Joint Development Agreement

JOINT DEVELOPMENT AGREEMENT



This Joint Development Agreement dated as of April 27, 1998 (this "Agreement") is between Lotus Development Corporation, a Delaware corporation with offices at 55 Cambridge Parkway, Cambridge, MA 02142 ("Lotu s") and Interliant, Inc., a Texas corporation with a place of business at 1301 Fannin, Suite 700, Houston, Texas 77002 ("Interliant").





Lotus has developed certain technology to be included in Louts Domino Instant! Host ("Instant! Host") as a servic e provider hosting platform for Lotus' Instant! Applications. The initial code implementing such technology is currently included in Lotus Instant!TEAMROOM. Interliant, as a network service provider of Lotus Notes and Lotus Domino services, is interested i n developing a set of service offerings based on Instant! Host technology that implements Lotus' "Instant!" products and related strategies. Lotus and Interliant share a common interest in reducing time to market for Lotus Instant! applications, and in pr o ducing an Instant! Host platform that benefits from each party's knowledge and expertise in producing quality Notes/Domino-based application hosting platforms. Lotus and Interliant now wish jointly to develop commercial versions of instant! Host on the te rms and conditions set forth herein. Therefore, the parties agree as follows:



1. Development.



(a) Joint Responsibility. Lotus and Interliant shall have joint architectural design, product management and product development responsibility for Lotus i nstant! Host, and have agreed on resources to be contributed, timelines, project plans and contingencies. Each party agrees in good faith to use diligent efforts to undertake and complete the development of a version of Lotus Instant! Host as contemplated hereunder and in accordance with functional specifications developed and agreed to by Lotus and Interliant (the "Work").



(b) Lotus Instant! Host Software Developer Kit, version 1.1. As agreed by the parties, the first phase of development is the dev elopment of the Lotus Instant! Host Developer Kit, version 1.x. This development kit will be made available by Lotus or Interliant, as the case may be, to Lotus and Interliant business partners at no charge. The parties acknowledge that version 1.0 of suc h development kit is complete and was made available for shipment on or about July 20, 1997 and that version 1.1 is complete and was made available for shipment on or about December 15, 1997.



(c) Functional Specifications and the Development Schedule s. During the course of development, Interliant shall implement changes to the functional specifications made by Lotus from time to time. Lotus shall, in consultation with Interliant and based on reasonable work estimates supplied by Interliant, revise an y relevant development schedules as reasonably necessary in Lotus' reasonable judgment, to accommodate changes made in the functional specification. Nothing herein shall require Lotus to revise development schedules based on delays attributable to Interlia nt or on Interliant's failure to meet the development schedules once revised to accommodate the changes to the functional specification.







(d) Product Development Review. Lotus shall appoint an employee to serve as project manager ("Lotus Project Man ager") and Interliant shall appoint an employee to serve as development liaison ("Interliant Liaison") throughout the course of development contemplated by this Agreement. Initially the Lotus Project Manager shall be Corinne Acheson and the Interliant Lia i son shall be David Botello. The parties may, at their own option, each appoint other employees to serve in such or other formal capacities during the term of this Agreement. The Lotus Project Manager and the Interliant Liaison shall meet at mutually agree d times and locations in order to discuss the status and progress of the development work on Instant! Host.



(e) Lotus Personnel. Lotus will provide non-dedicated architectural and product management assistance for Instant! Host, as well as qualified dedicated development personnel to complete Instant! Host product development, pursuant to the agreed upon development schedules.



(f) Interliant Personnel. Interliant will provide non-dedicated architectural and product management assistance to Lotu s for Instant! Host. Interliant will provide qualified dedicated development personnel to work with the Instant! Host product development team, pursuant to the agreed upon development schedules.



(g) Documentation. The parties shall jointly write and produce any necessary written end-user documentation and shall create the text for the "op-screen" help and documentation for Instant! Host.



(h) Testing. The joint Lotus/Interliant development team shall conduct interim evaluation and testing of In stant! Host on agreed upon dates. Upon completion of the development of Instant! Host, such joint development team shall deliver to Lotus and Interliant a final commercial release of Instant! Host, in both source and object code form, as well as all progr ammer's notes and technical documentation used or developed in performing the Work.



(i) Acceptance. Within ten (10) business days after the delivery by the joint Lotus/Interliant development team to both Interliant and Lotus of each development version and of the final release version of Instant! Host, each party shall review and test the Instant! Host product and Lotus shall either accept or reject the d elivery. In the event of rejection, Lotus shall specify the manner in which the version fails to meet the requirements of the agreed upon functional specifications. After such notification, the joint development team shall correct the aforesaid problems o r deficiencies within ten (10) business days (if practicable). Upon any redelivery, Lotus shall, in its reasonable judgment, determine whether or not to accept such redelivered version of Instant! Host or to require another iteration of the process.



2. Own ership; Licenses. (a) Lotus acknowledges that all code contributed or developed by Interliant hereunder and identified as "Interliant Code" on Schedule 1 attached hereto (the "Interliant Code") remains the sole property of Interliant, and Interliant ackno wledges that all code contributed or developed by Lotus hereunder and identified as "Lotus Code" on Schedule 2 attached hereto (the "Lotus Code") remains the sole property of Lotus. For the term of this







Agreement, Interliant may update Schedule 1 and Lot us may update Schedule 2 at any time in a writing and by mutual agreement of the other Party. With respect to any source code proprietary to the other party (to the extent such other party supplies such source code), each party agrees to maintain such sou rce code in confidence, and to protect such source code using the same degree of care it uses to protect its own proprietary and confidential information of like importance.



(b) Subject to acceptance of Instant! Host by Lotus pursuant to Section 1(i) above, Lotus hereby grants Interliant a royalty-free license to use and modify the Lotus Code for the sole purpose of enhancing its Domino-based hosting services, provided that if Interliant ceases jointly developing new versions of Instant! Host. Interl iant will receive updates to the source code for new versions developed by Lotus only so long as Interliant is actively hosting the complete Lotus family of Domino Instant! Applications and offering them to the marketplace.



(c) Subject to acceptance of Instant! Host by Lotus pursuant to Section 1(i) above, Interliant hereby grants Lotus a perpetual, irrevocable license to use, copy and modify, distribute, and sublicense the Interliant Code (as defined in Section 2(a) hereof) as part of Instant! Host ( or any successor product, or product in which the Instant! Host code is incorporated), subject to the nondisclosure requirements with respect the source code contained in said Section 2(a). Additionally, Lotus shall have the irrevocable right to assign th e licenses granted hereunder in connection with any sale or transfer of the Instant! Host product or the Louts Code or any exclusive licensing arrangement with respect thereto.



(d) Subject to acceptance of Instant! Host by Lotus pursuant to Section 1 , Lotus will have the right, without payment of any royalties other than those set forth in Section 3 thereof, independently to develop and market successor versions of Instant! Host (whether or not such versions constitute derivative works) and extension s to Instant! Host which add additional features and functionality, so long as such extension do not constitute derivative works. Interliant agrees that it shall not create either extensions or derivative works (within the meaning of the U.S. Copyright Act of 1976, as amended) of Instant! Host or the Interliant Code which offer similar functionality as Instant! Host as it applies to Domino applications. Except as expressly permitted in Section 2(b), Interliant may not create derivative works of the Lotus Co de.



(e) As long as Instant! Host contains the Interliant Code, all derivative works of the Interliant Code created by Interliant that apply to Lotus Domino shall be deemed for all purposes to be subject to the licenses and other rights granted to Lot us in Section 2(c) hereof herein with respect to Instant! Host.



(f) Interliant may host other service providers using Instant! Host. Interliant shall not otherwise have the right to resell the Instant! Host product, except as expressly provided in t his Agreement. Interliant will compensate Lotus for all such service provider hosting and related services or sales of instant! Host at Lotus' published Instant! Host rates.



(g) Interliant has the right to make pre-release versions of Instant! Host available to its business partners in connection with their application development efforts with the prior written approval of Lotus, pursuant to the terms and conditions of Lotus' standard beta agreement.







(h) If, so long as Lotus is obligated to pay royalties to Interliant hereunder, Lotus desires, or is required, to sell or transfer all or substantially all of the Instant! Host product or Lotus Code to an unaffiliated third party or to IBM Global Services, Lotus shall first offer to sell such Lo t us Code to Interliant at the same price and upon the same terms (or terms as similar as reasonably possible). Such right of first refusal shall be provided to Interliant by written notice (the "Notice of Offer") given to Interliant of the proposed sale or transfer. The Notice of Offer shall set forth with reasonable specificity the price and other terms and conditions of the proposed sale or transfer. Interliant shall then have the right, exercisable by written notice to Lotus (the "Notice of Acceptance") d elivered within fifteen (15) days following the receipt of the Notice of Offer, to elect to purchase the Lotus Code at the price and on the terms set forth in the Notice of Offer. Such purchase by I ...