopia's
licensors own all patents, copyrights, trade secrets and other proprietary
rights in and to the Server Product and the Product; and (iii) Netopia possesses
the legal right and authority to execute and perform this Agreement.
(b) Netopia agrees to indemnify, hold harmless, and defend ( from and
against any and all damages, costs, and expenses. including reasonable
attorneys' fees and costs, incurred in connection with a claim of a third party
which, if true, would constitute a breach of the foregoing warranties
(hereinafter "Infringement Claims"), provided Distributor notifies Netopia
promptly in writing of the existence of an Infringement Claim and grants Netopia
sole control over its defense or settlement, and Distributor provides reasonable
assistance in the defense of the same.
(c) Following notice of an Infringement Claim, Netopia shall use
commercially reasonable efforts to procure for Distributor the right to continue
to market, use and have others use, the allegedly infringing Server Product or
Product or may replace or modify the Server Product and the Product with a
functionally comparable product to make it non-infringing. In the event that
Netopia does not or cannot comply with this Section 4(c), Netopia shall refund
to Distributor all license fees paid, in which case this Agreement and the
license granted hereunder shall terminate immediately, and Netopia shall have no
further obligations to Distributor.
(d) Netopia shall have no liability for any Infringement Claim based on
Distributor's (i) use of the Server Product, and hosting or distribution of the
Product after Netopia's notice that Distributor should cease use, hosting or
distribution due to an Infringement Claim, or (ii) combination of the Server
Product or the Product with a non-Netopia program or data, if such Infringement
Claim would have been avoided by the exclusive use of the Server Product or the
Product.
(e) The provisions of this Section 4 state Netopia's entire liability to
Distributor with regard to Infringement Claims.
5. LICENSE RESTRICTIONS AND OBLIGATIONS
-------------------------------------------
(a) Distributor shall market, distribute and host use of the Product
only to and by end user customers in conjunction with the sale of Distributor's
internet-related products and services.
(b) Distributor shall not reverse engineer, decompile or disassemble the
Server Product and the Product.
(c) Distributor shall market, distribute, and host use of the Product to
and by and users only pursuant to Netopia's or Distributor's standard end user
license agreement, which may be a "click wrap" license agreement. In no event
will Distributor remove or disable any electronic acknowledgment or agreement
embedded in the Product. The limitations of liability and remedies in
Distributor's end user license agreement shall inure to the benefit of Netopia.
Distributor shall be the "Licensor" under its end user license agreement.
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6. COPYRIGHT NOTICES; TRADEMARK & PRODUCT NAME
------------------------------------------------
(a) Distributor will cause to appear on the container and labels of
each CDrom or other storage medium containing the Product, the copyright notices
that appear on the applicable release of the Product as provided to Distributor.
Distributor shall cause to appear on the title page of the documentation, and at
any other location where any copyright notice appears, the Netopia and third
party copyright or other proprietary rights notices that appear in the release
of documentation as provided to Distributor.
(b) Distributor shall market the Product under a name of Distributor's
choosing, provided, however, that Distributor agrees to use the appropriate
trademark symbol (either (R) or "tm" in a superscript) and clearly indicate
Netopia's ownership of the Product and its trademark(s) whenever the Product
name is first mentioned in any advertisement, brochure or in any other manner in
connection with the Product. In addition, Distributor shall indicate Netopia's
ownership of the Product on the screen display in such format as Netopia shall
designate. Distributor shall not at any time use any name or trademark
confusingly similar to a Netopia trademark, trade name and/or product name and
agrees that its use of such Netopia trademarks. trade names and/or product names
shall not directly or indirectly create in Distributor any right, title or
interest therein. Distributor shall not use or display any Netopia logo in its
materials or packagingwithout Netopia's prior written permission. Distributor
shall not use or imitate the trade dress of Netopia's products. Distributor
shall undertake no action that will interfere with or diminish Netopia's right,
title and/or interest in Netopia's trademark(s), trade name(s) or Product
name(s). Upon Netopia's request, Distributor also shall provide Netopia with
samples of all Distributor literature which uses Product name(s)
(c) Distributor agrees that during the term of this Agreement, it will
not market the Product using the words room". "planet", "dwp", "nvo", "mynvo",
"web center". "small business web center", "business web now". or "nextweb" as a
descriptor for the Product.
7. TERM OF AGREEMENT
-----------------------
The initial term of this Agreement shall run from the Effective Date for a
period of two (2) years. Thereafter, this Agreement shall renew automatically
for successive renewal terms of one (1) year unless either party gives notice of
termination no later than sixty (60) days before the end of the initial term
or any renewal term.
8. DEFAULT AND OBLIGATIONS UPON TERMINATION
------------------------------------------------
(a) This Agreement will terminate if either party materially breaches
this Agreement or any provision hereof, and the breach has not been cured within
thirty (30) days after notice to the breaching party. The rights and remedies of
the parties provided herein shall not be exclusive and are in addition to any
other rights and remedies provided by law or this Agreement.
(b) Within ten (10) days after termination or expiration of this Agreement,
Distributor shall cease distribution of the Product in any manner. Distributor
may retain and continue to use the Server Product to host end users that began
using the Product prior to the effective date of termination.
(c) Termination of this Agreement as a result of Distributor's default
shall result in acceleration of Distributor's obligation to pay to Netopia all
maintenance and supplemental license fees owed as of the effective date of
termination, including royalties for orders pending on the effective date of
termination,
(d) End user licenses properly granted pursuant to this Agreement and
prior to termination of this Agreement shall not be diminished or abridged by
termination. In addition, notwithstanding anything to the contrary contained
herein, Distributor may fill orders pending on the effective date of
termination, provided that such orders were placed and accepted prior to notice
of termination. As provided in and subject to the provisions of Section 2(c),
Distributor agrees to continue to pay monthly royalties to Netopia with respect
to such end users for so long as Distributor continues to host end user
customers using the Product.
(e) As provided in and subject to the provisions of Section 2(d), after the
expiration or earlier termination of this Agreement, Netopia shall continue to
provide Distributor all updates, revisions and new releases of the Server
Product and the Product for so long as Distributor pays the maintenance fee to
Netopia.
(f) All provisions of this Agreement that remain to be performed or by
their nature would be intended to continue to be applicable shall survive
termination or expiration of this Agreement.
9. LIMITATION OF LIABILITY AND REMEDY;DISCLAIMER OF WARRANTIES
---------------------------------------------------------------------
(A) LIMITATION OF LIABILITY
--------------------------------------------------------------
EXCEPT AS SET FORTH IN SECTION 4 NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, NEITHER PARTY NOR ITS AGENTS, REPRESENTATIVES OR EMPLOYEES SHALL BE
LIABLE TO THE OTHER PARTY PURSUANT TO THIS AGREEMENT FOR AMOUNTS REPRESENTING
LOSS OF REVENUES, LOSS OF PROFITS, LOSS OF BUSINESS OR INDIRECT, CONSEQUENTIAL,
SPECIAL OR PUNITIVE DAMAGES OF THE OTHER PARTY, EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. REGARDLESS OF WHETHER ANY
REMEDY PROVIDED IN THIS AGREEMENT FAILS OF ITS ESSENTIAL PURPOSE, EXCEPT AS SET
FORTH IN SECTION 4 IN NO EVENT WILL NETOPIA'S LIABILITY UNDER THIS AGREEMENT
EXCEED THE AGGREGATE AMOUNT OF PAYMENTS ACTUALLY PAID BY DISTRIBUTOR TO NETOPIA
REGARDLESS OF WHETHER A CLAIM IS BROUGHT IN TORT, CONTRACT OR OTHERWISE.
(B) DISCLAIMER OF WARRANTIES.EXCEPT AS EXPRESSLY PROVIDED HEREIN,
---------------------------
NETOPIA HEREBY SPECIFICALLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WITH
REGARD TO THE NETOPIA PRODUCT, INCLUDING ANY IMPLIED WARRANTIES OF
NONINFRINGEMENT MERCHANTABILITY OR FITNESS OF THE NETOPIA PRODUCT FOR A
PARTICULAR PURPOSE OR USE.
10. NOTICES
------------
All notices, authorizations and requests in connection with the Agreement shall
be deemed given on the day they are: (i) deposited on the United States mails,
postage prepaid, certified or registered, return receipt requested. (ii)sent by
----
air express courier, charges prepaid, and addressed to the addresses set forth
below. or (iii) sent by facsimile transmission, with confirmation of receipt.
Either party may change its address for notices by written notice to the other
party.
Distributor: ____________________
____________________
____________________
Attention: ____________________
Telephone: ____________________
FAX: ____________________
Netopia: Netopia Inc.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
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11. GOVERNING LAW; ARBITRATION; ATTORNEYS' FEES
----------------------------------------------------
(a) The rights and obligations under this Agreement shall be governed
by the laws of the State of California excluding its conflicts of law rules and
United States law and international treaties governing copyrights. The
applications to this Agreement of the United Nations Convention on Contracts for
the International Sale of Goods is hereby expressly excluded.
(b) Any dispute arising out of or relating to this Agreement shall be
referred for resolution by binding arbitration under the Commercial Arbitration
Rules of the American Arbitration Association. Any arbitration shall be
conducted by one arbitrator appointed pursuant to such rules, and shall be held
in San Francisco, California. The arbitrator shall be authorized to award
reasonably attorneys' fees and costs to the prevailing party in any arbitration.
The award of any arbitration shall be final and binding, and enforceable in any
court having jurisdiction over the party against which an award is sought to be
enforced.
12. SUPPORT
------------
(a) Distributor will be responsible for all activities associated with
customer account sign-up and billing and related database records, and template
development and deployment. At Distributor's request and subject to Netopia's
standard terms for consulting set-vices, Netopia will make available consulting
services to assist Distributor in the effective consummation of these
activities, including technical support to assist Distributor in be the Server
Product and hosting the Product, developing templates and implementing the
registration process.
(b) Distributor will be responsible for providing and maintaining all
technical equipment and be (including but not limited to server and storage
hardware, network connectivity and access to the internet via high speed access)
required to host users of the Product, for operations support, direct customer
support, and all billing and collection activities.
(c) Distributor exclusively shall be responsible for providing support
services relating to use of the Product directly to its end user customers.
Netopia will provide Distributor with backline support via e-mail to the same
extent that it provides such support to be other OEM customers.
(d) Distributor agrees to cooperate fully with Netopia with respect to any
warranty problems or bugs that may be discovered in the Product by Distributor
or its customers. Netopia will use reasonable commercial efforts to correct in
the next release of the Product any significant bugs identified by Distributor
or its customers.
(e) Each party will designate a competent technical contact who will serve
as the primary person responsible for resolution of and be contacted to resolve
technical and support issues arising under this Agreement.
13. GENERAL
------------
(a) This Agreement may not be assigned or sublicensed in whole or in
part by either party without the prior written consent of the other party, which
be shall not be withheld unreasonably, provided, however, that either party may
assign its rights and obligations hereunder without the other party's prior
written consent to a successor entity in connection with a merger or sale of
substantially all assets (a "Merger") provided that the successor agrees in
writing to perform all obligations of the assigning party. Notwithstanding the
foregoing, in the event of a Merger with an entity that is a direct competitor
of the other party, such party may terminate this Agreement effective on the
date the Merger is consummated upon prior written notice to the other party.
(b) If Distributor distributes, hosts or licenses the Product to or on
behalf of the United States of America, its agencies and/or instrumentalities
(the "Government"), the Product is provided to Distributor be Restricted Rights,
as defined in Title 27 of the Code of Federal Regulations. Distributor shall
comply with any requirements of the Government to obtain such Restricted Rights
protection, including without limitation, the placement of any restrictive
legends on the Product, related documentation, and any license agreement used in
connection with the Product.
(c) Distributor agrees that neither it nor its customers intends to or
will, directly or indirectly, export, host or transmit (i) any copies of the
Product or related documentation and technical data, or (ii) any product (or any
part thereof), process, or service that is the direct product of the Product
without the prior written consent, if required, of the Bureau of Export
Administration of the United States Department of Commerce, or such other
governmental entity as my have jurisdiction over such export or transmission.
Distributor warrants and represents that the Product is importable into any
country in or into which Distributor ships, hosts or otherwise makes available
copies of the Product.
(d) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and merges all prior and
contemporaneous communications. It shall not be modified except by a written
agreement dated subsequent to the Effective Date and signed on behalf of
Distributor and Netopia by their respective duly authorized representatives.
This Agreement shall control any provisions in purchase orders which are
inconsistent with this Agreement.
(e) Distributor agrees that the terms of this Agreement are confidential
and agrees not to disclose such terms to any third party other than its
attorneys and independent accountants. and as otherwise may be required by law
or regulation, without Netopia's prior written approval.
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(f) If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable, the remaining provisions shall remain in full force and
effect, and the provision shall be deemed amended to substitute a valid
provision so as to implement the intent of the parties.
(g) No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof, and no waiver shall be effective unless made in
writing and signed by an authorized representative of the waiving party.
(h) The section headings are intended for convenience only and shall not be
deemed to supersede or modify any provisions.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the Effective Date. All signed
copies of this Agreement shall be deemed originals.
NETOPIA, INC. NEXTTAXI ONLINE COMMUNITIES, INC.
By:____________ By:____________
Printed Name:__Alan Lefkof_____ Printed Name:__Dave Schlenz___
Title:____CEO______ Title:_MGR BUS. DEVELOPMENT____
