DEVELOPMENT AND MAINTENANCE AGREEMENT
This agreement (the "Agreement"), dated effective October 15, 1996, is by
and between CYBERMALL CORPORATION, INC., a Texas corporation ("CyberMall"), and
INTERGAMES, INC., a Texas corporation ("InterGames").
WHEREAS, CyberMall and InterGames desire to enter into an
agreement for, among other things, the development and maintenance by
CyberMall of a site on the world wide web for InterGames.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants set forth herein and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEVELOPMENT AND MAINTENANCE OF SITE;
ADDITIONAL SERVICES
SECTION 1.1 DEVELOPMENT OF SITE. CyberMall agrees to provide InterGames
with the following services in connection with the development of a site located
on the world wide web at xxx.XxxXxxxXxxxxx.xxx (the "Site"):
(a) Layout and design of the Site;
(b) Registration of domain(s) for the Site;
(c) Coordination of Site domain hosting setup;
(d) Design and production of all necessary programming for the Site,
including HTML, CGI and database programming; and
(e) Design and production of all graphics, copy and games for the Site.
SECTION 1.2 MAINTENANCE OF SITE. CyberMall hereby agrees to provide
continued domain hosting for the Site and to update and maintain the Site on an
ongoing basis for the duration of this Agreement.
SECTION 1.3 ADDITIONAL SERVICES. CyberMall hereby agrees to provide
certain additional services in connection with the Site, as requested by
InterGames, including without limitation, (i) on-line marketing of the Site, and
(ii) the coordination of awards and prize fulfillment in connection with games
played on the Site.
ARTICLE II
FEES
SECTION 2.1 DEVELOPMENT FEES. InterGames hereby agrees to pay to
CyberMall a fixed fee in the amount of $30,145, plus applicable taxes, for all
services provided by CyberMall to InterGames pursuant to Section 1.1 hereof.
SECTION 2.2 MAINTENANCE AND ADMINISTRATIVE FEES. InterGames hereby
agrees to pay to CyberMall fees for services provided pursuant to Sections 1.2
and 1.3 hereof according to the fee schedule attached as EXHIBIT A hereto.
ARTICLE III
OWNERSHIP OF INTELLECTUAL PROPERTY
CyberMall and InterGames hereby agree that the Site and all intellectual
property (the "Intellectual Property") created in connection with the Site,
including without limitation, all programming, design, graphics, copy and
games, (i) will be created by CyberMall for InterGames' exclusive use, (ii)
shall be the sole property of InterGames, and (iii) shall not be reproduced
by CyberMall for any purpose except as necessary for CyberMall to fulfill its
obligations under this Agreement. CyberMall agrees that, in connection with
the development and creation of the Site and the Intellectual Property, (i)
it will not violate any patent, copyright, trademark or any other
intellectual property rights held by any third party; (ii) it will own all
rights and interests in the Intellectual Property created in the development
of the Site, and (iii) no third-party software will be embedded in or
required to run the Site. CyberMall further covenants that upon delivery of
the Site and the Intellectual Property to InterGames, the Site and the
Intellectual Property will be free from any claims by any third parties, and
will become the sole possessions of InterGames with no rights thereto
allocated to CyberMall.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF CYBERMALL. To induce
InterGames to enter into this Agreement and to consummate the transactions
contemplated by this Agreement, CyberMall hereby represents and warrants as
follows:
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(a) CyberMall is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas and has full
corporate power and authority to own and lease CyberMall's properties and
to carry on CyberMall's business as presently conducted.
(b) The execution, delivery and performance by CyberMall of this
Agreement and the agreements, instruments and documents contemplated by
this Agreement do not breach any term or provision of or constitute a
default under any material indenture, mortgage, deed of trust, contract,
agreement, lease or other commitment or instrument to which CyberMall is a
party or by which CyberMall or its assets or properties are bound, do not
conflict with any provision of the articles of incorporation or bylaws of
CyberMall and do not constitute an event which, with the lapse of time or
action by a third party, could result in any default under any of the
foregoing.
(c) The execution, delivery and performance by CyberMall of this
Agreement and the agreements, instruments and documents contemplated by
this Agreement do not violate any provision of, or constitute default
under, any law, rule or regulation, or any court order, writ, injunction or
decree, of any court or other governmental agency or instrumentality
applicable to or binding upon CyberMall.
(d) CyberMall has full power, authority and legal right to enter into
this Agreement and the agreements, instruments and documents contemplated
by this Agreement and to consummate the contemplated transactions. This
Agreement and the agreements, instruments and documents contemplated by
this Agreement have been duly authorized by all requisite action of the
directors and shareholders of CyberMall. Upon execution and delivery by
CyberMall of this Agreement and the agreements, instruments and documents
contemplated by this Agreement, they will each be a valid and binding
obligation of CyberMall, enforceable in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization or
similar laws effecting the rights of creditors generally. Notwithstanding
the foregoing, no representation or warranty is made regarding the
availability of equitable remedies.
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF INTERGAMES. To induce
CyberMall to enter into this Agreement and to consummate the transactions
contemplated by this Agreement, InterGames represents and warrants as follows:
(a) InterGames is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas and has full
corporate power and authority to own and lease InterGames' properties and
to carry on InterGames' business as presently conducted.
(b) The execution, delivery and performance by InterGames of this
Agreement and the agreements, instruments and documents contemplated by
this
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Agreement by do not breach any term or provision of or constitute a
default under any material indenture, mortgage, deed of trust, contract,
agreement, lease or other commitment or instrument to which InterGames is a
party or by which InterGames or its assets or properties are bound, do not
conflict with any provision of the articles of incorporation or bylaws of
InterGames and do not constitute an event which, with the lapse of time or
action by a third party, would result in any default under any of the
foregoing.
(c) The execution, delivery and performance by InterGames of this
Agreement and the agreements, instruments and documents contemplated by
this Agreement do not violate any provision of, or constitute default
under, any law, rule or regulation, or any court order, writ, injunction or
decree, of any court or other governmental agency or instrumentality
applicable to or binding upon InterGames.
(d) InterGames has full power, authority and legal right to enter
into this Agreement and the agreements, instruments and documents
contemplated by this Agreement and to consummate the contemplated
transactions. This Agreement and the agreements, instruments and documents
contemplated by this Agreement have been duly authorized by all requisite
action of the directors and shareholders of InterGames. Upon execution and
delivery by InterGames of this Agreement and the agreements, instruments
and documents contemplated by this Agreement, they will each be a valid and
binding obligation of InterGames, enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization or similar laws effecting the rights of creditors generally.
Notwithstanding the foregoing, no representation or warranty is made
regarding the availability of equitable remedies.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 INDEMNIFICATION. SUBJECT TO THE PROVISIONS OF SECTION 5.2
HEREOF, CYBERMALL WILL INDEMNIFY AND HOLD HARMLESS INTERGAMES AND EACH OF ITS
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS HARMLESS FROM AND AGAINST, ANY AND ALL
DAMAGES, CLAIMS, DEFICIENCIES, LOSSES, INCLUDING TAXES, AND ALL EXPENSES
(INCLUDING INTEREST, PENALTIES, AND ATTORNEYS' AND ACCOUNTANTS' FEES AND
DISBURSEMENTS BUT REDUCED BY ANY TAX SAVINGS, BENEFITS OR OFFSETS TO WHICH ANY
PARTY SHALL BE ENTITLED DIRECTLY OR INDIRECTLY BY REASON THEREOF) (COLLECTIVELY,
"DAMAGES") RESULTING FROM ANY MISREPRESENTATION, BREACH OF WARRANTY OR
NONFULFILLMENT OR FAILURE TO PERFORM ANY COVENANT OR AGREEMENT ON THE PART OF
CYBERMALL UNDER THIS AGREEMENT.
SECTION 5.2 METHOD OF ASSERTING CLAIMS, ETC. All claims for
indemnification by InterGames under this Article V will be asserted and resolved
as follows:
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(a) In the event that any claim or demand for which CyberMall would
be liable to InterGames hereunder is asserted against or sought to be
collected from InterGames by a third party (a "Third Party Claim"),
InterGames will with reasonable promptness notify CyberMall of such claim
or demand, specifying the nature of and specific basis for such claim or
demand and the amount or the estimated amount thereof to the extent then
feasible (which estimate will not be conclusive of the final amount of such
claim and demand (the "Claim Notice")). CyberMall will not be obligated to
indemnify InterGames with respect to any such claim or demand to the extent
the failure of InterGames to promptly notify CyberMall of such a claim or
demand materially prejudices CyberMall's ability to defend against the
claim or demand. CyberMall will have 30 days from the personal delivery or
mailing of the Claim Notice (the "Notice Period") to notify InterGames
(i) whether or not it disputes the liability of CyberMall to InterGames
hereunder with respect to such claim or demand, and (ii) whether or not it
desires at the sole cost and expense of CyberMall, to defend InterGames
against such claim or demand; PROVIDED, HOWEVER, that InterGames is hereby
authorized prior to and during the Notice Period to file any motion, answer
or other pleading which it deems necessary or appropriate to protect its
interests or those of CyberMall and not materially prejudicial to
CyberMall. In the event that CyberMall notifies InterGames within the
Notice Period that it desires to defend InterGames against such claim or
demand, except as hereinafter provided, CyberMall will have the right to
defend by all appropriate proceedings. If InterGames desires to
participate in, but not control, any such defense or settlement it may do
so at its sole cost and expense. If requested by CyberMall, InterGames
agrees to cooperate with CyberMall and its counsel in contesting any claim
or demand which CyberMall elects to contest, and, if appropriate and
related to the claim in question, in making any counterclaim against the
person asserting the third party claim or demand, or any cross-complaint
against any person. No claim may be settled by CyberMall without the
consent of InterGames, which consent will not be unreasonably withheld.
Notwithstanding the foregoing, in connection with a Third Party Claim
asserted against both InterGames and CyberMall, if (i) InterGames has
available to it defenses which are in addition to those available to
CyberMall, (ii) InterGames has available to it defenses which are
inconsistent with the defenses available to CyberMall or (iii) a conflict
exists or may reasonably be expected to exist in connection with the
representation of both InterGames and CyberMall by the legal counsel chosen
by CyberMall, InterGames will have the right to select its own legal
counsel subject to the approval of such legal counsel by CyberMall, such
approval not to be unreasonably withheld. If InterGames selects its own
legal counsel pursuant to the immediately preceding sentence and the
underlying Third Party Claim is otherwise subject to the scope of the
indemnification obligations of CyberMall pursuant to this Article V, the
reasonable fees and expenses of such legal counsel will be included within
the indemnification obligations of CyberMall; provided that under no
circumstances will CyberMall be obligated to indemnify InterGames against
the fees and expenses of more than one legal counsel
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selected by InterGames in connection with a single claim (notwithstanding
the number persons against whom the Third Party Claim may be asserted).
(b) In the event InterGames should have a claim against CyberMall
hereunder which does not involve a claim or demand being asserted against
or sought to be collected from it by a third party, InterGames will send a
Claim Notice with respect to such claim to CyberMall. If CyberMall does
not notify InterGames within the Notice Period that CyberMall disputes such
claim, the amount of such claim will be conclusively deemed a liability of
CyberMall hereunder.
ARTICLE VI
TERMINATION
Upon consummation by InterGames of an initial public offering of equity
securities with gross proceeds to InterGames of greater than or equal to
$1,500,000, (i) this Agreement shall automatically terminate, and (ii) each of
Xxxxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxxxxx shall terminate his employment with
CyberMall and become an employee of InterGames for total compensation
aggregating an annualized $90,000, including bonus. After the initial
development of the Site has been completed, but in no event prior to August 31,
1997, this Agreement may be terminated by either party hereto upon thirty (30)
days' prior written notice to the other party hereto.
ARTICLE VII
CONFIDENTIALITY
SECTION 7.1 CONFIDENTIAL INFORMATION. "Confidential Information" as
used in this Agreement will mean any and all technical and non-technical
information disclosed pursuant to or in contemplation of this Agreement,
including trade secrets and proprietary information of InterGames and/or its
respective parents, subsidiaries, customers and/or vendors, whether delivered in
written (or other tangible) form or orally, and includes, without limitation,
information concerning research, experimental work, design details and
specifications, financial data, procurement requirements, customer lists,
business forecasts and purchasing, sales, development and marketing plans.
Without limiting the generality of the foregoing, the term "Confidential
Information" will also be deemed to include all analyses, compilations,
forecasts, studies or other documents prepared by InterGames in connection with
this Agreement.
SECTION 7.2 USE. CyberMall hereby agrees that it will not make use of
or in any way circulate within its own organization any Confidential Information
of InterGames which is supplied to or obtained by it in writing, orally or by
observation, except to the extent
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necessary for the development of the Site; and any other purpose InterGames
may hereafter authorize in writing.
SECTION 7.3 DEGREE OF CARE. Without limiting the generality of the
other provisions of this Agreement, CyberMall agrees that it will treat all
Confidential Information of InterGames with the same degree of care as it
affords to its own Confidential Information, and represents that it exercises
reasonable care to protect its own Confidential Information. CyberMall agrees
that it will keep a record in reasonable detail of the Confidential Information
of the other party furnished to it, the persons to whom such Confidential
Information has been disclosed and the location of such Confidential
Information.
SECTION 7.4 DISCLOSURE. CyberMall further agrees that (i) it will not
publish, copy or disclose any Confidential Information of InterGames to any
third party, (ii) it will use its reasonable best efforts to prevent inadvertent
disclosure of such Confidential Information to any third party, and (iii) it
will not and will direct its officers, directors, employees, agents or
consultants (individually referred to as a "Representative" and collectively
referred to as the "Representatives") not to disclose, except as may be required
to exercise its rights pursuant to this Agreement or as may be required by law,
to any person that Confidential Information has been received or disclosed
pursuant to this Agreement, or any other facts relating to the terms and
conditions of this Agreement. Notwithstanding the foregoing, the parties agree
that either party may disclose the existence of this Agreement and the terms
hereof to the extent (but only to the extent) reasonably required to enforce the
rights of such party under this Agreement.
SECTION 7.5 COMMUNICATION. Neither party will communicate any
information to the other in violation of the proprietary rights of any third
party.
SECTION 7.6 EQUITABLE RELIEF. Since unauthorized disclosure of
Confidential Information will diminish the value to InterGames of the
proprietary interests that are the subject of this Article 7, if CyberMall or
its Representatives breaches any of its obligations hereunder, InterGames will
be entitled to equitable relief to protect its interest therein, including but
not limited to injunctive relief, as well as monetary damages.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 APPLICABLE LAW. THIS AGREEMENT AND THE AGREEMENTS,
INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (EXCLUSIVE OF CONFLICTS OF LAW
PRINCIPLES) AND WILL, TO THE MAXIMUM EXTENT PRACTICABLE, BE DEEMED TO CALL FOR
PERFORMANCE IN XXXXXX COUNTY, TEXAS. TO THE EXTENT IT IS NECESSARY TO RESOLVE
ANY DISPUTES ARISING UNDER THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND
DOCUMENTS CONTEMPLATED HEREBY IN A COURT, COURTS WITHIN THE STATE OF TEXAS WILL
HAVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER
IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES CONSENT
TO AND AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS. VENUE IN ANY SUCH
DISPUTE, WHETHER IN FEDERAL OR STATE COURT, WILL BE LAID IN XXXXXX COUNTY,
TEXAS. EACH OF THE PARTIES HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH
DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I)
SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II)
SUCH PARTY AND SUCH PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY
SUCH COURTS OR (III) ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 8.2 NOTICES. All notices, demands, requests or other
communications that may be or are required to be given, served or sent by either
party to the other party pursuant to this Agreement will be in writing and will
be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery, telegram or
facsimile transmission addressed as follows:
(a) If to InterGames: InterGames, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Facsimile Transmission Number: (000) 000-0000
Attn: Xxxxxxxx X. Xxxxxxxx
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with a copy (which
will not constitute
notice) to: Xxxxxx Xxxx Xxxxxx
Xxxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Facsimile Transmission Number (000) 000-0000
(b) If to CyberMall: CyberMall Corporation, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Facsimile Transmission Number: (000) 000-0000
Attn: Xxxxxxxx X. Xxxxxxxxx
Either party may designate by written notice a new address to which any notice,
demand, request or communication may thereafter be given, served or sent. Each
notice, demand, request or communication that is mailed, delivered or
transmitted in the manner described above will be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee with the return receipt, the delivery receipt, the affidavit of
messenger or (with respect to a facsimile transmission) the answer back being
deemed conclusive evidence of such delivery or at such time as delivery is
refused by the addressee upon presentation.
SECTION 8.3 GENDER. Words of any gender used in this Agreement will be
held and construed to include any other gender, and words in the singular number
will be held to include the plural, unless the context otherwise requires.
SECTION 8.4 ENTIRE AGREEMENT. This Agreement and the agreements,
instruments and documents contemplated by this Agreement represent the parties'
entire agreement with respect to the subject matter of this Agreement and such
other agreements, instruments and documents and supersede and replace any prior
agreement or understanding with respect to that subject matter. This Agreement
may not be amended or supplemented except pursuant to a written instrument
signed by the party against whom such amendment or supplement is to be enforced.
Nothing contained in this Agreement will be deemed to create any agency, joint
venture, partnership or similar relationship between the parties to this
Agreement. Nothing contained in this Agreement will be deemed to authorize
either party to this Agreement to bind or obligate the other party.
SECTION 8.5 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed to be an original and all of which
will be deemed to be a single agreement. This Agreement will be considered
fully executed
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when all parties have executed an identical counterpart, notwithstanding that
all signatures may not appear on the same counterpart.
SECTION 8.6 SEVERABILITY. If any of the provisions of this Agreement
are determined to be invalid or unenforceable, such invalidity or
unenforceability will not invalidate or render unenforceable the remainder of
this Agreement, but rather the entire Agreement will be construed as if not
containing the particular invalid or unenforceable provision or provisions, and
the rights and obligations of the parties will be construed and enforced
accordingly. The parties acknowledge that if any provision of this Agreement is
determined to be invalid or unenforceable, it is their desire and intention that
such provision be reformed and construed in such manner that it will, to the
maximum extent practicable, be deemed to be valid and enforceable.
SECTION 8.7 THIRD PARTIES. Except as expressly set forth or referred to
in this Agreement, nothing in this Agreement is intended or will be construed to
confer upon or give to any party other than the parties to this Agreement and
their successors and permitted assigns, if any, any rights or remedies under or
by reason of this Agreement.
SECTION 8.8 ASSIGNMENT. Neither this Agreement nor any rights or
obligations under this Agreement may be assigned or delegated without the
written consent of the other party. Any attempted assignment or delegation in
violation of the immediately preceding sentence will be void.
SECTION 8.9 SURVIVAL OF REPRESENTATIONS WARRANTIES AND COVENANTS. The
representations, warranties and covenants, as well as the indemnification
provisions, contained in this Agreement will survive the consummation of the
transactions contemplated by this Agreement.
SECTION 8.10 WAIVER. No failure or delay in exercising any right
hereunder will operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement effective
as of the date first above written.
CYBERMALL CORPORATION, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
INTERGAMES, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
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EXHIBIT A
FEE SCHEDULE
Site Maintenance, Hosting and Marketing, and Prize Fulfillment Services
(after all initial games are full activated). . . . . . . . .$6,000 per month
Site Maintenance, Hosting and Marketing, and Prize Fulfillment
Services (before all initial games are full activated) . . reimbursement of
costs and expenses
