U S WEST AND SHARP TECHNOLOGY
DEVELOPMENT AND DISTRIBUTION PARTNERSHIP AGREEMENT
This Development and Distribution Agreement ("Agreement"), is effective as of
May 20, 1999 between SHARP TECHNOLOGY, INC., a Delaware corporation, having a
place of business at Sharp Technology, 0000 Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX
00000 XXX ("Sharp") and U S WEST COMMUNICATIONS SERVICES, INC., a Colorado
corporation, having a place of business at 0000 Xxxxxxxx, 0xx Xxxxx, Xxxxxx, XX
00000 ("USW").
PURPOSE. The parties desire to jointly develop an Internet Control and Content
Administration Product to be generally referred to as "It's Your Net" ("IYN")
and to engage in other activities on the terms and conditions set forth in this
Agreement. Additionally, the parties desire to disclose and grant rights to the
other party with respect to IYN.
2. RESPONSIBILITIES OF THE PARTIES
2.1 It's Your Net Product Development:
2.1.1 Sharp shall:
(a) In cooperation with USW, complete the development of the IYN Concept
and Product content features as described in Exhibit "A" attached
hereto and incorporated herein;
(b) Develop and maintain a technical product support Web site for IYN;
(c) Develop a multi-media tutorial and instruction guide to accompany IYN;
(d) Market IYN to other ISPs outside of the USW territory at Sharp's
expense;
(e) Provide all product maintenance and version upgrades during the
contract period;
(f) Provide USW personnel training and orientation with respect to IYN;
and
(g) Be responsible for the quality, technical accuracy, completeness, and
coordination of all information, specifications, and other items and
services furnished under this Agreement. If Sharp fails to meet
applicable professional standards, Sharp shall correct or revise any
error or deficiencies in the development.
2.1.2 USW shall:
(a) Actively offer and market IYN to current and new U S XXXX.xxx
customers at USW expense;
(b) Agree to make IYN a part of U S XXXX.xxx marketing materials during
the term of this Agreement;
(c) Where possible, introduce the availability of IYN to other regional
Xxxx companies with the objective of expanding the distribution of IYN
outside of the USW territory;
(d) Distribute and xxxx for IYN sales including sales by Sharp.
2.1.3 Each party shall pay 50% of the development-related costs and expenses,
including tutorials, domain names and product maintenance costs incurred
during the development period. Such costs are estimated at $250,000 total
and U S WEST's total share of such costs shall not exceed $125,000. No
later than January 1, 2000, Sharp will provide an itemized invoice to U S
WEST for development related costs.
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2.1.4 Each party shall be responsible for 50% of the royalty payments due to the
developer of the underlying source code. Such royalty payments shall be
based upon a $1.00 fee per copy of IYN sold. Sharp shall accurately account
for the number of copies sold, remit the royalty payments directly to the
owner, and invoice U S WEST for 50% of the fees. Sharp will pay 50% of the
fees. U S WEST and Sharp will share equally from any fees paid by any other
party.
2.2 Mutual Use of Both Parties Marks.
2.2.1 Each party grants to the other party during the term of this Agreement a
non exclusive, royalty free, worldwide right and license to use its
respective trade names, trademarks, service names and service marks
("Marks") under the following conditions:
(a) Ownership of the Xxxx. Each party may use the Xxxx of the other party
so long as that use conforms to the terms of this Agreement. Both
parties acknowledge that the other is the owner of their respective
Xxxx. Neither party shall at any time do or suffer to be done any act
or thing which will in any way impair the rights of the other in and
to its respective Xxxx or the goodwill inherent in such Xxxx. It is
understood that neither party shall acquire and shall not claim any
title to the other's Xxxx adverse to the owner by virtue of the
license granted herein, or through either party's use of the other's
Xxxx, it being expressly agreed that all use of the respective Xxxx by
other party shall inure to the benefit of the owner of said Xxxx. Both
parties are estopped from challenging the validity of the other's
respective Xxxx or from setting up any claim adverse to the owner of
the Xxxx.
(b) Use and Appearance of the Marks. Both parties shall comply with the
conditions set forth in the other party's Corporate Identity
Guidelines, as may be amended from time to time, or as directed by
said owner, with respect to the style, color, appearance and manner of
use of the Xxxx. Prior to producing, distributing or displaying any
advertising or other material containing the Marks, the party
requesting such use shall obtain prior written approval from the other
party. Each party is solely responsible for ensuring that any uses of
the other's Xxxx in any advertising or promotional materials or
otherwise is approved by said owner of the Xxxx.
(c) Quality Control and Right To Inspect. Sharp shall maintain a standard
of quality for the Products offered under the Xxxx commensurate with
standards previously achieved and maintained by USW and its
subsidiaries, and shall, at a minimum, provide the Services in
compliance with all laws and regulations. Representatives of USW shall
have the right, at reasonable times to visit Sharp's facilities or
inspect the rendering of the Services to ensure compliance with this
paragraph.
2.2.2 Each party will submit to the other party, for its prior written approval,
which shall not be unreasonably withheld or delayed, any marketing,
advertising, press releases, and all other promotional materials related to
IYN that reference the other party and/or its Marks (the "Materials"). Each
party shall solicit and reasonably consider the views of the other party in
designing and implementing such Materials. Once approved, the Materials
(other than press releases) may be used by a party for the purpose of
promoting IYN contained therein and reused for such purpose.
Notwithstanding the foregoing, either party may issue press releases and
other disclosures as required by law or as reasonably advised by legal
counsel without the consent of the other party and, is such event, prompt
notice thereof shall be provided to the other party.
2.3 General.
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2.3.1 The customers who purchase the software packages through this joint
marketing arrangement, shall be considered to be shared customers. Customer
information shall be shared between these two companies but only for the
purposes of tracking the customer's sale, for customer follow-up by the
partnership, for technical support and for notification of program
enhancements and up-grades. Neither party shall provide to any third
parties any of a customer's personal information regarding specific users,
including, without limitation, their names and addresses or any other
information the provision of which could violate any privacy or other
rights of users or third parties. Neither party will be required to include
in any reports any information the provision of which to the other would
cause such party to violate any law, rule or regulation or any contractual
or legal obligation of such party to any other person.
2.4 Grant Clauses. Each of the parties to this Agreement shall have an
undivided one-half ownership in the intellectual property rights
("Intellectual Property Rights") of the IYN Product or any other products
or derivatives developed as part of this Agreement based on the joint work
of the parties. For the purposes of this Agreement, intellectual property
rights shall mean all worldwide rights under letter patent and application
for letters patent and similar laws, copyright and rights of authorship,
and trade secret law. Neither party shall be required to obtain the consent
of, or account to, the other party for the exercise of Intellectual
Property Rights in the IYN Product.
3. REVENUE SHARING.
3.1.1 All revenue generated by IYN shall be divided by the Parties equally.
Revenue amounts due Sharp Technology under this Agreement shall be made by
USW within thirty (30) days of the end of each month representing payments
for the preceding calendar month. Sharp shall provide reports containing
sufficient information for the calculation of such amounts to USW. In the
event there is a dispute regarding the amount due, upon reasonable request,
a party will provide copies of all records or other documentation relevant
to the calculation of such amounts. The parties agree to maintain records
supporting fees payable by either party for a period of three (3) years
following the date that the payment was made. The relevant portion of such
records and accounts shall be available for inspection and audit by an
auditing Party or its representative (but not more than once in any twelve
(12) month period) during regular business hours and upon reasonable
advance written notice. The parties anticipate that IYN will be offered to
U S Xxxx.xxx customers as a service for a monthly fee. Such fees are
projected to be $3.00/month for residential customers and $8.00/month for
business customers.
3.1.2 Each party agrees to pay directly taxes and/or surcharges it incurs under
the law.
3.2 Software Distribution and Associated Billing, Order Fulfillment, and
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Customer Support. USW and/or its agents and Sharp shall sell the IYN and
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associated software packages.
3.3 The software version and computing platforms to be supported for all
distributed software as well as the pricing structure for these software
packages shall be determined by Sharp and USW jointly.
3.2.2 Customer support/Technical support for the IYN software packages shall be
provided free to the customer via the IYN technical support web site to be
provided by Sharp. All other technical support or customer support issues
shall be handled by USW as part of its U S XXXX.xxx customer support
service.
3.2.3 All IYN Customer billing to USW end-users will be provided by USW through
the U S WEST billing systems.
3.2.4 Order fulfillment to USW end-user customers will be accomplished through
CD distribution or online downloading of the software package. Should
customers desire to receive a hard copy of the software (i.e., via
Floppy-diskette) then an extra fee will be billed to the customer (pursuant
to Section 3.2.3, above) and this fee will be used to cover the additional
manufacturing, distribution, and relevant shipping and handling costs.
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3.2.5 Sharp warrants that all IYN software applications provided to the customer
will be Year 2000 software compliant.
4. MARKETING.
4.1 USW agrees to offer IYN to all current and future .net customers and
prospects. USW will display or advertise IYN in appropriate U S XXXX.xxx
marketing and sales campaigns at its expense. Sharp will market IYN to
prospective ISPs outside the USW 14-state region.
5. TERM / TERMINATION
5.1 The initial term of this Agreement shall begin on the Effective Date and
shall continue for three (3) years, and thereafter it may be canceled by
mutual agreement of the parties.
6. CONFIDENTIALITY.
6.1 Each party acknowledges and agrees that any and information marked as
"Confidential" or "Proprietary" and relating to the other party's business
and not publicly known including, without limitation, the contents of this
Agreement, technical processes and formulas, source codes, names, addresses
and information about users and advertisers, product designs, sales, costs
and other unpublished financial information, product plans, and marketing
data is confidential and proprietary information. Each party agrees that it
shall take reasonable steps, at least substantially equivalent to the steps
as it takes to protect its own proprietary information, other than by or to
its employees or agents who must have access to such information to perform
such party's obligations hereunder, who shall each treat such information
as provided herein, and as may be required by either of the parties for
public or private financing. To the extent that such information is
publicly known, already known by, or in the possession of the
non-disclosing party; is thereafter rightly obtained by the non-disclosing
party from a source other than the disclosing party; or is required to be
disclosed by law, regulation, or court order; then there shall be no
restrictions of the use of such information. The parties obligations shall
be binding for 2 years following the disclosure of such confidential
information.
7. REPRESENTATIONS WARRANTIES AND INDEMNIFICATION.
7.1 USW Representations and Warranties. USW represents and warrants to
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Sharp Technology that (I) its Sites are or will be functional Internet
sites accessible to subscribers of U S XXXX.xxx; (II) the Sites do not and
will not, to the best of its knowledge, contain any content, materials,
advertising or services that infringe on or violate any applicable law or
regulation, any proprietary right of any third party (including copyright,
trademark, patent, and trade secret), or which is defamatory, obscene or
offensive; (III) it has the right and authority to enter into and perform
all obligations under this Agreement; and (IV) it shall comply with all
applicable laws, statutes, ordinances, rules and regulations with respect
to its Sites. In the event of an error, delay, defect, breakdown or failure
of its Site, USW's obligation shall be limited to the use of reasonable
diligence under the circumstances to restore its Sites to operation.
7.2 Sharp Representations and Warranties. Sharp represents and warrants to USW
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that (I) the IYN Concept and Product will be developed in a workmanlike
manner and with professional diligence and skill in accordance with
applicable professional and industry standards; (II) the sites that are
allowed in the first level of the IYN Product do not and will not, to the
best of its knowledge, contain any content, materials, advertising or
services that give rise to any private cause of action, or which is
defamatory, obscene or offensive; (III) it has the right and authority to
enter into perform all obligations under this Agreement; and (IV) it shall
comply with all applicable laws, statutes, ordinances, rules and
regulations with respect to its Site(s).
7.3 Indemnity. Each party will defend, indemnify, save and hold harmless the
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other party, the other party's Affiliates, and their officers, directors,
agents, and employees from any and all third-party claims, demands,
liabilities, costs or expenses, including reasonable attorneys' fees
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("Liabilities"), resulting from the indemnifying party's breach of any
material duty, representation, or warranty contained in this Agreement,
except there shall be no obligation to indemnify, defend, save and hold
harmless where Liabilities result from the gross negligence or knowing and
willful misconduct of the other party. Each party agrees to (I) promptly
notify the other party in writing of any indemnifiable claim and (II) give
the other party's expense and cooperate fully with the other party, at that
other party's expense, in defending or settling such claims. Each party
reserves the right, at its own expense, to participate in the defense of
any matter otherwise subject to indemnification by the other party.
8. FREEDOM TO COMPETE.
8.1 Nothing in this Agreement precludes either party from independently
performing research and developing products in fields related to the IYN
Product.
8.2 Each party shall have the freedom to work independently with third parties
in related technical areas, and neither party shall have any obligation to
provide the by-product or results of such development to the other party
under this Agreement.
9. LIMITATION OF LIABILITY AND DISCLAIMER.
9.1 LIABILITY. EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS SPECIFICALLY SET
FORTH IN THIS AGREEMENT OR DAMAGES FOR PERSONAL INJURY OR PROPERTY DAMAGE,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY (EVEN IF THAT PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) ARISING FROM THIS
AGREEMENT, EXCEPT THAT NEITHER PARTY SHALL BE ENTITLED TO RECEIVE
CONSEQUENTIAL DAMAGES FOR A BREACH OF ANY LICENSES GRANTED UNDER THIS
AGREEMENT.
9.2 NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FOR TH IN THIS AGREEMENT,
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NEITHER PARTY MAKES, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING ANY MATTER
SUBJECT TO THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR IMPLIED WARRANTIES
ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
10. GENERAL PROVISIONS.
10.1 Amendment. No change, amendment or modification of any provision of this
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Agreement shall be valid unless set forth in a written instrument signed by
both parties. This Agreement sets forth the entire agreement and supersedes
any and all prior agreements, written or oral, of the parties with respect
to the transactions set forth herein.
10.2 Assignment. Neither this Agreement, nor any rights hereunder in whole or in
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part, shall be assignable or otherwise transferable by either party;
provided that either party may assign or transfer this Agreement and rights
and obligations hereunder to any current or future Affiliate or successor
if such assignee agrees in writing to the terms and conditions herein,
except that USW may assign this Agreement to any successor company
resulting from a merger, acquisition or corporate restructure.
10.3 Compliance with Laws. This Agreement and the parties' actions under this
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Agreement shall comply with all applicable federal, state, and local laws,
rules, regulations, court orders, and governmental or regulatory agency
orders.
10.4 Construction. In the event that any provision of this Agreement conflicts
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with the law under which this Agreement is to be construed, or if any such
provision is held invalid by a court with jurisdiction over the parties to
this Agreement, such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the parties in accordance
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with applicable law, and the remainder of this Agreement shall remain in
full force and effect. There shall be no presumption for or against either
party as a result of such party being the principle drafter of this
Agreement.
10.5 Dispute Resolution. Any claim, controversy or dispute between the parties,
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the parties' Affiliates, their agents, employees, officers, or directors
("Dispute") shall be resolved by arbitration conducted by single arbitrator
engaged in the practice of law and familiar with the subject matter of the
Dispute, under the then current rules of the American Arbitration
Association ("AAA"). The Federal Arbitration Act, 9 U.S.C. Secs. 1-16, not
state law, shall govern the arbitrability of all Disputes. The arbitrator
shall have authority to award compensatory damages only. The arbitrator's
award shall be final and binding and may be entered in any court having
jurisdiction thereof. Each party shall bear its own costs and attorneys'
fees and shall share equally in the fees and expenses of the arbitrator.
The arbitration shall occur in the City and State of the party against whom
the arbitration is brought, and the laws of such state shall govern the
construction and interpretation of the Agreement. It is expressly agreed
that the arbitrator shall be authorized to issue injunctive relief pending
an award in arbitration and either party may seek relief in an appropriate
court of law to enforce such determination by an arbitrator.
10.6 Independent Contractors. The parties to this Agreement are independent
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contractors. Neither party is an agent, representative, or partner of the
other party. Neither party shall have any right, power or authority to
enter into any agreement for, or on behalf of, or incur any obligation or
liability of, or to otherwise bind, the other party except those
obligations defined in this agreement or those agreed to by the parties as
addendum to this contract.
10.7 No Waiver. The failure of either party to insist upon or enforce strict
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performance by the other party of any provision of this Agreement, or to
exercise any right under this Agreement, shall not be construed as a waiver
or relinquishment of such party's right to enforce any such provision or
right in any other instance.
10.8 Notice. Any notice, approval, request, authorization, direction or other
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communication under this Agreement shall be given in writing and shall be
deemed to have been delivered and given for all purposes (I) on the
delivery date if delivered by electronic mail; (II) on the delivery date if
delivered personally to the party to whom the same is directed; (III) one
(1) business day after deposit with a commercial overnight carrier with
written verification of receipt; or (IV) five (5) business days after the
mailing date whether or not actually received, if sent by U. S. mail,
return receipt requested, postage and charges prepaid, or any other means
of rapid mail delivery for which a receipt is available to the Contact at
the address of the party to whom the same is directed.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Sharp Technology, Inc. U S WEST Communications Services, Inc.
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxxxxxx for Xxxxx Xxxxxx
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Authorized Signature Authorized Signature
Xxxxxx Xxxxx Xxxxxxx Xxxxxxxxx
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Name Typed or Printed Name Typed or Printed
CEO Manager
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Title Title
11/4/99 11/3/99
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Date Date
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Address for Notices: Address for Notices:
0000 Xxxxxxx, Xxxxx 0000 0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000 Xxxxxx, XX 00000
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