Sample Business Contracts

Network Credits Program Services Agreement - Microsoft Corp. and Inc.

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This Network Credits Program Services Agreement (the "Agreement") is entered
into and effective as of June 22, 1998 (the "Effective Date") by and between
Microsoft Corporation, a Washington corporation located at One Microsoft Way,
Redmond, WA 98052 ("Microsoft") and ISP, as described immediately below:
<S>                              <C>
          ISP Name & Address:, Inc.
                                 1725 Westlake Ave. N.
                                 Suite 102
                                 Seattle, WA  98109
              Attention:         Contact/Title:  Martin Tobias
                                 Phone: (206) 285-7205
                                 Fax: (206) 285-1128

         State of Incorp.:       Delaware
        ISP Services Credit      $250,000


ISP is an Internet service provider capable of delivering Internet
infrastructure services for Internet Content Providers and corporate customers,
including the encoding, production, hosting and serving of live or on-demand ICP

Microsoft is a developer of operating system technologies and tools for the
development and serving of high-performance, high-fidelity web and intranet
content, including interactive media content.

Microsoft is establishing a "Network Credits Program" whereby ICP's may utilize
Microsoft operating system technologies and ISP services to deliver ICP Content
to the ICP's users.

Microsoft wishes to engage ISP as, and ISP wishes to become, a supplier of
services to the Network Credits Program.

1.   Definitions

1    "ASF" means the proposed industry standard format referred to as the
     "Advanced Streaming Format," which as of the Effective Date is in
     comment/revision processes within industry standards bodies, and also any
     successors or replacements for such format that may be designated by such
     industry standards bodies.

2    "Confidential Information" means: (i) any source code of software provided
     by either party upon written request of the other party; (ii) any trade
     secrets and/or other proprietary information not generally known relating
     to either party's product plans, designs, costs, prices and names,
     finances, marketing plans, business opportunities, personnel, research,
     development, hardware configurations, customers or know-how; and (iii) the
     terms and conditions of this Agreement. "Confidential Information" shall
     not include information that: (i) is or becomes generally known or
     available by

     publication, commercial use or otherwise through no fault of the receiving
     party; (ii) is known and has been reduced to tangible form by the receiving
     party at the time of disclosure and is not subject to restriction; (iii) is
     independently developed by the receiving party without any use of the
     Confidential Information of the disclosing party; (iv) is lawfully obtained
     from a third party that has the right to make such disclosure without
     breach of this Agreement by the receiving party; or (v) is made generally
     available by the disclosing party without restriction on disclosure.

3    "Content" means data, text, audio, video, graphics, photographs, artwork
     and other technology and materials.

4    "ICP Content" means the Streaming Media Content ICP and Microsoft wish to
     make available through the ISP Services.

5    "ICP Site" means the URL and/or intranet site from which ICP wishes to
     redirect its users to take advantage of the ISP Services.

6    "ICP" means a Microsoft-designated Network Credits Program participant,
     including Internet Content Providers and corporate/large entity customers
     using intranets.

7    "ISP Site" means ISP's main website located at

8    "ISP Services Credit" means the amount set forth in the table on page 1 of
     this Agreement.

9    "ISP Services Guidelines" means the guidelines and procedures by which ISP
     will engage an ICP, deliver ISP Services to the ICP, and charge/bill the
     ICP for services additional to the portion of the ISP Services Credit
     assigned to the ICP by Microsoft, as more fully described in Exhibit B.

10   "ISP Services" means the provision of development, production, encoding,
     hosting, serving and delivery of "live," "on-demand" and archived ICP
     Content, as more fully described in Exhibit A.

11   "Microsoft Media Player" means the version released in June 1998 of the
     upgrade to the Windows 95 and Windows 98 Microsoft Media Player client
     technology, including all Updates thereof during the Term, that displays
     ASF, other formats of Streaming Media, and other multimedia data-types.

12   "Microsoft Technologies" means NetShow and the Microsoft Media Player.

13   "NetShow" means Microsoft's Streaming Media server technology and services
     for Microsoft Windows NT, including all Updates during the Term, regardless
     of whether marketed by Microsoft under the name "NetShow."

14   "Streaming Media" means audio, video and other media Content that is
     transmitted and played or displayed incrementally, or in semi-real time,
     such that it can be heard, viewed or received by an end user without
     substantial download delays.

15   "Term" means the period commencing on the Effective Date and ending on June
     24, 1999; unless this Agreement is earlier terminated in accordance with

16   "Updates" means all public releases of Microsoft Technologies during the
     Term, including public maintenance releases, error corrections, upgrades,
     enhancements, additions, improvements, extensions, modifications and
     successor versions.

All other initially capitalized terms shall have the meanings assigned to them
in this Agreement.

2.   Microsoft Obligations.

2.1  Software.

   (a)  Microsoft Technologies. Microsoft hereby grants to ISP a worldwide, non-
        exclusive, non-transferable, royalty-free license for the Term, to
        reproduce and use copies of Microsoft Technologies solely for purposes
        of (i) providing the ISP Services and (ii) developing and supporting
        Microsoft Technologies usage as part of ISP's business.

   (b)  Other Microsoft Software. Microsoft shall provide ISP with the Microsoft
        software ("Microsoft Software") set forth in Exhibit C.

   (c)  EULA. Except and solely to the extent otherwise provided in this Section
        2.1, all use of the Microsoft Technologies and Microsoft Software shall
        be in accordance with the end user license agreement ("EULA")
        accompanying such Microsoft Technologies.

   (d)  No Other Rights/Ownership. Except as expressly licensed in this Section
        2.1, ISP shall have no other rights in the Microsoft Technologies and
        Microsoft Software. Microsoft retains all right, title and interest in
        and to the Microsoft Technologies and Microsoft Software. Nothing in
        this Agreement shall be construed, by implication, estoppel or
        otherwise, as granting ISP any rights to any Microsoft software,
        technology or other intellectual property rights other than the express
        rights granted hereunder with respect to the Microsoft Technologies and
        Microsoft Software.

2.2  Early Releases.  During the Term, Microsoft will provide to ISP, at no
     charge, an object code copy of each successive commercial release (and, at
     Microsoft's sole discretion, beta and pre-beta releases) of Microsoft
     Technologies. Any pre-release Microsoft Technologies may only be used by
     ISP in accordance with the license grant in Section 2.1. ISP understands
     that pre-release software is not intended for commercial use.

2.3  Consideration.  In consideration of ISP's obligations under this Agreement,
     Microsoft will pay ISP (i) the ISP Services Credit upon execution of this
     Agreement and (ii) the monetary consideration, including the ISP
     Development/Infrastructure payment, specified in Exhibit C.

2.4  Promotional Efforts.  Microsoft will use reasonable commercial efforts to
     promote ISP and the ISP Services to top ICPs and to the public at large as
     detailed in Exhibit C, Section IV.

3.   ISP Obligations

3.1  ISP Services.

     (a)  Development/Infrastructure Build Out Work.  ISP shall complete the
          development and infrastructure build out work outlined in Exhibit A.

     (b)  Services. ISP shall provide the ISP Services to ICPs in accordance
          with the ISP Services Guidelines and up to the ISP Services Credit.
          ISP shall deliver a description of all available ISP Services,
          including a schedule of fees for such services, so that Microsoft and
          any ICP may track usage of the ISP Services Credit when using ISP
          Services. Microsoft may reallocate the ISP Services Credit among ICPs
          in Microsoft's sole discretion upon reasonable notice to ISP.
          Microsoft may also use ISP Services for its own Streaming Media

          Any ISP Services Credit not allocated by Microsoft by the end of the
          Term may be used by Microsoft as mutually agreed upon with the ISP for
          non-streaming related services during the following six (6) month
          period. Any ISP Service Credit not allocated by Microsoft by the end
          of such six (6) month period shall be forfeit by Microsoft and
          Microsoft shall not be entitled to a refund for such unused ISP
          Service Credit.

     (c)  Other Services. Pursuant to a separate agreement between ISP and ICP,
          ISP may provide to the ICP services in addition to the ISP Services,
          or additional ISP Services beyond the amount of ISP Services Credit
          assigned to an ICP by Microsoft.

     (d)  Reporting. On a monthly basis or as otherwise mutually agreed upon,
          ISP shall report ISP services performed and ISP service credits
          actually used in relation to program.

3.2  Technology Adoption and Promotion.  During the Term, ISP shall use and
     promote Microsoft Technologies as follows:

     (a) ISP shall complete the promotional obligations set forth in Exhibit C.

     (b) ISP shall make reasonable commercial efforts to place a "Powered by
         NetShow" logo on those ICP pages that contain Microsoft-funded ICP
         Content to the extent ISP designs, influences the design, or hosts such
         ICP pages on any ISP website which provides ISP Services. Such logo
         shall be used by ISP in accordance with Microsoft's logo guidelines in
         Exhibit D.

     (c) Microsoft shall be entitled to substitute a different sponsorship
         notice (and corresponding guidelines) in place of the "Powered by
         NetShow" notice for purposes of this Agreement upon reasonable advance
         written notice to ISP.

4.   Non-Exclusive

For purposes of clarification, nothing in this Agreement shall be deemed to
restrict either party's ability to license, develop, sub-license, manufacture,
deploy, support, promote, or distribute software, Content, Streaming Media or
any other technology.

5. Confidentiality.

5.1  Confidentiality Obligations.  Each party shall protect the other's
     Confidential Information disclosed hereunder from unauthorized
     dissemination and use with the same degree of care that such party uses to
     protect its own like information. Neither party will use the other's
     Confidential Information for purposes other than those necessary to
     directly further the purposes of this Agreement. Neither party will
     disclose to third parties the other's Confidential Information without the
     prior written consent of the other party. Except as expressly provided in
     this Agreement, no ownership or license rights are granted in any
     Confidential Information. The other provisions of this Agreement
     notwithstanding, either party will be permitted to disclose the
     Confidential Information to its outside legal and financial advisors; and
     to the extent required by applicable law, provided however that before
     making any such required filing or disclosure, the disclosing party shall
     first give written notice of the intended disclosure to the other party,
     within a reasonable time prior to the time when disclosure is to be made,
     and the disclosing party will exercise best efforts, in cooperation with
     and at the expense of the other party, consistent with reasonable time
     constraints, to obtain confidential treatment for all non-public and
     sensitive provisions of this Agreement, including without limitation dollar
     amounts and other numerical information. Each party agrees to notify the
     other in writing of any actual or suspected misuse, misappropriation or
     unauthorized disclosure of Confidential Information of the disclosing party
     which may come to the receiving party's attention.

5.2  Limitations.  The parties' obligations of confidentiality under this
     Agreement shall not be construed to limit either party's right to
     independently develop or acquire products without use of the other party's
     Confidential Information. Further, either party shall be free to use for
     any purpose the residuals resulting from access to or work with such
     Confidential Information, provided that such party shall maintain the
     confidentiality of the Confidential Information as provided herein. The
     term "residuals" means information in non-tangible form, which may be
     retained by persons who have had rightful and good faith access to the
     Confidential Information, including ideas, concepts, know-how or techniques
     contained therein. Neither party shall have any obligation to limit or
     restrict the assignment of such persons or to pay royalties for any work
     resulting from the use of residuals. However, the foregoing shall not be
     deemed to grant to either party a license under the other party's
     copyrights or patents.

6.   Warranties

6.1  ISP.  ISP warrants and covenants that: (i) it has the full power to enter
     into and perform according to the terms of this Agreement; and (ii) the ISP
     Services will be of high quality and performed in a manner commensurate
     with industry standards and practices.

6.2  Microsoft.  Microsoft warrants and covenants that it has the full power to
     enter into and perform according to the terms of this Agreement.

6.3  Continuous Nature.  The representations and warranties contained in this
     Section 6 are continuous in nature and shall be deemed to have been given
     by the warrantor at execution of this Agreement and at each stage of
     performance hereunder.

7.   Disclaimer Of Further Warranties


8.   Termination

8.1  Termination By Either Party.  Either party may suspend performance and/or
     terminate this Agreement:

     (a) Immediately upon written notice at any time, if the other party is in
         material breach of any material warranty, term, condition or covenant
         of this Agreement, other than those contained in Section 5, and fails
         to cure that breach within forty-five (45) days after written notice
         thereof; and

     (b) Immediately upon written notice at any time, if the other party is in
         material breach of Section 5.

8.2  Effect of Termination.

     (a)  Neither party shall be liable to the other for damages of any sort
          resulting solely from terminating this Agreement in accordance with
          its terms.

     (b)  Termination of this Agreement shall not affect any other agreement
          between the parties.

8.3  Survival.  In the event of termination or expiration of this Agreement
     for any reason: (i) Sections 1, 2.1(d), 3.1(b), 4, 5, 6, 7, 8, 9 and 10
     shall survive. Except for Microsoft's termination of this Agreement for
     ISP's material breach, licenses granted to ISP under Sections 2.1(a) and
     (b) shall survive any termination or expiration of the Term of this
     Agreement solely as set forth in the applicable EULA and solely with
     respect to the then current version of the Microsoft Technologies and
     Microsoft Software licensed to ISP.

9.   Limitation Of Liabilities



10.  General Provisions

10.1 Notices.  All notices and requests in connection with this Agreement shall
     be deemed given as of the day they are received either by messenger,
     delivery service, or in the United States of America mails, postage
     prepaid, certified or registered, return receipt requested, and addressed
     as follows:

To ISP:  see box on page 1
To Microsoft:                                           Copy to:
<S>                                                     <C>
Microsoft Corporation                                   Microsoft Corporation
One Microsoft Way                                       One Microsoft Way
 Redmond, WA  98052-6399                                Redmond, WA  98052-6399
Attention: Director of Business Development, Personal   Attention:  Law & Corporate Affairs
 and Business Systems Division
Phone:  (425) 882-8080                                  Phone:  (425) 882-8080
Fax:  (425) 936-7329                                    Fax:  (425) 936-7409

or to such other address as a party may designate pursuant to this notice

10.2  Independent Parties.  Nothing in this Agreement shall be construed as
      creating an employer-employee relationship, a partnership, or a joint
      venture between the parties.

10.3  Governing Law.  This Agreement shall be governed by the laws of the State
      of Washington. Any action or litigation concerning this Agreement shall
      take place in the federal or state courts in King County, Washington.

10.4  Attorneys' Fees.  In any action or suit to enforce any right or remedy
      under this Agreement or to interpret any provision of this Agreement, the
      prevailing party shall be entitled to recover its costs, including
      reasonable attorneys' fees.

10.5  Assignment.  This Agreement shall be binding upon and inure to the benefit
      of each party's respective successors and lawful assigns; provided,
      however, that neither party may assign its rights or delegate its duties
      under this Agreement, in whole or in part, to any third party without the
      prior written approval of the other party.

10.6  Force Majeure.  Neither party shall be liable to the other under this
      Agreement for any delay or failure to perform its obligations under this
      Agreement if such delay or failure arises from any cause(s) beyond such
      party's reasonable control, including by way of example labor disputes,
      strikes, floods, fire, lightning, utility or communications failures,
      earthquakes, vandalism, war, acts of terrorism, riots, insurrections,
      embargoes, or laws, regulations or orders of any governmental entity.

10.7  Construction.  If for any reason a court of competent jurisdiction finds
      any provision of this Agreement, or portion thereof, to be unenforceable,
      that provision of the Agreement will be enforced to the maximum extent
      permissible so as to effect the intent of the parties, and the remainder
      of this Agreement will continue in full force and effect. Failure by
      either party to enforce any provision of this Agreement will not be deemed
      a waiver of future enforcement of that or any other provision. This
      Agreement has been negotiated by the parties and their respective counsel
      and will be interpreted fairly in accordance with its terms and without
      any strict construction in favor of or against either party.

10.8  Entire Agreement.  This Agreement does not constitute an offer by
      Microsoft and it shall not be effective until signed by both parties. This
      Agreement constitutes the entire agreement between the parties with
      respect to the subject matter hereof and merges all prior and
      contemporaneous communications. It shall not be modified except by a
      written agreement dated subsequent to the date of this Agreement and
      signed on behalf of ISP and Microsoft by their respective duly authorized

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date written above.

MICROSOFT                              ISP

<S>                                    <C>

By: /s/ William Poole                  By: /s/ Martin Tobias


Name (print): William Poole            Name (print): Martin Tobias


Title: Sr. Director Bus. Dev.          Title: Minister of Reason

Date: 6/25/98                          Date: June 22, 1998


                                   Exhibit A

                                  ISP Services

I.   Development/Infrastructure Build Out

     [* * *]

II.  ISP Services

     [* * *]

Definitions and Explanation

     [* * *]

[*] Confidential Treatment Request

                                   Exhibit B

                            ISP Services Guidelines

Microsoft  shall have sole  discretion  regarding what ICPs, ISP Services,
and allocation of ISP Services Credits shall be used under this Agreement.
Microsoft shall make reasonable efforts to accommodate ICPs that ISP recommends
for this program. Microsoft shall use its best efforts to ensure that each
project for an ICP is at least $10,000 of ISP Services Credits. Microsoft shall
notify ISP of approved ICPs, ISP Services to be used, and allocation of ISP
Services Credits.

Notwithstanding the foregoing, the relationship between ISP and ICP shall be
separate from ISP's relationship with Microsoft. ICP shall be solely responsible
for the services acquired from ISP. ISP shall enter into a separate agreement
with participating ICPs, and such separate agreement shall be entered into in a
timely manner, ISP shall use its best efforts to enter into such agreement
within two weeks following Microsoft written notification to ISP of ICP
participation. At Microsoft's sole discretion, the ISP Services may be performed
for Microsoft acting on behalf of the ICP and under the terms of this Agreement.

ISP shall use reasonable commercial efforts to perform hosting and other
services as ICP shall reasonably request in manner ICP deems reasonably fitting,
including but not limited to "private labeling" of the site (that is, making the
site appear seamlessly a part of the existing ICP sites).


                                   Exhibit C


I.    Software Licenses Provided.


II.   Development/Infrastructure Consideration.

[*] shall pay [*] [*] to assist [*] with its development/infrastructure build
out as described in Exhibit A. The foregoing shall be paid to ISP within thirty
(30) days of the Effective Date.

III.  ISP Services Credit


IV.   Promotion.

ISP shall complete the following promotional efforts:
 .  ISP shall establish a public web page with a list of NetShow services
   available from ISP.
 .  ISP shall use appropriate "Powered by NetShow" and other Microsoft technology
   logos in conjunction with content hosted in this program.
 .  ISP shall allow Microsoft to reference ISPs participation in the program in
   sales and marketing materials, including but not limited to presentations and
   press releases.

Microsoft shall complete the following promotional efforts:
 .  Microsoft will promote ISP services on appropriate NetShow sites
 .  Microsoft will promote and evangelize the Network Credits Program to ICPs
 .  To the extent that there are public relations activities planned and executed
   involving the program activities, Microsoft shall include ISP
 .  Microsoft allows ISP to reference ISPs participation in the Microsoft program
   in conjunction with sales and marketing materials (excluding a press release,
   which should be coordinated by Microsoft's program announcements).

[*] Confidential Treatment Request

                                   Exhibit D

         Logo Program

1.     Except as Microsoft may authorize elsewhere, non-Microsoft Web sites may
       use only the logo provided herein ("Logo"). By downloading or otherwise
       using the Logo, you agree to be bound by these Policies.

2.     You may only use the Logo on your Web site, and not in any other manner.
       It must always be an active link to the Microsoft NetShow Player Download
       page at
       HTML code for the link is shown below.

3.     The Logo gif includes the words "Powered by Microsoft NetShow, Get
       NetShow," describing the significance of the Logo on your site (i.e., the
       Logo is a link to Microsoft, not an endorsement of your site). You may
       not remove or alter this or any other element of the Logo.

4.     The Logo may be used only on Web pages that make accurate references to
       Microsoft or its products or services. Your Web page title and your
       company's other trademarks and logos must appear at least as prominently
       as the Logo. You may not display the Logo in any manner that implies
       sponsorship, endorsement, or license by Microsoft.

5.     The Logo must appear by itself, with a minimum spacing (the height of
       the Logo) between each side of the Logo and other graphic or textual
       elements on your page. The Logo may not be used as a feature or design
       element of any other logo.

6.     You may not alter the Logo in any manner, including size, proportions,
       colors, elements, and so on, or animate, morph or otherwise distort its
       perspective or two-dimensional appearance, except with the authorization
       of Microsoft.

7.     You may not use the Logo on any site that, to your knowledge,
       (i) disparages Microsoft or its products or services, (ii) infringes upon
       any Microsoft intellectual property or other rights, or (iii) violates
       any state, federal, or international law.

8.     These Policies do not grant a license or any other right in Microsoft's
       logos or trademarks. Microsoft reserves the right in its sole discretion
       to terminate or modify permission to use the Logo at any time. Microsoft
       reserves the right to take action against any use that does not conform
       to these Policies, infringes upon any Microsoft intellectual property or
       other rights, or violates other applicable laws.



[*] Confidential Treatment Request