EXHIBIT 10(8)
WEB DESIGN & DEVELOPMENT AGREEMENT
This WEB DESIGN & DEVELOPMENT AGREEMENT (the "Agreement") is made and
entered into as of the 6th day of August, 1999 (the "Effective Date"), by and
between VCI Community Solutions, Inc. a Delaware corporation with offices at 000
0xx Xxxxxx, Xxx Xxxx, XX 00000 ("VCI") and Xxxxxxxxxx.xxx , Inc., a New York
corporation with offices at the Troma Building, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000 ("Client").
W I T N E S S E T H
WHEREAS, Client desires to engage VCI, and VCI desires to be engaged by
Client, to provide Internet services relating to, among other things,
development and design of sites on the World Wide Web portion of the Internet
(the "Web"), on the terms and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, VCI and Client (collectively, the "Parties") hereby
agree as follows:
1. Services
1.1. VCI Services. VCI agrees to provide Client with, and Client agrees to
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purchase from VCI (subject to the terms and conditions set forth herein),
services (the "Web Site Services") for the design and development of a portion
of Client's site on the Web (the "Web Site") as set forth or described in
Exhibit 1, and with the additional services (the "Additional Services"; together
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with the Web Site Services are hereinafter referred to collectively as the
"Services"), set forth or described in Exhibit 2 and mutually agreed upon in
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writing by the Parties. Obligations of VCI, if any, to provide ongoing
maintenance ("Maintenance") for the Web Site shall be set forth and included as
part of Additional Services in Exhibit 2. Client agrees that VCI is responsible
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only for providing the Services, and VCI is not responsible for providing any
services or performing any tasks not specifically set forth in Exhibit 1 or
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Exhibit 2.
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2. Web Site Development
2.1. Specifications and Client Content. VCI, in consultation with the
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Client's reasonable requests, shall prepare detailed written specifications (the
"Specifications") for the Web Site. Client agrees to respond promptly to all of
VCI's reasonable requests for information during the preparation of the
Specifications and for the remainder of this Agreement. The Specifications shall
consist of, among other things, a design for the Web Site, a flow-chart of the
pages for the Web Site, programming and interactive feature requirements,
modules, and the placement of any content or other materials which are to be
incorporated into the Web Site. The Specifications shall be subject to any
restrictions or limitations set forth in Exhibit 1 or Exhibit 2. The
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Specifications shall be delivered to the Client within thirty (30) days of the
Effective Date (the "First Milestone"), and upon being agreed to by the Parties
in writing (the "Specifications Approval"), shall be attached hereto as Exhibit
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3. Upon such First Milestone, Client shall pay to
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VCI the fees contemplated by Section 6.1 hereof. If the Parties are unable to
agree in writing to mutually acceptable Specifications, after using good faith
efforts, on or before sixty (60) days after the Effective Date, either party may
terminate this Agreement by providing ten (10) business days advanced written
notice to the other party. Such termination shall not relieve Client from the
obligation of paying VCI for all unpaid and outstanding fees due VCI through the
effective date of such termination.
2.2. Delivery of Client Content. "Client Content" shall mean any materials
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provided to VCI by Client for incorporation in the Web Site, including, but not
limited to, any images, photographs, illustrations, graphics, audio clips, video
clips or text. Client shall deliver all Client Content to VCI, prior to VCI's
commencement of the Template as set forth in Section 2.3 hereof, in an
electronic file standard graphic format commonly used in Internet Web site
development as specified by, and accessible by, VCI, which formats may include,
but are limited to, .GIF, .JPG, Adobe Illustrator EPS and TIFF or any other
formats mutually agreed to between the parties. Any services performed by, or at
the direction of, VCI that are required to convert Client Content shall be
charged to Client as Additional Services.
2.3. Delivery of Templates Following the Specifications Approval, and upon
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VCI's receipt of the requisite Client Content necessary to design and develop
the Web Site (as determined by both Parties) and any fees (the "Fees") specified
in Exhibit 4 (Fee and Payment Schedule) due and owing from Client to VCI, VCI
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shall commence (the "Commencement") the tasks associated with the development
and design of the sample pages of the Web Site (the "Templates") and notify the
Client of the URL (Uniform Resource Locator) or other Web address of the
Templates. VCI shall use the combinations of technology and designs as VCI, in
consultation with the Client's reasonable requests, deems appropriate to develop
the Web Site. Within the later of thirty (30) days from the Commencement or
sixty (60) days from the Effective Date (the "Template Delivery"), VCI shall
have substantially completed the development and design of the Templates, but
for any revisions, Change Orders or Order Forms as contemplated by Section 2
hereof.
2.4. Initial Version. Within the later of forty (40) days from the
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Template Delivery or one hundred (100) days from the Effective Date (the "Second
Milestone"), VCI shall have substantially completed the development and design
of the initial version (the "Initial Version"), but for any revisions, Change
Orders or Order Forms as contemplated by Section 2 hereof, and upon such Second
Milestone, Client shall pay to VCI the fees contemplated by Section 6.1 hereof.
If VCI does not attain the Second Milestone within the later of such periods,
then Client may terminate this Agreement as set forth in Section 10 hereof.
2.5. Revisions. (a) Client shall have five (5) business days from the date
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of a written notice of completion of both the Templates and the Initial Version
provided by VCI to review and request, in a detailed writing, revisions to the
Templates and the Initial Version. Upon receipt of such written request, VCI
shall use commercially reasonable efforts to implement such revision requests
that are within the scope of, and consistent with, the Specifications, as
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reasonably determined by both Parties. Client shall also have five (5) business
days from the date of a written notice of completion of the first revision to
both the Templates and the Initial Version provided by VCI to review and
request, in a detailed writing, revisions to the first revision of the Templates
and the Initial Version. Upon receipt of such second written request, VCI shall
use commercially reasonable efforts to implement such revision requests that are
within the scope of, and consistent with, the Specifications, as reasonably
determined by both Parties.
(b) If Client wishes VCI to implement any revisions to the Web Site that,
in both Parties' discretion, are deemed to deviate in any material respect from
the Specifications, or if the Client requests more than two (2) revisions to the
Templates, or if the Client requests more than two (2) revisions to the Initial
Version, or if the Client requests more than one (1) revision to any Change
Order (as hereinafter defined), then Client shall submit to VCI a written change
order (the "Change Order") containing (i) such requested revisions in detail,
and (ii) a request for a price quote from VCI for each revision requested. VCI
shall promptly evaluate the Change Order and submit to Client for its written
acceptance a proposal (the "Proposal") for undertaking the applicable revisions
and a price quote reflecting the associated fees related to Client's Change
Order. Client shall have five (5) business days from receipt of VCI's Proposal
to accept or reject VCI's Proposal in writing.
(c) If Client accepts VCI's Proposal to undertake the revisions specified
in the Change Order, then the Change Order, as supplemented and/or modified by
VCI's Proposal, shall be deemed to amend and become a part of the Specifications
and Exhibit 4, and VCI shall use commercially reasonable efforts to implement
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such revisions in accordance with the Specifications and the revised Exhibit 4.
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Client shall have five (5) business days from the date of a written notice of
completion of the Change Order provided by VCI, to review and request, in a
detailed writing, revisions to the Change Order, the implementation and review
of which shall be treated by VCI and the Client in the same manner as the
revision to either the Templates or the Initial Version (as if such revision was
requested). In the event that the Client requests additional revisions to any
Change Orders, it shall be made pursuant to additional Change Orders.
(d) If Client rejects VCI's Proposal to undertake the revisions specified
in the Change Order, then VCI shall be under no obligation to amend or resubmit
to Client a new proposal, and Client may, at its option, either terminate this
Agreement by providing five (5) business days advanced written notice to VCI, or
accept the current iteration of the Web Site and continue this Agreement
pursuant to its terms and conditions; provided, however, that such termination
shall not relieve Client from the obligation of paying VCI for all unpaid and
outstanding fees due VCI through the effective date of such termination.
Notwithstanding the same, in the event Client elects to terminate the Agreement
on or after VCI's delivery of the Initial Version in accordance with this
section, VCI shall deliver to Client in working order the Web Site pursuant to
the original Specifications and any Change Orders subsequently agreed to by the
parties and implemented by VCI. Upon its receipt of same, Client shall pay VCI
the amounts due to VCI pursuant to Exhibit 4, Section (A) (I) (iii) and (iv).
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(e) In the case of the Templates, if Client has not made any requests for
revisions by the earlier of: (i) the end of five (5) business days from the date
of written notice of completion of the Templates provided by VCI; (ii) such time
as otherwise agreed by the Parties in writing; (iii) the end of five (5)
business days from the date of written notice of completion of the first or
second (if applicable) revision to the Templates provided by VCI or (iv) the end
of five (5) business days from the date of VCI's completion of the Change Order,
then the Templates shall be deemed accepted by Client.
(f) In the case of the Initial Version, if Client has not made any
requests for revisions by the earlier of: (i) the end of five (5) business days
from the date of written notice of completion of the Initial Version provided by
VCI; (ii) such time as otherwise agreed by the Parties in writing; (iii) the end
of five (5) business days from the date of written notice of completion of the
first or second (if applicable) revision to the Initial Version provided by VCI
or (iv) the end of five (5) business days from the date of VCI's completion of
the Change Order, then the Initial Version shall be deemed accepted by Client
("Acceptance"). Upon the date of such Acceptance, the Web Site Services to be
provided by VCI shall be deemed complete (the "Completion") and Client shall pay
to VCI, the fees contemplated by Section 6.1 hereof.
2.6. Work Order Forms. Subsequent to the Acceptance of the Web Site by
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Client, in the event VCI and Client agree that VCI is to perform additional
tasks related to the Web Site or modify any Work (as defined in Section 3.1
hereof), then the Parties shall execute a work order form (each an "Order Form")
in the form attached hereto as Schedule I, upon which each such Schedule I shall
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be incorporated into and shall become a part of this Agreement and shall be
subject to the terms and conditions hereof.
3. Proprietary Rights
3.1. Proprietary Rights of Client. As between Client and VCI, Client
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Content shall remain the sole and exclusive property of Client, including,
without limitation, all copyrights, trademarks, servicemarks, patents, trade
secrets, and any other proprietary rights. Nothing in this Agreement shall be
construed to grant VCI any ownership right in, or license to, the Client
Content, except as provided in Section 4.1 of this Agreement. In addition, all
work product delivered to Client by VCI in connection with the Services and
accepted by Client pursuant to Section 2 hereof (the "Work") shall be deemed a
"work made for hire" and shall be the exclusive property of Client with the
exception of Work related to the modification of software or other services
received by VCI through licenses from third parties which shall remain the
ownership of such third parties.
3.2. Proprietary Rights of VCI. Notwithstanding Section 3.1 hereof, all
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materials created by VCI which are of general applicability and non-Web Site
specific, including, without limitation, any computer software (in object code,
byte code or source code form), script, programming code, data, information or
HTML script developed or provided by VCI or its suppliers under this Agreement,
and any trade secrets, know-how, methodologies and processes
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related to VCI's products or services, shall remain the sole and exclusive
property of VCI or its suppliers, including, without limitation, all copyrights,
trademarks, servicemarks, patents, trade secrets, and any other proprietary
rights inherent therein and appurtenant thereto (collectively "VCI Materials").
To the extent, if any, that ownership of the VCI Materials does not
automatically vest in VCI by virtue of this Agreement or otherwise, Client
hereby transfers and assigns to VCI all rights, title and interest which Client
may have in and to the VCI Materials. Client acknowledges and agrees that VCI is
in the business of, among other things, designing, developing and hosting Web
sites, and that VCI shall have the right to provide to third parties services
which are the same or similar to the Services, and to use or otherwise exploit
any VCI Materials in providing such services.
3.3. Confidentiality. The Parties agree that during the course of this
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Agreement, information that is confidential or proprietary may be disclosed to
the other party, including, but not limited to software, technical processes and
formulas, source codes, product designs, sales, cost and other unpublished
financial information, product and business plans, advertising revenues, usage
rates, advertising relationships, projections, and marketing data (collectively,
the "Confidential Information"). Confidential Information shall not include
information that the receiving party can demonstrate (a) is, as of the time of
its disclosure, or thereafter becomes, part of the public domain through a
source other than the receiving party, (b) was known to the receiving party as
of the time of its disclosure, (c) is independently developed by the receiving
party, or (d) is subsequently learned from a third party not under a
confidentiality obligation to the providing party. Except as provided for in
this Agreement, the Parties shall not make any disclosure of the Confidential
Information to anyone other than its employees who have a need to know in
connection with this Agreement; provided, however, that VCI may disclose the
Confidential Information to any third party that VCI is obligated to disclose
such information where such obligation arose prior to the Effective Date. The
Parties shall notify their employees of their confidentiality obligations with
respect to the Confidential Information and shall require their employees to
comply with these obligations. Except as provided in Section 10.4 of this
agreement and Exhibit 4 attached hereto, the Parties agree that, upon written
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request by either party, all Confidential Information given by one party to the
other party shall immediately be returned to the party which owns, controls or
developed the same and no part thereof shall be retained by the other party or
such other party's representatives in any form or for any reason. The
confidentiality obligations of the Parties and its employees shall survive the
expiration or termination of this Agreement.
3.4. VCI Notices. Unless otherwise agreed in writing by the Parties, VCI
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shall have the right to place proprietary notices of VCI and its suppliers
(including hypertext links related thereto) on the VCI Materials, the Work and
on the Web Site, including design and developer attribution and hypertext links
to VCI's web sites, and to change or update such notices from time to time upon
notice to Client; provided, however, that such notices, attributions and links
shall be subject to Client's reasonable prior approval, which approval shall not
be unreasonably withheld; and provided further that, VCI shall be entitled in
its sole discretion to place a notice stating "Powered by VCI" and any notice
that VCI previously agreed or in the future may agree
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to place on the VCI Materials, the Work and on the Web Site. Furthermore, in no
event may Client remove or alter any VCI proprietary notice from the VCI
Materials or the Web Site without VCI's prior written consent.
4. License
4.1. Grant of License - Client. Client hereby grants to VCI a limited,
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non-exclusive, worldwide, royalty-free license for the Initial Term and any
Renewal Term (as hereinafter defined) to edit, modify, adapt, translate,
exhibit, publish, transmit, participate in the transfer of, reproduce, create
derivative works from, distribute, perform, display, and otherwise use the
Client Content as necessary only to render the Services to Client under this
Agreement.
4.2. Grant of License - VCI. VCI hereby grants to Client a limited, non-
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exclusive, worldwide, perpetual, royalty-free, non-transferable license to use
the VCI Materials, the Work which shall include, without limitation, the Content
Management System (CMS) in its runtime and source code form, which are
incorporated in the Web Site and which are required for the operation of the Web
Site, but only as a part of the Web Site; provided, however, that (i) Client
shall not have any right to modify, copy, publish, distribute or change any
element of the VCI Materials ("Modifications") without VCI's prior written
consent, other than Modifications permitted to be made pursuant to any end user
license or Software Development Kit ("SDK") which shall be provided to Client by
VCI or a third party for any element included in the VCI Materials and Work and
(ii) with respect to CMS, Client shall adhere to the terms set forth in Exhibit
5 hereto. Any enhanced features developed by Client that are derived from the
VCI Materials (other than CMS), shall be jointly owned by Client and VCI. To
eliminate doubt, VCI shall provide Client with SDK upon Acceptance of the
Initial Version by Client in accordance with Section 2.5 (f). VCI hereby
reserves for itself all rights in and to the VCI Materials not expressly granted
to Client . In no event shall Client use any trademarks or servicemarks of VCI
without VCI's prior written consent. Such license to use VCI Materials shall
survive the termination of this Agreement (provided that VCI has not terminated
the Agreement pursuant to a decision under section 12.8 herein) except with
respect to licenses for those elements incorporated in the Client Web Site which
were licensed to VCI on the condition such elements be used only on web sites
residing on VCI's server. In the event that the Client's Web Site is removed
therefrom as a result of termination or otherwise, Client shall be responsible
for obtaining such licenses directly from the licensors thereof or Client shall
remove such elements from the Client Web Site upon removal of the Client's Web
Site from the Host Server.
5. Client Content
5.1. Accuracy and Review of Client Content. Client assumes sole
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responsibility for (a) acquiring any authorization necessary for use of the
Client Content on the Web Site, (b) acquiring any authorization(s) necessary for
hypertext links to third party Web sites and (c) the accuracy of materials
provided to VCI, including, without limitation, Client Content, descriptive
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claims, warranties, guarantees, nature of business, and address where business
is conducted and (d) ensuring that the Client Content does not infringe or
violate any right of any third party.
5.2 Limitations on Client Content. Client shall provide Client Content
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that to the best of Client's knowledge does not contain any content or materials
which infringe on or violate any applicable law or regulation or any
proprietary, contract, moral, privacy or other third party right, or which
otherwise exposes VCI to civil or criminal liability. The delivery of any
materials by Client to VCI which do not satisfy the foregoing requirements in
this Section 5.2 shall be deemed to be a material breach of this Agreement.
6. Fees and Taxes
6.1. Web Site Services Fees. In consideration for the Web Site Services to
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be rendered by VCI, Client shall pay to VCI the fees identified in Exhibit 4 in
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accordance with the terms and payment schedule set forth therein.
6.2. Maintenance Fees. To the extent that VCI is to provide Maintenance
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under Exhibit 2, Client shall pay to VCI the fees identified in Exhibit 2 in
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accordance with the terms and payment schedules set forth therein.
6.3. Change Orders and Order Forms. To the extent that VCI is to perform
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services under Change Orders or Order Forms pursuant to Section 2 hereof, Client
shall pay VCI for all fees for such Change Orders and Order Forms as indicated
thereon.
6.4. Additional Services Fees. To the extent that VCI is to provide
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Additional Services under Exhibit 2, Client shall pay VCI for all fees for
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Additional Services on a time and materials basis, as invoiced by VCI.
6.5. Invoices and Late Payment. VCI shall xxxx Client quarterly for all
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fees due for Services rendered, provided that: (i) Maintenance fees contemplated
by Section 6.2 hereof shall be billed and paid quarterly in advance; and (ii)
all fees specifically itemized on Exhibit 4 shall not be billed, and are due and
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payable upon the date set forth therein.. All VCI invoices are due and payable
upon receipt. If Client fails to pay any fees when due, late charges of the
lesser of one and one half percent (1 1/2%) per month or the maximum allowable
under applicable law shall also become payable by Client to VCI. In addition,
Client acknowledges and agrees that the failure of Client to fully pay any fees
within ten (10) days after the applicable due date shall be deemed a material
breach of this Agreement, and VCI shall not be liable to Client or any third
party for missing any agreed upon deadlines as a result of any delays or
otherwise as set forth in Section 9 hereof. To eliminate doubt, such material
breach of the Agreement shall not entitle VCI to unilaterally suspend
performance of the Services, rather the parties shall refer to arbitration to
settle such dispute in accordance with Section 12.8 herein. Any such breach does
not relieve Client from paying past due fees plus interest and in event of
collection enforcement, Client shall be liable for any costs associated with
such collection, including, but not limited to, legal costs, attorney's fees,
court costs, and collection agency fees.
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6.6. Taxes. Client shall pay, or promptly reimburse, VCI for all sales,
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use, transfer, privilege, excise, and all other taxes and all duties, whether
international, national, state or local, however designated, which are levied or
imposed by reason of the performance by VCI under this Agreement; excluding,
however, income taxes on profits which may be levied against VCI.
7. Warranties
7.1. VCI Warranties. VCI represents and warrants that (a) VCI has the
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power and authority to enter into and perform its obligations under this
Agreement, (b) VCI's Services under this Agreement shall be performed in a
workmanlike manner, and (c) the VCI Materials, the Work and the Web Site will
not contain any internal elements which, due to the change of millennium, will
cause the VCI Materials, the Work or the Web Site to cease functioning or to
produce incorrect date values. VCI further represents and warrants that as of
the Second Milestone (as defined in Section 2.4 hereof), VCI has or will have
all requisite licenses necessary to perform the Services hereunder. VCI further
represents and warrants, that until the earlier of: (i) the termination of this
Agreement; (ii) the expiration of this Agreement; and (iii) the termination of
Maintenance provided by VCI to the Client's Web Site, the Web Site will operate
substantially in accordance with the Specifications. VCI further warrants to
Client that, to the best of VCI's knowledge, the VCI Materials do not and will
not infringe, or be misappropriations of, the property rights of third parties;
provided, however, that VCI shall not be deemed to have breached such warranty
to the extent that Client or its agent(s) have modified the Web Site in any
manner or if the Web Site incorporates unauthorized third-party materials,
through framing or otherwise.
7.2. Client Warranties. Client represents and warrants that (a) Client has
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the power and authority to enter into and perform its obligations under this
Agreement, (b) to the best of Client's knowledge, Client Content does not and
shall not contain any content, materials, advertising or services that are
materially inaccurate or that infringe on or violate any applicable law,
regulation or right of a third party, including, without limitation, export
laws, or any proprietary, contract, moral, or privacy right or any other third
party right, (c) Client owns the Client Content, or otherwise has the right to
place the Client Content on the Web Site, (d) Client has obtained any
authorization(s) necessary for hypertext links from the Web Site to other third
party Web sites, (e) neither this Agreement nor the fulfillment hereof by any
Party infringes upon the rights of any third party, (f) Client shall be solely
responsible for, and shall pay, all sums due to any third parties entitled to
receive any payment in connection with materials provided by Client to VCI
hereunder and/or materials which Client requires VCI to obtain provided that
such materials are not VCI's responsibility to provide pursuant to this
Agreement;, (g) Client will use its best efforts to comply with all applicable
federal, state, local and foreign laws, statutes, ordinances and regulations in
the performance of its obligations hereunder, and (h) to the best of Client's
knowledge, Client's Web Site, as designed, operated or modified, will not
violate any federal, state, local or foreign laws, statutes, ordinances and
regulations.
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7.3. Disclaimer of Warranty. EXCEPT FOR THE LIMITED WARRANTY SET FORTH IN
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SECTION 7.1 HEREOF, VCI MAKES NO WARRANTIES HEREUNDER, AND VCI EXPRESSLY
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
TITLE, OR THAT THE WEB SITE WILL BE ERROR FREE, UNINTERRUPTED, OR THAT THE WEB
SITE WILL YIELD OR ACHIEVE ANY PARTICULAR RESULT.
8. Indemnification
8.1. Client. Each party agrees to indemnify, defend, and hold harmless the
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other party and , its parent and subsidiary companies, if applicable, and each
of its entities' directors, officers, employees and agents, and defend any
action brought against same with respect to any claim, demand, cause of action,
debt or liability, including, without limitation, reasonable attorneys' fees and
expenses in connection therewith, to the extent that such action is based upon,
or arises out of, a claim that: (i) if true, would constitute a breach of the
breaching party's representations, warranties, or agreements hereunder; (ii)
arises out of the negligence or willful misconduct of the other party; or (iii)
any of the Client Content in the case of the Client or Services in the case of
VCI, infringes or violates any rights of third parties, including, without
limitation, rights of publicity, rights of privacy, patents, copyrights,
trademarks, servicemarks, trade secrets and/or licenses.
8.2. Notice. In claiming any indemnification hereunder, the indemnified
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party shall promptly provide the indemnifying party with written notice of any
claim which the indemnified party believes falls within the scope of the
foregoing paragraphs. The indemnified party may, at its own expense, assist in
the defense if it so chooses; provided, however, that the indemnifying party
shall control such defense and all negotiations relative to the settlement of
any such claim, and further provided that, any settlement intended to bind the
indemnified party shall not be final without the indemnified party's written
consent, which shall not be unreasonably withheld.
9. Limitation of Liability
VCI SHALL HAVE NO LIABILITY WITH RESPECT TO VCI'S OBLIGATIONS UNDER THIS
AGREEMENT OR OTHERWISE FOR LOST PROFITS, LOST OPPORTUNITIES, INDIRECT,
CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES EVEN IF VCI
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY EVENT, THE AGGREGATE
LIABILITY OF VCI TO CLIENT FOR ANY REASON AND UPON ANY CAUSE OF ACTION SHALL BE
LIMITED TO ONE HUNDRED PERCENT (100%) OF THE AMOUNT ACTUALLY PAID TO VCI BY
CLIENT UNDER THIS AGREEMENT. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION IN
THE AGGREGATE, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF
WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATIONS, AND OTHER
CONTRACTUAL OR TORTIOUS
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CLAIMS. TO ELIMINATE DOUBT, THIS LIMITATION OF LIABILITY SHALL NOT APPLY TO
INDEMNIFICATION OF CLIENT BY VCI WITH RESPECT TO ANY SUCCESSFUL THIRD PARTY
CLAIMS AGAINST CLIENT IN ACCORDANCE WITH SECTION 8.1 ABOVE.
10. Term, Termination And Renewal
10.1. Term. This Agreement shall be effective when signed by the Parties
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and thereafter shall remain in effect for twelve (12) months, unless earlier
terminated as otherwise provided in this Agreement (the "Initial Term"). This
Agreement shall automatically be renewed beyond the Initial Term for additional
two (2) one-year terms (each, a "Renewal Term") unless Client provides VCI with
a written notice of termination at least sixty (60) days prior to the expiration
of the Initial Term or the then-current Renewal Term.
10.2. Termination. Either of the Parties may terminate this Agreement if:
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(a) a bankruptcy proceeding is instituted against the other party which is
acquiesced in or not dismissed within thirty (30) days, or results in an
adjudication of bankruptcy, or (b) the other party materially breaches any of
its representations, warranties or obligations under this Agreement, and such
breach is not cured within twenty (20) days of receipt of written notice
specifying the breach, except that the cure period for failures of payment
obligations shall be ten (10) days, and such breach has been referred to
Arbitration in accordance with section 12.8 herein and determined by the
Arbitrator as a breach justifying termination of this Agreement. Upon sixty
(60) days prior written notification to the Client, VCI may terminate this
Agreement at any time and for any reason, including, without limitation, that
the Services have been performed in full and are completed; provided, however,
if such termination occurs as of a date upon which VCI received fees from Client
for Services not yet rendered, then concurrently with such termination, VCI
shall refund that portion of such fees paid by Client that corresponds to the
Services not yet rendered by VCI on the date of termination and provided that
such termination shall not occur prior to the Client's Acceptance of the Initial
Version as set out in Section 2.5 (f).
10.3. Termination and Payment. Upon any termination or expiration of this
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Agreement, Client shall pay VCI all unpaid and outstanding fees due VCI through
the effective date of termination or expiration of this Agreement.
10.4. Transfer of Client's Web Site. Subject to the terms and conditions
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of Exhibit 4 hereto, upon Client's written request, or upon the termination or
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expiration of this Agreement, whichever occurs first, VCI shall, at no
additional cost, provide all necessary assistance to Client, and third parties
authorized by Client, to transfer the Client's Web Site, or portions thereof, to
a server owned and operated by Client or the person of Client's choice including
but not limited to, assisting Client in attempting to obtain necessary software
licenses for those elements of the Client's Web Site that may not be used by
Client other than on the Host Server. Following such transfer of the Client's
Web Site, Client shall be solely liable for all hardware, support,
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maintenance, and Internet connectivity except as provided for under the terms of
any continuing Maintenance agreement with VCI.
11. Designated Contact
As set forth in Exhibit 1, each party shall designate one person who will
---------
act as the primary liaison for all communications regarding the Services to be
rendered by VCI hereunder.
12. Miscellaneous
12.1. Entire Agreement. This Agreement and attached Exhibits and Schedules
----------------
constitute the entire agreement between Client and VCI with respect to the
subject matter hereof, and there are no representations, understandings or
agreements which are not fully expressed in this Agreement.
12.2. Cooperation. The Parties acknowledge and agree that successful
-----------
completion of the Services shall require the full and mutual good faith
cooperation of each of the Parties.
12.3. Independent Contractors. The Parties are acting as independent
-----------------------
contractors in performance of this Agreement, and not as agent, partner,
employee, or joint venturer with the other party for any purpose. Except as
provided in this Agreement, neither of the Parties shall have the right, power,
or authority to act or to create any obligation, express or implied, on behalf
of the other.
12.4. Amendments. No amendment, change, waiver, or discharge hereof shall
----------
be valid unless in writing and signed by the party against which such amendment,
change, waiver, or discharge is sought to be enforced.
12.5. Client Identification and Registered Users. VCI may use the name of
------------------------------------------
and identify Client as a VCI client, or promote any of the Work, in any
advertising, publicity, press releases, press kits, promotional materials or
similar materials distributed or displayed to prospective clients or otherwise,
provided however, that should VCI wish to include text describing the Client
and/or its operation, VCI shall provide the Client with a copy of such text for
its prior approval to be given or denied within twenty-four (24) hours of
receipt. In the event the Client does not respond to VCI's request for consent
within such twenty-four (24) hour period, consent shall be deemed to have been
given by the Client. In addition, VCI may, from time to time and for any reason
or purpose, upon prior written approval by the Client, use the names, postal
addresses, email addresses, telephone numbers, facsimile numbers or any other
information that Client obtains from the users of Client's Web Site who register
on such Site. VCI's right to use such user information, subject to Client's
written approval, shall survive the termination of this Agreement until such
time as the Client sells such user information and provides payment to VCI in
accordance with Exhibit 4 (D) herein.
11
12.6. Force Majeure. Except for the payment of fees and expenses by
-------------
Client, if the performance of any part of this Agreement by either of the
Parties is prevented, hindered, delayed or otherwise made impracticable by
reason of any flood, riot, fire, judicial or governmental action, labor
disputes, mechanical or electronic breakdowns, act of God or any other causes
beyond the control of either of the Parties (including in the event of any
prevention, hinderance or delay by VCI, the Clients failure to approve VCI's
Work or Services or provide required materials to VCI), that party shall be
excused from such to the extent that it is prevented, hindered or delayed by
such causes. VCI's obligations hereunder are also subject to VCI's ability to
comply with any and all laws, regulations, orders and other governmental
directives.
12.7. Governing Law. This Agreement shall be governed in all respects by
-------------
the laws of the State of New York without regard to its conflict of laws
provisions.
12.8. Settlement of Disputed Claims; Arbitration. The Parties agree to
------------------------------------------
attempt in good faith to agree on the rights of the respective Parties regarding
any, controversy, dispute or claim arising out of or relating to this Agreement,
including, without limitation, any breach hereof. If no such agreement can be
reached after good faith negotiation, either Party may demand arbitration of the
matter as provided herein. All controversies, disputes and claims arising
hereunder shall be referred to final and binding arbitration (an "Arbitration")
conducted before a single neutral arbitrator, who shall be a certified public
accountant nominated according to the Commercial Arbitration Rules of the
American Arbitration Association sitting in the City of New York, New York. The
judgment rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Any such Arbitration shall commence within 14 days of the
date of filing a notice of intention to arbitrate with the arbitrator after
serving the notice on the other party (which notice shall specify in reasonable
detail the nature of the dispute), and the arbitrator shall render his or her
decision within 30 days of the date of filing such notice of intention to
arbitrate with the arbitrator. In any such Arbitration, the arbitrator shall
determine all questions of arbitrability, including, without limitation, the
scope of this agreement to arbitrate a dispute or claim, whether an agreement to
arbitrate exists and if so whether it covers the controversy, dispute or claim
in question. Any such Arbitration shall be administered by the arbitrator in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The Arbitration award shall be in writing. The arbitrator may not
make any ruling, finding or award that does not conform to the terms and
conditions of this Agreement. Each Party shall pay its share of the fees and
costs of the Arbitration and of the arbitrator, provided that the arbitrator
shall reallocate same in favor of the prevailing party as set forth herein
below.
12.9. Attorneys' Fees and Costs. The prevailing party in any Arbitration,
-------------------------
or in any other legal action or proceeding brought for the enforcement of this
Agreement, or because of any alleged dispute, breach or default based on or
arising under this Agreement, shall be entitled to recover reasonable attorneys'
fees and other costs incurred in such Arbitration, action or proceeding,
including the Arbitrator's fees and costs, in addition to any other relief to
which it may be entitled.
12
12.10. Assignment. Either Party may, in its sole discretion, assign this
----------
Agreement or any or all of its rights and obligations hereunder to any
subsidiary or affiliate of either Party, to any entity in which either Party or
an affiliate may hereafter acquire a substantial interest, to any entity that
merges with either Party, or to any entity acquiring all or a substantial
portion of such Party's assets or outstanding securities; and effective upon any
such assignment, the Parties agree that the assigning Party shall be discharged
and released from all liabilities and obligations to the non-assigning Party
under or in connection with this Agreement to the extent that the assignee has
assumed same.
12.11. Notice. Any notice provided pursuant to this Agreement, if
------
specified to be in writing, shall be in writing and shall be deemed given (i) if
by hand delivery, upon receipt thereof, (ii) if mailed, three (3) days after
deposit in the United States mails, postage prepaid, certified mail return
receipt requested, (iii) if by facsimile transmission, upon electronic
confirmation thereof, or (iv) if by next day delivery service, upon such
delivery. All notices shall be addressed as follows (or such other address as
either party may in the future specify in writing to the other):
In the case of VCI:
VCI Community Solutions, Inc.
000 0/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Avi Xxxxxxxxx, President
with copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
In the case of Client:
Xxxxxxxxxx.xxx Inc.
Troma Building
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxx, Vice President
13
12.12. Waiver. The waiver of failure of either party to exercise any right
------
in any respect provided for herein shall not be deemed a waiver of any further
right hereunder.
12.13. Severability. If any provision of this Agreement is held to be
------------
inconsistent with any present or future law, ruling, rule or regulation of any
court or authority having jurisdiction over the subject matter of this
Agreement, such provision shall be deemed to be rescinded or modified to the
minimum extent necessary to comply with such law, ruling, rule or regulation,
and the remainder of this Agreement shall not be affected thereby.
12.14. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original and both of which shall constitute one
agreement.
12.15. Headings. The section headings used herein are for reference and
--------
convenience only and shall not enter into the interpretation hereof.
12.16. Approvals and Similar Actions. Where agreement, approval,
-----------------------------
acceptance, consent or similar action by either of the Parties hereto is
required by any provision of this Agreement, such action shall not be
unreasonably delayed or withheld.
12.17. Survival. All provisions of this Agreement relating to Client
--------
representations, warranties, confidentiality, non-disclosure, indemnification
obligations and payment obligations shall survive the termination or expiration
of this Agreement. No other provisions of this Agreement shall survive the
termination or expiration of this Agreement.
12.18. Non-solicitation. During the term of this Agreement and for one (1)
----------------
year thereafter, neither Party shall solicit for employment or employ any of the
other Party's then-current employees without such Party's prior written consent.
14
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
XXXXXXXXXX.XXX, INC. VCI COMMUNITY SOLUTIONS, INC.
By: /Xxxxx Xxxxxxx By: /s/Avi Xxxxxxxxx
Name: Xxxxx Xxxxxxx
Title: President Avi Xxxxxxxxx
President
15
EXHIBIT 1
---------
1. Project Management
Project management dynamically guides the allocation of resources of the project
and will coordinate their integration into Tromaville.
VCI will assign a Project Manager ("PM") to coordinate the development of each
component of Tromaville, and to provide advice and guidance or technical aspects
of Tromaville. We require that Troma assign an individual ("Troma Contact") with
a parallel role who will serve as a single point of contact and will work
directly with the PM. [Item 2]
VCI's PM will be responsible for establishing appropriate communication between
the Troma Contact and VCI. VCI's PM will establish milestones and assign the
necessary resources to reach those milestones.
VCI's PM will pay particular attention to ensuring that an orderly work-flow is
followed and that the necessary dependencies between stages of development are
addressed to facilitate the smooth completion of the overall project within the
agreed upon timeframe.
2. Personnel Resources
The following are the individuals at VCI with whom the Troma Contact will
dialogue throughout the development of Tromaville:
Xxxxx Xxxxxxx - Chief of Operations
Xxx Xxxxxx - Deputy Chief of Operations
Xxxxxxx Xxxxxx - Art Director
VCI's team will also consist of graphic artists, programmers and other VCI
staff resources.
3. The Tromaville Community: Construction and Design
VCI will, in conjunction with Troma, build a flowchart model of the Tromaville
Web Site [Item 4]. This will include designing the structure of the
administrative interfaces, Web Design (as defined below), workflow (editors,
managers and content partners), flow of data and an overall community structure.
This stage is required to configure the content management system tailored
specifically to the needs of Tromaville. During the first stage of the project,
a master site organization chart for the entire site will be prepared and we
will agree upon an overall thematic "look and feel" that will form the user
experience.
Exh. 4-1
Web Design refers to everything that appears on the screen during a user's
interaction to the Troma Web Site. This includes the overall graphic "look and
feel", site navigation, the registration interface as well as the branding of
specific areas of the site (e.g. Personal e-mail, Chat, Guestbooks, Quiz, etc.).
VCI's Art Director will head the team of graphic artists who will be working on
the Troma site. The following community components have design considerations:
the full community site, free e-mail, free homepages, chat, polling engine,
bulletin boards, and e-commerce.
In addition to the above construction and design services, VCI will (i) use
commercially reasonable efforts to introduce Troma to some of its relevant
content and service providers (VCI will not, however, guarantee that such
providers will contract with Troma); and (ii) within ninety (90) days of the
Completion of the Web Site, prepare a one-half day presentation for Troma
regarding content acquisition strategies and the state of the marketplace.
Back-End Technologies
4. Content Management System (CMS).
VCI will install VCI's Content Management System (CMS) at the Troma Web Site,
provide instructions and documentation as well as ongoing support at terms
specified in Exhibit 2.
---------
Through a graphical user interface, Troma's content team and affiliated content
providers will be able to edit, update, search, and schedule future content from
any worldwide location with basic connectivity to the Internet.
5. Interactive Modules Provided by VCI [Item 12]
. Registered Users Module - A real-time database that collects user data and
tracks activity of registered users in Tromaville. The user will then have
access to the community's various features and services without need for
additional sign-ins. Analyzing reports based on this user data allows for a
targeted advertisement campaign, content and e-commerce personalization;
data can be compiled in a variety of ways.
. Sweepstakes Module - An add-on to the registered user module, this module
enters users into sweepstakes-style contests, encouraging registration and
repeat visits.
. Greeting Card Module - This module enables Troma to build a portfolio of
on-line greeting cards which can include multimedia elements. Visitors to
the site can send these cards to friends, thus providing a user service and
providing exposure for Tromaville. Art for these cards is supplied by
Troma.
Exh. 4-2
. "E-mail this article to a friend" Module - Users can e-mail pages or
articles to friends, once again promoting Tromaville's presence. The format
in which the article arrives is customizable, and can include links to the
site, ads, and any other pre-defined material.
. "Refer a friend" Module - A utility to allow a user to easily e-mail a
friend with reference to the page or section of the site that may be of
particular interest. Like the above module, it facilitates spreading the
Tromaville name and growing the user base.
. Polls - Interactive polls in which users can cast their vote and see the
results as they are updated dynamically, in order to involve Tromaville
users and promote an "interactive community" feel.
. Traffic/Statistics Module [item 14] - This module enables Troma to access
daily site statistics including most-visited pages, referring sites, user
entry pages and other relevant statistics. The specific types of data and
the format in which they are viewed are customizable and will be suited to
the priorities of Troma's analysis needs.
. Games Module - Simple, on-line interactive games (specifics to be
discussed).
6. Services
. Free E-mail [Item 9]- At the completion of the registration process, a
personal Tromaville web-based e-mail account will automatically be set up
for all new registered users. This e-mail account, like all interactive
features on the site, will be activated by the registered user's single
username and password. At login, the user will be alerted to waiting
messages. VCI shall provide Troma with access to an IDE and/or the
opportunity to work with VCI to make the email graphics and interface
memorable to its users.
. E-mail List Server [Item 17] - The Email List Server (ELS) enables Troma to
manage and coordinate Email Lists to its user base. The ELS is web-based
for easy administrative use and is incorporated into Troma's site allowing
community members the ability to subscribe to mailing lists of their choice
quickly and easily. Lists of users can be transferred into the List Server
from existing Troma list databases.
. Advertising Management System [Item 11] - A toolkit from ad placement and
tracking to allow Troma to feature ad banners on the site. Advertising
Reports can be viewed by Troma staff and/or advertising clients in a
graphical form for all or part of the web site.
. Bulletin Boards / Forums [Item 16]- A Troma registered member will be able
to post and read messages on bulletin boards on a wide variety of topics
related to Troma content. While the technical aspects of the Bulletin Board
are maintenance free once established, each
Xxx. 0-0
Xxxxxxxx Xxxxx xxxx does need minimal hands-on human management which Troma
will provide. The administration of the Bulletin Boards is performed
through a simple web-based interface.
. Full E-Commerce Solution [Item 13]- Both Troma and its users will have the
ability to develop on-line stores using secure server technology.
. Chat [Item 8]- A Troma-branded Chat Center will be set up allowing the
client to open chat-rooms within this Center. Chat rooms may have their own
unique theme or moderator. The Chat Center may be moderated in any number
of ways to protect users against nuisance. While a moderator is provided
for each chat room, a host can be appointed for special discussions or Q&A
session and granted rights that allow him to control the discussion.
. Online Classifieds [Item 16] - A forum-style service, which allows users to
post classified advertisement.
. Free User created Home Pages [Item 10] - Registered users of Troma's site
will be able to build their own home pages in designated areas within the
site. These pages can include a mixture of text and graphics of the user's
choice.
If Troma provides written notice to VCI of its desire to add Additional
Services to the above services, including, without limitation, music search
engines, calendaring functions, personalizable calendars, a Troma bank, a dating
service and auctions online, then VCI shall use commercially reasonable efforts
to initiate contact with companies that provide the enabling software for such
services; provided, however, that Troma shall bear all additional costs incurred
by VCI in connection with sourcing such comparison, initiating such contact and
obtaining, modifying or installing such software, as contemplated by Section 6.4
of the Agreement, unless such services are not placed exclusively on the
Client's Web Site and are utilized by VCI for other purposes, in which case,
such services shall be considered to be included in Maintenance Services in
accordance with Exhibit 2 herein.
7. Technical Infrastructure
The Troma Community sites will reside on VCI's servers (the "Host Servers")
located at ISI Global Center in either New York City or the Virginia hosting
facility until such time as the Client's Web Site is transferred pursuant to
Section 10.4 of the Agreement.
VCI will provide the following services:
. Web hosting on two separate fully redundant and load-balanced server
machines close to the Internet backbone and located in New York. Within 6
months after the Completion, VCI will duplicate the Web Site on to another
server in a geographically different location.
Xxx. 0-0
. Xxxxxxxx security protection
. 24/7 System monitoring
. System administration services
8. Search Engine Submission
VCI will submit all components of the Tromaville Community to existing
search engines and directory listings as appropriate. In addition, VCI will
confirm that HTML code is written in a fashion which will facilitate their
discovery by metacrawlers, web-bots and spiders. We cannot, however, guarantee
the subsequent acceptance and placement of the Tromaville's reference on these
search sites.
Exh. 4-5
Exhibit 2
Additional Services
Maintenance Services:
---------------------
As part of its Maintenance services VCI will:
1. provide instructions and documentation to the Troma Contact for VCI's CMS;
2. provide ongoing support for VCI's CMS during the Initial Term and each
Renewal Term;
3. deliver, install and grant a license to Client (subject to the terms and
conditions set forth in Section 4.2 of the Agreement) for any modules,
technologies/services, enhancements and upgrades to the CMS developed by VCI
during the Initial Term and each Renewal Term; and
4. provide Hosting services on the Host Server during the Initial Term and each
Renewal Term, in consideration of an annual maintenance fee of $40,000
payable in accordance with Sections 6.2 and 6.5 of the Agreement; provided,
however, that VCI shall provide all Maintenance services to Client without
charge during the Initial Term as partial consideration for the Web Site
Services Fee contemplated by Section 6.1 hereof. Any Maintenance-related
tasks not specified above shall be paid for by Client on a time and
materials basis, as invoiced by VCI per Section 6.5 of the Agreement
provided, however, that VCI has obtained the prior written consent of the
Client to perform such Maintenance-related tasks.
Additional Services:
-------------------
Any technologies, modules or services that are not contemplated in
Sections 4, 5 or 6 of Exhibit 1 hereof shall be deemed Additional Services and
---------
subject to fees as contemplated by Section 6.4 of the Agreement. Should VCI not
be in a position to provide the Client with any such additional technologies,
modules or services requested by the Client, then the Client shall be entitled
to independently pursue same at its own expense and VCI shall use reasonable
commercial efforts to incorporate such technologies, modules or services into
the Client's Web Site.
Exh. 2-1
Exhibit 3
---------
Specifications
Exh. 3-1
Exhibit 4
---------
Fee and Payment Schedule
A. Payment Terms. Payment will include the following two components:
-------------
I. A Web Site Service Fee in the amount of $275,000, payable in increments,
as follows:
i) 10% at contract signing ("Effective Date")
ii) 25% at 30-day milestone ("First Milestone")
iii) 25% at 60-day milestone ("Second Milestone")
iv) Balance on project completion ("Completion"); and
II. Advertising and E-Commerce Revenue. During the Initial Term of this
Agreement and any Renewal Terms, Client shall pay to VCI the following:
(i) Five percent (5%) of the aggregate gross dollar receipts
("Advertising Revenue") collected, accrued or earned by Client for the
placement of advertisement on the Web Site or on email lists served by
VCI. Such advertisements may include, without limitation, banner
advertisements, page sponsorships, site sponsorships or any other form
of advertising, including the cash equivalents of any barter revenue
received, earned or accrued by Client during such period; and
(ii) Two percent (2%) of the aggregate gross dollar receipts ("E-
Commerce Revenues") collected, accrued or earned by Client for the sale
of products or services marketed or sold on the Web Site, including,
without limitation, books, magazines, audio and video cassettes and CD
ROM's (the "Products"). Such E-Commerce Revenues shall not exceed
twenty-five percent (25%) of the Client's gross profit from the sale of
such Products, which shall be defined as the gross revenue less the
cost of goods to the Client.
B. Payment Procedure. Client shall provide VCI with an accounting of Web Site
-----------------
Advertising Revenues and E-Commerce Revenues, if any, on a quarterly basis.
Client shall provide VCI with the names of each advertiser from which
Advertising Revenues were received in the preceding quarter, advertising
fees charged to such advertiser and the total sum to be distributed to VCI
as set forth above in addition to an itemized list of all sales orders for
the Products from the preceding quarter made through the Web Site and the
total due to VCI as set forth above.
C. Payment on Transfer of Client's Web Site. Pursuant to Section 10.4 of the
----------------------------------------
Agreement, in the event that VCI is required to provide transfer assistance for
the Client's Web Site, then:
Exh. 4-1
(i) if the Agreement has not terminated, Client shall continue to pay VCI
the Advertising Revenues and E-Commerce Revenues contemplated by Section
A. II. of this Exhibit 4, any Web Site Services Fees still due and owing
---------
as contemplated by Section 6.1 of the Agreement, annual Maintenance Fees
still due and owing as contemplated by Section 6.2 of the Agreement (and
in exchange for VCI providing Maintenance services to a server owned and
operated by Client or the person of Client's choice), and any Additional
Service Fees still due and owing as contemplated by Section 6.4 of the
Agreement; in addition, Client shall pay the appropriate licensor any
license fees due for modules which Client desires to transfer from VCI's
server; provided, however, that for as long as the Agreement is not
terminated, VCI shall pay the appropriate licensor any license fees due
for the CMS module contemplated in Section 4 of Exhibit 1 hereto; and
---------
provided further, however, that for as long as the Agreement is not
terminated, VCI will use commercially reasonable efforts solely to
introduce Client to all of VCI's service providers, whether or not Client
has previously purchased or utilized a license or module from such
provider; or
(ii) if the Agreement has terminated, Client shall pay VCI, (a) any Web
Site Services Fees still due and owing as contemplated by Section 6.1 of
the Agreement, (b) any Maintenance Fees or Additional Service Fees still
due and owing as contemplated by Sections 6.2 and 6.4 of the Agreement,
respectively, and (c) subject to the terms of Section D of Exhibit 4
---------
hereto, the applicable Buy Out Amount, if required; in consideration of
these payments, VCI shall secure for Client, and pay for on Client's
behalf, a perpetual, non-exclusive, worldwide, royalty-free, non-
transferable license for the CMS module contemplated in Section 4 of
Exhibit 1 hereto, provided, however, that such license shall be furnished
---------
to Client solely in the form provided by VCI to Client at the time of
such termination, and such license shall only provide Client the right to
operate its Web Site on any server to which such Site is transferred, and
provided further that, following such termination, VCI shall no longer be
required to secure or provide upgrades, support or maintenance for any
software, hardware, source or object code, modules, derivative works, or
otherwise, except for CMS support services which VCI shall provide to
Client in exchange for an annual fee of $20,000 which payment shall be
due in advance each year and shall commence upon such termination.
D. Buy Out Provision. In the event the Agreement is terminated in accordance
-----------------
with Section 10.1 or terminated by VCI in accordance with Section 10.2(b),
Client shall pay VCI either of the following amounts (each a "Buy Out
Amount") as applicable: (i) during the first twenty-four (24) months
following the Effective Date of this Agreement, Five Hundred Thousand
($500,000) Dollars; or (ii) following such initial twenty-four (24) month
period, the greater of Three Hundred and Fifty Thousand ($350,000) Dollars,
or an amount that shall be equal to five (5) times the aggregate of the
Advertising Revenue and E-Commerce Revenue received, accrued or earned by the
Client in the twelve (12) months prior to such termination plus Twenty ($20)
Dollars for each registered user on the Web Site as of the
Exh. 4-2
time of such termination if termination occurs after the initial twenty-four
(24) month period and before the completion of seventy-two (72) months, and
Ten Dollars ($10) for each registered user if termination occurs any time
thereafter, up to a maximum of Two and One-Half Million Dollars ($2,500,000).
Notwithstanding the foregoing, the Client's obligation to pay to VCI such
amount for each registered user shall apply only upon the sale of the
registered user information by the Client and in no event shall the amount
paid to VCI by the Client in consideration for the registered users on the
Web site exceed more than Ten Percent (10%) of the gross proceeds received by
the Client for the sale of its registered user base.
It is understood and agreed that any termination occasioned by (a) VCI's
decision to cease providing services to Client in accordance with Section
10.2 herein; (b) VCI's breach of its obligations, warranties or indemnities
under this Agreement as determined in accordance with Section 10.2 (b)
herein; or (c) VCI ceasing to do business or the institution of proceedings
in the nature of bankruptcy against VCI, shall not give rise to Client's
obligations under this Buy Out Provision.
All payments to be in cash, or cash equivalents, and remitted to VCI via check
or wire transfer.
Exh. 4-3
Exhibit 5 - Terms Related To Content Management System ("CMS")
Client shall be bound by the following terms and conditions with respect to a
license granted to it for certain software utilized in the creation of CMS (the
"Magazine Software"):
1. DEFINITIONS.
1.1 "Derivative Work" shall mean a work based upon one or more preexisting
works, such as a translation, abridgment, condensation, or any other form in
which a work may be recast, transformed, or adapted, or a work consisting of
editorial revisions, annotations, elaborations, or other modifications which, as
a whole, represent an original work of authorship; and a "compilation" is a work
formed by the collection and assembling of preexisting materials or of data that
are selected, coordinated, or arranged in such a way that the resulting work as
a whole constitutes an original work of authorship, and including collective
works.
1.2 "Proprietary Rights" shall mean, collectively, patents, trade secrets,
copyrights, moral rights, trade names, rights in trade dress, and all other
intellectual property rights and proprietary rights, whether arising under the
laws of Israel or the United States or any other state, country or jurisdiction,
including all rights or causes of action for infringement or misappropriation of
any of the foregoing, now existing or hereafter developed during the term of
this License, including, but not limited to: all patent rights and all right,
title and interest in all patent applications, letters patent or equivalent
rights and applications, including any reissue, extension, division,
continuation, or continuation-in-part applications throughout the world, all
right, title and interest in all trade secrets and trade secret rights arising
under common law, state law, federal law or laws of foreign countries and all
copyrights, and all right, title and interest in all copyrights, copyright
registrations and applications for copyright registration, certificates of
copyright and copyrighted interests throughout the world, and all right, title
and interest in related applications and registrations throughout the world.
2. LICENSE.
Subject to Client's full compliance with the terms of this Exhibit 5,
Client shall receive a worldwide, non-transferable, perpetual, royalty-free,
non-exclusive license under the Proprietary Rights held by the licensor (the
"Licensor") of the Magazine Software and, to the extent applicable, VCI, for the
use of the Magazine Software in object and source code only to:
(i) Reproduce, modify, adapt, customize, translate into foreign
languages, combine or integrate with other software and/or content.
(ii) Perform or publicly display all or any portion or portions of the
Magazine Software in combination with other software and/or content; and
Exh. 4-1
(iii) Reproduce and otherwise use all or any portion or portions of
the Magazine Software for the sole purpose of back-up, archival, maintenance,
and technical support purposes.
3. RESTRICTIONS.
Magazine Software and its related documentation shall only be used by
Client, and shall not be sold, assigned or transferred by Client to anyone else.
Client undertakes to ensure that all titles, trademarks, copyright notices
and other proprietary markings placed by Licensor on the Magazine Software shall
be reproduced on all permitted copies of the Magazine Software. In no event
shall Client remove, or permit others to remove, such titles, trademarks,
copyright notices or other proprietary markings.
4. OWNERSHIP.
Client acknowledges that the Magazine Software, including all Proprietary
Rights with respect thereto, are, and at all times will be, the sole property of
Licensor, and to the extent applicable, VCI. It is agreed and acknowledged that
Client is not permitted to create or make any Derivative Work. Notwithstanding
anything to the contrary contained herein, any Derivative Work, whether made by
Client or by any third party, including all Proprietary Rights with respect
thereto, based on or using Magazine Software, shall be at all times owned by
Licensor.
5. MAINTENANCE AND TECHNICAL SUPPORT SERVICES.
VCI shall be responsible for providing Client with all maintenance and
technical support services in accordance with the Agreement.
6. TERM AND TERMINATION
The term of the License for the Magazine Software shall commence as of the
date of the Second Milestone (as defined in Section 2.4 of the Agreement). This
License may be immediately terminated in the event that Client materially
breaches the terms herein. Upon termination, all of Client's rights shall
expire.
7. WARRANTY; LIMITATION OF LIABILITY.
Licensor warrants to Client that:
a) The authorized use of the Magazine Software within the scope of this
License does not infringe any copyright or patent or misappropriate
any trade secret or any other intellectual or proprietary right of a
third party
b) To the best of its knowledge the Magazine Software contains no "time-
bombs" or other materially disabling features which in any way may
materially adversely affect
Exh. 4-2
Client's use of the Magazine Software within the scope of this License
c) The Magazine Software is year 2000 compliant.
THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED
BY LICENSOR OF MAGAZINE SOFTWARE. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND
THE FACE HEREOF, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL LICENSOR BE LIABLE TO END
USER FOR LOSS OF PROFITS, LOSS OF REVENUES, LOSS OF SAVINGS, LOSS OF USE, LOSS
OR CORRUPTION OF DATA OR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL DAMAGES, WHETHER UNDER TORT, CONTRACT OR OTHER THEORIES OF
RECOVERY, EVEN IF LICENSOR HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
This License is governed by and construed in accordance with the laws of
the State of Israel without regard to conflicts of laws provisions thereof and
without regard to the United Nations Convention on Contracts for the
International Sale of Goods.
Exh. 4-3
Schedule 1
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Work Order Form
Exh. 4-4
