CONSULTING AND SUPPORT AGREEMENT
This agreement (the "Agreement") is entered into as of the 22 day of
February, 2000 (the "Effective Date"), by and between Netdotworks, Corp., a Utah
corporation ("Provider"), and WordCruncher Internet Technologies, Inc. a Nevada
corporation ("WordCruncher").
Recitals
A. Whereas, WordCruncher has developed and will soon an Internet website at
xxx.xxxxx.xxx wherein it will provide a searchable business portal dedicated to
news, data and services of importance to business professionals; and
B. Whereas, Provider is a full service network systems consulting firm with
experience in network architectural design, multi-platform database
administration, network security, network audits, Web site administration and
project management; and
C. Whereas, WordCruncher desires to engage Provider to perform certain
consulting and support services, and Provider desires to provide such services,
in accordance with the terms and conditions of this Agreement; and
D. Whereas, Provider and WordCruncher desire to set forth in writing their
mutual intent and understanding of the scope and terms of such engagement.
Agreement
Now, therefore, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings, unless the context otherwise requires. Certain other terms are defined
elsewhere in this Agreement.
1.1 "Access Terminals" mean the computer terminals located at
_________ Draper, Utah (the "Access Terminals Site") and connected to the
System through the Frame relay.
1.2 "Agreement" means this Consulting and Support Agreement between
Provider and WordCruncher, as amended from time to time.
1.3 "Code" means all computer programming code (both object and
source, unless otherwise specified) and application program interfaces
associated with the System, as modified or enhanced from time to time by
WordCruncher, including, without limitation, all interfaces, navigational
devices, menu structures or arrangements, icons, help, operational
instructions, commands, syntax, hyper-text markup language, design,
templates the literal and non-literal expressions of ideas that operate,
cause, create, direct, manipulate, access or otherwise affect the Content
whether created or licensed from third parties by WordCruncher including,
without limitation, any copyrights, trade secrets and other intellectual or
industrial property rights therein.
1.4 "Content" means all text, graphics, animation, audio and/or
digital video components and other online materials and services included
on logio-com, but does not include the Code.
1.5 "End-User(s)" means any person or entity that accesses xxxxx.xxx
or uses the services therein.
1.6 "Frame Relay" means the data-packet switching service used by
WordCruncher to transmit data between the System and the Access Terminals.
1.7 "Intellectual Property Right(s)" means any patent, copyright,
trademark, trade secret, trade dress, mask work, right of attribution or
integrity or other intellectual or industrial property rights or
proprietary rights arising under the laws of any jurisdiction (including,
without limitation, all claims and causes of action for infringement,
misappropriation or violation thereof and all rights in any registrations
and renewals).
1.8 "Launch Date" means the first day that xxxxx.xxx provided services
become available on the Internet to End Users.
1.9 "Services" mean any and all services provided by Provider under
Section 2 of this Agreement.
1.10 "xxxxx.xxx" means the WordCruncher owned Internet site, namely
xxx.xxxxx.xxx.
1.11 "System" means all application server hardware devices and
software owned, rented or licensed by WordCruncher, used to operate
xxxxx.xxx and located at the data center of Qwest Communications
International Inc. in ___________________, California (the "Data Center
Site"). The System does not include the Access Terminals and the Frame
Relay.
2. Scope of Services. On the terms and subject to the conditions set forth
in this Agreement, Provider shall provide to WordCruncher the following services
(collectively, the "Services"):
2.1 Obtaining Familiarity. Provider shall at least three weeks prior
to the Launch Date, provide two senior employees of Provider to be
available at the Access Terminals Site to develop a familiarity with the
System and the procedures WordCruncher has established relating to the
System. These two senior employees are billable at a rate of $10,000 per
month each. Any amount payable to Provider under this Section 2.1 shall be
prorated during any month in which this Agreement is not in effect for the
entire month.
2.2 Database and Web Server Support. From and after one week prior to
the Launch Date, Provider shall 9a) proactively monitor the System to
identify situations that could cause downtime of the System and to respond
to those issues to maintain the availability of the System for all End
Users, (b) seek ways to improve performance and reliability of the System
through optimization of the System, (c) monitor the backend connectivity
between the database, application, Web and search servers of the System to
verify that the entire process is functioning and providing the required
resources for the operation of the System, (d) monitor backups of the
content and verify the backups' integrity through regular testing, (e)
administer, and update as reasonably necessary, a disaster recovery plan
for the System and (f) assist WordCruncher managers, developers and
programmers with the implementation of modifications to the System and the
establishment of proper quality control requirements to be met before such
modifications are made.
2.2.1 Level of Support. From and after one week prior to the
Launch Date, Provider shall provide at all times of every day a
database server administrator and a Web site administrator at the
Access Terminals Site and a security consultant on an as-needed basis
to provide the Services set forth in Section 2.2.
2.2.2 Logs and Manuals. Provider shall keep detailed logs of
resolution steps taken by Provider to remedy any failure, or events
that could potentially create failure, of the System. Provider shall
maintain and update a manual relating to the Services set forth in
Section 2.2.
3. WordCruncher's Responsibilities. WordCruncher shall, to the extent
reasonably necessary for Provider to fulfill its responsibilities under this
Agreement and at no charge to Provider, (a) provide reasonable cooperation and
assistance to Provider, (b) be responsible for all costs associated with
maintaining and upgrading the System, Access Terminals and Frame Relay, (c)
provide and be responsible for all costs associated with the Access Terminals
Site, including, but not limited to, security for such site (d) furnish
information requested by Provider, including, but not limited to, the Code, (e)
provide reasonable access to WordCruncher personnel, and (f) keep Provider
reasonably informed of the date on which WordCruncher believes the Launch Date
will occur. Any delays attributable to WordCruncher's failure to respond to
reasonable requests by Provider shall extend any and all deadlines set forth in
this Agreement for an amount of time equal to WordCruncher's delay and/or
release Provider from its obligations hereunder to the extent that Provider is
affected by such delay or failure of WordCruncher.
4. Payments.
4.1 Payment for the Services and Reimbursements. The amount to be paid
to Provider for all of the Services during the Initial Term (as hereinafter
defined) shall be $90,000 per month (with first months payment due upon
execution of the Agreement) payable on the fifteenth (15) day of each month
during the Initial Term. In the event that WordCruncher elects to extend
the term of this Agreement for an additional two hundred forty days in
accordance with Section 5.1(a), the amount to be paid to Provider for all
of the Services during such extended period shall be $85,000 per month
during the first four months of the Extended Period (as hereinafter
defined) and $85,000 per month during the first four months of the Extended
Period (as hereinafter defined) and $80,000 per month during the fifth
month of the Extended Period through the end of the Extended Period. In the
event that WordCruncher elects to extend the term of this Agreement on a
month to month basis in accordance with Section 5.1(b), the amount to be
paid to Provider for all of the Services during such extended period shall
be $90,000 per month during the first two months of the Month to Month
Period (as hereinafter defined) and $80,000 per month during the third
month of the Month to Month Period through February 22, 2001. Any amount
payable to Provider under this Section 4.1 shall be prorated during any
month in which this Agreement is not in effect for the entire month.
WordCruncher shall reimburse Provider for actual, reasonable out-of-pocket
expenses, including travel expenses, incurred by Provider in furtherance of
its obligations under this Agreement. Without limiting the generality of
the foregoing, WordCruncher shall reimburse Provider for all expenses
Provider incurs to travel to the Data Center Site. WordCruncher shall pay
such reimbursements within thirty days after Provider has submitted to
WordCruncher an invoice therefor.
4.2 Payment Terms. All payments required to be made by WordCruncher
hereunder shall be in U.S. currency. In the event of a payment dispute
between the parties hereto, WordCruncher agrees to pay any and all sums due
to Provider not in dispute without prejudice to WordCruncher's legal
rights. The fees to be paid by WordCruncher hereunder are exclusive of any
and all sales, use or other taxes or charges levied or imposed on Provider,
resulting from this Agreement or any part thereof.
5. Term and Termination.
5.1 Initial Term. This Agreement shall remain in full force and effect
for a period of one hundred twenty days from the date Provider first
provides full time support in accordance with section 2.2 and 2.2.1 above
(the "Initial Term"). WordCruncher may terminate this Agreement with or
without cause at the end of the Initial Term upon thirty days written
notice to Provider prior to the end of the Initial Term.
5.2 Option to Extend. In the event WordCruncher does not elect to
terminate this Agreement at the end of the Initial Term in accordance with
Section 5.1, WordCruncher shall have the option to extend the term of this
Agreement in full force and effect (a) for a period of an additional two
hundred forty days from the end of the Initial Term (the "Extended Term");
provided that this Agreement may be terminated during the Extended Term in
accordance with Section 5.3 or (b) on a month to month basis until February
22, 2001 (the "Month to Month Period").
5.3 Termination. During the Extended Term, either party may deliver to
the other party a written "Notice of Default" in the event that the other
party has breached any material provision hereunder. Such Notice of Default
must prominently contain the following sentences in capital letters: "THIS
IS A FORMAL NOTICE OF A BREACH OF CONTRACT. FAILURE TO CURE SUCH BREACH
WILL HAVE SIGNIFICANT LEGAL CONSEQUENCES." A party that has received a
Notice of Default shall have twenty days to cure the alleged breach (and,
if the defaulting party shall have commenced actions in good faith to cure
such defaults which are not susceptible of being cured during such
twenty-day period, such period shall be extended (but not in excess of
twenty additional days) while such party continues such actions to cure
(the "Cure Period") If such party fails to cure the breach within the Cure
Period, as long as such default shall be continuing, the non-defaulting
party shall have the right to either (a) suspend its performance or payment
obligations under this Agreement, (b) seek an order of specific
performance, (c) seek an award of compensatory damages, and/or (d)
terminate the Agreement.
6. Confidential Information.
6.1 Nondisclosure. If either party acquires Confidential Information
of the other, such receiving party shall maintain the confidentiality of
the disclosing party's Confidential Information, shall use such
Confidential Information only for the purposes for which it is furnished
and shall not reproduce or copy it in whole or in part except for use as
authorized in this Agreement. Without limiting the generality of the
foregoing, neither party shall use the Confidential Information of the
other party to solicit the other party" customers or to otherwise compete
unfairly with the other party. Confidential Information shall mean all
information of the disclosing party which it treats as confidential or
proprietary. Confidential Information shall not include information which
is or hereafter becomes generally available to others without restriction
or which is obtained by the receiving party without violating the
disclosing party's rights under this Section 6 or any other obligation of
confidentiality. The terms and conditions of this Agreement and the Code
shall constitute Confidential Information. Provider and WordCruncher shall
cooperate to request confidential treatment as may be mutually agreed by
them with respect to certain terms of this Agreement and the transactions
contemplated hereby in any filing with the Securities and Exchange
Commission, any other government authority or any securities exchange or
stock market.
6.2 Duration. With respect to all Confidential Information, the
parties' rights and obligations under this Section 6 shall remain in full
force and effect following the termination of this Agreement.
6.3 Ownership. All materials and records which constitute Confidential
Information, other than copies of this Agreement, shall be and remain the
property of, and belong exclusively to, the disclosing party, and the
receiving party agrees either to surrender possession of and turn over or
to destroy and certify to the other party the destruction of all such
Confidential Information which it may possess or control upon request of
the disclosing party or upon the termination of this Agreement.
6.4 Injunctive Relief. The parties acknowledge and agree that, in the
event of a breach or threatened breach by any party of any provision of
this Section 6, the other party will have no adequate remedy in money or
damages and, accordingly, shall be entitled to an injunction against such
breach. However, no specification in this Section 6 of a specific legal or
equitable remedy shall be construed as a waiver or prohibition against any
other legal or equitable remedies in the event of a breach of this Section
6 of this Agreement.
6.5 Legal Obligation to Disclose. Each party shall be released from
its obligations under this Section 6 with respect to information which such
party is required to disclose to others pursuant to obligations imposed by
law, rule or regulation or securities exchange or stock market rule;
provided, however, that prior to any such required disclosure, such party
shall, to the extent practicable, provide written notice and consult with
the other party.
7. Representations and Warranties.
7.1 General. Each party represents and warrants to the other party
that (a) it has the right and power to perform its obligations and (b) its
performance under this Agreement will not violate any agreement or
obligation between it and a third party or any applicable law or
regulation, and does not now or will not in the future infringe upon or
violate any Intellectual Property Right or other proprietary or
non-proprietary right of any third party.
7.2 Quality; Conformity. Provider warrants that each of the Services
will (a) be completed in a good and workmanlike manner consistent with the
requirements of and in accordance with standards customary in the industry
and (b) be completed by duly qualified and skilled personnel of Provider
with qualifications no less favorable than those set forth in Exhibit A
hereto.
7.3 WordCruncher's Ownership Rights. WordCruncher warrants that it
owns all right, title and interest in and to the System and the Code and
any other programs, systems, data or materials provided to Provider
hereunder, unless expressly stated otherwise in Exhibit B hereto.
7.4 No Warranties. Provider makes no express or implied warranties,
including but not limited to, implied warranties of merchantability and
fitness for a particular purpose with respect to the services rendered by
its personnel or th results obtained from their work. Any of the services
provided by provider pursuant to this agreement are provided "As is"
without warranty of any kind. The entire risk as to such services is
assumed by WordCruncher. Provider disclaims all warranties either expressed
or implied with respect to the services including, but not limited to
implied warranties of merchantability, fitness for a particular purpose.
8. Limitation of Liability. In no event shall Provider be responsible for
any special, incidental, direct, indirect, punitive, reliance or consequential
damages, whether foreseeable or not, arising under this Agreement or from any
breach or partial breach of the provisions of this Agreement or occasioned by
any defect in the Services, delay in availability of the Services, failure of
the Services, interruptions or outages of the System, Frame Relay, Access
Terminals or any other cause whatsoever or arising out of any act or omission by
Provider, as applicable, its employees, servants and/or agents, including but
not limited to, damage or loss of data, property or equipment, loss or profits
or revenue, cost of capital, cost of replacement services, or claims of End
Users and other customers for service interruptions or transmission problems.
9. Force Majeure. Neither party shall be liable for any delay or failure to
perform its obligations under this Agreement, where such delay or failure
results from any cause beyond such party's reasonable control including, without
limitation, any (a) act of God (fire, storm, floods, earthquakes, etc.), (b)
civil disturbances, (c) mechanical, electronic or communications failure, or (d)
disruption of telecommunications, power or other essential services; provided
that it gives the other party written notice thereof promptly and, in any event
within fifteen days of discovery thereof and uses its best efforts to cure the
delay if such party is responsible to cure such delay. Notwithstanding the
foregoing, either party may terminate this Agreement upon written notice to the
other party in the event such failure to perform continues unremedied for a
period of thirty days in the aggregate.
10. General.
10.1 Amendments. Any term of this Agreement may be amended and the
observance of any term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the parties.
10.2 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its
right at a later time to enforce the same unless the same is waived in
writing. No waiver by a party of any condition or any breach of any term,
covenant, representation or warranty contained in this Agreement shall be
effective unless in writing, and no waiver of any one or more instances
shall be deemed to be a further or continuing waiver of any such condition
or breach in other instances or a waiver of any other condition or breach
of any other term, covenant, representation or warranty. A valid waiver is
limited to the specific situation for which it was given.
10.3 Assignment. This Agreement may not be assigned, or otherwise
transferred, in whole or in part, by either party without the prior written
consent of the other party. Any attempted assignment in violation of the
foregoing will be void.
10.4 Interpretation. This Agreement has been negotiated by the parties
and their respective counsel and will be interpreted fairly in accordance
with its terms and without any strict construction in favor of or against
either party.
10.4 Counterparts. This Agreement may be executed in two or more
counterparts, and each counterpart will be deemed an original, but all
counterparts together will constitute a single instrument.
10.6 Choice of Law; Venue. This Agreement will be governed by and
construed in accordance with the laws of the State of Utah, without regard
to principles of conflicts of law. Each party hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of any state or
federal court sitting in Salt Lake City, Utah over any suit, action or
proceeding arising out of or relating to this Agreement.
10.7 Headings. The headings contained in this Agreement are for the
purposes of convenience only and are not intended to define or limit the
contents of this Agreement.
10.8 Independent Contractors. The parties are independent contractors
and neither party is an employee, agent, servant, representative, partner
or joint venturer of the other. Neither party has the right or ability to
bind the other to any agreement with a third party or to incur any
obligation or liability on behalf of the other party without the other
party's written consent. WordCruncher shall have no direction or control of
Provider, or any person employed by or contracted for by Provider, except
in the results to be obtained.
10.9 Notices. Any notice or other communication must be in writing,
and either actually delivered (including delivery by facsimile, telex,
courier or similar means) or deposited in the United States mail in
registered or certified form, return receipt requested, postage prepaid,
addressed to the receiving party at the address stated below or to another
address as such party may indicate by notice in accordance with this
Section 10.9. Notice will be effective on the date that it is delivered or,
if sent by mail in accordance with this Section 10.9, five days after the
date of mailing.
For Provider: Netdotworks, Corp.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Facsimile: 000-000-0000
For WordCruncher: WordCruncher Internet Technologies Inc.
000 X. 00000 X Xxxxx X
Xxxxxx, XX 00000
Facsimile: 000-000-0000
10.10 Severance. Whenever possible, each provision of this Agreement
will be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement is found to violate
a law, it will be severed from the rest of the Agreement and ignored.
10.11 Survival of Terms. Regardless of the circumstances of
termination or expiration of this Agreement or portion thereof, the
provisions of Sections 6 ("Confidential Information"), 7 ("Representations
and Warranties"), 8 ("Limitation of Liability"), 10 ("General") will
survive the termination or expiration and continue according to their
terms.
10.12 Time. Whenever reference is made in this Agreement to "days,"
the reference means calendar days, not business days, unless otherwise
specified.
10.13 Attorneys' Fees. If any party hereto brings an action or
proceeding for the declaration of the rights of the parties hereunder, for
injunctive relief, or for an alleged breach or default of, or any other
action arising out of this Agreement or the transactions contemplated
hereby, the prevailing party in any such action shall be entitled to an
award of reasonable attorneys' fees and any court costs incurred in such
action or proceeding, in addition to any other damages or relief awarded,
regardless of whether such action proceeds to final judgment.
10.14 Entire Agreement. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and
merges all prior written or oral communications, understandings, and
agreements with respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives, to be effective as of the Effective Date stated
above.
NETDOTWORKS, CORP.
By: /s/
-------------------------------------
Name: Xxxx Xxxxx
Title: Principal Partner
WORDCRUNCHER INTERNET TECHNOLOGIES, INC.
By: /s/
-------------------------------------
Name: M. Xxxxxx Xxxx
Title: President and CEO
