Exhibit 10.17
[Confidential Treatment has been requested for this portion of this Exhibit]
WEBTV NETWORKS, INC.
INDEPENDENT CONTRACTOR AGREEMENT
(NON-STANDARD)
This Independent CONTRACTOR Agreement (the "Agreement") is made effective as of
October 1, 2000 (the "Effective Date"), by and between WEBTV NETWORKS, INC., a
California corporation and wholly owned subsidiary of Microsoft Corporation
("WNI"), and SNAP2 Corporation, acting as an independent contractor
("CONTRACTOR").
WNI and CONTRACTOR agree as follows:
1. WORK, DELIVERY SCHEDULE, ACCEPTANCE
1.1 CONTRACTOR shall perform the following work for WNI ("WORK"):
CONTRACTOR shall provide specialized consulting services to [Confidential
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o [Confidential Treatment has been requested for this portion of this
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o [Confidential Treatment has been requested for this portion of this
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1.2 CONTRACTOR shall start on October 23, 2000 and complete the WORK on or
before February 28, 2001 and deliver it in accordance with the schedule set
forth below:
o Milestone 1 - BSG Version - 11/6/00
o Milestone 2 - Final Version - 11/30/00
o Milestone 3 - Release Candidate Declared - 12/15/00
1.3 The WORK performed by CONTRACTOR shall conform to and be delivered to WNI
in accordance with the description and specifications set forth in this
Agreement. All WORK delivered must reference the Agreement Contract Number.
In the event that WNI desires to make changes to the WORK specifications
and/or delivery schedule during the term of this Agreement, WNI shall so
notify CONTRACTOR, and both parties shall agree in writing on necessary
adjustments, if any, to the other terms of this Agreement to accommodate
such changes.
1.4 For software code deliverables, WNI shall evaluate WORK at the beta and
final version of each deliverable and shall submit a written acceptance or
rejection to CONTRACTOR within ten (10) business days after WNI's receipt
of the engineering prototype and beta versions and within thirty (30) days
after receipt of the final version of the deliverable. Acceptance shall be
in writing, and WNI shall not unreasonably withhold its acceptance. If WNI
identifies errors in each deliverable prior to acceptance, then CONTRACTOR
shall correct such errors within the time specified in Exhibit A with
respect to errors discovered of each deliverable.
For documentation or report deliverables, if any, WNI shall evaluate each
version of such deliverable. In the event that it requires corrections, WNI
shall specify the corrections needed and CONTRACTOR shall deliver an
amended version of such documentation within five (5) business days.
If CONTRACTOR fails to deliver any deliverable within the dates specified
herein and if any errors discovered before acceptance cannot be eliminated
in the correction period specified in Exhibit A then WNI may, at its
option: (i) retain the deliverable (including any applicable documentation)
with rights as set forth in the Agreement, and pay CONTRACTOR for all
outstanding WORK for which WNI has accepted corresponding deliverables,
with no further development and license fee to be paid to CONTRACTOR
thereafter; (ii) extend the correction period; or (iii) suspend its
performance and/or terminate this Agreement for cause.
2. LICENSE TO WNI MATERIALS
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WNI grants to CONTRACTOR a nonexclusive, personal, nontransferable,
nonassignable, limited license to use the WNI Materials solely on WNI's premises
and CONTRACTOR'S premises, by CONTRACTOR's employees and contractors as a
reference to the extent necessary to complete the WORK.
3. PAYMENT
3.1 WNI shall pay CONTRACTOR an amount [Confidential Treatment has been
requested for this portion of this Exhibit]
o [Confidential Treatment has been requested for this portion of this
Exhibit]
o [Confidential Treatment has been requested for this portion of this
Exhibit]
o [Confidential Treatment has been requested for this portion of this
Exhibit]
3.2 All payments due hereunder are conditioned upon WNI's written acceptance of
the WORK. CONTRACTOR shall invoice WNI upon completion and delivery of each
portion of the WORK. Such payment is due net thirty (30) days from the
later of (a) WNI's acceptance of the WORK, or (b) WNI's receipt of a
CONTRACTOR invoice.
3.3 CONTRACTOR shall bear sole responsibility for all expenses incurred in
connection with the performance of the WORK, unless otherwise agreed to in
writing by WNI.
4. OWNERSHIP OF WORK BY WNI
To the extent that the WORK delivered to WNI hereunder includes material subject
to copyright, CONTRACTOR agrees that the WORK is done as a "work for hire" as
that term is defined under U.S. copyright law, and that as a result, WNI shall
own all copyrights in the WORK. To the extent that the WORK does not qualify as
a work for hire under applicable law, and to the extent that the WORK includes
material subject to copyright, patent, trade secret, or other proprietary right
protection, CONTRACTOR hereby assigns to WNI, its parent companies, successors
and assigns, all right, title and interest in and to the WORK, including all
copyrights, patents, trade secrets, and other proprietary rights therein
(including renewals thereof). CONTRACTOR shall execute and deliver such
instruments and take such other action as may be required and requested by WNI
to carry out the assignment contemplated by this paragraph. Any documents,
magnetically or optically encoded media, or other materials created by
CONTRACTOR pursuant to this Agreement shall be owned by WNI and subject to the
terms of this section. To the maximum extent permitted by law, CONTRACTOR waives
all moral rights in the WORK.
5. WARRANTIES
CONTRACTOR warrants that:
(a) CONTRACTOR's performance of the WORK pursuant to this Agreement will
not violate any agreement or obligation between CONTRACTOR and a third party;
(b) The WORK will either be originally created by CONTRACTOR, or that
CONTRACTOR will obtain all necessary rights to the WORK to transfer ownership to
WNI as required by Section 4 above;
(c) The WORK will not infringe any copyright, patent, trade secret,
trademark or other proprietary right held by any third party;
(d) All services provided by CONTRACTOR in connection with the WORK will be
performed in a professional manner and shall be of a high grade, nature, and
quality;
(e) Any software, hardware or firmware provided by CONTRACTOR to WNI or
used by CONTRACTOR in connection with the WORK performed by CONTRACTOR under
this Agreement accurately manipulate, process, compare, display and calculate
date or time data from, into, and between the twentieth and twenty-first
centuries, including leap years; and the information technology, financial,
operational, communication and other systems and processes used by CONTRACTOR,
its subcontractors, agents, and other third parties in connection with the WORK
shall not be interrupted or adversely affected by the manipulation, processing,
comparison, display or calculation of dates from, into and between the twentieth
and twenty-first centuries, including leap years. Additionally, CONTRACTOR
agrees to cooperate with WNI and provide all necessary information in a prompt
manner should MICROSOFT have any inquiries regarding the Year 2000 readiness of
CONTRACTOR or any of the information or technology that is the subject of this
Section 5(e); and
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(f) The WORK performed by CONTRACTOR under this Agreement will be in
compliance with all applicable U.S. laws and regulations.
6. INDEMNITY
CONTRACTOR agrees to indemnify, pay the defense costs of, and hold WNI and its
parent companies, successors, officers, directors and employees harmless from
any and all actions, causes of action, claims, demands, costs, liabilities,
expenses and damages (including attorneys' fees) arising out of, or in
connection with (i) any claim for bodily injury, death, or property damage to
the extent caused by CONTRACTOR in connection with the WORK, (ii) any claim that
the WORK infringes any copyright, patent, trade secret, trademark, or other
legal right of any third party, or (iii) any other claim that, if true, would
constitute a breach of CONTRACTOR's warranties set forth in Section 5 above.
7. CONFIDENTIALITY
CONTRACTOR agrees that at all times during the term of this Agreement, and for
five (5) years thereafter, CONTRACTOR will hold in strictest confidence, and
will not use or disclose to any third party, any Confidential Information, as
defined herein. The term "Confidential Information" shall mean all non-public
information that WNI designates as being confidential, or which, under the
circumstances of disclosure ought to be treated as confidential. Confidential
Information includes, without limitation, the terms and conditions of this
Agreement, information relating to released or unreleased WNI products,
marketing or promotion of any WNI product, business policies or practices of
WNI, customers or suppliers of WNI, or information received from others that WNI
is obligated to treat as confidential. If CONTRACTOR has any questions as to
what comprises Confidential Information, CONTRACTOR agrees to consult with WNI.
Confidential Information shall not include information that was known to
CONTRACTOR prior to WNI's disclosure to CONTRACTOR, or information that becomes
publicly available through no fault of CONTRACTOR.
8. INSURANCE
8.1 CONTRACTOR warrants that it shall maintain sufficient insurance
coverage to enable it to meet its obligations created by this Agreement and
by law. Without limiting the foregoing, CONTRACTOR warrants that such
insurance shall include the following lines of coverage (with minimum
limits of $1,000,000 per occurrence) to the extent this Agreement creates
exposures generally covered by these insurance policies: Commercial General
Liability (Occurrence Form), Automobile Liability, Workers' Compensation
(statutory limits), and Employer's Liability.
8.2 In addition, if:
(a) the WORK consists of, includes, or results in any copyrightable
material; or
(b) CONTRACTOR's performance of the WORK constitutes such professional
consulting services as:
(i) system development, design, or maintenance;
(ii) technical support; or
(iii) financial services (e.g., collections, and transaction
authorization);
then CONTRACTOR shall maintain Professional Liability and Errors
& Omissions Liability Insurance with policy limits of not less than
One Million Dollars (US$1,000,000.00) each claim with a deductible of
not more than Twenty-Five Thousand Dollars (US$25,000.00). Such
insurance shall include coverage for infringement of any proprietary
right of any third party, including without limitation copyright and
trademark infringement as related to CONTRACTOR's performance under
this Agreement. The Professional Liability and Errors & Omissions
Liability Insurance retroactive coverage date will be no later than
the Effective Date. CONTRACTOR shall maintain an extended reporting
period providing that claims first made and reported to the insurance
company within two (2) years after WNI's final payment for the WORK
will be deemed to have been made during the policy period.
8.3 Upon request, CONTRACTOR shall deliver to WNI proof of such coverage.
In the event that CONTRACTOR's proof evidences coverage which WNI reasonably
determines to be less than that required to meet CONTRACTOR'S obligations
created by this Agreement, then CONTRACTOR agrees that it shall promptly acquire
such coverage and notify WNI in writing thereof.
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9. TERM
9.1 WNI may terminate this Agreement and cancel CONTRACTOR's services hereunder
at any time without cause and without further obligation to CONTRACTOR
except for payment due for services performed with respect to WORK
completed and accepted by WNI prior to the date of written notice of such
termination.
9.2 Upon the earlier of either completion of the WORK or termination of this
Agreement, CONTRACTOR shall return to WNI all WNI Materials, drawings,
blueprints, notes, memoranda, specifications, designs, devices, documents
and any other material containing or disclosing any confidential or
proprietary information of WNI. CONTRACTOR shall not retain any such
materials without WNI's written approval. In the event of termination of
this Agreement and upon request by WNI, CONTRACTOR agrees to turn over to
WNI all WORK, whether complete or in progress, within ten (10) days of such
termination.
9.3 Upon any expiration of this Agreement, Sections 4, 5, 6, 7, 9.2, 9.3, and
10 shall survive.
10. GENERAL
10.1 CONTRACTOR is an independent contractor for WNI. Nothing in this Agreement
shall be construed as creating an employer-employee relationship, as a
guarantee of future employment, or as a limitation upon WNI's sole
discretion to terminate this Agreement at any time without cause.
CONTRACTOR further agrees to be responsible for all of CONTRACTOR's federal
and state taxes, withholding, social security, insurance, and other
benefits. Upon request, CONTRACTOR shall provide WNI with satisfactory
proof of independent contractor status. CONTRACTOR further warrants that in
the event the Internal Revenue Service or any other state or local agency
determines that CONTRACTOR is a common law employee of WNI and therefore
subject to withholding and payroll taxes (e.g. federal income tax, FICA,
FUTA, etc.), CONTRACTOR will fully indemnify WNI for all such withholding
and payroll taxes, and associated interest and penalties, if any, assessed
against WNI in connection with such determination. In the event taxes are
required to be withheld on payments made hereunder by any U.S. (state or
federal) or foreign government, WNI may deduct such taxes from the amount
owed CONTRACTOR and pay them to the appropriate taxing authority. WNI shall
in turn promptly secure and deliver to CONTRACTOR an official receipt for
any taxes withheld. WNI will use reasonable efforts to minimize such taxes
to the extent permissible under applicable law.
10.2 CONTRACTOR is free to engage in other independent contracting activities,
provided that CONTRACTOR does not engage in any such activities which are
inconsistent with any provisions hereof, or that so occupy CONTRACTOR's
time as to interfere with the proper and efficient performance of
CONTRACTOR's services hereunder.
10.3 This Agreement may not be assigned by either party without prior written
consent of the other; provided, however, WNI may assign the Agreement to
Microsoft Corporation.
10.4 CONTRACTOR agrees that WNI will not be responsible for loss of or damage to
any personal property located on WNI premises belonging to CONTRACTOR.
10.5 This Agreement shall be governed by and construed in accordance with the
laws of the State of California, Northern District. The federal and state
courts within the State of California, Northern District, shall have
exclusive jurisdiction to adjudicate any dispute arising with this
Agreement and CONTRACTOR hereby consents to such jurisdiction. 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.
Process shall be served on either party in the manner authorized by
applicable law or court rule.
10.6 This Agreement does not constitute an offer by WNI and it shall not be
effective until signed by both parties. This Agreement constitutes the
entire agreement between 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 signed by CONTRACTOR and WNI by
their duly authorized representatives.
WNI NETWORKS, INC. SNAP2 CORPORATION
1065 La Avenida 10641 Justin Drive
Mountain View, CA 94043 Des Moines, IA 50322
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By Dan Zigmund By Mark Malinak
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(Sign) (Sign)
Dan Zigmund Mark Malinak
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Name (Print) Name (Print)
Director of Client Engineering V.P. Sales
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Title Title
10/24/00 10/20/00
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Date Date
Federal Tax ID# 39-1891053
CONTRACTOR's
Federal Employer ID Number
or Social Security number
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EXHIBIT A
[Confidential Treatment has been requested for this portion of this Exhibit]
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