Co-development & Marketing Agreement

EXHIBIT 10.17


CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


CO-DEVELOPMENT AND MARKETING AGREEMENT


This Co-Development and Marketing Agreement is made effective as of January 25, 2000 (the "Effective Date") by Noosh, Inc., a California corporation having a place of business at 3401 Hillview Avenue, Palo Alto, California 94303 ("Noosh"), and R.R. Donnelley & Sons Company, a Delaware corporation having a place of business at 77 West Wacker Drive, Chicago, IL 60601 ("RRD").


Recitals


A. Noosh is engaged in the business of, among other things, designing, developing, and providing an Internet-based service known as "Noosh.com," which is designed to help improve the process of buying, selling and managing print jobs by providing a web site where corporate print buyers, printers and creative agencies can work collaboratively on print jobs.


B. RRD is engaged in the business of, among other things, providing print-related products and services to its customers.


C. Noosh and RRD desire to enter into a relationship whereby the parties will work together to actively promote and market the usage of the Noosh Service (as defined below), particularly by RRD, RRD's customers and others for print jobs within certain segments of the print industry. Initially, pursuant to a User Agreement to be entered into between the parties as of the Effective Date, RRD will be entitled to access and use of the standard Noosh Service for the processing of print jobs. Promptly following the Effective Date, the parties also intend to create rrd.noosh.com, a private web site which will link users of RRD's web site to the Noosh Service and feature RRD as the only print vendor permitted to interact with print buyers through rrd.noosh.com. Subsequently, the parties intend to extend the functionality of rrd.noosh.com by integrating the Noosh Service with up to four RRD Portals (as defined below).


D. The parties also wish to undertake co-marketing activities for their mutual benefit as further specified in this Agreement.


Agreement


Accordingly, in consideration for their respective covenants set forth below, the parties agree as follows:


1. Definitions. As used in this Agreement:


1.1 "Affiliate" of a party means any person, corporation or other entity (i) which own more than 50% of the voting securities or ownership interest of such party ("Parent"); (ii) in which such party, directly or indirectly, owns more than 50% of the voting securities or ownership interest; or (iii) in which such party's Parent, directly or indirectly, owns more than 50% of the voting securities or ownership interest.


1.2 "API" means an application's programmer's interface.


1.3 "Integration Code" means the software, programming code, API's and other software-based technology used or developed by the parties, whether alone, jointly or with


1.


others, in object code form only, for use in integrating the Noosh Service with the RRD Portals pursuant to Section 3 below.


1.4 "Integration SC" means the Integration Code, excluding third- party source code for which Noosh does not have rights to sublicense, in human- readable source code format and any programmer's notes or other related materials, licensed to RRD pursuant to Section 3.5 below.


1.5 "Intellectual Property Rights" means all current and future worldwide copyrights, trade secrets, patents and other patent rights, utility models, mask work rights, moral rights, trademarks, trade names, service marks, and all other intellectual property rights, including all applications and registrations with respect thereto.


1.6 "Noosh Competitor" means [*] together with any of their respective Affiliates or successors in interest, together with any other persons or entities which market the products, services or technologies of [*] under license from [*]


1.7 "Noosh Marks" means the trademarks, service marks, trade names, and logos of Noosh listed in Exhibit A, as such list may be updated from time to
--------- time by Noosh.


1.8 "Noosh Service" means Noosh's proprietary Internet-based service as described in Recital A above, provided by Noosh through www.noosh.com or any successor web site, as such service may be revised, augmented, superseded, enhanced, modified or supplemented from time to time. For the purposes of this Agreement, the Noosh Service will include [*] The Noosh Service shall not include [*]


1.9 "Noosh Technology" means the software, programming code, API's, and other technology used or developed by Noosh, (whether alone or with others) or licensed by Noosh from third parties, to develop and provide the Noosh Service and rrd.noosh.com, together with any modifications, improvements, enhancements and derivative works made to or from any of the foregoing by either party in connection with this Agreement. Without limiting any rights of RRD in the RRD Marks, Noosh Technology will include all such technology used to create the RRD GUI as displayed within the Noosh Service (as integrated with the RRD Portals) or rrd.noosh.com.


1.10 "Print Vendor" means, with respect to any print job run on the Noosh Service (whether directly on the Noosh Service or through rrd.noosh.com or an RRD Portal), the corporation or other entity which, by itself or through subcontractors, is responsible for or performs the actual printing of materials which are the subject of such print job.


1.11 "RRD Competitor" means [*] together with any of their respective Affiliates or successors in interest, together with any other persons or entities which market the products, services or technologies of [*] under license from [*]


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


2.


1.12 "RRD Deliverables" shall be as defined in Section 3.2 below.


1.13 "RRD GUI" means the graphic user interface intended to be developed and displayed within rrd.noosh.com or the Noosh Service (as integrated with the RRD Portals) to RRD Customers pursuant to the integration process contemplated by Section 3 below.


1.14 "RRD Marks" means the trademarks, service marks, trade names, and logos which are owned by Heritage Preservation Corporation and licensed to RRD listed in Exhibit B, as such list may be updated from time to time by RRD.
---------


1.15 "RRD Portals" means the up to four (4) Internet-based services to be designed and developed by RRD based upon the RRD Portal Technology to provide print-related products and services to RRD Customers. The four potential RRD Portals are expected to include services focused on the needs of RRD Customers in each of the three RRD Segments [*]. RRD may change the marketing and customer focus of an RRD Portal from time to time; however, Noosh shall not be obligated to undertake any engineering or other efforts which may be required to implement any such change. However, Noosh agrees to consider and discuss any reasonable request RRD may make for additional such efforts by Noosh.


1.16 "RRD Portal Technology" means the software, programming code, API's and other technology used or developed by RRD, alone or with others, to develop and provide the RRD Portals or the RRD Deliverables, together with any modifications, improvements, enhancements and derivative works made to or from any of the foregoing by either party in connection with this Agreement; provided, however, the RRD Portal Technology will not include any software, programming code, API's or other technology used within or relating to the Noosh Service. Without limiting any rights of RRD in the RRD Marks, the RRD Portal Technology will not include any such technology used to create the RRD GUI as displayed within rrd.noosh.com or the Noosh Service (as integrated with the RRD Portals).


1.17 "RRD Segments" means the categories of print jobs which apply to, and only to the extent they apply to, the printing of Books, Magazines or Catalogs.


1.18 "RRD Subscriber" means any individual or entity which uses or accesses any portion of the functionality of the Noosh Service through rrd.noosh.com or through any of the RRD Portals.


1.19 "RRD Web Site" means the one or more web sites maintained by RRD for use in its business, as such web sites may be modified and updated by RRD from time to time. The home page for the principal web site of RRD is currently (as of the Effective Date) located at the URL "http://www.rrdonnelley.com."


1.20 "rrd.noosh.com" means the web site [*]


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


3.


1.21 "Target Dates" means the target dates for completion of various aspects of the work to be undertaken by the parties pursuant to Section 3.1 of this Agreement, as such dates may be modified and updated from time to time by written agreement of the parties.


1.22 "User Agreement" means, collectively, the Noosh User Agreement, the RRD Site Agreements and the RRD Subscriber Agreements, as defined in Section 3.4 below.


1.23 "NPV" means, with respect to any print job run on the Noosh Service (whether directly on the Noosh Service or through rrd.noosh.com or an RRD Portal), a Print Vendor which (i) is a user of the Noosh Service and (ii) uses the Noosh Service to communicate with or provide data to other users of the Noosh Service with respect to such print job.


1.24 "OPV" means, with respect to any print job run on the Noosh Service (whether directly on the Noosh Service or through rrd.noosh.com or an RRD Portal), a Print Vendor which (i) performs the actual printing of materials which are the subject of such print job as a subcontractor of an NPV and (ii) is not identified on the Noosh Service to other users of the Noosh Service as a Print Vendor or participant with respect to such print job.


1.25 "RRD Customer" means any current or prospective customer of RRD or any RRD Affiliate with respect to printing services.


1.26 "RRD Customer List" shall have the meaning set forth in Section 2.4(c)(ii)(1) below.


1.27 "Usage Data" means all data entered on the Noosh Service by RRD or RRD Subscribers in the course of RRD's and all RRD Subscribers' use of the Noosh Service.


1.28 "Permitted Affiliate" shall have the meaning set forth in Section 4.20 below.


1.29 "Books" means printed books in hard cover and paperback, including, but not limited to, trade books, children's books, professional books, reference books, elementary, high school and college textbooks, religious books, and direct mail books.


1.30 "Catalogs" means printed catalogs including, but not limited to, consumer catalogs, business catalogs, retailer catalogs, and direct mail catalogs.


1.31 "Magazines" means printed magazines including, but not limited to, consumer magazines, trade magazines, professional and association magazines, and Sunday newspaper magazines (including free standing inserts of the type typically distributed with Sunday newspapers).


2. Co-Marketing.


2.1 Initial Press Release. Upon the Effective Date, Noosh and RRD will issue a press release announcing their alliance and their co-marketing and co-development plans, as contemplated by this Agreement. The form and substance of the press release will be substantially as set forth in Exhibit C to this
--------- Agreement. Noosh and RRD will each be entitled to refer to their alliance pursuant to this Agreement in the "About" sections of their subsequent


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


4.


press releases, on their respective web sites and otherwise as required by law. However, any additional press releases focusing on the alliance will require prior written mutual consent of the parties.


2.2 Co-marketing Funds. During the term of the Agreement, RRD will commit [*] to promote and enhance the relationship between Noosh and RRD and the usage of the Noosh Service by RRD Customers. Such activities will include sales training regarding the Noosh Service for the RRD sales force, advertising, joint presentations at industry trade shows and similar events, and joint sales calls. The marketing activities and funds will be focused on each RRD business unit as it begins utilization of the Noosh Service. Within thirty (30) days of the end of each calendar quarter during the term of this Agreement, RRD will provide Noosh with a written summary of its marketing activities in the quarter relating to the alliance, all in reasonable detail as reasonably requested by Noosh.


2.3 Relationship Support. To help assure the parties' continued close working relationship and the success of their relationship, the parties agree to the following provisions:


(a) Alliance Committee. Promptly following the Effective Date, Noosh and RRD will form an Alliance Committee. The objective of the committee will be to explore, plan and implement programs and other steps designed to leverage their respective strengths for their mutual benefit. The composition of the committee will be agreed upon by the relationship managers for both parties, initially David Hannebrink will be the relationship manager for Noosh and a senior member of RRD management will be the relationship manager for RRD. During the first three months following the Effective Date, the relationship managers will meet at least monthly, and, thereafter, at least quarterly. The committee will alternate its meetings between Chicago and Palo Alto, as determined by the committee.


(b) Pre-Release Access. The parties agree that the following provisions will be effective until [*] of the date of the initial use of rrd.noosh.com by an RRD Subscriber (but no later than [*] following the Effective Date):


(i) Noosh Features. A reasonable amount of time before making new features generally available on the Noosh Service, Noosh will provide RRD with reasonably detailed descriptions of such proposed features. At its option, RRD will provide Noosh with input and consult with Noosh regarding the desirable specifications and functionality of the proposed features.


(ii) RRD Features. A reasonable amount of time before making new features generally available on the RRD Portals, RRD will provide Noosh with reasonably detailed descriptions of such proposed features. At its option, Noosh will provide RRD with input and consult with RRD regarding the desirable specifications and functionality of the proposed features.


(c) Personnel Matters. During the term of this Agreement, Noosh will not solicit for employment then current employees of RRD without RRD's prior written consent, except that Noosh may hire any RRD employees who had existing and outstanding offers of employment from Noosh as of January 5, 2000.


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


5.


2.4 No Conflict of Interest. The parties agree that the following provisions will be effective until the [*] of the date of the initial use of rrd.noosh.com by an RRD Subscriber (but no later than [*] following the Effective Date):


(a) Except with Noosh's written consent, RRD will not [*]


(b) Except with RRD's written consent, Noosh will not [*] Without limiting Noosh's obligations under Section 2.4(c)(ii)(5) below as to the handling of leads, this prohibition will not preclude Noosh from [*] Also, this prohibition will not limit Noosh's activities with [*]


(c) Promptly following the Effective Date, pursuant to this Section 2.4 above and, specifically, in each case subject to Section 2.4(b) above:


(i) Noosh will begin work, with assistance from RRD, to deploy rrd.noosh.com for RRD Subscribers to gain access to the Noosh Service.


(ii) Noosh and RRD sales management will meet and set sales plans and priorities for marketing to customers in the RRD Segments. A preliminary list of their activities will include, without limitation:


(1) Identifying existing RRD Customers in the RRD Segments who may want to use the Noosh Service immediately in order to direct them to rrd.noosh.com. RRD will use reasonable commercial efforts to prepare a list of such RRD Customers (the "RRD Customer List") for use and review by both parties in developing related marketing plans.


(2) Notifying all Noosh and RRD Customers in the RRD Segments and inform them about rrd.noosh.com for the purposes of processing print jobs in the RRD Segments.


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


6.


(3) Promoting the Noosh/RRD alliance and direction and sending updates (mailings, etc.) to identified potential customers in the RRD Segments.


(4) Developing plans for marketing the Noosh Service and/or the rrd.noosh.com to qualified accounts.


(5) With respect to any leads received by Noosh on prospective customers for applications in the RRD Segments, Noosh will use its reasonable commercial efforts to notify RRD promptly of such leads (other than leads provided by or through Print Vendors) and, unless impractical, RRD will invite Noosh to join RRD in calling upon the potential customers. In handling such leads, RRD shall consider in good faith input from Noosh, [*] to such leads for use in the RRD Segments, subject to the following:


a. RRD will not introduce or work with a Noosh Competitor in the account [*] Further, before RRD introduces or works in an account [*] RRD will provide Noosh with reasonable advance notice [*]


b. Noosh will not be restricted by the provisions of Section 2.4(b) above or this Section 2.4(c) with respect to any lead where:
i. prior to the Effective Date, the prospect already has [*] Prior to the Effective Date, Noosh will provide the RRD [*]


ii. prior to the Effective Date, the prospect is already [*]


iii. in Noosh's reasonable judgment, the prospect will be considering [*] or


iv. during the [*] following Noosh's delivery of a lead to RRD, RRD has not [*] to market rrd.noosh.com and/or an RRD Portal to the prospect; provided, however, that this subsection (iv) shall not apply until the earlier of [*].


(6) Attending trade shows and conferences jointly.


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


7.


(7) As plans for the RRD Portals are developed, RRD, with reasonable Noosh assistance, will use reasonable commercial efforts to notify the prospect/customer base.


(8) Noosh will commence training RRD staff in selling and supporting Noosh in order to support the parties' joint sales calls and customer maintenance.


(9) Noosh will use reasonable commercial efforts to promote each RRD Portals when available.


(10) The parties will seek to establish performance metrics (not necessarily usage) so that RRD and Noosh are satisfied account awareness and customer relationship goals are tracked and met.


3. Development and Implementation of rrd.noosh.com and RRD Portals.


3.1 Design and Development.


(a) With assistance and input from RRD, Noosh will use commercially reasonable efforts to design and implement (i) first, rrd.noosh.com and (ii) after the implementation of rrd.noosh.com, the Integration Code required to implement the integration of the Noosh Service with each RRD Portal. This work is expected to include, among other things, (a) identification of the technical and functional specifications for and implementation of rrd.noosh.com; (b) identification of the technical and functional specifications for the Integration Code and the custom features of the RRD GUI to be implemented as part of the integration of the Noosh Service and each RRD Portal; (c) acquisition or development, and implementation, of the hardware, software, and other technology, needed to provide the rrd.noosh.com, which shall be solely at Noosh's expense, and the integration of the Noosh Service and each RRD Portal, which, for the purposes of the integration of the Noosh Service with each RRD Portal, may include modifications to the Noosh Technology, and which shall be solely at RRD's expense; (d) internal and potentially external (i.e., at customer beta sites) evaluation and testing of the Noosh Service as accessed through rrd.noosh.com and each RRD Portal until both parties are satisfied with levels of service quality and reliability such that, initially, rrd.noosh.com and, subsequently, each RRD Portal, respectively, are suitable for commercial release; and (e) the development of appropriate target dates ("Target Dates") relating to the design and implementation of each of rrd.noosh.com and the Integration Code with each RRD Portal. It is understood and agreed that Noosh cannot guarantee the results or success of these efforts, the Target Dates are subject to change as circumstances warrant, and neither Noosh nor RRD will have liability to the other for any change in the Target Dates, or any failure to complete any portion of this work by the applicable Target Date, as long as each such party is using good faith, commercially reasonable efforts to fulfill its responsibilities in performing this work.


(b) With respect to rrd.noosh.com and each of the RRD Portals (with each of rrd.noosh.com and the RRD Portals being referred to as a "Site"), the parties agree that each such Site shall:


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


8.


(i) be designed to provide full functionality as provided within the Noosh Service;


(ii) with respect to each print job run on the Noosh Service through such Site, identify only one Print Vendor to other users of the Noosh Service, and such Print Vendor must be an NPV;


(iii) permit the NPV for each such print job to be only RRD or a Permitted Affiliate; provided, however, that there shall not be any limitation as to the number of OPVs to which such NPV may subcontract work in connection with any particular print job.


[*] (as referenced in Section 1.15 above) is developed, the parties recognize that RRD may request amendments or waivers to the limitations set forth in this Section 3.1(b). Noosh agrees to consider and discuss any such request, together with the potential terms upon which any requested exceptions to such limitations might be acceptable.


3.2 RRD Assistance.


(a) RRD will use commercially reasonable efforts to assist Noosh, as Noosh may reasonably request from time to time, in the design and development of rrd.noosh.com and the Integration Code. Without limiting the generality of the foregoing, RRD will use commercially reasonable efforts to (a) make available to Noosh the facilities and personnel of RRD or its agents or contractors, as Noosh may reasonably request, and (b) deliver to Noosh the APIs, software, and other technology used by RRD in connection with the RRD Web Site and/or the RRD Portals, as Noosh may reasonably request (collectively, the "RRD Deliverables").


(b) RRD hereby grants to Noosh a non-exclusive, non- transferable, royalty-free license during the term of this Agreement to use and reproduce, and to the extent necessary to fulfill its obligations under this Agreement, modify and create derivative works from, the RRD Deliverables, solely for the purpose of performing the work described in Section 3.1; provided, however, that all modifications and derivative works of the RRD Deliverables and/or the RRD Portal Technology created pursuant to this Section 3.2 (the "Modifications") will be [*] The RRD Deliverables and the Modifications are deemed to be the Confidential Information of RRD subject to the provisions of Section 4.3.


3.3 Provision of Noosh Service. When the parties agree that rrd.noosh.com or the integrated version of the Noosh Service, as the case may be, is ready for commercial release, Noosh will begin providing the related service. As between Noosh and RRD, RRD will have sole responsibility for first- level customer service and support to RRD Subscribers who access the Noosh Service through rrd.noosh.com or the RRD Portal, and Noosh will have sole responsibility for operation of the Noosh Service and rrd.noosh.com and will provide reasonable back-up support to RRD to resolve customer questions and problems relating or attributable to the content or operation of the Noosh Service as provided to such RRD Subscribers.


3.4 Use by RRD Subscribers and RRD of the Noosh Service. The parties agree that:


[] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


9.


(a) To enable RRD or a Permitted Affiliate to process print jobs as a user on the Noosh Service (directly, as opposed to through rrd.noosh.com or through the RRD Portals), RRD will execute and deliver to Noosh a User Agreement in substantially the form attached as Exhibit D on or before the Effective Date
--------- (the "Noosh User Agreement"). The Noosh User Agreement shall incorporate the terms set forth below in Section 3.4(c) below.


(b) Pursuant to Section 3.1 above, the parties are to use their diligent efforts to work together to determine the final specifications, duties of the parties, Target Dates and other matters relating to the development of each Site (as defined in Section 3.1(b) above). Promptly following the parties' determination of such ...