EXHIBIT 10.10
* Certain portions of this document have been omitted pursuant to a request for
confidential treatment filed separately with the Commission.
SERVICES AGREEMENT
This Services Agreement ("Agreement") is entered into as of February 15,
1999 ("Effective Date"), by and between Guidance Solutions, Inc. ("Developer"),
with offices at ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, and The Right
Start, Inc. (the "Company"), with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, ▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc. (the "Subsidiary") is in the business of
providing or desires to provide products for parents, infants and children on
the Internet; and
WHEREAS, Developer provides professional services to third parties seeking
to develop electronic commerce web sites for use on the Internet; and
WHEREAS, the Company desires to retain the services of Developer to perform
the services as specifically described in the attached Schedule I under the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants and conditions
specified in this Agreement, the parties hereto agree as follows:
1. DEFINITIONS
"Additional Services" shall have the meaning set forth in Section 2.2
hereof.
"Billing Rates" shall mean the applicable hourly billing rates of
Developer's employees as described in Schedule II hereto.
"Company" shall have the meaning set forth in the preamble.
"Company-Supplied Content" shall mean all Content provided or to be
provided by or on behalf of the Company in connection with the design and
development of the Web Sites pursuant to this Agreement, excluding any
Developer-Supplied Content.
"Confidential Information" shall have the meaning set forth in Section 6.1.
"Content" shall mean text, graphics, including JPEG and GIF files, images,
artwork and audiovisual materials to be displayed on any Web Sites pursuant to
this Agreement and the
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selection and arrangement of the foregoing, including trade dress and overall
"look and feel" of the Web Sites.
"Damages" shall have the meaning set forth in Section 9.1.
"Derivatives" of a work shall mean derivative works of that work as such
term is used in the United States Copyright Act of 1976, as amended.
"Developer" shall have the meaning set forth in the preamble.
"Developer-Supplied Content" shall mean all Content, including without
limitation HTML files, provided by Developer in connection with the development
of the Web Sites pursuant to this Agreement which Content is accessible to Web
Site users, including without limitation Third Party Content. For the avoidance
of doubt, the Developer-Supplied Content does not include any Guidance Solutions
Software.
"Effective Date" shall have the meaning set forth in the preamble.
"GIF" shall mean the Graphics Interchange Format.
"Guidance Solutions Software" shall have the meaning given to such term in
Schedule III attached hereto and incorporated herein by this reference.
Guidance Solutions Software does not include the Right Start Software, the
Developer-Supplied Content, nor any enhancements or amendments to the Guidance
Solutions Software that are released after the term of this Agreement as
provided in Section 4.
"HTML" shall mean hypertext markup language.
"Indemnitee" shall have the meaning set forth in Section 9.3(a).
"Indemnitor" shall have the meaning set forth in Section 9.3(a).
"JPEG" shall mean Joint Photographics Experts Group.
"Miscellaneous Services" shall have the meaning set forth in Section 2.3.
"Notice of Claim" shall have the meaning set forth in Section 9.3(a).
"Right Start Software" shall have the meaning given to such term in
Schedule III attached hereto and incorporated herein by this reference.
"Services" shall mean the specific services as set forth in Schedule I
hereto, specifying the target completion dates for such services (and any
Additional Services set forth in any addendum to such Schedule I pursuant to
Section 2.2) and any miscellaneous services that are not
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identified in Schedule I hereto or any addendum thereto to be provided by
Developer to the Company under the terms and conditions of this Agreement.
"Third Party Claim" shall have the meaning set forth in Section 9.3(b).
"Third Party Content" shall mean any Content owned by a third party that
Developer provides in connection with the development of the Web Sites pursuant
to this Agreement and is accessible to Web Site users.
"Web Sites" shall mean the Internet world-wide web sites to be designed and
developed by Developer for the Company pursuant to this Agreement.
2. SERVICES
2.1 Services. Developer shall provide to the Company the Services. The
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Company shall provide Developer with all Company-Supplied Content, as needed
during the term of this Agreement, and reasonable access to the Company's
facilities, records, personnel and other materials as Developer may from time to
time require in connection with the performance of the Services hereunder,
subject to the terms and conditions of Section 6 hereof.
2.2 Additional Services. If the parties so agree in writing, from time to
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time, the parties may add an addendum to Schedule I for each new service
("Additional Services") mutually agreed to by the parties. Each such addendum
shall specify the Additional Services and the target completion date, and shall
be signed by the parties.
2.3 Miscellaneous Services. From time to time, Developer may provide
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miscellaneous services that are not identified in Schedule I or any addendum
thereto ("Miscellaneous Services") to the Company upon the Company's request.
All such Miscellaneous Services shall be provided to the Company at the Billing
Rates identified in Schedule II hereto.
3. PAYMENT
3.1 Service Fees. In consideration for the Services, any Additional
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Services and any Miscellaneous Services to be provided by Developer under this
Agreement, the Company agrees to pay Developer promptly and fully the following
fees:
(a) Time-and-Materials Work. The Company agrees to pay for Developer's
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time-and-materials Services, Additional Services and Miscellaneous Services at a
rate of [ /*/ ]% of the
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/*/ Portion has been omitted pursuant to a request for confidential treatment
filed separately with the Commission.
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Billing Rates set forth in Part A of Schedule II hereto. Such Billing Rates
shall remain in effect until the aggregate fees payable by the Company for
Developer's time-and-materials Services, Additional Services and Miscellaneous
Services, calculated on a [ * ]% discount basis, exceeds $[ * ]. Thereafter, the
rates for such Services, Additional Services and Miscellaneous Services shall be
the Developer's then-current market rates; provided, however, that such market
rates shall not exceed the [ * ] of (i) [ * ] the billing rates set forth in
Part A of Schedule II, or (ii) [ * ] the lowest billing rates charged by
Developer to its non-venture fee-for-service customers for similar services.
(b) Flat-Fee Services. The Company agrees to pay for Developer's
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flat-fee Services, Additional Services and Miscellaneous Services in accordance
with the Billing Rates set forth in Part B of Schedule II hereto, as such rates
may be adjusted from time to time with the prior consent of the Company (which
consent shall not be unreasonably withheld).
3.2 Payment of Expenses. From time to time, Developer may incur
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reasonable expenses in the performance of Services, the Additional Services and
Miscellaneous Services hereunder. Such expenses may include, but are not
limited to, travel, food, lodging and miscellaneous office expenses, such as
phone, courier, duplicating and similar charges. The Company shall promptly
reimburse Developer on a pass-through basis for those actual expenses which are
reasonably incurred by Developer in performing its duties and obligations
hereunder. These expenses will be itemized on Developer's invoices as described
in Section 3.3 hereof. Developer shall notify and obtain approval from the
Company prior to incurring any expenses under this Section 3.2 in excess of
$[ * ] in any calendar month.
3.3 ▇▇▇▇▇▇▇▇. Developer shall invoice the Company monthly for Services,
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Additional Services and any Miscellaneous Services for the time incurred by the
Developer in connection with the Web Sites at the Billing Rates set forth in
Schedule II, as such rates may be adjusted pursuant to Section 3.1. Each
invoice will describe the Services, the Additional Services or any Miscellaneous
Services rendered, the respective costs of each activity, and any associated
expenses. Each invoice shall be due and payable immediately upon receipt but no
later than 30 days of the date of the invoice. Any balance which is unpaid for
more than 30 days after the invoice date will be subject to a late fee, which
will be calculated at a rate of 1.5% per month of such overdue balance, provided
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that nothing in this Agreement shall be deemed to require the payment by the
Company of late fees on overdue balances in excess of the amount which Developer
may lawfully contract to charge under applicable usury and other laws.
----------------------------------------
/*/ Portion has been omitted pursuant to a request for confidential treatment
filed separately with the Commission.
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4. TERM
Unless this Agreement is terminated pursuant to Sections 10.2, this
Agreement shall be in effect from the Effective Date until the completion of the
Services and any Additional Services or Miscellaneous Services by Developer.
5. OWNERSHIP; LICENSE
5.1 Developer-Supplied Content.
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(a) Assignment. Subject to the payment by the Company of all agreed upon
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fees and expenses pursuant to Section 3 of this Agreement when due, Developer
assigns to the Company exclusively, throughout the world, all of its right,
title and interest in and to the Developer-Supplied Content supplied by
Developer hereunder, including all copyright and trademark and trade dress
rights associated therewith. Nothing herein transfers to the Company ownership
of rights of Developer in respect of any know-how, processes, techniques,
methods, inventions, discoveries or developments created or developed or
otherwise owned or controlled by Developer, including without limitation any
patent that may issue in respect of any invention, system or process created or
developed by Developer during the course of performing the Services, Additional
Services or Miscellaneous Services under this Agreement (all of which the
Company agrees and acknowledges are and shall remain the sole and exclusive
property of Developer).
(b) License. The Company's sole rights with respect to any know-how,
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processes, techniques, methods, inventions, discoveries, developments or patents
developed or otherwise owned or controlled by Developer shall be a non-
transferable (except to Subsidiary or to a successor to substantially all of the
business of the Company or Subsidiary that, in each case, is not then a direct
competitor of Developer and who agrees to be subject to the terms and conditions
of this Agreement), non-sublicensable (except to Subsidiary or to a successor to
substantially all of the business of the Company or Subsidiary that, in each
case, is not then a direct competitor of Developer and who agrees to be subject
to the terms and conditions of this Agreement), non-exclusive, royalty-free and
fully paid-up, and worldwide license to use and practice any of the foregoing
solely to the extent necessary in order for the Company to use, develop,
reproduce, broadcast, distribute, display, publish, transmit and otherwise make
available the Developer-Supplied Content and the Company-Supplied Content on the
Web Sites.
(c) Third Party Content. The Company acknowledges that Developer may
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include Third Party Content in the Developer-Supplied Content. Developer will
identify all Third Party Content and any limitations that are applicable to the
use and exploitation of such Third Party Content prior to or at the time of
delivery thereof. Except as otherwise agreed by the Company and Developer prior
to the delivery by Developer of any Third Party Content, Developer has the sole
obligation for obtaining any and all rights, clearances or licenses necessary to
use and exploit any Third Party Content in connection with the Web Sites or to
comply with the Company's rights under this Agreement.
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(d) Trade Dress. Notwithstanding that title to all Developer-Supplied
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Content prepared for the Company under and during the term of this Agreement
shall belong to the Company, the ideas, concepts, overall structures, and other
information embodied or reflected in the Developer-Supplied Content developed
during the course of this Agreement by personnel of Developer, including without
limitation screen formats, structure, sequence and organization of any
Developer-Supplied Content, may be used, without an obligation to account, by
Developer in any way that Developer deems appropriate, including by or for its
clients or customers. Developer agrees not to replicate the "look and feel" and
overall trade dress aspects of the Web Sites for a direct competitor of the
Company or Subsidiary, or create any web site for any direct competitor of the
Company or Subsidiary which is confusingly similar to the Web Sites in respect
of "look and feel" and overall trade dress. Developer is in the business of
developing and designing web sites for a wide variety of clients, including
clients that may be in competition with the Company, and the Company understands
that Developer will continue these activities.
5.2 Guidance Solutions Software. Developer shall at all times remain the
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exclusive owner of all right, title and interest in and to the Guidance
Solutions Software and all intellectual property rights associated therewith,
except as otherwise expressly provided herein. Except as provided in Section
5.3, neither this Agreement, nor any act by Developer or Company in furtherance
thereof, shall be construed as granting any right or license, express or
implied, in the Guidance Solutions Software. This Section 5.2 shall survive the
termination of this Agreement for any reason.
5.3 License of Guidance Solutions Software. Subject to the terms and
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conditions of this Agreement, Developer hereby grants to the Company, Subsidiary
and any third-party that hosts the Web Sites a perpetual, world-wide, royalty-
free, nonexclusive, fully paid-up, license and right to use, develop, reproduce,
publish, broadcast, distribute, modify, transmit, display, transfer, maintain
and otherwise fully exploit the Guidance Solutions Software and its Derivatives;
provided, however, that such third-party hosting service of the Web Sites enter
into the Developer's then form of non-disclosure agreement. Developer reserves
all rights with respect to the Guidance Solutions Software not expressly granted
by this Agreement to the Company, including without limitation any right to
reproduce, display, distribute, adapt, modify, enhance or prepare Derivatives
based on the Guidance Solutions Software. The Company shall not use the Guidance
Solutions Software other than as expressly permitted under this Agreement.
6. CONFIDENTIAL INFORMATION
6.1 Confidential Information. During the course of this Agreement,
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Developer and the Company may become aware of information relating to the
products, documentation, software research and development, inventions,
processes, techniques, designs or other technical, marketing and business
information of the other party or its affiliates, including the Guidance
Solutions Software. All such information is considered by both parties to be
proprietary and confidential ("Confidential Information").
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6.2 Confidentiality. Both during and after this Agreement, each party
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agrees that, except as authorized in writing by the other party, it will: (i)
use reasonable efforts to preserve and protect the confidentiality of all
Confidential Information of the other party and its affiliates (and in any event
no less care than is used by such party in protecting the confidentiality of its
own Confidential Information); (ii) except as necessary to carry out the terms
hereof, use reasonable efforts to prevent any disclosure to anyone, including
its employees of the existence, source, content or substance of the Confidential
Information of the other party and its affiliates; and (iii) not use
Confidential Information of the other party and its affiliates in any way other
than in furtherance of this Agreement or as required by applicable laws.
6.3 Exceptions. No party shall have any liability to the other for
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disclosure of any Confidential Information of the other party or its affiliates
which the disclosing party can establish to have: (i) become publicly known
without breach of this Agreement; (ii) been publicly released for disclosure by
the other party or its affiliates; (iii) been given to such party by someone
other than the other party or its affiliates without a duty to maintain
confidentiality; or (iv) been required by applicable laws.
6.4 Injunctive Relief. Each party agrees that any material breach or
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attempted or threatened breach of this Section 6 could result in irreparable
injury to the other party for which there would be no adequate remedy at law and
consents to injunctive relief without limiting the applicability of any other
remedies.
6.5 Return of Confidential Information. Not later than thirty (30) days
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after the termination of this Agreement for any reason, each party will return
to the other party all originals or copies of Confidential Information of the
other party and all notes with respect thereto, and provided, however, that as
to notes and internal analyses and work product containing Confidential
Information, each party may, in lieu of delivering such material to the other
party, destroy all such material without retaining any copies thereof and shall
confirm in writing to the other party of such destruction.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 By Developer. Developer represents and warrants that (i) it has full
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power and authority to enter into and perform its obligations under this
Agreement and that such power and authority are not limited or restricted by any
agreements or understandings between Developer and any other persons, (ii) with
respect to any Services or Miscellaneous Services to be provided by Developer to
the Company, including any Developer-Supplied Content or other deliverables
supplied by Developer hereunder, either (A) Developer shall have obtained all
necessary third-party rights and licenses for use thereof in connection with the
Web Sites as contemplated hereby or (B) in the case of Third Party Content or
software or other technology developed by a third party as to which Developer
has not then acquired such rights and licenses, Developer shall specifically
identify such Third Party Content and inform the Company prior to furnishing or
incorporating such Third Party Content or such third party software or other
technology that the Company needs to acquire such rights and licenses at its own
expense, (iii) neither the execution, delivery nor performance of this Agreement
by Developer will result in the breach of any term or
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provision of any contract, agreement or understanding of Developer with any
third party, and (iv) Developer shall not challenge the Company's ownership
(subject to the payment by the Company of all agreed upon fees and expenses
pursuant to Section 3 of this Agreement) or validity of the Developer-Supplied
Content, the Company-Supplied Content and Confidential Information of the
Company.
7.2 By the Company. The Company represents and warrants that (i) it has
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full power and authority to enter into and perform this Agreement and that such
power and authority are not limited or restricted by any agreements or
understandings between the Company and other persons, (ii) with respect to any
Company-Supplied Content or any other information or materials provided by the
Company to Developer hereunder, the Company shall have obtained all necessary
rights and licenses for Developer to utilize such Content, information or
materials on the Company's behalf prior to providing such Content, information
or materials to Developer, (iii) neither the execution, delivery nor performance
of this Agreement by the Company will result in the breach of any term or
provision of any contract, agreement or understanding of the Company with any
third party, and (iv) the Company shall not challenge the ownership or validity
of the Guidance Solutions Software and Confidential Information of Developer.
7.3 No Other Warranty/Disclaimer. Developer shall use its commercially
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reasonable efforts in accordance with practices customary in its industry to
ensure that the Web Sites' operations will be uninterrupted, error-free, and
while the Developer is responsible for hosting the Web Sites, that the Web Sites
reside on a secure server and that there are appropriate safeguards, procedures
and firewalls in place to ensure the safety and security of the Web Sites'
server and Web Sites from outside persons. The parties acknowledge that the
Internet is a new medium, and problems frequently do occur. Developer does not
warrant that the Web Sites' operations will be uninterrupted, error-free, or
completely secure or that any defects in any software to be provided by
Developer to the Company under this Agreement will be corrected. Furthermore,
Developer does not make and hereby disclaims, any and all other express and/or
implied warranties, including, but not limited to, warranties of
merchantability, fitness for a particular purpose, any implied warranties of
noninfringement and any warranties arising from a course of dealing, usage, or
trade practice. In no event will Developer be liable to the Company or any
other person for any claims arising out of or related to any lost revenue, lost
profits, indirect, consequential, special or punitive damages, loss of data, or
interruption or loss of use of service even if advised of the possibility of
such damages, whether under theory of contract, tort, strict liability or
otherwise. In any event, any liability of Developer arising out of or in
connection with this Agreement or the Company's use of the Guidance Solutions
Software shall not exceed the amount paid by the Company pursuant to Section 3.1
(calculated on a non-discounted basis).
7.4 Year 2000 Compliance. The Guidance Solutions Software and Right Start
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Software are Year 2000 Compliant. For purposes of this Section 7.4, the
Guidance Solutions Software and Right Start Software are Year 2000 Compliant if
it will not produce errors in the processing of the date data related to the
year change from December 31, 1999 to January 1, 2000.
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8. ADVERTISING AND MARKETING
The parties hereto agree that Developer may use the Company's name, service
marks or trademarks in any advertising, sales presentation or promotional
efforts in accordance with the Company's guidelines to be provided to the
Developer or, prior to receipt of such guidelines, with the Company's prior
written consent.
9. INDEMNIFICATION
9.1. By Developer. Developer hereby agrees to indemnify and hold harmless
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the Company and its officers, employees and agents against any suits, losses,
liabilities, damages, claims, settlements, costs and expenses, including
reasonable attorneys' fees and expenses (collectively, "Damages"), arising from:
(i) any breach by Developer of this Agreement; or (ii) any breach of the
representations and warranties contained in Sections 7.1 and 7.4 hereof.
9.2 By the Company. The Company hereby agrees to indemnify and hold
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harmless Developer and its officers, employees and agents against any Damages
arising from: (i) any breach by the Company of this Agreement; (ii) any breach
of the representations and warranties contained in Section 7.2 hereof; or (iii)
the maintenance and operation of the Web Sites by any third party if the Web
Sites have been altered or modified by any party other than the Developer.
9.3 Indemnification Procedure.
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(a) Any party making a claim for indemnification hereunder (an
"Indemnitee") shall notify the indemnifying party (an "Indemnitor") of the claim
in writing promptly (but in no event later than ten (10) days) after receiving
notice of any action, lawsuit, proceeding, investigation or other claim against
it (if by a third party) or discovering the liability, obligation or facts which
may reasonably be expected to give rise to such claim for indemnification,
describing the claim, the amount thereof (if known and quantifiable), and the
basis thereof (a "Notice of Claim"), provided that the failure to so notify an
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Indemnitor shall not relieve the Indemnitor of its obligations hereunder except
to the extent such failure shall have actually prejudiced the Indemnitor.
(b) With respect to any third party action, lawsuit, proceeding,
investigation or other claim which is the subject of a Notice of Claim (a "Third
Party Claim"), an Indemnitor shall be entitled to assume and control the defense
of such Third Party Claim at the Indemnitor's expense and at its option by
sending written notice of its election to do so within fifteen (15) days after
receiving the Notice of Claim from the Indemnitee; provided, however, that:
(i) The Indemnitee shall be entitled to participate in the defense of
such Third Party Claim and to employ counsel of its choice for such purpose
(the fees and expenses of such separate counsel shall be borne by the
Indemnitee);
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(ii) If the Indemnitor elects to assume the defense of any such
Third Party Claim, the Indemnitor shall obtain the prior written consent of
the Indemnitee (which shall not be unreasonably withheld) prior to
compromising or settling such Third Party Claim; and
(iii) If the Indemnitor shall not have assumed the defense of such
Third Party Claim within the fifteen (15) day period set forth above, the
Indemnitee may assume the defense of such Third Party Claim and may make
any compromise or settlement thereof or otherwise protect against the same
and be entitled to all amounts paid as a result of such Third Party Claim
or any compromise or settlement thereof, provided that, in the case of any
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such compromise or settlement, the Indemnitee shall obtain the prior
written consent of the Indemnitor (which shall not be unreasonably
withheld).
(c) The party that assumes the defense of a Third Party Claim shall select
the counsel, subject to the approval of the other party (such approval not to be
unreasonably withheld). The party selecting the counsel shall give the other
party notice of the name of the counsel selected by it at the time of assuming
the defense and the other party shall be deemed to have approved such counsel
unless it objects to such counsel within five (5) business days.
(d) The Indemnitee shall at all times cooperate in all reasonable ways
with, make its relevant files and records available for inspection and copying
by, and make its employees available or otherwise render reasonable assistance
to, the Indemnitor.
10. GENERAL PROVISIONS
10.1 No Solicitation of Employees. Each party agrees not to hire or
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solicit, directly or indirectly, the other party's employees during the term of
this Agreement and for a period of two years after the expiration or termination
of this Agreement without the other party's prior written consent.
10.2 Termination for Cause. Upon the occurrence of any material breach of
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this Agreement which remains uncured following written notice specifying the
nature of the breach from the injured party, for a period of thirty (30) days
after such notice, in the case of nonpayment by the Company or for a period of
thirty (30) days after such notice, in all other cases, the injured party has
the right to immediately terminate this Agreement by providing additional
written notice of such termination. In the event of a termination of this
Agreement by the Company pursuant to this Section 10.2, Developer, within 30
days after the effective date of termination, shall deliver to the Company all
of Developer's work (including source code for the Guidance Solutions Software),
in connection with completed work paid for by the Company, and the Company shall
make all payments to Developer required pursuant to the Agreement, and the
Company's license of the Guidance Solutions Software pursuant to Section 5.3
shall continue in full force and effect. In the event of a termination of this
Agreement by Developer pursuant to this Section 10.2, Developer shall have no
further obligations under this Agreement to perform any further services for the
Company, and the Company shall make all payments to Developer required pursuant
to this Agreement. Termination of this Agreement by Developer pursuant to
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this Section 10.2 shall not affect the Company's ownership of any Developer-
Supplied Content for which the Company has made full payment to Developer, but,
upon such termination, the Company's right, title and interest in any and all
other Developer-Supplied Content, and all right and license of the Company with
respect to the Guidance Solutions Software, shall be extinguished.
10.3 Modification. This Agreement may be modified or amended by the
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parties only in writing executed by both parties hereto.
10.4 Waiver. A waiver of a breach or default does not constitute a waiver
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of future or other breaches or defaults.
10.5 Applicable Law and Forum. This Agreement shall be deemed entered
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into in Los Angeles County, California and will be governed by and interpreted
in all respects by the laws of the State of California without regard to
provisions regarding choice of laws. Subject to Section 10.17 hereof, the
parties hereby agree that Los Angeles County, California is the venue for any
proceedings regarding this Agreement and that any legal proceedings regarding
this Agreement shall be brought in the courts of Los Angeles County, California,
or the United States District Court for the Central District of California. The
parties hereby consent to the personal jurisdiction of such courts.
10.6 Entire Agreement. This Agreement includes Schedule I, Schedule II,
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Schedule III, and any addenda to such Schedules, all of which are incorporated
into this Agreement by this reference, and together with the Restricted Stock
Agreement between The Right Start, Inc., ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., and Guidance
Solutions, Inc., dated the Effective Date, the related Registration Rights
Agreement and the other documents contemplated hereby or thereby constitute the
entire understanding between the parties with respect to the subject matter
hereof, superseding all prior negotiations, preliminary agreements,
correspondence or understandings, written or oral between the parties.
10.7 Notices. All notices, statements and payments to Developer shall be
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delivered to ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇,
facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇ with a copy to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇. All notices,
statements and payment to be given to the Company shall be delivered to ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇
▇▇▇▇▇▇▇▇▇, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇ or at such other address as either party
shall designate in writing to the other party, by giving notice in accordance
with this Section 10.8 from time to time. All notices shall be in writing and
shall either be served by personal delivery, fax, certified or registered mail
or overnight service, all charges prepaid. Except as otherwise provided herein,
such notices shall be deemed given (i) when personally delivered, (ii) when
faxed (provided that a copy of such notice is also sent on such same date by
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certified or registered mail or overnight service), (iii) on the date five (5)
days following the date of mailing or (iv) the date one (1) business day
following the date of mailing via an overnight service, except that notices of
change of address shall be effective only after the actual receipt thereof.
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10.8 Uncontrollable Events. If either party cannot perform any of its
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obligations because of circumstances beyond its reasonable control, then such
non-performing party will: (i) notify the other party; (ii) take reasonable
steps to resume performance as soon as possible; and (iii) not be considered in
breach during the period in which the failure to perform is beyond the party's
reasonable control.
10.9 Independent Contractor Relationship. In accordance with the mutual
-----------------------------------
intentions of the parties hereto, Developer is performing services for the
Company as an independent contractor, and all of the terms and conditions of
this Agreement shall be interpreted in light of such relationship. Nothing
contained in this Agreement constitutes appointment of either party as an agent,
representative, partner, joint venture or employee of the other party for any
purpose. Neither party may bind the other party to any agreement with any third
party.
10.10 Severability. Should any provision of this Agreement be held to be
------------
void, invalid or inoperative, such provision shall be enforced to the greatest
extent possible and the remaining provisions of this Agreement shall not be
affected and shall remain valid and in full force.
10.11 Headings. The headings of the Sections of this Agreement are for
--------
convenience only and shall not be of any effect in construing their meanings.
10.12 Survivability. The following Sections shall survive the expiration
-------------
or earlier termination of this Agreement: 5.1, 5.2, 6, 8, 9 and 10.
10.13 Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original Agreement for all purposes, including the
judicial proof of any of the terms hereof, provided, however that all such
--------
counterparts shall constitute one and the same Agreement.
10.14 Remedies. Unless expressly set forth to the contrary, either
--------
party's election of any remedies provided in this Agreement shall not be
exclusive of any other remedies available hereunder or other wise at law or in
equity, and all such remedies shall be deemed to be cumulative.
10.15 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of each of the parties hereto and their respective,
permitted successors and assigns. Neither party hereto may assign any of its
rights or obligations hereunder without the prior written consent of the other
party hereto, except to a successor to substantially all of such assigning
party's business or assets and to an affiliate of the Developer or the Company,
and provided further that such successor or affiliate agrees to be bound by this
--------
Agreement.
10.16 Attorney Fees. Should any litigation or arbitration be commenced
-------------
among the parties in relation to this Agreement, the party prevailing in such
litigation or arbitration shall be entitled, in addition to such other relief as
may be granted, to a reasonable fees and expenses for
12
attorneys, accountants and expert witnesses in connection with such litigation
or arbitration or in a separate action brought for that purpose.
10.17 Arbitration of All Disputes, Claims or Controversies. As a material
----------------------------------------------------
part of this Agreement, the parties agree that any and all disputes, claims or
controversies arising out of or relating to this Agreement, the relationship
between the parties, or the Services performed, shall be determined exclusively
by confidential, final and binding arbitration in Los Angeles, California, in
accordance with the then existing rules for commercial arbitration of the
American Arbitration Association. Disputes, claims and controversies subject to
final and binding arbitration under this Agreement include, without limitation,
all those that otherwise could be tried in court to a judge or jury in the
absence of this Agreement. Such disputes, claims and controversies include,
without limitation, claims for disputes over Developer's fees and expenses, any
disputes over the quality of Services which the Developer renders, any claims
relating to or arising out of the Company's or Developer's performance under
this Agreement, and any other claims arising out of any alleged act or omission
by the Company or Developer. By agreeing to submit all disputes, claims and
controversies to binding arbitration, each of the parties expressly waives its
rights to have such matters heard or tried in court before a judge or jury or in
another tribunal. Any award shall be final, binding and conclusive upon the
parties, subject only to judicial review provided by statute, and a judgment
rendered on the arbitration award may be entered in any state or federal court
having jurisdiction thereof. Notwithstanding the foregoing, each party agrees
that if the other party or anyone acting on the other party's behalf threatens
or attempts to or does violate Sections 5 or 6 of this Agreement then in any
suit or proceeding that may be commenced by the non-violating party, its
successors or assigns, for or with respect to such threatened, attempted or
actual violation, an order may be obtained enjoining the violating party and/or
any other person, persons or entities acting in concert with the violating party
from violating any such restriction. Such a restraining order may be obtained
pending determination of the litigation as well as upon final determination
thereof, and request for such restraining order shall be without prejudice to
any other right or remedy available to the non-violating party by reason of such
threatened, attempted or actual violation of any such contractual restriction.
The violation of Sections 5 or 6 of this Agreement would cause irreparable
injury to the non-violating party and monetary damages in and of itself would
not afford adequate relief.
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
GUIDANCE SOLUTIONS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
THE RIGHT START, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Financial
Officer
14
SCHEDULE I
SERVICES
Time and Materials Services
The Services listed below will be provided by Developer on a time-and-materials
basis at the applicable Billing Rates listed in Part A of Schedule II. The
target completion dates listed below represent estimates and may be revised
during the course of Developer performing its Services. Developer will use
diligent efforts to achieve the target completion dates.
---------------------------------------------------------------------------------
Services Target Completion Date
---------------------------------------------------------------------------------
Completion of Phase 1 6/29/99
Completion of "Pre-school" and "Kindergarten" 9/13/99
sections
Completion of the following enhancements: 10/1/99
. Drop shipments
. Net Effects online customer service
. SID's and links for affiliates
. Re-design of Articles-page
Completion of the following enhancements: Work to commence in
. [ * ] 1/2000; target completion
. [ * ] dates TBD
Other enhancements to be agreed by the parties TBD
---------------------------------------------------------------------------------
Flat Fee Services
The Services listed below will be provided by Developer on a flat-fee basis at
the applicable rates set forth in Part B of Schedule II:
. Hosting of the Web Site (includes "basic" application support), to be more
fully described in a Hosting Proposal.
. "Premium Application" Support, to be more fully described in the Hosting
Proposal.
------------------------------
* Portion has been omitted pursuant to a request for confidential treatment
filed separately with the Commission.
15
SCHEDULE II
RATES
-----
A. Time and Materials Rates
------------------------
Billing Rates for Developer's personnel for time-and-materials services are set
forth below, subject to the discount provided in Section 3.1(a). In the event
that other personnel are required in connection with such services, the rates
for such personnel shall be mutually agreeable to the parties.
-----------------------------------------------------------------
Resource Hourly Rate
-----------------------------------------------------------------
Client Partner [ * ]
Site Director/Producer [ * ]
Project Manager [ * ]
Technical Director [ * ]
Account Executive [ * ]
Senior Developer [ * ]
Associate Developer [ * ]
Art Director [ * ]
Graphic Designer [ * ]
HTML Design [ * ]
Editor [ * ]
-----------------------------------------------------------------
B. Flat-Fee Rates
Hosting
Monthly hosting fees will be based on bandwidth used, as measured by data
(gigabytes) transferred during the week of the applicable month with the highest
activity:
-----------------------------------------------------------------------------------------------------
"Peak week" data transferred (in Approximate User Sessions Monthly Hosting Fee
gigabytes) Per Week *
-----------------------------------------------------------------------------------------------------
0 - 4 0 - 14,000 [ * ]
5 - 14 14,000 - 43,000 [ * ]
15 - 29 43,000 - 85,000 [ * ]
30 - 49 85,000 - 142,000 [ * ]
50 - 74 142,000 - 213,000 [ * ]
Each additional 25 GB 213,000 + [ * ] per each [ * ]
From 75 and above
-----------------------------------------------------------------------------------------------------
* The number of user sessions is an approximation based on aggregate usage
figures from other web sites developed by Developer, and is provided for
reference purposes only. The actual correlation between user sessions and
gigabytes of data transferred will vary depending on each individual site
composition, application architecture and individual user behavior.
------------------------------
* Portion has been omitted pursuant to a request for confidential treatment
filed separately with the Commission.
16
Basic Support
The "Basic Support" package is included in the monthly hosting package, and
there is no additional charge.
Premium Support
Monthly fees for "Premium Support" are as follows:
-----------------------------------------------------------------------------------------
Component Rate
-----------------------------------------------------------------------------------------
"Red Alert" software Rates charged by Red Alert from
time to time (without any ▇▇▇▇-up
by Developer)
Dedicated support [ * ]
-----------------------------------------------------------------------------------------
------------------------------
* Portion has been omitted pursuant to a request for confidential treatment
filed separately with the Commission.
17
SCHEDULE III
A. Guidance Solutions Software
Guidance Solutions Software includes Developer's Relational Database Management
Systems (RDBMS) based on the Objective SQL model. RDBMS includes the following:
(1) Database applications used in connection with database objects, user-
interface, file parsing and interpretation and database manipulation.
(2) Database tables, views and stored procedures used to implement
Objective SQL (including the properties within each table), and the
methods and events that are implemented through the following views
and stored procedures:
[*]
B. Right Start Software
Right Start Software consists of the following:
(1) Custom database model objects specifically designed for the Web Site
which interact with the Guidance Solutions Software, consisting of the
following views and stored procedures:
[*]
(2) Software used for data exports to the Company's legacy systems and
data imports from the Company's legacy systems and vendors.
------------------------------
* Portion has been omitted pursuant to a request for confidential treatment
filed separately with the Commission.
18
