EXHIBIT 10.18
Development, License and Co-Marketing Agreement
This Development, License and Co-Marketing Agreement (this "Agreement") is made
and entered into as of the 2/nd/ day of September, 1999 (the "Effective Date")
by and between Microsoft Corporation, a Washington corporation, ("Microsoft")
and Data Return Corporation, a Texas Corporation ("Data Return").
Recitals
Whereas, Microsoft develops, markets and licenses computer software including
without limitation operating system, application and server products;
Whereas, Data Return develops, markets and licenses computer software including
without limitation automated install scripts based on Microsoft operating system
products.
Agreement
1. Definitions.
1.1 Commerce Server shall mean Microsoft's server software product known as
Site Server Commerce Edition, version 3.0 and updates, upgrades and successor
versions thereto.
0.2 Deliverable(s) shall mean the items to be delivered by Data Return to
Microsoft pursuant to Section 2.1.
1.3 Derivative Technology shall mean: (i) for copyrightable or copyrighted
material, any translation (including translation into other computer languages),
portation, modification, correction, addition, extension, upgrade, improvement,
compilation, abridgment or other form in which an existing work may be recast,
transformed or adapted; (ii) for patentable or patented material, any
improvement thereon; and (iii) for material which is protected by trade secret,
any new material derived from such existing trade secret material, including new
material which may be protected by copyright, patent and/or trade secret.
1.4 Error(s) shall mean defect(s) in a Deliverable which prevent it from
performing in accordance with the Specifications and/or a Severity Level 1, 2 or
3 error, as such errors are defined in Exhibit B.
1.5 Exchange Server shall mean Microsoft's server software product known as
Exchange Server, version 5.5 and updates, upgrades and successor versions
thereto.
1.6 Initial Scripts shall have the meaning set forth on Exhibit A.
1.7 Microsoft Office shall mean Microsoft's suite of productivity
application software known as Microsoft Office 98 and updates, upgrades and
successor versions thereto.
1.8 Microsoft Windows NT shall mean Microsoft's operating systems software
product known as Microsoft Windows NT, version 4.0 and updates, upgrades and
successor versions thereto.
1.9 Microsoft Windows 2000 shall mean Microsoft's operating systems software
product to be released as Microsoft Windows 2000 and updates, upgrades and
successor versions thereto.
1.10 New Scripts shall have the meaning set forth in Section 7.
1.11 Training Materials shall mean speakers' notes and PowerPoint slides to
be used in the training seminars described in Section 5.2, covering the usage of
the Initial Scripts and the content in the related White Paper with regard to
building a reliable and scalable application service within a Microsoft Windows
NT-based Web farm environment.
1.12 White Paper(s) shall mean a detailed written description of the use of
the Initial Scripts and New Scripts, discussing the platform, infrastructure and
configuration for hosting the applicable application services in a reliable,
scalable Microsoft Windows NT-based Web farm environment.
2. Development.
2.1 Development. Data Return shall develop the following Deliverables and
deliver them to Microsoft no later than the dates indicated below.
2.1.1 Initial Scripts, no later than October 1, 1999;
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2.1.2 White Paper, covering all of the Initial Scripts, no later than
October 30, 1999; and
2.1.3 Training Materials, no later than October 30, 1999.
2.2 Acceptance.
2.2.1 For software code Deliverables, Microsoft shall evaluate the
final version of each Deliverable and shall submit a written acceptance
or rejection to Data Return within twenty (20) business days after
Microsoft's receipt of the final version of the Deliverable. Acceptance
shall be in writing, and Microsoft shall not unreasonably withhold its
acceptance. If Microsoft identifies Errors in each Deliverable prior to
acceptance, then Data Return shall correct such Errors within twenty
(20) business days following receipt of notice thereof during acceptance
testing for the Final Version of each Deliverable.
2.2.2 For documentation, White Paper or Training Materials
Deliverables, Microsoft shall evaluate each version of such Deliverable.
In the event that it requires corrections, Microsoft shall specify the
corrections needed and Data Return shall deliver an amended version of
such documentation within five (5) working days.
2.2.3 If Data Return fails to deliver any Deliverable within the
dates specified in Section 2.1 above and if any Errors discovered before
acceptance cannot be eliminated in the correction period specified in
Section 2.2.1 above then Microsoft may, at its option: (i) retain the
Deliverable (including any applicable documentation) with rights as set
forth in Section 4; (ii) extend the correction period; or (iii) suspend
its performance and/or terminate this Agreement pursuant to Section
16.2.
2.3 Upgrades. During the first two years after the Effective Date, Data
Return shall provide Microsoft with any Derivative Technology of the Initial
Scripts (which Derivative Technology relates to Commerce Server, Exchange Server
and Microsoft Office (for Microsoft Windows NT and/or Microsoft Windows 2000))
promptly after development thereof and such Derivative Technology shall be
considered part of the Initial Scripts for all purposes herein, including
without limitation the license set forth in Section 4 below.
2.4 Correction of Errors. For a period of thirty (30) days following
Microsoft's final acceptance of the Deliverables and at no further charge to
Microsoft, Data Return will fix all Errors found in the Deliverables in
accordance with the severity schedule set forth in Exhibit B. After such 30 day
period, Data Return will fix all errors or bugs found in the Deliverables at an
hourly rate of $200.
2.5 Infringement. If Microsoft reasonably determines, either during the
evaluation period set forth in Section 2.2 above or any time thereafter, that
the Deliverables infringe any intellectual property rights of Microsoft,
Microsoft shall promptly contact Data Return and provide an explanation of the
claimed infringement. If such determination occurs within forty-five (45) days
after delivery of the allegedly-infringing Deliverables, Data Return shall
promptly replace the infringing portion of the Deliverables with a version that
is non-infringing, provided that the replacement or modified version provides
the same material functionality as the infringing version. If such
determination by Microsoft occurs any time after forty-five (45) days have
elapsed since the delivery of the allegedly-infringing Deliverables, the parties
shall then discuss the options of removing the infringing portion of the
Deliverables or agreeing upon a licensing arrangement. In the event that the
parties cannot agree on a licensing arrangement, Data Return shall, with
reasonable assistance from Microsoft, promptly replace the infringing portion of
the Deliverables with a version that is non-infringing, provided that the
replacement or modified version provides the same material functionality as the
infringing version.
3. Microsoft Consulting Services and Assistance.
3.1 Consulting Services. To assist Data Return in developing the three (3)
Initial Scripts, Microsoft shall provide Data Return technical consulting
services up to a total of one hundred (100) consulting hours, which services
will be performed by, and be subject to a separate agreement with Microsoft
Consulting Services.
2.2 Technical Writer. Microsoft shall provide a technical writer to review
and edit the White Paper for the three (3) Initial Scripts. Such technical
writer shall be provided upon the delivery of the drafts of the White Paper as
required in Section 2.1 above.
3.3 Schedule. The time deadlines with respect to any Deliverables to be
provided under this Agreement are subject to Microsoft's timely provision of the
resources as described in Sections 3.1 and 3.2.
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4. Rights.
4.1 Non-Exclusive Source License to Microsoft. Data Return hereby grants to
Microsoft a nonexclusive, perpetual, irrevocable, royalty-free, fully paid up,
worldwide right and license to:
4.1.1 Use, copy, edit, format, modify, translate and create
Derivative Technology of the source and object code versions of the
Initial Scripts;
4.1.2 Reproduce, license, rent, lease or otherwise distribute, and
have reproduced, licensed, rented, leased or otherwise distributed, to
and by third parties, source and/or object code versions of the Initial
Scripts, and any Derivative Technology thereof;
4.1.3 Grant the rights set forth in Section 4.1.1 in the Initial
Scripts to third parties; and
4.1.4 Grant to third parties the right to reproduce and distribute to
further third parties, [source and/or] object code versions of the
Initial Scripts, and any Derivative Technology thereof created by the
third parties who are directly Microsoft's licensees pursuant to Section
4.1.3. Any license grants to a third party pursuant to Section 4.1.3
must include an agreement by the third party to license back to
Microsoft and Data Return any Derivative Technology that is created
pursuant to such license grant. Microsoft and Data Return shall agree on
a standard license back provision to be used with such third parties.
The foregoing license grants include a license under any current and
future patents owned or licensable by Data Return to the extent
necessary: (i) to exercise any license right granted herein; and (ii) to
combine the Initial Scripts or Derivative Technology thereof with any
hardware and software.
4.2 Non-Exclusive Source License to Data Return. Microsoft hereby grants to
Data Return a nonexclusive, perpetual, irrevocable, royalty-free, fully paid up,
worldwide right and license to:
4.2.1 Use, copy, edit, format, modify, translate and create
Derivative Technology of the source and object code versions of any
improvement to the Initial Scripts created by Microsoft pursuant to
Section 4.1.1 ("Microsoft Improvements");
4.2.2 Reproduce, license, rent, lease or otherwise distribute, and
have reproduced, licensed, rented, leased or otherwise distributed, to
and by third parties, source and/or object code versions of the
Microsoft Improvements, and any Derivative Technology thereof;
4.2.3 Grant the rights set forth in Section 4.2.1 in the Microsoft
Improvements to third parties; and
4.2.4 Grant to third parties the right to reproduce and distribute to
further third parties, object code versions of the Microsoft
Improvements, and any Derivative Technology thereof created by the third
parties who are directly Data Return's licensees pursuant to Section
4.2.3.
4.3 Ownership. Except as expressly licensed to Microsoft in this Agreement,
Data Return retains all right, title and interest in and to the Initial Scripts;
provided, however, that, subject to the license grant in Section 4.1 and Data
Return's ownership of the underlying Initial Scripts, Microsoft shall own all
right, title and interest in and to any Derivative Technology of the Initial
Scripts created by or for Microsoft.
5. Co-Marketing.
5.1 White Paper(s). The White Paper(s) shall be co-branded in a manner
mutually agreeable to the parties. Each party may distribute such co-branded
White Paper(s) to such recipients and in such manner as it desires without the
consent of the other party. Each party may include, without co-branding,
portions of the White Paper(s) into other materials, including without
limitation marketing collateral, without the consent of the other party. Data
Return may also distribute the White Paper(s) as a whole without co-branding
without Microsoft's consent; however, Microsoft must obtain Data Return's prior
written consent to distribute any White Paper, without co-branding, which
consent may not be unreasonably withheld or delayed.
5.2 Training Seminars. Data Return and Microsoft shall provide four (4) one
day (8 hour) training seminars with regard to the Initial Scripts and related
White Paper, two of which shall occur at least thirty (30) days after acceptance
by Microsoft of both the Initial Scripts and White Paper therefor pursuant to
Section 2.2 above (the first two seminars currently anticipated to occur in mid-
October of 1999) and two of which shall occur four months later (the second two
seminars currently anticipated to occur in February of 2000). The training
seminars shall occur at the Microsoft Partner Center in Redmond, Washington.
Data Return shall act as the primary leader of the
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first two training seminars, with Microsoft assisting; Microsoft shall act as
the primary leader of the second two training seminars, with Data Return
assisting. The training seminars shall be provided to Microsoft's value-added
provider channel, including without limitation, value-added resellers, solutions
partners and system integrators. Microsoft shall determine the list of invitees.
6. Programs and Designations. The Contact Representative for Microsoft set
forth in Section 9 shall use reasonable efforts assist Data Return in obtaining
access to the relevant Microsoft product units to facilitate inclusion in all
early adopter programs, beta programs, councils, and designations that for
hosting providers using Microsoft Windows NT or Microsoft Windows 2000, and all
early adopter programs, beta programs, councils, and designations that are
specific to Exchange Server, Commerce Server and Microsoft Office. Data Return
understands that each such program, council or designation has its own
participation requirements and nothing in this provision guarantees that Data
Return will be included in such programs, councils or designations.
7. Options With Respect To New Installation Scripts. During the Term of
this Agreement, Data Return will provide written notice to Microsoft if and when
Data Return plans to develop additional automated installation scripts which are
built on Microsoft Windows 2000 and which package, utilize or include Commerce
Server, Exchange Server and/or Microsoft Office. Such notice shall be provided
at the time that the project scope for such installation scripts is complete.
The parties shall discuss in good faith, and use their best efforts to decide
within thirty (30) days after the notice is given to Microsoft, whether to
include such script(s) within this Agreement and have Microsoft provide the same
assistance and obtain the same rights with respect to such scripts as Microsoft
has with respect to the Initial Scripts. If the parties agree to include such
script(s) within this Agreement, the rights and obligations between the parties
with respect to the such scripts (the "New Script(s)") shall be identical to the
rights and obligations with regard to the Initial Scripts set forth in Sections
2, 3, 4 and 5 above, with the difference that the Microsoft Consulting Service
support shall be limited to thirty (30) hours per New Script and that the
parties shall mutually agree on the delivery schedules for the New Scripts and
related White Paper(s). Should tthe parties decide not to include such script(s)
within this Agreement, Data Return may develop the automated install scripts
referenced in such notice without any further obligations to Microsoft.
8. Revenue Sharing. In consideration of the various obligations of
Microsoft hereunder, Data Return agrees to pay Microsoft a percentage of the
total gross Revenues as set forth in Exhibit C that Data Return receives from
third parties in consideration of its licensing and other exploitation of any
New Scripts for the five (5) years following acceptance of the relevant New
Script by Microsoft provided such script enables a solution for a customer that
extends beyond the basic functionality inherent in Commerce Server, Exchange
Server and/or Microsoft Office. For example, installation scripts designed to
assist in the deployment of Exchange Server as a secure document repository for
legal documents would pertain to Section 7, but installation scripts designed to
facilitate the deployment of Exchange Server as an outsourced messaging platform
would not. "Revenues" shall mean all kinds of consideration, including but not
limited to cash, barter and any other in-kind consideration. Data Return shall
submit such payments within forty-five (45) days after the end of each three
month period, the first three-month period commencing with the month in which
Microsoft accepts the New Script in accordance with Section 2.2. Such payment
shall be accompanied by a report in the form of an affidavit, reasonably
acceptable to Microsoft, detailing the sources and amount of Revenues for the
preceding three-month period.
9. Contact Representatives. Each party shall designate a contact to be
responsible for the administration of this Agreement. Either party may change
its contact at any time upon notice to the other party. The initial contacts
are: for Microsoft, Xxxxx Xxxxxxx and for Data Return, Xxxxx Xxxxxxxxxx.
10. Press Releases. The parties will cooperate with each other on press
releases and similar communications regarding the non-confidential subject
matter of this Agreement. The content, timing and necessity of all such
communications will be agreed upon in writing by both parties. At least one
press release shall be issued by Microsoft pertaining to this agreement, within
thirty (30) days of the execution of this agreement and with content to be
determined by the Contact Representatives named in Section 8.
11. Audits. During the term of this Agreement and for two (2) years
thereafter, Data Return agrees to keep all usual and proper records and books of
account and all usual and proper entries relating to the revenues it receives
from third parties in consideration of its licensing and other exploitation of
the Initial Scripts and New Scripts. Microsoft may cause an audit and/or
inspection to be made of the applicable Data Return records in order to verify
statements issued by Data Return. Any such audit shall be conducted by an
independent certified public accountant selected by Microsoft (other than on a
contingent fee basis). Such independent certified public
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accountant shall provide a summary of its findings regarding its verification of
the statements issued by Data Return, but shall not provide Microsoft with any
other information produced from the audit of such Data Return records. Any audit
shall be conducted during regular business hours at Data Return's facilities
with at least three (3) business days' notice. Data Return agrees to provide
Microsoft's designated audit team access to the relevant Data Return records.
Data Return shall pay Microsoft the full amount of any underpayment revealed by
the audit from the date such payments were due under the terms of this
Agreement. Notwithstanding the foregoing, if such audit reveals an underpayment
by Data Return of more than ten percent (10%) for the period covered by the
audit report, Data Return shall pay the amount underpaid with interest at the
rate of the Prime Rate as announced by Seattle First National Bank of Seattle,
Washington (the "Prime Rate"), (or, if less, at a rate equal to the highest rate
permitted under applicable law from the date such payment was due pursuant to
this Section.
12. No Obligation/Independent Development. Notwithstanding any other
provision of this Agreement, Microsoft shall have no obligation to market, sell
or otherwise distribute the Initial Scripts or New Scripts, either alone or in
any Microsoft product. Except as provided in Section 12, nothing in this
Agreement will be construed as restricting Microsoft's ability to acquire,
license, develop, manufacture or distribute for itself, or have others acquire,
license, develop, manufacture or distribute for Microsoft, similar technology
performing the same or similar functions as the technology contemplated by this
Agreement, or to market and distribute such similar technology in addition to,
or in lieu of, the technology contemplated by this Agreement.
13. Confidentiality. The parties acknowledge and agree that the terms and
conditions of the Microsoft Corporation Non-Disclosure Agreement (Reciprocal)
dated as of the same date as the Effective Date ("NDA") entered into by and
between the Parties are incorporated into this Agreement and that all of the
terms of this Agreement and all discussions and negotiations related thereto and
all nonpublic information exchanged pursuant hereto are considered Confidential
Information as defined in the NDA.
14. Warranties.
14.1 Data Return. Data Return warrants and represents that:
14.1.1 It has the full power to enter into this Agreement and make the
assignments and license rights set forth herein;
14.1.2 It has not previously granted, and will not grant, any rights
in the Deliverables to any third party that are inconsistent with the
rights granted to Microsoft herein;
14.1.3 The Deliverables are original to Data Return and do not
infringe any copyright, trade secret, or other proprietary right (other
than patent) held by any third party, and to the best of Data Return's
knowledge, do not infringe any patent held by any third party;
14.1.4 The Deliverables will be created by employees of Data Return
within the scope of their employment and under obligation to assign
inventions to Data Return, or by independent contractors under written
obligations to assign all rights in the Deliverables to Data Return; and
14.1.5 The Services shall be performed in a good and workmanlike
manner consistent with industry standards and consistent with the
quality of Data Return's currently existing products.
14.2 Microsoft. Microsoft warrants and represents that it has taken the
necessary steps to enter into this Agreement.
15. Indemnity.
15.1 Indemnity.
15.1.1 Data Return shall, at its expense and Microsoft's request,
defend any claim or action brought against Microsoft, and Microsoft's
subsidiaries, affiliates, directors, officers, employees, agents and
independent contractors, which, if true, would constitute a breach of a
warranty by Data Return in Section 14, and Data Return will indemnify
and hold Microsoft harmless from and against any costs, damages and fees
reasonably incurred by Microsoft, including but not limited to fees of
attorneys and other professionals, that are attributable to such claim.
Microsoft shall: (i) provide Data Return reasonably prompt notice in
writing of any such claim or action and permit Data Return, through
counsel mutually acceptable to Microsoft and Data Return, to answer and
defend such claim or action; and (ii) provide Data
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Return information, assistance and authority, at Data Return's expense,
to help Data Return to defend such claim or action. Data Return will not
be responsible for any settlement made by Microsoft without Data
Return's written permission, which permission will not be unreasonably
withheld.
15.1.2 Microsoft shall have the right to employ separate counsel and
participate in the defense of any claim or action. Data Return shall
reimburse Microsoft upon demand for any payments made or loss suffered
by it at any time after the date hereof, based upon the judgment of any
court of competent jurisdiction or pursuant to a bona fide compromise or
settlement of claims, demands, or actions, in respect to any damages
related to any claim or action under this Section 15.
15.1.3 Data Return may not settle any claim or action under this
Section 15 on Microsoft's behalf without first obtaining Microsoft's
written permission, which permission will not be unreasonably withheld.
In the event Microsoft and Data Return agree to settle a claim or
action, Data Return agrees not to publicize the settlement without first
obtaining Microsoft's written permission, which permission will not be
unreasonably withheld.
15.2 Duty to Correct. Notwithstanding Section 15.1, should the Deliverables
or any portion thereof be held to constitute an infringement and use as
contemplated by this Agreement be enjoined or be threatened to be enjoined, Data
Return shall notify Microsoft and immediately, at Data Return's expense: (i)
procure for Microsoft the right to continue use the Product, Deliverables or
portion thereof, as applicable, as licensed in this Agreement; or (ii) replace
or modify the Product, Deliverables or portion thereof with a version that is
non-infringing, provided that the replacement or modified version provides the
same material functionality as the allegedly infringing version. If (i) or (ii)
are not available to Data Return, in addition to any damages or expenses
reimbursed under Section 15.1, Data Return shall refund to Microsoft all cash
sums paid to Data Return by Microsoft under this Agreement.
16. Termination.
16.1 Term. The term of this Agreement shall commence as of the Effective Date
and shall continue until terminated as provided in this Section 16.
16.2 Termination by Microsoft. Microsoft shall have the right to cancel any
Deliverable with or without cause by providing Data Return written notice of
such cancellation, in which event all rights and obligations with regard to such
Deliverable under Sections 3, 4, 5 and 7 shall terminate.
16.3 Partial Termination. If Microsoft determines that it will no longer
market Data Return as an Application Service Provider, then the obligations set
forth in Sections 2.3, 7 and 8 shall terminate.
16.4 Termination By Either Party For Cause. Either party may suspend
performance and/or terminate this Agreement immediately upon written notice at
any time if:
16.4.1 The other party is in material breach of any material warranty,
term, condition or covenant of this Agreement, other than those
contained in Section 13, and fails to cure that breach within thirty
(30) days after written notice thereof; or
16.4.2 The other party is in material breach of Section 13.
16.5 Effect of Termination.
16.5.1 In the event of termination of this Agreement for any reason,
Sections 4 (with respect to any Initial Scripts or New Scripts delivered
to Microsoft hereunder, and any Derivative Technology thereof), 5.1, and
11 through 18 shall survive termination.
16.5.2 Neither party shall be liable to the other for damages of any
sort resulting solely from terminating this Agreement in accordance with
its terms. Any licenses or sublicenses already granted by Microsoft
under this Agreement shall not be affected by any termination of this
Agreement and shall remain in full force and effect.
17. Limitation on Liabilities.
17.1 NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
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17.2 OTHER THAN WITH RESPECT TO PUNITIVE DAMAGES, THIS SECTION 17 HAS NO
APPLICATION TO SECTIONS 13 AND 15. IN NO EVENT HOWEVER WILL THE AGGREGATE
AMOUNT OF LIABILITY OF EITHER PARTY EXCEED TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000.00.)
18. General.
18.1 Notices. All notices, authorizations and requests in connection with
this Agreement shall be deemed given as of the day they are deposited prepaid
with DHL, Airborne, Federal Express or similar overnight air courier, and
addressed as follows:
To Data Return: 000 Xxxx Xxx Xxxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxxx, CEO
FAX: 000 000 0000
With a copy to: Xxxxxxxx & Knight
000 Xxxxxx Xx. Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
FAX: 000-000-0000
To Microsoft: Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx
FAX: 000 000 0000
With a copy to: MICROSOFT CORPORATION
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Attention: Legal Department
FAX: 000-000-0000
or to such other addresses and/or telex and telefax number as the party to
receive the notice or request so designates by written notice to the other. All
notices, authorizations and requests shall be simultaneously confirmed by telex
or telefax, provided that failure to receive such a confirmation shall not
effect in any way the validity of the notice, authorization or request sent by
international air courier.
18.2 Independent Contractors. Data Return is an independent contractor for
Microsoft, and nothing in this Agreement shall be construed as creating an
employer-employee relationship, a partnership, or a joint venture between the
parties.
18.3 Taxes.
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18.3.1 The amounts to be paid by Data Return to Microsoft herein do
not include any foreign, U.S. federal, state, local, municipal or other
governmental taxes, duties, levies, fees, excises or tariffs, arising as
a result of or in connection with the transactions contemplated under
this Agreement including, without limitation, any state or local sales
or use taxes or any value added tax or business transfer tax now or
hereafter imposed on the provision of services to Data Return by
Microsoft under this Agreement, regardless of whether the same are
separately stated by Microsoft. All such taxes (and any penalties,
interest, or other additions to any such taxes), with the exception of
taxes imposed on Microsoft's net income or with respect to Microsoft's
property ownership, shall be the financial responsibility of Data
Return. Data Return agrees to indemnify, defend and hold Microsoft
harmless from any such taxes or claims, causes of action, costs
(including, without limitation, reasonable attorneys' fees) and any
other liabilities of any nature whatsoever related to such taxes.
18.3.2 Data Return will pay all applicable value added, sales and use
taxes and other taxes levied on it by a duly constituted and authorized
taxing authority on the software, services or other product provided
under this Agreement or any transaction related thereto in each country
in which the services and/or property are being provided or in which the
transactions contemplated hereunder are otherwise subject to tax,
regardless of the method of delivery. Any taxes that are owed by Data
Return, (i) as a result of entering into this Agreement and the payment
of the fees hereunder, (ii) are required or permitted to be collected
from Data Return by Microsoft under applicable law, and (iii) are based
upon the amounts payable under this Agreement (such taxes described in
(i), (ii), and (iii) above the "Collected Taxes"), shall be remitted by
Data Return to Microsoft, whereupon, upon request, Microsoft shall
provide to Data Return tax receipts or other evidence indicating that
such Collected Taxes have been collected by Microsoft and remitted to
the appropriate taxing authority. Data Return may provide to Microsoft
an exemption certificate acceptable to Microsoft and to the relevant
taxing authority (including without limitation a resale certificate) in
which case, after the date upon which such certificate is received in
proper form, Microsoft shall not collect the taxes covered by such
certificate.
18.3.3 This tax section shall govern the treatment of all taxes
arising as a result of or in connection with this Agreement
notwithstanding any other section of this Agreement.
18.4 Governing Law. In the event an action is commenced to enforce a party's
rights under this Agreement, the prevailing party in such action shall be
entitled to recover its costs and reasonable attorneys' fees. Data Return and
Microsoft each agree that this Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, U.S.A., and Data Return and
Microsoft hereby each consent to the jurisdiction of the state and federal
courts sitting in the state in which the other party's corporate headquarters is
located. Both parties hereby agree that any lawsuit arising hereunder brought
by Data Return shall be brought exclusively in either the state or federal
courts sitting in the state in which the other party's corporate headquarters is
located. Both parties waive all defenses of lack of personal jurisdiction and
forum inconveniens. Process may be served on either party in the manner
authorized by applicable law or court rule.
18.5 Dispute Resolution. Notwithstanding the foregoing, in the event of a
disagreement between Microsoft and Data Return, the Contact Representatives will
first attempt to resolve the disagreement through negotiation. In the event the
Representatives cannot resolve the disagreement within sixty (60) days, the
President or CEO of Data Return and a representative of the upper management of
Microsoft will attempt to resolve the disagreement through negotiation. In the
event that the President or CEO of Data Return and a Representative of upper
management of Microsoft are unable to resolve the dispute through negotiation
within thirty (30) days, the Parties will try in good faith to settle the
dispute by non-binding mediation under the Commercial Mediation Rules of the
American Arbitration Association, prior to the commencement of litigation.
18.6 Assignment. The authorization by Microsoft for Data Return to acquire
and distribute Initial Scripts in accordance with this Agreement is personal to
Data Return and this Agreement shall not be assignable by Data Return. Any
prohibited assignment is null and void. Microsoft may transfer its rights and
obligations hereunder to any third party without prior written approval of Data
Return.
18.7 Construction. If for any reason a court of competent jurisdiction finds
any provision of this Agreement, or portion thereof, to be unenforceable, that
provision of the Agreement will be enforced to the maximum extent permissible so
as to effect the intent of the parties, and the remainder of this Agreement will
continue in full force and effect. Failure by either party to enforce any
provision of this Agreement will not be deemed a waiver of future
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enforcement of that or any other provision. 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.
18.8 Entire Agreement. This Agreement supersedes and terminates any and all
prior agreements or contracts, written or oral, entered into between the parties
relating to the subject matter hereof, and any representations, promises, or
conditions in connection therewith not in writing shall not be binding upon
either party. This Agreement shall be effective from the date first set forth
above, provided it has been properly executed on behalf of Microsoft and Data
Return by their duly authorized officers and accepted by Microsoft at its
Redmond, Washington offices.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date written above.
MICROSOFT CORPORATION DATA RETURN CORPORATION
/s/ Xxxxxx Xxxxx /s/ Sunny X. Xxxxxxxxxx
----------------------------------- -----------------------------------
By (Sign) By (Sign)
Xxxxxx Xxxxx Sunny X. Xxxxxxxxxx
----------------------------------- -----------------------------------
Name (Print) Name (Print)
Director, Corporate Development Chairman and CEO
----------------------------------- -----------------------------------
Title Title
September 2, 1999 September 2, 1999
----------------------------------- -----------------------------------
Date Date
Page 9 of 12
Exhibit A
Initial Scripts
Three software install scripts built on Microsoft Windows NT that provide
processes to package hosted services, one script for each of three areas: (a)
Commerce direct selling; (b) Commerce corporate purchasing; and (c) Line of
business customer relations management services. Each of the Initial Scripts
shall have the following features:
1. Provides automated installation where possible; installation that cannot be
automated will be documented.
2. Details the hardware required, including without limitation the necessary
configuration of the PC; and
3. Details the client/server load that service can handle.
The scripts shall be delivered in source and object code form, together with
documentation detailing the methods for using the scripts.
Page 10 of 12
EXHIBIT B
Maintenance Problem Severity and Resolutions
Severity Criteria Time Limit
-------- -------- ----------
1 Critical: Problem which prevents or seriously 24 hours
impairs the performance of substantially all major
functions. (What about test blocking bugs)
2 Severe Impact: Problem which prevents or 3 days
seriously impairs the performance of a major function.
3 Degraded Operation: Problem which disables or 2 weeks
impairs the performance of a minor function.
Page 11 of 12
EXHIBIT C
Revenue Sharing
The following table outlines the percentage of gross revenues that will be paid
to Microsoft pursuant to Section 8.
Year Percentage of Gross Revenues
---------------------------------------
1 3%
2 3%
3 4%
4 4%
5 5%
Page 12 of 12
