EXHIBIT 10.3
LIVEWARE5, INC. AGREEMENT FOR SERVICES BETWEEN
LIVEWARE5, INC. AND XXXXXXXXXXXXXXXX.XXX, INC.
DATED MARCH 24, 2000
LIVEware5, Inc. Agreement for Services
This service agreement entered this 24th day of March 2000 by and between
LIVEware5 Inc., an Iowa corporation with principle offices at 000 Xxxxxx Xxx.
XX, Xxxxx 000 Xxxxx Xxxxxx, XX 00000, hereafter referred to as LW5 and
xxxxxxxxxxxxxxxx.xxx, Inc., a corporation with principle offices at 0000 Xxxx
Xxxxx Xxxxxxx, Xxxxx 000 Xxxxxxx Xxxxx, XX 00000, hereafter referred to as
Reseller.
Whereas LW5 is a provider of online communication and learning technologies &
services including but not limited to online application for rich media
distribution and user collaboration, content development and production, and
hosting and network services; and
Whereas Reseller is a corporation that provides communication and distribution
channels to its' customers; and
Whereas RESELLER desires to use LW5's products & services for the development,
management and delivery of streaming media-based programming;
NOW THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1) SCOPE OF WORK
The scope of work for deliverables is contained in its' entirety in this
"Agreement" (Agreement, Addendum A, and signed Customer Requirements Documents).
This is the complete understanding between the parties of deliverables being
contracted for under the terms of this Agreement. LW5 is committed to providing
these products and services, as described in this Agreement, within the
specified timeframe to RESELLER. RESELLER is committed to providing the
necessary internal support to LW5 to allow for the timely completion. Changes to
the scope of work are only binding when in writing and accepted by signature of
both parties.
2) LICENSE AND RIGHTS
LW5 retains all licenses, title and rights to the services, service marks,
trademarks, and other materials that are provided to enable the delivery of
programs to RESELLER customers. This includes Intelligent Learning Network-TM-,
Question Retrieval System-TM-, KnowledgePortal-TM- and other marks and products
owned by LW5.
RESELLER retains all licenses, titles, and rights to the materials, service
marks and trademarks developed by or exclusively for the RESELLER that are
included on the RESELLER KnowledgePortal-TM-. RESELLER hereby acknowledges that
they have rights and ownership of the materials provided to LW5 for distribution
on the KnowledgePortal-TM-. If these materials are owned or delivered by a third
party, RESELLER assumes all responsibility for obtaining written authorization
as required from third parties, including speakers, affiliate corporations or
other parties to transmit these materials electronically via videoconferencing,
Internet delivery or other delivery technologies.
3) MARKETING & PROMOTION
RESELLER is responsible for promoting the use of KnowledgePortal-TM- and LW5
services within their customer base and creating demand for streaming media
programming. RESELLER will use its' best efforts to build awareness and interest
for the services. LW5 will provide RESELLER with start up materials for customer
advertising of the products and services. RESELLER will then make copies and
provide their own materials to customers for the services. LW5 will provide
RESELLER with logos and other electronic artwork.
1
LW5 is allowed to name RESELLER as a customer in LW5 marketing and presentation
materials, but not RESELLER's customer's unless specifically stated in writing
by RESELLER.
4) NONEXCLUSIVE ARRANGEMENT
Nothing in this Agreement shall be construed to prevent either party from
entering into arrangements similar to this Agreement with any other entities.
Nothing in this Agreement shall be construed to prevent LW5 from providing
Services to any other entities.
5) FEE SCHEDULE
The fees to be paid for products delivered and services performed under this
agreement are detailed in Addendum A- Scope of Work and/or any Custom Exhibit
created and agreed to by both parties for unique customer requirements.
6) PAYMENT TERMS
RESELLER agrees to pay LW5 as follows:
Creation of RESELLER Knowledge Portal: Upon signing contract
Creation of RESELLER Customer Knowledge Portal: Upon signing contract
Hosting Charges: Net 30 days; invoiced monthly.
Streaming Participation (video streaming) Charges: Net 30 days; invoiced
monthly.
Application Development Services: 50% upfront; 50% at billed completion, net 30
days.
Consulting Fees: Net 30 days; invoiced monthly.
The streaming service charges will be based on actual hours of usage and will be
accompanied by a detailed report of users, the programs they accessed and
participation for each KnowledgePortal.
LW5 will invoice RESELLER for Services and other expenses to be paid by RESELLER
within ten (10) business days after the end of each month. It is understood that
RESELLER will be a direct customer of LIVEware5 and will be responsible for
payment of services that LW5 provides to RESELLER for RESELLER and RESELLER
customers.
7) REIMBURSEMENT FOR EXPENSES
If RESELLER requests LW5 to undertake activities in the marketing and
performance of services which are not typically provided to other RESELLERS or
customers of LW5 without charge, RESELLER shall reimburse LW5 for all reasonable
expenses incurred by LW5 in the performance of such activities. RESELLER will be
notified by LW5 of activities that would be considered not typical and would
result in incremental expense recovery. LW5 will provide RESELLER an estimate of
those expenses in writing prior to the commencement of the activity.
8) TERMS AND CONDITIONS
The term of this agreement is one (1) years from acceptance date and will
continue in effect until the earlier of:
a) Expiration or
b) mutual agreement of parties to termination, expressed in writing or
c) a material breach by either party, which the breaching party fails to cure
within thirty (30) days after receipt of written notice.
This agreement shall be automatically renewed for successive one (1) year terms
unless written notice is given by
2
either party within sixty (60) days prior to the anniversary date.
9) TERMINATION
The Agreement shall terminate upon the first to occur of (a) the expiration of
this agreement as outlined herein or (b) the other party's breach of material
provision of this Agreement, which breach has not been cured to the reasonable
satisfaction of the non-breaching party within thirty (30) days after the
non-breaching party notifies the breaching party, in writing, of such breach, or
(c) as otherwise provided in this Agreement. This agreement can be terminated
with ninety (90) days written notice by either party. All fees due shall be paid
immediately upon termination and any costs incurred to transfer materials to
RESELLER will be invoiced within sixty (60) days thereafter.
10) INDEMNIFICATION
RESELLER and LW5 each shall indemnify, defend and hold harmless the other from
and against any and all claims for physical property damage, physical personal
injury or wrongful death to the extent that such claims arise out of the
negligence or willful misconduct of the respective indemnifying party, its
employees, agents, affiliates or contractors in connection with the provision of
Services or other performance pursuant to this Agreement. The indemnified party
shall promptly notify the indemnifying party in writing of any such claims.
11) REPRESENTATIONS AND WARRANTIES
RESELLER hereby warrants, represents and agrees that:
a) RESELLER has complete power and authority to enter into this agreement.
b) RESELLER is under no restrictions or prohibition with respect to its rights
to execute this contract and with its rights to perform the terms and
provisions hereof.
c) RESELLER will pay all sums due third parties that provide materials or
deliver programs materials or other products and services provided to LW5.
RESELLER shall not make nor permit its employees, agents or affiliates to make,
any misrepresentations as to the capabilities, specifications or functionality
of the Services, or any warranties with respect to the products and services
other than those that are authorized by LW5 in writing.
LW5 and RESELLER desire to enter into an arrangement whereby RESELLER will
engage its sales force to promote to its customers and prospective customers
(collectively termed "Customers") the streaming media services of LW5, in
exchange for the consideration and subject to the terms and conditions set forth
herein. It is expressly understood and agreed that the agency created herein is
a limited agency and RESELLER shall have only those rights and responsibilities
specifically described in this Agreement. No agency rights or responsibilities
shall arise by operation of law. RESELLER is not a legal representative of LW5
and LW5 is not a legal representative of RESELLER. Neither party is granted by
the terms or execution of this Agreement, or otherwise, any right or authority
to assume or create any responsibility on behalf of, or in the name of, the
other, or to bind in any manner what-so-ever.
LIVEware5 hereby warrants, represents and agrees that:
a) LW5 has the complete power and authority to enter into this agreement.
b) LW5 is under no restrictions or prohibition with respect to its rights to
execute this contract and with its rights to perform the terms and
provisions hereof.
LW5 represents and warrants that the provision of services hereunder will not
infringe upon any United States
3
patents, copyrights, trademarks or other proprietary rights of third parties.
LW5 shall indemnify, defend and hold harmless RESELLER from and against any
claims for
infringement upon any United States patents, copyrights, trademarks or other
proprietary rights brought by third parties with respect to Services; provided,
however, that RESELLER promptly notifies LW5 of any such claim.
THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDLING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE.
12. CONFIDENTIALITY
The terms of this agreement are "Confidential" and, except as required by law,
shall not be disclosed to any other party without the written consent of the
non-disclosing party. Each party shall preserve in strict confidence information
such as trade secrets, strategic plans, proprietary information and other
sensitive information obtained in the course of execution of this agreement. For
a period of one (1) years after the termination or expiration of this Agreement
LW5 and RESELLER will not directly approach the other parties customers nor will
either party share confidential information that is not available publicly
during that time. In handling the other party's customer, LW5 will ensure all
information shared during the execution of Services that all information made
available is considered confidential.
13. FORCE MAJEURE
Neither LW5 or RESELLER shall be held liable for any delay or failure to perform
any part of this Agreement (other than payment of amounts due hereunder) for any
cause beyond its control and without its fault or negligence, including but not
limited to acts of civil or military authority, government regulations,
embargoes, epidemics, wars, terrorist acts, riots, insurrections, fires,
explosions, nuclear accidents, strikes, extended power blackouts, natural
disasters or any law, regulation or of any government agency or court of
competent jurisdiction affecting either of the parties hereto in the performance
of their obligations hereunder. The parties' obligations, which cannot be
performed because of the force majeure event, will be suspended until the force
majeure is resolved. If such contingency occurs and continues for more than five
(5) business days, the non-delaying party may, without any liability or
associated costs to the other party, terminate the Services requested or any
portions thereof relating to the affected Services.
14. LIMITATION OF LIABILITY
NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR THROUGH THE OTHER FOR ANY
INDIRECT, CONSEQUENTIAL, SPECIAL, INCIDENTAL, PUNITIVE OR SIMILAR DAMAGES, OR
FOR ANY LOST PROFITS OR BUSINESS OF ANY KIND OR NATURE WHATSOVERVER, REGARDLESS
OF THE FORM OF ACTION AND WHETHER EITHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. WITH RESPECT TO THIRD PARTIES THAT USE SERVICES
THROUGH RESELLER, RESELLER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS LW5 FROM
AND AGAINST ANY CLAIMS FOR SUCH DAMAGES BROUGHT BY SUCH THIRD PARTIES. IN NO
EVENT WILL LW5'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID BY
RESELLER PURSUANT TO THIS AGREEMENT.
15. MISCELLANEOUS
a. NOTICES
All notices, reports, records or other communications which are required or
permitted to be given to the parties
4
under this Agreement shall be sufficient in all respects if given in writing and
delivered in person, by facsimile, email, by overnight courier or by registered
or certified mail, postage prepaid, return receipt requested, to the receiving
party at the address set forth below.
Notice shall be deemed given on the date of delivery, in the case of personal
delivery or telecopy, or on the delivery or refusal date, as specified on the
return receipt, in the case of overnight courier or registered mail.
If to LW5: LIVEware 5, Inc.
Xx. Xxxxxxxxx Xxxxxxx
XX Xxx 00000
Xxxxx Xxxxxx, XX 00000
319/298-3455
319/000-0000 (fax)
With copy to: Xxxxxxxxxxxxx & Ingersoll
Xx. Xxxx Xxxxx
000 Xxxxxxx Xxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
319/365-9461
If to RESELLER: Xxxxxxxxxxxxxxxx.xxx, Inc.
0000 X. Xxxxx Xxxxxxx, Xxxxx 00
Xxxxxxx Xxxxx, XX 00000
949/645-9970
949/000-0000 (fax)
With Copy to: Xxxxxxx & Beam
Attn: Xxxxx Xxxxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
949/453-0300
949/9614 (fax)
b. APPLICABLE LAW
This agreement and its validity, construction and performance shall be governed
in all respects by the internal laws of the State of Iowa. All controversies
arising under this agreement shall be litigated in a court of competent
jurisdiction within the County of Linn, State of Iowa, and in no other venue.
c. SEVERABILITY
If any term or provision of this Agreement shall, to any extent, be determined
to be invalid or unenforceable by court or body of competent jurisdiction, then
(i) both parties shall be relieved of all obligations arising under such
provision and this Agreement shall be deemed amended by modifying such provision
to the extent necessary to make it valid and enforceable while preserving its
intent, and (ii) the remainder of this Agreement shall be valid and enforceable.
d. ASSIGNMENT
Neither party may assign this Agreement without the other party's prior written
consent not to be unreasonably withheld: provided, however, that any transfer or
issuance of capital stock shall not be deemed an assignment for
5
purposes herein, and further provided that LW5 may assign this Agreement to an
affiliate, without prior consent.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed
as of the date first set forth above.
Xxxxxxxxxxxxxxxx.xxx LIVEWARE5, INC.
BY: /s/ Xxxxxxx Xxxxxx BY: /s/ Xxxxx Xxxxxxx
----------------------------------- ---------------------
Date: 2/24/00 Date: 3/24/00
----------------------------------- ---------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxx Xxxxxxx
----------------------------------- ---------------------
Title: Vice President Business Development Title: President
----------------------------------- ---------------------
6
ADDENDUM A
SCOPE OF WORK
CREATION OF "KNOWLEDGEPORTAL" AND THREADED DISCUSSION
LW5 will provide a URL address to Reseller to create a link from the Reseller or
Reseller's Customer site to LIVEware5's KnowledgePortal site. This site will be
customized with Reseller logo or customer logo, and Internet links, program
listings and descriptions. The initial set-up will be done by LW5. The link
establishes the interface through which customers will participate in streaming
media based programs.
------------------------------------------- ----------------------------- -----------------------------------
KNOWLEDGEPORTAL-TM- MSRP Reseller Cost
------------------------------------------- ----------------------------- -----------------------------------
Purchase $15,000 $10,000
------------------------------------------- ----------------------------- -----------------------------------
12 Month Lease* $1,500/ month $1,000/ month
------------------------------------------- ----------------------------- -----------------------------------
Reseller KnowledgePortal $10,000
------------------------------------------- ----------------------------- -----------------------------------
Optional: Private Chat and Threaded $500 $400
Discussion Setup
------------------------------------------- ----------------------------- -----------------------------------
* Minimum lease commitment is 12 months. First 3 payments can be applied to
purchase price.
HOSTING AND DISTRIBUTION SERVICES
LW5 will maintain a network of videoservers, WWW servers and necessary bandwidth
to support KnowledgePortal usage for Reseller customers worldwide. LW5 will
manage hardware, software and upgrades. Services will be available 24 hours per
day, 7 days per week under normal operating conditions. Catastrophic server or
bandwidth loss, which is out of LW5 control, will be reported within 24 hours to
Reseller.
The system has been designed using easy-to-follow database entries. LW5 will
set-up the KnowledgePortal with guidance from Reseller on content. A site
administrator can modify these templates at their discretion. LW5 will provide 4
hours of technical training at no charge to Reseller and Reseller Customers as
they learn to use and administer the KnowledgePortal. This training will be
accomplished using phone, videoconference and Internet communications or in LW5
offices.
------------------------------------------- ----------------------------- -----------------------------------
NETWORK COSTS- HOSTING MSRP Reseller Cost
------------------------------------------- ----------------------------- -----------------------------------
Hosting Service (Up to 50MB) $50 $50
------------------------------------------- ----------------------------- -----------------------------------
Hosting Service (Additional increments of $25 $25
50MB)
------------------------------------------- ----------------------------- -----------------------------------
Hosting Threaded Discussion $25 $25
------------------------------------------- ----------------------------- -----------------------------------
------------------------------------------- ----------------------------- -----------------------------------
NETWORK COSTS- STREAMING MSRP Reseller Cost
------------------------------------------- ----------------------------- -----------------------------------
110K Audio/Video Stream $17 $9
------------------------------------------- ----------------------------- -----------------------------------
48K Audio/Video Stream $14 $7
------------------------------------------- ----------------------------- -----------------------------------
22K Audio/Video Stream $10 $5
------------------------------------------- ----------------------------- -----------------------------------
12K Audio Stream $8 $4
------------------------------------------- ----------------------------- -----------------------------------
Multibit rate Audio/Video Stream $10 $5
------------------------------------------- ----------------------------- -----------------------------------
7
APPLICATION DEVELOPMENT SERVICES
LW5 provides varying levels of support for program development, production and
streaming program implementation. The following matrix describes these levels
and associated costs.
LIVEWARE5 INC. XXXXXX XX XXXXXXX
XXXXX X XXXXX XX XXXXX XXX
FEATURE/ FUNCTION SELF-MANAGED KP CUSTOM KP CUSTOM EVENT
-----------------------------------------------------------------------------------------------------------------------------
STREAMING FUNCTIONALITY
Audio Only X X Will customize
Audio/Video X X any feature
WMT X X on a per event
Real X X basis.
Multibit Rate Only
Customer Defined Streams X X Client pays
QCIF X X
Bigger than QCIF X
for each
SIGNAL ACQUISITION custom feature.
Automated Bridge Call
Analog Port X X
Point to Point Videoconference X X
Multipoint Videoconference X X
Satellite X X
Video/ Audio Tape X X
Onsite/ Studio Production X
KNOWLEDGEPORTAL
3rd Party KP
Custom KP X X
KP Integrated into customer website X
APPLICATION DEVELOPMENT SERVICES
Content Development X
Content Repurposing X
Network Support X
Production Support X
TOOLS Templates modified
Graphics/ PPT X X
Slide Pushing X X
Slide Caching X
Threaded Discussion X
Download Materials X X
Chat X
Online Q&A X X
Polling X
8
Testing Database X
Testing- Formatted X
Evaluation Forms X
Whiteboard X
Memory Devices X
Hyperlinks X
Case Studies X
Role Plays X
Simulations X
Embedded Video X
Workbook X
Indexing X
Glossary X
-----------------------------------------------------------------------------------------------------------------------------
LEVEL I: Program Set-Up: $750/ finished hr. MSRP
Reseller Cost: $500/ finished hr.
LEVEL II: Program Set-Up: $2500/ finished hr. MSRP
Reseller Cost: $2000/ finished hr.
Production Support: Onsite support min. charge $2000
+ travel
LEVEL III: Complete, custom development
Costs TBD
Reseller Customers can contract for additional support at a rate of $250/ hour.
CANCELLATION POLICY
Application Development Service fees will be paid in full if work has been
completed but the program is not delivered. If work has not been completed, a
minimum of 25% of fees will be billed to the customer.
KnowledgePortal set-up fees will be paid in full if the site has been customized
and implemented for the Reseller or Reseller Customer.
XXXXXXXXXXXXXXXX.XXX LIVEWARE5, INC.
BY: /s/ Xxxxxxx Xxxxxx BY: /s/ Xxxxx Xxxxxxx
-------------------- ---------------------
Date: March 24, 2000 Date: March 24, 2000
-------------------- ---------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxx Xxxxxxx
-------------------- ---------------------
Title: Vice President
Business Development
---------------------
9
