DEVELOPMENT AGREEMENT
(NETTAXI)
This Development Agreement (the "Agreement') is dated as of December 16, 1998
between the Big Not-work Inc., a Delaware corporation, with its principal place
of business located at 0000 Xxxxxxxx Xxx, Xxxxxxxx, XX 00000 (the "Company") and
NetTaxi On-Line Communities, a Delaware corporation, with its principal place of
business located at 0000 X. Xxxxxx Xxx., Xxxxxxxx, XX. 00000 ("Net:Taxi"),
Pursuant to this Agreement, the Company and NetTaxi will develop, publish,
display and promote Internet-based games for users of NetTaxi's Internet
aggregation service. The Company and NetTaxi will share the revenue resulting
from the business relationship, as described herein.
Accordingly, in exchange for the mutual promises contained herein, the parties
hereby agree as follows;
1. BACKGROUND.
1.1 The Company. The Company offers Internet-based games from its
Internet site located at xxxx://xxx,xxxxxxxxxx.xxx.
1.2 NetTaxi. NetTaxi operates a website community and aggregation site
on the World Wide Web located at xxxx://xxx.xxxxxxx.xxxx.
2. DEFINITIONS.
"Advertisements" means all banner advertisements, portals, links, buttons and
other promotions for third parties displayed on the Game Pages.
"Company Marks" means any trademarks, trade names, service marks and logos that
may be delivered by the Company to NetTaxi expressly for inclusion in promotions
for the Games,
"Company Service" means any product or service sold or otherwise distributed by
the Company (but not third parties) on or through the Game Pages or the Company
Site,
"Company Site" means the Internet site currently located at
http;//xxx.xxxxxxxxxx.xxx, through which the Company offers Internet-based games
directly to end users, together with any successors thereto.
"Development Schedule" means the mutually agreed upon development schedule set
forth in Exhibit A (the "Development Schedule", as such development schedule may
be modified or amended from time to time through written agreement between the
parties.
"Game Pages" Means Internet pages to be developed and hosted by the Company, in
accordance with this Agreement, through which Users will be able to register for
and/or play the Games via the NetTaxi Site, including through individual member
pages on the NetTaxi site.
"Game Revenue" means revenue derived by NetTaxi, through Advertisements on the
Game Pages or through other means in connection with the publication, display or
other use of the Games, less any associated advertising agency commissions
(provided, however, that such
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advertising agency commissions may not in any case exceed 35% of the Game
Revenue).
"Games" means Java-based card games, board games and other games to be offered
to Users of the Game Pages.
"Look and reel" means the look and feel, user interface and flow of user
experience of an Internet site.
"Minimum Deliverables" means the minimum Game Pages and Games sufficient to
launch the Game Pages as part of the NetTaxi site, as more specifically
identified in the Development Schedule.
"NetTaxi Marks" means any trademarks, trade names, service marks and logos
delivered by NetTaxi to the Company expressly for inclusion in the Game Pages.
"NetTaxi Site" means the Internet site currently located at
xxxx://xxx.xxxxxxx.xxx, and any successors thereto.
"Term" means the term of this Agreement, as set forth in Section 5.
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"User" means a user of the NetTaxi Site.
"User Data" means name, address and other registration or demographic data and
any information concerning traffic or usage levels or patterns.
3. DEVELOPMENT AND IMPLEMENTATION.
3.1 The Company will develop the Game Pages and the Games in accordance with
the Development Schedule.
3.2 The Company will insure that the Look and Feel of the Game Pages is
reasonably consistent with the Look and Feel of the NetTaxi Site throughout
the Term, so that the Game Pages appear to be part of the NetTaxi Site
rather than a separate site. The Company and NetTaxi will cooperate reasonably
and in good faith to ensure a seamless user experience as Users move between
the NetTaxi Site and the Game Pages. NetTaxi will provide mock-ups, logos
and other materials as reasonably necessary to allow the Company to achieve
the required Look and Feel for the Game Pages. Company Marks included on the
Game Pages will link back to the Company Site. Each Game Page will include a
promotional tag for the Company, reasonably acceptable to NetTaxi and the
Company, indicating that the Company is the sole provider of Games for NetTaxi
and including a link to a site designated by the Company,
3.3 The Company will host and maintain the Game Pages on its servers and
will be responsible for providing all necessary computer hardware, software
and bandwidth for such purposes. The Company and NetTaxi will use reasonable
efforts (including by selecting appropriate URL:s for the Game Pages within
the XxxXxxx.xxx domain) to ensure that it appears to Users that the Game Pages
are part of the NetTaxi Site.
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3.4 The Company will ensure that the quality, functionality and reliability
of the Game Pages and the Games does not decline in any material respect
after initial acceptance by NetTaxi.
3.5 In addition to the specific requirements set forth above, the Company
will be responsible for ensuring that the Games and the, Game Pages function
with reasonable reliability and in a commercially reasonable manner
throughout the Term.
3.6 The Company will provide support services to NetTaxi personnel and to
Users of the Game Pages as described in Exhibit B.
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4. PROMOTION OF THE GAME PAGES. Following acceptance by NetTaxi of the
Minimum Detiverables, NetTaxi will incorporate links to the Came Pages into the
NetTaxi Site for the purpose of generating traffic to the Came Pages, which
shall be subject to reasonable review and approval by the Company. In
particular, NetTaxi will display promotions for the Game Pages on the "home" or
first page of the NetTaxi Site and through links within the Arcade community
within the Site, subject to reasonable review and approval by the Company.
5. REVENUE SHARING.
5.1 NetTaxi will manage the sales effort with respect to all Advertisements
to be sold on the Game Pages, and will be responsible for delivering such
Advertisements to the Company for display on the Game Pages and for all related
billing and collecting services. The Company will cooperate reasonably and in
good faith with NetTaxi with respect to such sales activities. The Company and
NetTaxi will cooperate reasonably and in good faith to develop appropriate
procedures and technologies to allow NetTaxi to serve Advertisements for the
Game Pages remotely.
5.2 Within 30 days after the end of each month during the Term, NetTaxi will
pay the Company an amount equal to REDACTED of all Game Revenue generated during
such month from the NetTaxi Site, An invoice showing the calculation of the
amount owed to the Company will accompany each payment.
5.3 Upon reasonable request, the Company may engage an independent
accounting firm to audit the books and records of NetTaxi directly applicable to
the calculation of required payments hereunder by providing written notice to
NetTaxi at least 30 days before initiation of such audit. The Company shall be
limited to two audits in any 12 month period, and each audit shall be conducted
during a specified audit period of reasonable length, which will be established
by NetTaxi at least once during each calendar quarter.
6. TERM AND TERMINATION.
6.1 The term of this Agreement (the "Term") will begin on the date hereof
and will continue until the first anniversary of the date hereof, unless
otherwise terminated as provided in this Agreement. Thereafter, the Term
will be automatically extended for successive one month periods until terminated
by either party on 30 days written notice.
6.2 If either party commits a material breach of its obligations hereunder
that is not cured within 30 days after notice thereof from the non-breaching
party, the non-breaching
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party may terminate this Agreement at any time by giving written notice of
termination to the breaching party.
6.3 The Company or its successor may terminate this Agreement upon 60 days
prior written notice in the event of a sale of all or substantially all of the
assets of the Company.
6.4 The provisions of Section 11.6 and any obligations arising prior to
termination will survive any termination of this Agreement.
7. Users. All Users sent to the Game Pages must be able to register and
authenticate using existing NetTaxi member names and passwords.
8. INTELLECTUAL PROPERTY.
8.1 As between the Company and NetTaxi, the Company will retain all right,
title and interest in and to the Games and to the content of the Game Pages,
excluding the Look and Feel of the NetTaxi Site to the extent embodied in the
Game Pages. NetTaxi will be responsible for providing the Company with any
necessary or appropriate license agreements to be entered into online within
the Game Pages by Users of the Games,
8.2 The Company hereby grants to NetTaxi a non-exclusive, royalty-free
license, effective throughout the Term, to use, display and publish the Company
Marks solely within promotions for the Game Pages. Any use of the Company Marks
by NetTaxi must comply with any reasonable usage guidelines communicated by the
Company to NetTaxi from time to time. Nothing contained in this Agreement will
give NetTaxi any right, title or interest in or to the Company Marks or the
goodwill associated therewith, except for the limited usage rights expressly
provided above. NetTaxi acknowledges and agrees that, as between the Company and
NetTaxi, the Company is the sole owner of all rights in and to the Company
Marks.
8.3 NetTaxi hereby grants to the Company a non-exclusive, royalty free
license, effective throughout the Term, to use, display and publish the NetTaxi
Marks solely within the Game Pages and to use the Look and Feel of the NetTaxi
Site on the Game Pages as contemplated by Section 3.2. Any use of the NetTaxi
Marks or such Look and Feel by t'he Company must comply with any reasonable
usage guidelines communicated to the Company by NetTaxi from time to time.
Nothing contained in this Agreement will give the Company any right, title or
interest in or to the NetTaxi Marks, such Look and Feel or the goodwill
associated therewith, except for the limited usage rights expressly provided
above. The Company acknowledges and agrees that, as between the Company and
NetTaxi, NetTaxi is the sole owner of all rights in and to the NetTaxi Marks and
the Look and Feel of the NetTaxi Site.
9. RESPONSIBILITY FOR Games and Company Services. The Company acknowledges
and agrees that, as between the Company and NetTaxi, the Company will be
responsible for any claims or other losses associated with or resulting from the
distribution or use of the Games, the operation of the Game Pages and the sale
or other distribution of any Company Services by the Company or through the Game
Pages; provided however that the Company shall be liable only to the extent of
its own negligence in connection with claims for which NetTaxi is contributorily
negligent. NetTaxi is not authorized to make, and agrees not to make, any
representations or
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warranties concerning the Games, the Game PAGES or any Company Services, except
to the extent (if any) contained within promotions for the Game Pages delivered
to NetTaxi by the Company or approved by the Company.
10. MUTUAL INDEMNIFICATION.
10.1 Indemnification by NetTaxi. NetTaxi shall indemnify and hold the
Company harmless from and against any costs, losses, liabilities and expenses,
including all court costs, reasonable expenses and reasonable attorneys' fees
(collectively, "Losses") that NetTaxi may suffer, incur or be subjected to by
reason of any legal action, proceeding, arbitration or other claim by a third
party, whether commenced or threatened, arising out of or as a result of (a) the
use of NetTaxi Marks by the Company in accordance with this Agreement; (b) the
content of the NetTaxi Site (except for content provided by NetTaxi); (c) any
content provided by NetTaxi for display on the Game Pages and any negligent act
of NetTaxi with respect to the Game Pages.
10.2 Indemnification by the Company. The Company shall indemnify and hold
NetTaxi harmless from and against any Losses that NetTaxi may suffer, incur or
be subjected to by reason of any legal action, proceeding, arbitration or other
claim by a third party, whether commenced or threatened, arising out of or as a
result of (a) the use of the Company Marks by NetTaxi in accordance with this
Agreement; (b) any content provided by the Company to NetTaxi for display on the
Company Site; (e) the operation of the Game Pages or the Company Site or the
distribution of the Games or any Company Services by the Company or through the
Game Pages.
10.3 Indemnification Procedures. If any party entitled to indemnification
under this Section (an "Indemnified Party") makes an indemnification request to
the other, the Indemnified Party shall permit the other party (the "Indemnifying
Party") to control the defense, disposition or settlement of the matter at its
own expense; provided that the Indemnifying Party shall not, without the consent
of the Indemnified Party enter into any settlement or agree to any disposition
that imposes an obligation on the Indemnified Party that is not wholly
discharged or dischargeable by the Indemnifying Party, or imposes any conditions
or obligations on the Indemnified Party other than the payment of monies that
are readily measurable for purposes of determining the monetary indemnification
or reimbursement obligations of Indemnifying Party. The Indemnified Party shall
notify Indemnifying Party promptly of any claim for which Indemnifying Party is
responsible and shall cooperate with Indemnifying Party in every commercially
reasonable way to facilitate defense of any such claim; provided that the
Indemnified Party's failure to notify Indemnifying Party shall not diminish
Indemnifying Party's obligations under this Section except to the extent that
Indemnifying Party is materially prejudiced as a result of such failure. An
Indemnified Xxxxx shall at all times have the option to participate in any
matter or litigation through counsel of its own selection and at its own
expense.
11. MISCELLANEOUS.
11. 1 LIMITATION OF DAMAGES. NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS
AGREEMENT, HOWEVER CAUSED AND ON
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ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), AND EVEN IF SUCH PARTY HAS BEEN
ADVISED OF TM POSSIBILITY OF SUCH DAMAGES. FURTHEIZ, EXCEPT FOR ANY CLAIM FOR
TNDEMNTFICATION ARISING UNDER SECTION 10 ABOVE AND 11.6, IN NO EVENT SHALL
EITI-WR PARTY BE LIABLE FOR DAMAGES IN EXCESS OF TBE TOTAL PAYMENTS REQUIRED TO
BE MADE UNDER THIS AGREEMENT DURING THE PRIOR t2 MONTHS.
11.2 Assignment. NetTaxi may not assign this Agreement, except (a) in
connection with the transfer of substantially all of the business operations of
NetTaxi (whether by asset sale, stock sale, merger or otherwise); or (b) with
the written permission of the Company, which will not be unreasonably withheld.
The Company may not assign this Agreement, except (a) in connection with the
transfer of substantially all of the business operations of the Company (whether
by asset sale, stock sale, merger or otherwise); or (b) with the written
permission of the Company, which will not be unreasonably withheld,
11.3 Relationship of Parties. This Agreement will not be construed to
create a joint venture, partnership or the relationship of principal and agent
between the parties hereto, nor to impose upon either party any obligations for
any losses, debts or other obligations incurred by the other party except as
expressly set forth herein,
11.4 Entire Agreement. This Agreement constitutes and contains the
entire agreement between the parties with respect to the subject matter hereof
and supersedes any prior oral or written agreements, This Agreement may not be
amended except in writing signed by both parties. Each party acknowledges and
agrees that the other has not made any representations, warranties or agreements
of any kind, except as expressly set forth herein.
11.5 Applicable Law. This Agreement will be construed in accordance with
and governed by the laws of the State of California, without regard to
principles of conflicts of law.
11.6 Confidentiality. In connection with the activities contemplated by
this Agreement each party may have access to confidential or proprietary
technical or business information of the other party, including without
limitation (a) proposals, ideas or research related to possible new products or
services; (b) financial information; and (c) the material terms of the
relationship between the parties; provided, however, that such information will
be considered confidential only if it is expressly designated as Confidential
Information in this Agreement or conspicuously designated as "Confidential" in
writing or, if provided orally, identified as confidential at the time of
disclosure and confirmed in writing within 10 days of disclosure (collectively,
"Confidential Information"). Each party will take reasonable precautions to
protect the confidentiality of the other party's Confidential information, which
precautions will be at least equivalent to those taken by such party to protect
its own Confidential Information. Except as required by law or as necessary to
perform under this Agreement, neither party will knowingly disclose the
Confidential Information of the other party or use such Confidential Information
for its own benefit or for the benefit of any third party. Each party's
obligations in this Section with respect to any portion of the other party's
Confidential Information shall terminate when the party seeking to avoid its
obligation under this Section can document that: (i) it was in the public domain
at or subsequent to the time it was communicated to the receiving party
("Recipient") by the disclosing party ("Discloser") through no fault of
Recipient; (ii) it was
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rightfully in Recipient's possession free of any obligation of confidence at or
subsequent to the time it was communicated to Recipient by Discloser; (iii) it
was developed by employees or agents of Recipient independently of and without
reference to any information communicated to Recipient by Discloser; or (iv) the
communication was in response to a valid order by a court or other governmental
body, was otherwise required by law or was necessary to establish the rights of
either party under this Agreement
11.7 Press Release. Each party may issue a press release concerning the
business relationship contemplated in this Agreement, and each party will
provide an appropriate quote from one of its senior executive officers for use
in the other party's release. Each party will provide the other with a
reasonable opportunity to review and comment on its press release.
11.8 Attorney Fees. In any action or suit to enforce any right or remedy
under this Agreement or to interpret any provision of this Agreement, the
prevailing party shall be entitled to recover its costs, including reasonable
attorneys' fees.
11.9 Dispute Resolution. In the event that any dispute arises hereunder, the
parties agree that prior to commencing litigation, arbitration, or any other
legal proceeding, each party shall send an officer of such party to negotiate a
resolution of the dispute in good faith at a time and place as may be mutually
agreed. Each officer shall have the power to bind its respective party in a.11
material respects related to the dispute. If the parties cannot agree on a time
or place, upon written notice from either party to the other, the negotiations
shall be held at the principal executive offices of the Company 21 days
following such notice (or on the next succeeding business day, if the 21 st day
is a weekend or holiday).
11.10 Authority; No Conflicts. NetTaxi hereby represents and warrants to the
Company that it has the right and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution, delivery and performance of
NetTaxi's obligations under this Agreement do not conflict with any other
agreement to which NetTaxi is a party.
IN WITNESS WIMREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first written above.
THE BIG NETWORK, INC. NETTAXI, INC.
By: By:
Name: Name:
Title: Title:
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EXHIBIT A
DEVELOPMENT SCHEDULE
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EXHIBIT B
Support Services
1. Definition
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"Hours of Operation" means Monday to Friday 6:OOAM - 5:OOPM PST (Pacific
Standard Time) or other hours of operation at least as favorable to end users of
the Game Pages,
"Problem" means any error, bug, or malfunction that causes any feature of the
Game Pages to perform unpredictably or to otherwise become intermittently
unavailable or that causes the Game Pages to have a material degradation in
response time performance,
"Severe Problem" means any error, bug, or malfunction that causes the Game Pages
to become inaccessible to Users for 15 consecutive minutes or longer.
"Enhancement Request" means any suggestion regarding the design, aesthetics,
functionality, content, or other feature, of the Game Pages or the Games that is
not a Problem or a Severe Problem.
"Fix" means a correction, fix, alteration or workaround that solves a Problem or
a Severe Problem.
2. Contact points.
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2.1 NetTaxi Technical Support Personnel. NetTaxi will designate no more than
two NetTaxi employees or contractors as qualified to contact the Company for
technical support. NetTaxi will ensure NetTaxi Technical Support Personnel have
received adequate training from the Company, as described in this Exhibit, and
are otherwise capable of providing technical support. NetTaxi will provide the
Company with the names, email addresses, telephone numbers and pager numbers of
NetTaxi Technical Support Personnel no later than one week prior to the launch
date of the Game Pages, NetTaxi may change its designated Technical Support
Personnel at its discretion with reasonable notice to the Company.
2.2 Company Technical Support Personnel, The Company will designate one
primary and one backup Technical Support employee or contractor to provide
technical support to NetTaxi. The Company will ensure that its Technical Support
Personnel are adequately trained to provide technical support to NetTaxi. The
Company will provide NetTaxi with the names, email addresses, telephone numbers
and pager numbers of the Company Technical Support Personnel no later than one
week prior to the launch date of the Game Pages. The Company may change its
designatBd Technical Support Personnel at its discretion with reasonable notice
to NetTaxi.
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3. Support procedures.
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3.1 All Problems reported by NetTaxi Technical Support Personnel to the
Company must be submitted via email to xxxxxxx@xxxxxxxxxx.xxx
3.2 If NetTaxi believes it is reporting a Severe Problem, NetTaxi will
accompany its email request with a phone call and page to the Company Technical
Personnel.
3.3 Upon receiving an email report from NetTaxi, the Company will, in its
reasonable discretion, determine whether the email request is a Problem, a
Severe Problem or an Enhancement Request. The Company will respond to the email
request and provide a Fix as described in Section 4,of this Exhibit.
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3.4 The Company will use commercially reasonable efforts to inform NetTaxi
Technical Support Personnel of Fixes.
4. Support, levels.
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4.1 The Company will provide technical support to Users of the Game Pages or
the Games who email or otherwise contact the Company directly with questions
about the Game Pages or the Games. The Company will use its commercially
reasonable efforts to respond to such emails within two business days, and to
Fix any Problems as fast as is commercially reasonable, NetTaxi will use its
commercially reasonable efforts to inform the Company of any Enhancement
Requests that NetTaxi receives from Users of the Game Pages or that NetTaxi
otherwise develops through its own efforts.
4.2 The Company will provide the following technical support solely to
NetTaxi Technical Support Personnel:
RECEIPT OF TYPE OF EMAIL TARGET RESPONSE TARGET FIX TIME AND REPORTING
EMAIL REQUEST TIME FROM EMAIL
REQUEST RECEIPT
During Problem Within four hours Commercially reasonable with
Hours of weekly status reports to NetTaxi
Operation or
other times
During Severe Problem Within two hours Commercially reasonable efforts
Hours of with daily status reports to
Operation NetTaxi
During other Severe Problem Within three hours Commercially reasonable efforts
times with daily status reports to
NetTaxi
During Enhancement As soon as In the Company's reasonable
Hours of Request commercially discretion
Operation or reasonable
others times
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EXHIBIT A
EXHIBIT A: NETTAXI DEVELOPMENT SCHEDULE
Web Integration
Registraton system conference call 03/08/99
Templates delivered by NetTaxi 03/10/99
Web Integration COMPLETE 03/15/99
Game launch (Minimum Deliverables) 03/22/99
Chess
Checkers
Reversi
Backgammon
Morph
Spades
Phase 11 Games
Hearts April
Poker April
Blackjack May
Phase III Games
Game 1 May
Game 2 May
Game 3 May
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