Exhibit 10.3
ENGINEERING SERVICES AGREEMENT
This Agreement is entered into and effective as of June 30, 1999 ("Effective
Date") between Switchboard Incorporated, a Delaware corporation ("SB") with
principal offices located at 000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000, and Online
System Services, Inc., a Colorado corporation which plans to change its name to
XXXX Interactive Services, Inc. ("XXXX"), with principal offices located at 0000
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000.
In consideration of the premises and covenants herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SB Engineering Services. XXXX hereby acknowledges that SB has
-----------------------
satisfactorily performed the following engineering services for XXXX prior to
the date of this Agreement:
(a) Development of (i) a co-branded version of the "Switchboard Directory
Services" (as defined in paragraph (b) below) for XXXX'x web site
located on the Internet at xxx.xxxx.xxx ("XXXX Site"); and (ii) a
------------
generic co-branded version of the Switchboard Directory Services for
third party web sites. The co-branded version referenced in (i) above
has the primary branding and "look and feel" of XXXX; the co-branded
version referenced in (ii) above anticipates the primary branding and
"look and feel" the specific third party web site for which it will be
used. Each co-branded version has or will have a "Powered by
Switchboard" logo with form and placement as mutually agreed.
(b) "Switchboard Directory Services" shall mean the following interactive
directory services offered on SB's web site located on the Internet at
xxx.xxxxxxxxxxx.xxx ("Switchboard Site"): (i) SB's directory of
-------------------
business listings and display advertisements (Yellow Pages); (ii) SB's
directory of residential listings (White Pages); (iii) SB's directory
of maps, routes and driving directions (Interactive Routes); (v) SB's
directory of World Wide Web sites organized by topic (Sideclick), and
(vi) SB's directory of email addresses..
2. Payment by XXXX. In consideration of the services performed by SB as
---------------
described in Section 1, XXXX hereby agrees to pay SB on or before July 31, 1999
the non-refundable amount of Two Hundred and Fifty Thousand Dollars ($250,000).
3. Further Agreement. In consideration of each party's performance as stated
-----------------
in Section 1 and 2, the parties hereby agree to enter into a written agreement
on mutually agreeable terms no later than July 31, 1999 pursuant to which the
parties will agree as follows:
(a) XXXX will have a right to display co-branded versions of the
Switchboard Directory Services described in Section 1(a)(i) above
through links on the XXXX Site.
(b) SB will, at no additional charge, work with Xxxx to modify the
co-branded Switchboard Directory Services to meet the needs, as
reasonably determined by SB and Xxxx, of Xxxx'x current four co-
branded sites (two Bresnan markets, one Peak Communications
market, and one Rapid Communication market). This work will
include a link to SB's What's Nearby?(sm) functionality tailored
to each of the four co-branded market locations.
(c) XXXX will have the right to license to third parties to be mutually
agreed, the right to display through links on their web sites, co-
branded versions of the Switchboard Directory Services as described in
Section 1(a)(ii) above.
(d) SB will, at no additional charge, modify the generic co-branded
version of the Switchboard Directory Services for up to four
additional third party web sites requested by XXXX as necessary to
include the primary branding and "look and feel" of such third party.
The replication and setup fees for additional co-branded sites will be
a one-time payment of $1500.
(e) SB shall have the right to sell banner advertisements on pages of the
co-branded versions of the Switchboard Directory Services and shall
pay Xxxx 55% of the net revenue (where net revenue is in no case less
than 85% of gross revenue) where Xxxx'x third party is a cable
television service provider and 60% of such net revenue in all other
cases. SB agrees that on a co-branded site-by co-branded site basis,
up to 15% of the advertising inventory will be made available to
Xxxx'x third party customer without any compensation to SB. Any
inventory made available under this provision that was not
subsequently used by Xxxx'x third party will revert to SB for its use
under the terms of this Agreement. Should Xxxx'x third party customer
require more advertising inventory, SB agrees to provide such
inventory in return for payment based on SB's then effective CPM rate.
Xxxx'x third party customers must inform SB within 48 hours before
each month if they intend to sell their 15% portion of the next
month's inventory. In the event that Xxxx'x third party customer fails
to claim such inventory for that month SB shall sell the inventory and
split revenues with Xxxx based on formulas outlined in this section.
(f) SB will host the Switchboard Directory Services.
(g) SB agrees to use commercially reasonable efforts to keep the co-
branded versions of the Switchboard Directory services continually
available to Xxxx and Webb's customers on a 24x7 basis, and maintain
agreed upon levels of infrastructure and operational standards.
(h) SB and Xxxx will agree upon penalty and termination provisions
associated with Chronic Interruptions of Service.
(i) This Agreement will be for a one-year term.
IN WITNESS WHEREOF, the parties, through their authorized representatives, set
their hands and seals as of the Effective Date.
ONLINE SYSTEM SERVICES, INC. SWITCHBOARD INCORPORATED
By:_________________________ By:_________________________
Title:______________________ Title:________________________
