SOFTWARE LICENSE AND MARKETING AGREEMENT
THIS AGREEMENT is entered into as of January 26, 1998, by and between HOUSTON
INTERWEB DESIGN, INC., a Texas corporation ("Houston Interweb") and WEBSOURCE
MEDIA, L.L.C., a Texas limited liability company ("Websource").
WHEREAS, Houston Interweb has the right to license the Licensed Software; and
WHEREAS, the parties desire that Houston Interweb license to Websource the
rights (i) to combine the Licensed Software with specified Websource
Database(s), (ii) to create product units (dynamically generated internet
websites) consisting of the combined products, and (iii) to market and
distribute the combined product units as specified herein, subject to the terms
and conditions hereof;
NOW, THEREFORE, in consideration of the foregoing, and in reliance on the mutual
agreements contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Licensed Software." Houston Interweb's computer program(s) in Source
Code or Object Code form as listed and described in Houston Interweb's attached
Confidential Product and Price Exhibit A, together with associated
Documentation, and any fixes, updates, or upgrades which are delivered to
Websource by Houston Interweb under this initial Agreement or under any other
agreement or arrangement between the parties.
1.2 "Documentation." The user's guides, manuals, other written materials
and interface specifications and comments for the Licensed Software sufficient
for Websource to combine the Licensed Software with Websource Database(s) as
provided herein.
1.3 "Deliverables." Master copies of the Licensed Software and
Documentation, as follows: (i) master diskette(s) containing Licensed Software
programs in Source Code or Object Code form, and (ii) master cop(y)(ies) of
Documentation in digital and/or printed form as required to permit Websource to
exercise its rights hereunder. All Deliverables shall be considered as
embodiments of intellectual property.
1.4 "Object Code." The representation of Licensed Software in the binary
instruction code form suitable for execution by a computer which is at all times
available on Websource's Server and a master copy of which will be provided to
Websource.
1.5 "Source Code." The representation of Licensed Software in a
relatively high-level computer programming language which is at all times
available on Websource's Server and a master copy of which will be provided to
Websource.
1.6 "Websource Database(s)." Data which (i) Websource owns or otherwise
has rights to combine or bundle with the Licensed Software, and (ii) are
identified on the Confidential Product and Price List Exhibit A.
1.7 "Composite Website(s)." Website(s) created by Websource by combining
the Licensed Software with a Websource Database(s) using interface
specifications provided by Houston Interweb.
1.8 "End-Users." Customers who acquire Composite Website(s) for their
use and not for redistribution or remarketing.
1.9 "Retail Channels." Resellers who purchase and resell Composite
Website units and provide distribution and logistical resources for purchase by
End-Users.
1.10 "Electronic Channels." Any and all electronic channels and/or methods
of distribution, including without limitation, commercial online services,
online malls and shopping services, electronic distribution methods and
channels, bulletin board services, and Internet worldwide domains and sites.
1.11 "End-User License Terms." Terms and conditions described in the
attached End-User License Terms Exhibit to be incorporated into an End-User
license agreement by Websource for use in the distribution of Composite
Product(s).
1.12 "Proprietary Rights." Any and all rights worldwide in and with
respect to patents, patent rights, copyrights, rights to register copyrights,
Confidential Information, know-how, trade secrets, inventions, trademarks,
trademark rights, moral rights, contract or licensing rights, confidential and
proprietary information protected under contract or otherwise under law, and
other similar rights or interests in intellectual or industrial property.
1.13 "Indemnify." To fully defend and indemnify the designated party to be
indemnified, its officers, directors, employees, agents and other
representatives, and to pay any and all liabilities, losses and damages
(including awards of court costs and attorneys' fees) resulting from the subject
claim.
1.14 "Confidential Information." Information (i) relating to the
architecture, design, and coding methodology embodied in the Licensed Software;
(ii) embodied herein regarding the terms and conditions of this Agreement; and
(iii) disclosed by one party to the other regarding past, present, or future
marketing and business plans, customer lists, and lists of prospective
customers.
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1.14.1 "Confidential Information" includes all tangible materials
which contain the information described above, including without limitation,
written or printed documents and electronic media.
1.14.2 "Confidential Information" does not include (i) information
which is or becomes generally known or available through no act or failure to
act by the receiving party; (ii) is already known by the receiving party as
evidenced by its written records, (iii) is rightfully furnished to the receiving
party by a third party without restriction or disclosure; or (iv) is
independently developed by the receiving party without reference to Confidential
Information.
1.15 "Technical Support Terms." Those terms and conditions set forth in
the attached Technical Support Terms Exhibit C, and by reference incorporated
herein.
1.16 "Effective Date." The date of execution hereof by both parties as
specified in the preamble hereof.
2. LICENSE AND RESTRICTIONS
2.1 Grant of License. Subject to the limitations and restrictions
provided in this Section 2 and to the other terms and conditions of this
Agreement, Houston Interweb hereby grants, and Websource hereby accepts, the
limited right and license:
2.1.1 Use License - to practice, use, and operate the Licensed
Software and only those of Houston Interweb's Proprietary Rights embodied
therein which are necessary for purposes of the reasonable exercise and
enjoyment of the limited rights granted herein.
2.1.2 Derivative Works License - to create derivative works based
on the Licensed Software only by combining the Licensed Software with Websource
Database(s) by the use of interface specifications provided as part of the
Deliverables for the purpose of creating Composite Website(s); no rights to
modify the Licensed Software are granted herein with the exception of Provisions
of Section 10 below.
2.1.3 Manufacturing License - to create, develop, and have made
the Composite Website(s) into finished product units suitable for marketing and
distribution in accordance with the terms and conditions hereof.
2.1.4 Distribution License - to market, distribute, and display
the Licensed Software only as a component of Composite Website(s), only in HTML
or Object Code form; distribution is authorized for all channels and methods of
distribution now known and hereafter developed, including without limitation,
Retail Channels and Electronic Channels.
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2.1.5 End-User Sublicenses - to grant sublicenses for Composite
Website(s) to End-Users only for use of Composite Website(s) and not for
redistribution, only in conformity with the Sublicense Terms, and only in the
form of Websource's license agreement, which may be unsigned in either
"shrink-wrapped" form or an electronic equivalent which permits the End-User
to view and indicate agreement with the license terms prior to paying for the
license.
2.1.6 Reseller Sublicenses - to grant sublicenses to Resellers
only for redistribution of Composite Website(s), only in conformity with the
Sublicense Terms, only in written form and signed by the Reseller, and only on a
standalone basis and not as bundled with other third-party software products.
2.2 Non-Exclusive License. The license granted herein is non-exclusive.
Houston Interweb may distribute the Licensed Software both on a standalone basis
and as combined with other software without restriction.
2.3 Restriction on Promotional Copies. Notwithstanding anything to the
contrary contained herein, distribution of promotional or demonstration copies
of Composite Website(s) by Websource without payment of fair market value in
money is authorized, but only in quantities which are reasonably expected to
stimulate sales of Composite Website(s) which quantities shall not exceed ten
percent (10%) of total Websource sites.
2.4 Product Naming. No license is given nor intended for any tradename,
trademark, or service xxxx proprietary to Houston Interweb. Websource is not
authorized to use any such xxxx of Houston Interweb for any purpose. Websource
shall use its own private label xxxx(s) with Composite Website(s).
2.5 Export. Composite website(s), including associated technical data,
are subject to United States export control laws, and may be subject to export
or import regulation in other countries. If Websource is authorized to
distribute Composite website(s) outside the United States at any time during the
term hereof, Websource agrees to comply strictly with all such regulations, and
acknowledges that it has the responsibility to obtain such licenses to export,
re-export, or import Composite Website(s). Websource shall, at its own expense,
obtain and arrange for the maintenance in full force and effect of all
governmental approvals, consents, licenses, authorizations, declarations,
filings and registrations as may be necessary or advisable for the performance
of the terms and conditions of this Agreement, including without limitation,
fair trade approvals.
2.6 Retained Rights. All Proprietary Rights that are not expressly
granted to Websource herein are retained by Houston Interweb.
3. HOUSTON INTERWEB'S DELIVERY AND SUPPORT RESPONSIBILITIES
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3.1 Duties of Houston Interweb. Houston Interweb shall at its expense
unless otherwise provided:
3.1.1 Provide the Deliverables to Websource no later than sixty
(60) days after the Effective Date.
3.1.2 Confirm that Deliverables are received by Websource as
specified herein and promptly repair or replace any non-conforming or defective
software within ten (10) days of original receipt by Websource.
3.1.3 Provide to Websource one half (1/2) day (consisting of 4
hours) of training at Houston Interweb's facility regarding the use and
operation of the Licensed Software; additional training, if requested by
Websource, will be provided at Houston Interweb's then-current rates for
consulting services.
3.1.4 Provide technical support only to Websource in accordance
with the Technical Support Terms. Houston Interweb shall charge fees for
technical support as provided in the Technical Support Terms.
3.2 Standard of Performance. Houston Interweb shall use reasonable efforts
to perform the delivery and support responsibilities described above.
4. WEBSOURCE'S DEVELOPMENT, MARKETING AND SUPPORT RESPONSIBILITIES
4.1 Duties of Websource. Websource shall at its expense unless otherwise
provided:
4.1.1 Develop and create finished Composite Website(s) by
combining licensed software and Websource data individually or in batches.
4.1.2 Produce trade dress, End-User documentation, and packaging
as required for Composite Website(s).
4.1.3 Design and print product advertising and collateral
materials for the Composite Website(s).
4.1.4 Develop and implement positioning strategies for the
Composite Website(s).
4.1.5 Develop and implement a commercially reasonable pricing
structure subject to minimum royalty per site provision below and taking into
account then existing market conditions.
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4.1.6 Develop, implement, and maintain a marketing and
merchandising strategy for Electronic Channels which incorporate commercially
effective technology and marketing techniques.
4.1.7 Provide suitable press releases and public relations efforts
for the initial launch of Composite Website(s), together with ongoing public
relations activities.
4.1.8 Promote, market, and distribute the Composite Website(s)
through all channels and methods of distribution to the extent commercially
feasible.
4.1.9 Comply with all limitations and restrictions on marketing
and distribution provided in Section 2.
4.1.10 Provide all end user technical support services required for
Composite Website(s), such support to include, without limitation, Websource's
telephone support technicians receiving all calls concerning Composite
Website(s) with such support technicians assessing and resolving all end user
problems in the telephone call or in subsequent follow up calls.
4.2 Standard of Performance. Websource shall use its reasonable efforts
to perform the marketing and support responsibilities described above.
5. ROYALTIES
5.1 Non-Refundable, Base Royalty. Websource shall pay to Houston Interweb
a non-refundable, base royalty upon the execution hereof as specified in the
attached Confidential Product and Price List Exhibit A, such royalty to be
credited against the periodic royalty described below.
5.2 Periodic Percentage/Per Unit Royalty. Websource shall pay to Houston
Interweb a periodic royalty which is the greater of (i) a percentage of Gross
Revenues derived from Composite Website(s), or (ii) a fixed dollar amount per
unit of Composite Website(s) distributed, pursuant to the attached Confidential
Product and Price List Exhibit A.
5.2.1 For purposes hereof, "Gross Revenues" shall mean all monies
received by Websource in connection with the creation and distribution of
Composite Website(s), including (i) all upgrades and enhancements sold, and
excluding taxes, duties, or tariffs relating to the sale of Composite
Website(s).
5.2.2 For purposes hereof, Composite Website(s) are deemed to be
"distributed" when a copy(ies) thereof is loaded on the internet, distributed,
transmitted electronically, or otherwise transferred or used by a third party.
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5.3 Guaranteed Minimum Royalty. Notwithstanding the foregoing, Websource
shall pay to Houston Interweb a periodic guaranteed minimum royalty of ten
thousand dollars ($10,000) pursuant to the attached Confidential Product and
Price List Exhibit A. The periodic guaranteed minimum royalty shall be
cumulative on an annual basis such that Websource shall be entitled to a credit
in subsequent monthly periods for payments made in prior periods of each annual
(12 month) period. In the event of a breach by Websource of any obligation to
pay guaranteed minimum royalties, which breach remains uncured after any
applicable grace period provided herein, Houston Interweb reserves the right, in
Houston Interweb's sole and absloute discretion, to modify the license grant
provided in Section 2 hereof in any, all, or any combination of the following
respects: (i) Territory, (ii) Sublicense, (iii) channels or methods of
distribution, or (iv) exclusivity.
5.4 Taxes and Duties. Royalties are exclusive of taxes, duties, licenses,
or levies imposed on the production, storage, sale, transportation or use of the
Composite Website(s). Websource shall pay all such charges either as levied by
taxing authorities or as invoiced by Houston Interweb, or, in lieu thereof,
Websource shall provide an exemption certificate acceptable to the relevant
taxing authorities.
5.5 Written Reports. Websource shall send sales activities reports in
writing to Houston Interweb accompanying each periodic royalty payment. All
sales activity reports shall include the number of Composite Website(s)
distributed during the royalty period broken down by channel or method of
distribution and total price. Websource shall keep all such records and
supporting documentation for a period of three (3) years from the date of each
transaction.
5.6 Audit Rights. Upon three (3) days' advance written notice, Houston
Interweb or its agent shall have the right to examine during normal business
hours at Websource's principal place of business, Websource's records supporting
Websource's sales activities reports required hereunder together with supporting
documentation. Any underpayment in royalties due shall bear interest at the
rate of eighteen percent (18%) per annum from the payable date. If any audit
reveals underpayment of three percent (3%) or greater in royalties payable,
then Websource shall reimburse Houston Interweb for all the costs and expenses
of the audit.
6. WARRANTIES
6.1 Houston Interweb's Limited Performance Warranty. For a period of
ninety (90) days commencing with the date of delivery of the Deliverables,
Houston Interweb warrants that the unmodified Licensed Software shall (i)
perform in accordance with the Documentation, and (ii) be free of defects in
materials, operations and workmanship. Websource's sole and exclusive remedy
for breach of this warranty shall be limited to the prompt repair of the defects
in operation of the Licensed Software at Houston Interweb's expense.
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6.2 Disclaimer. TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, HOUSTON
INTERWEB DISCLAIMS ALL OTHER WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
6.2.1 SPECIFICALLY, HOUSTON INTERWEB MAKES NO REPRESENTATION OR
WARRANTY THAT THE LICENSED SOFTWARE IS FIT FOR ANY PARTICULAR PURPOSE, AND ANY
IMPLIED WARRANTY OF MERCHANTABILITY IS LIMITED TO THE DURATION OF THE LIMITED
WARRANTY COVERING THE DELIVERABLES ONLY, AND IS OTHERWISE HEREBY EXPRESSLY
DISCLAIMED.
6.2.2 WEBSOURCE EXPRESSLY ACKNOWLEDGES THAT NO REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS AGREEMENT HAVE BEEN MADE RESPECTING THE GOODS
OR SERVICES TO BE PROVIDED HEREUNDER, AND THAT WEBSOURCE HAS NOT RELIED ON ANY
REPRESENTATION NOT EXPRESSLY SET OUT HEREIN.
6.3 Websource's Performance Warranty. Websource is free to offer separate
and additional warranty terms regarding the Websource Product(s) component of
the Composite Website(s) as well as the entire Composite Website(s) in
Websource's name only, but Websource shall not bind Houston Interweb to such
additional terms.
6.4 Rights Warranties.
6.4.1 Right to Contract and License. Houston Interweb has the
authority to enter into this Agreement and the right to grant the rights and
licenses granted to Websource herein without breach of obligation to any third
party; and the performance of this Agreement will not breach any obligation to
any third party.
6.4.2 No Encumbrances. Houston Interweb hereby represents and
warrants that the Licensed Software, and any prior or subsequent versions
thereof (including any components thereof), as of the Effective Date and
throughout the term hereof is not pledged, covered, collaterally assigned as
security, or otherwise affected in any way by any bank loan, equipment
financing, lending, or security arrangement, or other such arrangement which is
entered into by or binding upon Houston Interweb in any way, and no further
consent is required by any third party to assign or convey Licensed Software.
6.4.3 Right to Quiet Enjoyment. Houston Interweb hereby
represents and warrants that the Licensed Software, and any prior or subsequent
versions thereof (including any components thereof), as of the Effective Date
and throughout the term hereof, does not contain any virus, Trojan horse, worm,
or other software routine designed to permit unauthorized access to the
associated computer system, or to disable,
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erase or otherwise damage software, hardware, or data, or to perform other
similar actions; and does not contain or implement any back door, time bomb,
software lockout key or device, drop dead device, or other software routine
designed to disable a computer program, either automatically with the passage
of time or under the positive control of a person other than Websource.
7. INDEMNIFICATION
7.1 Websource's Indemnity For Product Liability and Licensed Software
Warranties. Subject to the terms and conditions provided herein regarding all
Indemnities, Websource shall Indemnify Houston Interweb from and against any
product liability or warranty claim regarding the Licensed Software as a
component of Composite Product(s), unless such claim is attributable to a breach
of this agreement by Houston Interweb.
7.2 Rights Indemnities. Subject to the terms and conditions provided
herein regarding all Indemnities, Houston Interweb shall Indemnify Websource
against any breach by Houston Interweb of any of the rights and warranties
stated above.
7.3 Infringement Indemnity of Websource. Subject to the terms and
conditions hereof, Websource shall Indemnify Houston Interweb against any claim
that any material which Websource combines or bundles with the Licensed Software
or derivative works based thereon created by Websource infringes any Proprietary
Right of a third party.
7.4 Infringement Indemnity of Houston Interweb. Subject to the terms and
conditions hereof, Houston Interweb shall Indemnify Websource against any claim
that the Licensed Software used by Websource within the scope of this Agreement
infringes any Proprietary Right of a third party.
7.5 Infringement Indemnity Terms and Conditions. The infringement
Indemnities shall not apply to the extent that any third party's infringement
claim is based upon modifications, enhancements and other revisions to the
material which have been made by Indemnified party or by parties operating under
license from or authorization by the Indemnified party. In the event of any
ruling of infringement by a court of competent jurisdiction, or if the
Indemnifying party reasonably believes such a ruling is likely, the Indemnifying
party shall, at its expense and after notice to and consultation with the
Indemnified party, at the Indemnifying party's option either:
7.5.1 modify the subject infringing material so as not to
infringe, or replace such infringing material with a material that does not
infringe; provided, however, that any modified or replacement material provided
by Houston Interweb shall have the same functionality, operating
characteristics, compatibility and interoperability as the infringing material
being modified or replaced; or
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7.5.2 if Websource is the Indemnified party, Houston Interweb
shall obtain a license for Websource to continue using the subject material,
free of any future liability from the claiming party.
7.6 Conditions to All Indemnities. All Indemnities are subject to the
following conditions:
7.6.1 The Indemnified party notifies the Indemnifying party in
writing within thirty (30) days of being apprised of the claim.
7.6.2 The Indemnifying party has sole control of the defense and
all related settlement negotiations, subject to the right of Indemnified party
to participate in and monitor such defense, at its own cost and option and
through its own counsel, for the purpose of consulting with the Indemnifying
party's counsel.
7.6.3 The Indemnified party provides the Indemnifying party with
the assistance, information, and authority necessary to perform as required
above, provided that reasonable costs and expenses incurred by the Indemnified
party in providing such assistance and information will be reimbursed by the
Indemnifying party.
8. LIMITATION OF LIABILITY
8.1 Houston Interweb's Limitation of Actual Damages. Except for rights
and infringement Indemnities, Houston Interweb's liability to Websource for
actual damages from any cause whatsoever, and regardless of the form of the
action, whether in contract, tort (including negligence), product liability or
otherwise, will be limited to the amounts paid to Houston Interweb hereunder.
8.2 Disclaimer. NEITHER PARTY WILL BE LIABLE TO THE OTHER IN ANY EVENT
FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING ANY
DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, OR LOSS OF BUSINESS
INFORMATION), EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE.
9. PROPRIETARY RIGHTS
9.1 Title to Licensed Software and Derivative Works. Except as provided
elsewhere in this Agreement, Websource acquires only a license for the Licensed
Software and does not acquire any rights of ownership of any Proprietary Rights
embodied therein. All right, title and interest in and to the Proprietary
Rights embodied in the Licensed Software shall at all times remain the property
of Houston Interweb or its licensors. To the extent that any Composite Website
is a derivative work based on the Licensed Software under applicable copyright
laws, Websource shall own the copyrights embodied in any such derivative work,
subject to the terms and conditions of this
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Agreement and the continuing ownership rights of Houston Interweb in the
underlying Licensed Software. As the copyright owner, Websource may register
such derivative works in Websource's name, but only as derivative works based
on the Licensed Software, and not as separate, independent works of
authorship. In the event that provisions under Sections 10, become
applicable, Houston Interweb shall create a substantially similar customized
version of Licensed Software in which Websource shall acquire all right,
title and interest in the Proprietary Rights of such version.
9.2 Confidential Information. Each party acknowledges that the other
party may disclose its Confidential Information to the other in the performance
of this Agreement. Each party further acknowledges the other party's assertion
that the other party's Confidential Information is deemed to include valuable
trade secrets and confidential business information proprietary to the other
party and/or third parties. Accordingly, each party shall (i) take reasonable
steps to keep the Confidential Information disclosed by the other party
confidential, and (ii) use and disclose such Confidential Information only with
the receiving party's employees and contractors who have a need to know and only
for the purposes of fulfilling this Agreement, or for purposes of disclosure to
affiliated companies and professional advisors for the purpose of disclosing the
party's internal business.
9.3 Confidentiality of Licensed Software. Specifically regarding the
Licensed Software, Websource acknowledges Houston Interweb's claim that the
Licensed Software embodies valuable trade secrets proprietary to Houston
Interweb or its licensors. Accordingly, Websource shall take reasonable
measures to protect the Licensed Software from unauthorized access, disclosure,
and use, including without limitation, the placement of any Proprietary Rights
notice on the Licensed Software or Composite Product(s) that is reasonably
requested by Houston Interweb. Websource shall not:
9.3.1 Distribute, transfer, loan, rent, or provide access to the
Licensed Software, except as provided herein and subject to provisions of
Section 10 below.
9.3.2 Remove or add any Proprietary Rights notice associated with
the Licensed Software without the express written permission of Houston
Interweb.
9.3.3 Disassemble or decompile the Licensed Software for any
purpose subject to provisions of Section 10 herein.
9.4 Injunctive Relief. The parties hereby agree that any breach of this
Section regarding Proprietary Rights would constitute irreparable harm, and that
the aggrieved party shall be entitled to specific performance and/or injunctive
relief in addition to other remedies at law or in equity.
10. CONTINGENT EVENTS
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10.1 In the event Websource shall offer for sale all or substantially
all of its business or assets, or in which a majority of the voting control
in Websource shall be transferred to an unrelated third party, Houston
Interweb shall have the first right to purchase the then existing customer
base (Websource database(s)) at the fair market value price offered and under
the same terms and conditions offered by any third party offeror who is
negotiating in good faith and in an arm's length transaction. Houston
Interweb will be allowed to offset such purchase price by any amounts due and
payable to Houston Interweb under provision 10.3 below.
10.2 In the event Houston Interweb shall offer for sale all or
substantially all of its business or assets, or in which a majority of the
voting control in Houston Interweb shall be transferred to an unrelated third
party, Websource shall have the first right to purchase the then existing
customer base (Houston Interweb's "Xxxxxxxxxx.xxx" database(s)) at the fair
market value price offered and under the same terms and conditions offered by
any third party offeror who is negotiating in good faith and in an arm's
length transaction.
10.3 In the event Websource shall sell all or substantially all of its
business, assets or its database of customers or in which a majority of the
voting control in Websource shall be transferred to any third party,
including Houston Interweb, Websource agrees to pay Houston Interweb the sum
of five percent (5%) of the gross sales price. In the event that such amount
(5% of gross sales price) is less than five hundred thousand dollars
($500,000), Websource shall pay such sum which when added to the royalties
paid to date equals the total amount of five hundred thousand dollars
($500,000.) Upon payment of the total amount due under this provision,
Houston Interweb shall terminate the license and immediately convey,
transfer, assign and deliver, for no further consideration, title to the
Source Code or Object Code of a substantially similar customized version of
Licensed Software and all other documentation, schematics, work papers and
other information related to the deliverables.
10.4 In the event that Websource pays total cumulative royalties to
Houston Interweb of five hundred thousand dollars ($500,000), Houston Interweb
shall immediately convey, transfer, assign and deliver, the Source Code or
Object Code of a substantially similar customized version of Licensed Software
and all other documentation, schematics, work papers and other information
related to the deliverables to Websource. All other terms and conditions of
this agreement shall remain in full force and effect including but not limited
to the royalty provisions of Section 5 above and the sales percentage provision
of Section 10.3 above.
11. TERM AND TERMINATION
11.1 Term of Agreement. The initial term of this Agreement shall commence
as of the Effective Date hereof and shall continue for a period of five (5)
years.
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11.2 Renewal. The initial term hereof shall automatically renew for
successive one (1) year terms unless either party notifies the other in writing
not less than ninety (90) days prior to the expiration of the current term of
its intention not to renew. Both the initial term and any renewal term are
subject to earlier termination as otherwise provided herein.
11.3 Termination by Houston Interweb for Cause. Houston Interweb may
terminate this Agreement and all licenses granted herein for a material breach
by Websource which remains uncured after thirty (30) days from receipt by
Websource of written notice describing the nature of the breach.
11.4 Termination by Websource for Cause. Websource may terminate this
Agreement for a material breach by Houston Interweb which remains uncured after
thirty (30) days from receipt by Houston Interweb of written notice describing
the nature of the breach.
11.5 Acknowledgment and Waiver. The parties acknowledge that the
provisions of this Section are essential, fair, and reasonable, and that the
occurrence of any of the events described herein shall constitute good, just,
and sufficient cause for the termination or nonrenewal of this Agreement. The
parties further acknowledge that any amounts spent in the performance of this
Agreement shall be spent with the understanding that this Agreement may not be
renewed. Accordingly, each party hereby waives any claim against the other for
loss or damage of any kind (including, without limitation, damages or other
compensation for unjust enrichment, loss of prospective profits, reimbursement
for expenditures or investments made, or commitments entered into or goodwill),
due to failure of the parties to renew this Agreement or upon expiration to make
a similar agreement.
11.6 Continuing Obligations. The following obligations shall survive the
expiration or termination hereof and the distribution grace period provided
above: (i) any and all limitations of liability and Indemnities granted by
either party herein, (ii) any covenant granted herein for the purpose of
protecting the Proprietary Rights of either party or any remedy for breach
thereof, and (iii) the payment of taxes, duties, or any money to Houston
Interweb hereunder.
11.7 Treatment of License in Bankruptcy. In the event of Houston
Interweb's bankruptcy under The Intellectual Property Bankruptcy Protection Act,
codified as subsection (n) of Section 365 of the United States Bankruptcy Act,
as such act is set forth in Xxxxx 00, Xxxxxx Xxxxxx Code, as amended from time
to time ("Bankruptcy Act"), and an attendant rejection of this Agreement or any
license granted herein pursuant to Section 365 thereof, the parties intend that
the provisions of the Bankruptcy Act shall apply.
11.7.1 The parties acknowledge that all Deliverables delivered to
Websource by Houston Interweb under this Agreement shall be deemed to be
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embodiments of intellectual property, and as such, Websource shall be entitled
to retain possession of same.
11.7.2 Pursuant to subsection (1)(B) of the Bankruptcy Act,
Websource hereby elects to retain all of its rights under this Agreement.
12. DISPUTE RESOLUTION
12.1 Documentation. Except for actions to protect Proprietary Rights and
to enforce an arbitrator's decision hereunder, all disputes, controversies, and
claims arising out of the terms, operation, or interpretation of this Agreement
shall be initiated by a written demand for resolution, documented in writing,
and escalated through the appropriate levels of management of each party, up to
and including a corporate officer responsible for this Agreement, until
resolution of the issue is achieved or those officers agree that the dispute
cannot be resolved.
12.2 Mediation. If the dispute cannot be resolved by the parties as
provided above within ten (10) days from the date of the written demand for
resolution, the parties agree to choose a mutually agreeable neutral third party
who will attempt to mediate the dispute between the parties. The mediator will
be a person qualified under the Texas Alternate Dispute Resolution Procedures
Act and will be appointed by Professional Attorney Mediators if the parties are
unable to agree upon a qualified person. Mediation will be non binding and will
be confidential. The parties will refrain from court proceedings during the
mediation process insofar as they can do so without prejudicing their legal
rights. The parties will participate in good faith in accordance with the
recommendations of the mediator and will follow the procedures for mediation as
suggested by the mediator. All expenses of mediator except expenses of the
individual parties, will be shared equally by the parties. Each party will be
represented in the mediation by a person with authority to settle the dispute.
In no case will the provisions of this paragraph delay any other time periods
set forth in this agreement except by written agreement of the parties.
12.3 Arbitration. If the dispute cannot be resolved by the parties as
provided above under Sections 12.1 and 12.2 within thirty (30) days from the
date of the written demand for resolution, the dispute shall be resolved by
binding arbitration under the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") then in effect. The proceedings shall be held
in Houston, Texas under the auspices of the AAA. As a minimum set of rules in
the proceeding, the parties agree as follows:
12.3.1 The arbitration proceeding shall be held by a single
arbitrator mutually acceptable to the parties. If the parties cannot agree on a
single arbitrator within fifteen (15) days after the date written demand for the
appointment of an arbitrator is made, each party shall identify one independent
individual, and these individuals shall then meet to appoint a single
arbitrator. If an arbitrator still cannot be agreed upon within
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an additional thirty (30) days, one shall be appointed by the AAA. The
arbitrator shall be knowledgeable regarding the personal computer and
software industries.
12.3.2 The parties shall equally bear the costs and fees of the
arbitration proceeding, and each party shall bear its own legal expense.
12.3.3 Any arbitration proceeding hereunder shall be conducted on a
confidential basis.
12.3.4 The arbitrator shall specify the basis of his/her decision
and the basis for any damages awarded. The decision of the arbitrator shall be
considered as a final and binding resolution of the dispute, and may be entered
as judgment in any court of competent jurisdiction in the United States. Each
party agrees to submit to the jurisdiction of any such court for purposes of the
enforcement of any such decision, award, order, or judgment.
12.3.5 The parties shall agree upon what, if any, discovery will be
made available. If the parties cannot agree on the form of discovery within
fifteen (15) days of the written demand for the appointment of the arbitrator,
there shall be neither discovery nor the issuance of subpoenas. In no event,
however, shall any such discovery take more than one (1) month.
12.3.6 Neither party shall xxx the other where the basis of the
suit is a disagreement arising directly under the express terms of this
Agreement except for (i) injunctive relief for Infringement or misappropriation
of Proprietary Rights, or (ii) enforcement of the arbitrator's decision in the
event the other party is not performing in accordance with the arbitrator's
decision.
13. GENERAL PROVISIONS
13.1 Notices. All notices shall be given in writing and shall be effective
when either (i) served by personal delivery, (ii) upon receipt of mail sent as
certified mail, return receipt requested, or (iii) upon receipt of facsimile
transmission if verified by a written or electronic record of the transmission,
provided that any such communication is addressed to the parties at their
respective addresses and/or facsimile numbers set forth below, or to such other
address or numbers as either party may later specify by written notice or
provide as part of the performance of this Agreement.
If to Houston Interweb:
Houston Interweb Design, Inc.
0000 Xx. Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Contact: Xxx Xxxxxxx
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Telephone: (713) 627 - 9494
Facsimile: (713) 627 - 2744
If to Websource:
WebSource Media, L.L.C.
0000 Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Contact: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (713) 267 - 2323
13.2 Merger; Amendment. This Agreement shall not be considered an offer by
either party, and it shall not be effective until signed by both parties. This
Agreement constitutes the entire understanding of the parties with respect to
the subject matter of this Agreement and merges all prior communications,
understandings, and agreements. This Agreement may be modified only by a
written agreement signed by the parties.
13.3 Independent Contractors. The relationship of the parties is that of
independent contractor, and nothing herein shall be construed to create a
partnership, joint venture, franchise, employment, or agency relationship
between the parties. Websource shall have no authority to enter into agreements
of any kind on behalf of Houston Interweb and shall not have the power or
authority to bind or obligate Houston Interweb in any manner to any third party.
13.4 Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law or public policy, the
remaining provisions shall remain in full force and effect.
13.5 No Implied Waivers. The failure of either party to enforce at any
time any of the provisions hereof shall not be a waiver of such provision, or
any other provision, or of the right of such party thereafter to enforce any
provision hereof.
13.6 Governing Law. This Agreement shall be construed under and in
accordance with the laws of the State of Texas, and all obligations of the
parties created hereunder are performable in Xxxxxx County, Texas. The courts
of Xxxxxx County, Texas will have jurisdiction of all disputes hereunder.
13.7 Force Majeure. Neither party shall be liable for damages for any
delay or failure of delivery arising out of causes beyond their reasonable
control and without their fault or negligence, including, but not limited to,
Acts of God, acts of civil or military authority, fires, riots, wars, or
embargoes.
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13.8 Multiple Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each one of which shall be deemed
an original, but all of which shall constitute one and the same instrument.
13.9 Assignment. Websource shall not assign this Agreement or any
right or interest under this Agreement, nor delegate any work or obligation
to be performed under this Agreement, without Houston Interweb's prior
written consent which consent shall not unreasonably be withheld. Any
attempted assignment or delegation in contravention of this provision shall
be void and ineffective and shall be deemed to be a material breach hereof.
This agreement shall be binding on all succesors and assigns.
13.10 Attached Exhibit(s). This Agreement includes the attached
exhibit(s) listed below, which are hereby incorporated in this Agreement by
reference.
Confidential Product and Price List Exhibit A
Sublicense Terms Exhibit B
Technical Support Terms Exhibit C
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
below.
HOUSTON INTERWEB DESIGN, INC. WEBSOURCE MEDIA, L.L.C.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------- -----------------------------
1-26-98
Title: CEO Title: Director
---------------------------- --------------------------
1-26-98
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