Development Agreement - YP Corp. and SurfNet Media Group
DEVELOPMENT AGREEMENT
ENHANCED TOOLBAR INCLUDING AUDIBILIZATION
This Agreement, dated as of June 8, 2004, is by and between YP Corp., a Nevada
corporation with its principal place of business at 4840 E. Jasmine Street,
Suite 105, Mesa, Arizona 85205 and SurfNet Media Group, Inc, a Delaware
corporation with its principal place of business at 2801 South Fair Lane, Tempe,
Arizona 85282. YP and SurfNet are sometimes referred to individually as the
"Party" and collectively as the "Parties."
RECITALS:
A. SurtNet develops computer software that, among other things, provides
enhanced communications capabilities via the Internet.
B. YP is in the business of providing Internet-based yellow page
advertising space on or through www.yellow-page.net, www.yp.net and www.yp.com.
C. YP wishes to utilize in its business certain software applications
developed by SurfNet to enhance and improve the functionality and utility of the
products and services YP uses in its business.
D. SurfNet and YP desire to enter into a business relationship pursuant
to which, among other things, (i) SurtNet would deliver certain software
applications via the Internet to YP, and (ii) YP would make certain payments to
SurfNet.
AGREEMENT:
Accordingly, the Parties hereby agree as follows:
1. Certain Definitions. For the purposes of this Agreement, the following
terms will have the indicated meanings:
1.1 "Beneficial Owner" has the meaning set forth in Rule 13d-3 under the
Securities Act of 1993, as amended.
1.2 "Change Of Control" means a change in control of YP of a nature that
would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not YP is subject to the
Exchange Act at such time, including any of the following events:
1.2.1 Any Person becomes the Beneficial Owner, directly or indirectly,
of securities of YP representing a majority of the combined
voting power of or equity interest in YP in connection with a
merger or otherwise. In applying the preceding sentence,
securities acquired directly from YP, its
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subsidiaries, or affiliates by or for the Person shall not be
taken into account.
1.2.2 A merger or consolidation of YP is consummated will, any other
corporation or entity or any other form of business combination
pursuant to which the outstanding stock of YP is exchanged for
cash, securities or other property paid, issued or caused to be
issued by the surviving or acquiring corporation or entity unless
the stockholders immediately before the merger or consolidation
would continue to own equity securities that represent (either by
remaining outstanding or by being converted into equity
securities of the surviving entity) at least a controlling
interest in YP or such surviving or acquiring entity corporation
immediately after such merger or consolidation.
1.2.3 A sale, transfer or lease by YP of all, or substantially all, of
YP's assets is consummated.
1.3 "Deliverables" means the software code as set forth in the
Specifications and other materials required to be delivered by SurfNet
to YP hereunder, as more fully described in the Specifications,
including, without limitation, the Toolbar. Unless otherwise set forth
in this Agreement (including the Specifications), or unless otherwise
agreed by the Parties, all code to be delivered to YP will be
transmitted by SurfNet to YP electronically in accordance with such
security measures as may be mutually agreed by the Parties.
1.4 "Error(s)" means defect(s) in the Technology which prevent(s) it from
performing in accordance with the Specifications.
1.5 "Impression(s)" means a single instance of the Toolbar being accessed
or viewed by an end user.
1.6 "Internet" means any systems for distributing digital electronic
content and information to end users via transmission, broadcast,
public display, or other forms of delivery, whether direct or
indirect, whether over telephone lines, cable television systems,
optical fiber connections, cellular telephones, satellites, wireless
broadcast, or other mode of transmission now known or subsequently
developed.
1.7 "Launch Date" will mean that date on which the Toolbar is first
generally available for use by YP.
1.8 "Person" has the meaning given in Section 3(a)(9) of the Securities
Act of 1933, amended, as modified and used in Section 13(d) of the
Securities Act of 1933, amended, and will include a "group," as
defined in Rule 13d-5 promulgated thereunder. However, a person will
not include YP or any of its affiliates.
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1.9 "Schedule" means the schedule(s) for completion of the Services, as
set forth in the Specifications.
1.10 "Services" means the design, development and delivery of the
Technology in accordance with the Specifications, as modified from
time to time, and all other services performed by SurfNet pursuant to
this Agreement.
1.11 "Specifications" means the specifications for the Services and
Technology, attached to this Agreement as Exhibit A, which includes a
Technology design and content summary, as well as a detailed
specification for all required features and functionality, and a
complete delivery and implementation schedule. The Parties contemplate
that the Specifications may be modified by mutual consent from time to
time during the Term; if and when the Specifications are modified, the
Parties shall initial the new Specifications or amendments to the
existing Specifications, and immediately following the last initialing
such new Specifications or amendments shall automatically be deemed to
supercede or supplement (as the case may be) Exhibit A.
1.12 "Technology" means (i) Metaphor desktop engine computer software
developed by SurfNet driving a YP-designed toolbar created by SurfNet
that will provide an end user with active desktop access to the
Toolbar without imbedding the Technology in the operating system or
desktop, as more fully described in the Specifications, and all future
versions thereof and enhancements, upgrades and modifications thereto
developed by SurfNet ("Phase I"); and (ii) an audibilized Metaphor
desktop engine computer software developed by SurfNet, as more fully
described in the Specifications, and all future versions thereof and
enhancements, upgrades and modifications thereto developed by SurfNet
driving a YP-designed toolbar created by SurfNet that will (A) provide
an end user with active desktop access to the Toolbar without
imbedding the Technology in the operating system or desktop, and (B)
incorporate streaming audio into the Metaphor desktop engine for such
uses as press releases, management announcements and other YP
generated audible messaging ("Phase II").
1.13 "Toolbar" means the product derived from the Technology.
1.14 "Term" means the period of time commencing on the Effective Date and
continuing thereafter indefinitely until this Agreement is terminated
pursuant to Section 8 below.
1.15 "Territory" means the entire universe.
1.16 "Web" means the so-called World Wide Web, containing, inter alia,
pages written in hypertext markup language (HTML) and/or any similar
successor technology.
2. License. Subject to the terms and conditions contained in this Agreement,
SurfNet hereby grants to YP for a duration of two (2) years commencing on
the date that the
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technology is delivered and accepted by YP a worldwide, exclusive license, with
respect to the Internet yellow pages market only, to (i) use the Technology on
YP's websites and permit the Technology to be copied onto the websites of YP's
end users, and (ii) promote the Technology on a co-branded basis.
Notwithstanding the foregoing, if the Launch Date does not occur within six (6)
months from the date hereof, YP will forfeit its exclusivity and the foregoing
license automatically will become a nonexclusive license. SurfNet reserves the
right to make copies of, to make derivative works of and to use the Technology
for commercial purposes and to license the Technology to third parties subject
to the terms of this Agreement, subject to any additional terms relative to the
original term sheet executed by the parties in _______. No rights or licenses
are granted or deemed granted hereunder or in connection herewith, other than
those rights or licenses expressly granted in this Agreement.
3. Compensation. YP shall pay SurfNet for the Services the following:
3.1 A development fee of eighty-five thousand dollars ($85,000), with
fifty thousand dollars ($50,000) payable upon the execution of this
Agreement and thirty-five thousand dollars ($35,000) payable upon
delivery of Phase II.
3.2 A monthly license fee of three thousand seven hundred fifty dollars
($3,750), covering up to one million Impressions per month based on a
streaming rate of 16kbs, payable in arrears on the 15th day of the
month immediately following the Launch Date, and on the 15th day of
each month thereafter during the Term; and
3.3 A monthly license fee of four thousand seven hundred fifty dollars
($4,750) for each additional one million Impressions per month, or any
part thereof, in excess of the aggregate Impressions referenced in
Section 3.2, based on a streaming rate of 16kbs, payable in arrears on
the 15th day of the following month.
3.4 A Change of Control fee of one hundred thousand dollars ($100,000)
payable not later than five (5) business days following a Change of
Control.
4. Technology Development.
4.1 In General. SurfNet shall perform the Services, and deliver to YP the
Technology, in accordance with the Specifications (including the
Schedule), as the same may change from time to time during the Term
with the mutual consent of YP and SurfNet, and all other terms and
conditions contained in this Agreement. SurfNet will use its best
efforts to meet each milestone in the Schedule for delivering the
Technology. SurfNet agrees that the Services shall be performed in a
professional manner and shall be of a high grade, nature and quality.
Throughout the Term:
4.1.1 SurfNet will assign human and financial resources to develop the
Technology.
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4.1.2 SurfNet will monitor the reliability and accessibility of the
Technology, and ensure that it continues to perform in accordance
with the Specifications, excluding any modifications and changes
made by YP without the knowledge or consent of SurfNet.
4.1.3 From time to time, YP may request that SurfNet undertake to
develop certain enhancements to the Technology. Upon such
request, SurfNet shall confer in good faith with YP regarding the
feasibility of developing such enhancements and the time frame
for developing, testing and incorporating such enhancements.
Then, SurfNet and YP shall mutually agree as to whether SurfNet
should pursue development of such enhancements, and, if so, which
of SurfNet and/or YP will fund such development. Upon mutual
written agreement, the Specifications shall be deemed amended to
include such enhancements.
4.2 Acceptance. The terms and conditions contained in this Section will
apply to the initial release of the Technology, as well as to each
subsequent release, upgrade, enhancement and version thereof.
4.2.1 SurfNet agrees to thoroughly test the Technology (including
without limitation each and every release, version, and
enhancement thereof), as appropriate under the circumstances, at
all appropriate stages of development, and shall document its
testing by written test documents delivered to YP. Such test
documents shall include a detailed description of the tests as
conducted, and test results (including, without limitation,
resulting bug list and outstanding issues list). Notwithstanding
anything contained in this Agreement to the contrary, SurfNet
will not deploy the Technology, and/or any enhancement thereof,
unless and until YP authorizes such deployment in writing.
4.2.2 If either Party is aware or becomes aware of a delay that will
prevent SurfNet from meeting a scheduled milestone for any
component of the Technology under the Schedule, such Party will
promptly inform the other Party of such delay, and the reason
therefore, in writing. If such delay is caused by YP, the
Schedule will automatically be deemed extended, if and to the
extent minimally necessitated by the original delay. If such
delay is caused by SurfNet, SurfNet will be given a reasonable
period (up to thirty (30) business days, depending on the
circumstances) to cure. However, SurfNet acknowledges that timely
meeting the Schedule is of critical importance under this
Agreement, and that time is of the essence in curing a delayed
delivery.
4.2.3 YP shall evaluate the beta and final version of the Technology
and shall submit a written acceptance or rejection to SurfNet
within ten (10) business days after YP Net's receipt of the beta
versions and fifteen (15) business days after receipt of the
final version of the Technology. If YP
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identifies Errors in the Technology prior to acceptance, then
SurfNet shall correct, at its sole expense, such Errors, and use
its best efforts to effect such correction within fifteen (15)
business days. If no written acceptance or rejection is received
by SurfNet, acceptance shall he deemed to have occurred.
4.2.4 If SurfNet fails to deliver the Technology within the dates
specified in the Schedule (after application of the applicable
reasonable cure period) and if any Errors discovered during the
acceptance process cannot be eliminated in the correction period
specified in the Specifications or Exhibit B (whichever is
applicable) then YP may, at its option: (i) extend the correction
period; or (ii) suspend its performance until the problem is
corrected to YP's reasonable satisfaction and/or, if the failure
to deliver or uncorrected Error is material, terminate this
Agreement for cause pursuant to Section 8.
4.2.5 Notwithstanding anything contained herein to the contrary,
SurfNet shall at all times hereunder be responsible for ensuring
that the Technology meets all Specifications, and if any Error in
the originally submitted Technology is discovered after
acceptance, SurfNet shall remain obligated to correct such Error
in accordance with the applicable timetable determined by YP and
SurfNet as set forth in the Specifications or Exhibit B, or as
otherwise may be mutually agreed under the circumstances.
5. Representations and Warranties.
5.1 By SurfNet. SurfNet warrants and represents that:
5.1.1 It is a corporation duly organized, validly existing and in good
standing under the laws of Delaware.
5.1.2 It has the full power to enter into this Agreement and to grant
the rights set forth herein.
5.1.3 This Agreement, when executed and delivered by SurfNet, will be
the legal, valid and binding obligation of SurfNet, enforceable
against it in accordance with its terms.
5.1.4 The execution, delivery and performance of this Agreement by
SurfNet does not conflict with, or constitute a breach or default
under, any provision of any agreement, contract, commitment or
instrument to which it is a party
5.2 By YP. YP warrants and represents that:
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5.2.1 It is a corporation duly organized, validly existing and in good
standing under the laws of Nevada.
5.2.2 It has the full power to enter into this Agreement and to grant
the rights set forth herein.
5.2.3 This Agreement, when executed and delivered by YP, will be the
legal, valid and binding obligation of YP, enforceable against it
in accordance with its terms.
5.2.4 The execution, delivery and performance of this Agreement by YP
does not conflict with, or constitute a breach or default under,
any provision of any agreement, contract, commitment or
instrument to which it is a party.
6. Indemnification.
6.1 SurfNet warrants that the use of the Technology by YP pursuant to the
terms hereof shall not constitute an infringement of any existing
patent, copyright or other right. SurfNet hereby agrees to defend or
settle any suit, proceeding or claim brought against YP based on a
claim that the use of the Technology or any part thereof by YP
constitutes an infringement of any existing patent, copyright or other
right. SurfNet shall pay all damages or costs awarded against or
expenses, including attorneys' fees, incurred by YP in such suit,
proceeding or claim.
6.2 In the event the Technology or any part thereof shall be in SurfNet's
opinion likely to or shall become the subject of a claim for patent,
copyright, or other infringement, may, at its option and expense, and
without diminishing SurfNet's obligations under Section 7.1, procure
for YP the right to continue using such affected part of the
Technology or modify such affected part to become non-infringing.
Should SurfNet elect to remove or modify such infringing part of the
Technology, SurfNet shall forthwith replace such part with a
functionally equivalent non-infringing part and/or take other
appropriate action to ensure that the Technology conforms to the
Specifications to YP Net's satisfaction, without cost to YP.
6.3 In the event that SurfNet shall refuse or shall be unable to supply or
shall be prevented from supplying the Technology or any part thereof
to YP, or in the event that YP Net's continued use of the Technology
shall be prohibited or enjoined at any time, SurfNet shall promptly
replace all affected parts of the Technology with functionally
equivalent non-infringing parts and/or shall take such other action to
ensure that the Technology conforms to the Specifications to YP's
satisfaction, without cost to YP.
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6.4 SurfNet warrants that YP shall suffer no interruption of its normal
business activities or cycles as a result of any claimed infringement,
any litigation referred to in Section 7.1 or any replacement of items
contemplated in Sections 5.2 or 5.3 hereof.
7. Warranties.
7.1 SurfNet represents and warrants to YP that as of the date of delivery:
7.1.1 SurfNet has good and merchantable title to and the right to sell
and/or license the Technology as the case may be as provided for
in this Agreement, free and clear of all security interests,
liens and encumbrances.
7.1.2 The Technology is designed in accordance with this Agreement.
7.1.3 The Technology is comprised of all of the features and functions
agreed to herein.
7.1.4 YP shall receive any licenses or warranties extended by any
third party used by SurfNet in connection with the Technology.
7.2 SurfNet further warrants and covenants that for a period of one year
following the Technology Acceptance Date:
7.2.1 The Technology will be free from defects in workmanship and
material.
7.2.2 The Technology will have all of the qualities and features, and
be capable of performing all of the functions described in the
Specifications.
7.2.3 The Technology will be of merchantable quality, will be fit for
the ordinary purposes for which such goods are used, and will
pass without objection in the trade.
7.3 During the one year following the Technology Acceptance Date, SurfNet
will immediately and in no event later than thirty (30) business days
after notice, provide, at no charge to YP, corrections, modifications
or additions to the Technology where YP notifies SurfNet in writing,
of any errors, omissions, deficiencies or inconsistencies in the
Technology, except for any changes made by YP. YP shall assist SurfNet
in identifying these circumstances on which such errors, omissions,
deficiencies or inconsistencies are discovered, and, if requested by
SurfNet, shall document their existence.
7.4 EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, THERE ARE NO
EXPRESS WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION SET FORTH IN
THIS AGREEMENT.
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8. Termination and Other Remedies.
8.1 In addition to any other rights and/or remedies that YP may have under
the circumstances, all of which are expressly reserved, YP may suspend
performance and/or terminate this Agreement immediately upon written
notice at any time if:
8.1.1 SurfNet is in material breach of this Agreement, and fails to
cure that breach within sixty (60) business days after written
notice thereof, in which case YP Net will have the right to
withhold payment of amounts otherwise owed by YP Net to SurfNet
pursuant to this Agreement; or
8.1.2 In the case of a failure to provide the technology or
deliverables as promised by the delivery dates as mutually agreed
by the parties herein or as extended than YP will be entitled to
the return of all the development money tendered herein.
8.1.3 SurfNet becomes insolvent or makes any assignment for the
benefit of creditors or similar transfer evidencing insolvency;
or suffers or permits the commencement of any form of insolvency
or receivership proceeding; or has any petition under any
bankruptcy law filed against it, which petition is not dismissed
within sixty (60) business days of such filing; or has a trustee
or receiver appointed for its business or assets or any part
thereof.
8.2 In addition to any other rights and/or remedies that SurfNet may have
under the circumstances, all of which are expressly reserved, SurfNet
may suspend performance and/or terminate this Agreement immediately
upon written notice at any time if:
8.2.1 YP is in material breach of Section 3 of this Agreement, and
fails to cure that breach within thirty (30) business days after
written notice thereof; or
8.2.2 YP becomes insolvent or makes any assignment for the benefit of
creditors or similar transfer evidencing insolvency; or suffers
or permits the commencement of any form of insolvency or
receivership proceeding; or has any petition under any bankruptcy
law filed against it, which petition is not dismissed within
sixty (60) business days of such filing; or has a trustee or
receiver appointed for its business or assets or any part
thereof.
8.3 In the event of termination or expiration of this Agreement for any
reason, any provision required to interpret the rights and obligations
of the Parties arising prior to termination of this Agreement shall
survive termination.
9. Confidentiality.
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9.1 Nondisclosure.
9.1.1 SurfNet shall maintain in confidence and shall not disclose to
any third Party the Confidential Information received pursuant to
this Agreement, without the prior written consent of YP. The
foregoing obligation shall not apply to: (i) information that is
known to SurfNet or independently developed by SurfNet prior to
the time of disclosure; (ii) information disclosed to SurfNet by
a third party that has a right to make such disclosure; (iii)
information that becomes patented, published or otherwise part of
the public domain as a result of acts by YP or by a third person
who has the right to make such disclosure; or (iv) information
that is required to be disclosed by order of any governmental
authority or a court of competent jurisdiction; provided that
SurfNet shall notify YP if it believes such disclosure is
required and shall use its best efforts to obtain confidential
treatment of such information by the agency or court.
9.1.2 YP shall maintain in confidence and shall not disclose to any
third Party the Confidential Information received pursuant to
this Agreement, without the prior written consent of SurfNet. The
foregoing obligation shall not apply to: (i) information that is
known to YP or independently developed by YP prior to the time of
disclosure; (ii) information disclosed to YP by a third party
that has a right to make such disclosure; (iii) information that
becomes patented, published or otherwise part of the public
domain as a result of acts by SurfNet or by a third person who
has the right to make such disclosure; or (iv) information that
is required to be disclosed by order of any governmental
authority or a court of competent jurisdiction; provided that YP
shall notify SurfNet if it believes such disclosure is required
and shall use its best efforts to obtain confidential treatment
of such information by the agency or court.
9.1.3 The receiving Party's obligations of confidentiality with
respect to Confidential Information that constitute trade secrets
under the Uniform Trade Secrets Act as adopted in the State of
Georgia (or other similar applicable law) shall run for as long
as such information remains a trade secret. The receiving Party's
obligations of confidentiality with respect to Confidential
Information that is not covered under the Uniform Trade Secrets
Act as adopted in the State of Arizona (or other similar
applicable law), shall run for three (3) years from the date of
termination of this Agreement.
9.2 Use of Confidential Information.
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9.2.1 SurfNet shall ensure that all of its employees, agents and
contractors having access to the Confidential Information of YP
are obligated in writing to abide by SurfNet's obligations
hereunder. SurfNet shall use the Confidential Information only
for the purposes contemplated under this Agreement.
9.2.2 YP shall ensure that all of its employees, agents and
contractors having access to the Confidential Information of
SurfNet are obligated in writing to abide by YP Net's obligations
hereunder. YP shall use the Confidential Information only for the
purposes contemplated under this Agreement.
9.3 Disparagement. Without having first sought and obtained YP Net's
written approval (which YP may withhold in its sole and absolute
discretion), SurfNet shall not, directly or indirectly, (i) trade upon
this transaction or any aspect of SurfNet's relationship with YP, or
(ii) otherwise deprecate YP technology.
9.4 Press Release. Neither Party will issue any press release or make any
public announcement(s) relating in any way whatsoever to this
Agreement or the relationship established by this Agreement without
the express prior written consent of the other Party. However, the
Parties acknowledge that this Agreement, or portions thereof, may be
required under applicable law to be disclosed, as part of or an
exhibit to a Party's required public disclosure documents. If either
Party is advised by its legal counsel that such disclosure is
required, it will notify the other in writing and the Parties will
jointly seek confidential treatment of this Agreement to the maximum
extent reasonably possible, in documents approved by both Parties and
filed with the applicable governmental or regulatory authorities.
Notwithstanding the foregoing, YP and SurfNet will cooperate to create
a mutually approved joint press release regarding the non-confidential
aspects of this Agreement, which press release shall be issued by each
Party on the Launch Date; provided, however, that the precise timing
of such press release shall be subject to the approval of YP (in its
sole and absolute discretion).
9.5 Injunctive Relief. Because damages at law will be an inadequate remedy
for breach of any of the covenants, promises and agreements contained
in this Article 9 hereof, the aggrieved Party shall be entitled to
injunctive relief in any state or federal court located within the
City of Phoenix, Arizona, including specific performance or an order
enjoining the breaching Party from any threatened or actual breach of
such covenants, promises or agreements. The rights set forth in this
Section shall be in addition to any other rights which the aggrieved
Party may have at law or in equity.
10. Miscellaneous
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10.1 Neither Party shall represent itself as the agent nor legal
representative of the other for any purpose whatsoever, and neither
Party shall have the right to create or assume for the other any
obligation of any kind. This Agreement shall not create or be deemed
to create an agency, partnership, franchise, employment relationship
or joint venture between the Parties. Each Party's employees who
perform services related to this Agreement shall remain under the
exclusive direction and control of their respective employer and shall
receive such salaries, compensation and benefits as their respective
employer may from time to time determines. Each Party shall have full
and sole responsibility for its employees who perform any service
related to this Agreement with regard to compliance with all
applicable laws, rules and regulations governing such Party relating
to employment, labor, wages, benefits, taxes and other matters
affecting its employees,
10.2 Any notice required or permitted to be given under this Agreement
shall be made in writing and shall be deemed to have been given or
made if it is in writing and is: (i) delivered in person, (ii) sent by
same day or overnight courier, (iii) mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed to the
Party at its address set forth below or at such other address as such
Party may subsequently furnish to the other Party by notice hereunder,
or (iv) delivered by facsimile, the transmittal of which shall be
confirmed by a telephone call to the other Party and by dispatch of a
confirming copy of the transmittal by registered or certified mail,
postage prepaid. Notices will be deemed effective on the date of
delivery in the case of personal delivery, or three (3) business days
after mailing, or on the date of dispatch in the case of notification
by facsimile (assuming confirmation of transmission). The Parties'
addresses for purposes of notice shall be as set forth above.
10.3 This Agreement shall be construed, enforced, performed and in all
respects governed by and in accordance with the laws in the State of
Arizona. In any action or suit to enforce any right or remedy under
this Agreement the prevailing Party shall be entitled to recover its
reasonable attorneys' fees and costs.
10.4 In the event any provision of this Agreement is rendered null, void or
otherwise ineffective in any given country or any political
subdivision in a given country, then (i) the Parties agree to
negotiate in good faith an acceptable alternative provision which
reflects as closely as possible the intent of the unenforceable
provision and which shall apply only with respect to that portion of
the Territory in which the original provision is rendered null, void
or otherwise ineffective and (ii) notwithstanding, and regardless of
whether the Parties reach agreement after the good faith negotiations
described in clause (i) immediately above, the validity, legality and
enforceability of the remaining provisions of this Agreement with
respect to such portion of the Territory (and of all of the provisions
of this Agreement with respect to the balance of the Territory) shall
not in any way be
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affected or impaired thereby and shall remain in full force and
effect. Section and all other headings used herein are provided for
convenience only and are not to be given any legal effect or
considered in interpreting any provision of this Agreement. No
provision of this Agreement shall be interpreted against any Party
because such Party or its legal representative drafted such provision.
10.5 Neither Party may transfer, assign or sublicense this Agreement, or
any rights or obligations hereunder, whether by contract or by
operation of law, except with the express written consent of the other
Party, and any attempted transfer, assignment or sublicense by a Party
in violation of this Section shall be void. For purposes of this
Agreement, an "transfer" under this Section shall be deemed to
include, without limitation, the following: (a) a merger or any other
combination of an entity with another party, whether or not the entity
is the surviving entity; (b) any transaction or series of transactions
whereby a third party acquires direct or indirect power to control the
management and policies of an entity, whether through the acquisition
of voting securities, by contract, or otherwise; (c) the transfer of
any rights or obligations in the course of a liquidation or other
similar reorganization of an entity; or (d) the transfer to a
subsidiary. Neither Party will unreasonably withhold or delay its
consent to a requested transfer, assignment or sublicense. Subject to
the provisions of this Section, this Agreement shall be binding upon
and inure to the benefit of each Party and their respective successors
and assigns.
10.6 All rights and obligations of the Parties hereunder arc personal to
them. Except as otherwise specifically stated herein, this Agreement
is not intended to benefit, nor shall it be deemed to give rise to,
any rights in any third party.
10.7 Each Party shall be responsible for compliance with all applicable
laws, rules and regulations, if any, related to the performance or its
obligations under this Agreement.
10.8 No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of
the same or any other provisions hereof or thereof, and no waiver
shall be effective unless made in writing and signed by an authorized
representative of the waiving Party.
10.9 Neither Party shall be liable hereunder by reason of any failure or
delay in the performance of its obligations hereunder during any event
of force majeure.
10.10 This Agreement contains the entire agreement of the Parties with
respect to the premises, and may not be modified or amended except by
a written instrument executed by the Party sought to be charged or
bound thereby.
10.11 The Parties acknowledge that there may be instances during the Term
when, notwithstanding the Non-Disclosure Agreement referred to in
Section 10.1 above, either party will not wish to disclose or have the
other party become aware
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(through inspection or otherwise) of certain confidential and
proprietary information of the other party relating to its business
and/or technology. In those instances, the Parties agree to work
together in a spirit of cooperation to work around such disclosure so
that each party is able to perform the Services under this agreement
to the other party's reasonable satisfaction and otherwise discharge
their obligations under this Agreement without making such disclosure.
11. Source Code Escrow. SurfNet agrees to deposit a full and complete
electronic copy of the source code to the Technology, and all updates and
enhancements thereto (the "Source Materials"), into escrow with a mutually
agreed upon escrow services company. The parties will enter into a mutually
agreeable escrow agreement. YP shall pay all fees for such escrow and
SurfNet shall bear its own costs in preparing the Source Materials for
deposit. The escrow agreement shall provide for the release of such Source
Materials in the event SurfNet ceases to do business in the normal course
(except in the cases of corporate restructuring, acquisition or
reorganization under Chapter 11 of the U.S. Bankruptcy Code). Subject to
the terms and conditions of this Agreement, upon release from escrow, YP
shall have a nonexclusive, license to use and modify the Source Materials
and distribute the same. Title in all Source Materials shall remain in
SurfNet, and YP will take all reasonable precautions to maintain the
secrecy of the Source Materials unless Surfnet becomes insolvent as defined
herein.
Executed as of the date set forth above.
SURFNET MEDIA GROUP, INC. YP CORP.
By:_________________________ By:_____________________
Robert Arkin Peter Bergmann
Chairman Chief Executive Office
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EXHIBIT A
SPECIFICATIONS, DELIVERY AND IMPLEMENTATION SCHEDULE
The toolbar shall contain the following:
1. Search controls consistent with the YP main website
2. Stock ticker information
3. Rotating banners consisting of a YP banner and banners for YP's
national customer base including audio commercials.
4. This will be based on Surfnet's MetaphorTM patented technology.
The toolbar shall be similar to that shown in www.toolbar.com on the Surfnet
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proofing station.
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EXHIBIT B
CORRECTION PERIODS
Corrections shall be made as needed on an ongoing basis, Should such corrections
result in designing a new toolbar or one with new functionalities, revised
pricing will be instituted based on negotiations to be conducted at the time.
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