Web Design & Development Agreement

EXHIBIT 10(8)


WEB DESIGN & DEVELOPMENT AGREEMENT


This WEB DESIGN & DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into as of the 6th day of August, 1999 (the "Effective Date"), by and between VCI Community Solutions, Inc. a Delaware corporation with offices at 589 8th Avenue, New York, NY 10018 ("VCI") and Tromaville.com , Inc., a New York corporation with offices at the Troma Building, 733 Ninth Avenue, New York, NY 10019 ("Client").


W I T N E S S E T H


WHEREAS, Client desires to engage VCI, and VCI desires to be engaged by Client, to provide Internet services relating to, among other things, development and design of sites on the World Wide Web portion of the Internet (the "Web"), on the terms and subject to the conditions set forth below.


NOW, THEREFORE, in consideration of the mutual promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, VCI and Client (collectively, the "Parties") hereby agree as follows:


1. Services


1.1. VCI Services. VCI agrees to provide Client with, and Client agrees to
------------ purchase from VCI (subject to the terms and conditions set forth herein), services (the "Web Site Services") for the design and development of a portion of Client's site on the Web (the "Web Site") as set forth or described in Exhibit 1, and with the additional services (the "Additional Services"; together --------- with the Web Site Services are hereinafter referred to collectively as the "Services"), set forth or described in Exhibit 2 and mutually agreed upon in
--------- writing by the Parties. Obligations of VCI, if any, to provide ongoing maintenance ("Maintenance") for the Web Site shall be set forth and included as part of Additional Services in Exhibit 2. Client agrees that VCI is responsible
--------- only for providing the Services, and VCI is not responsible for providing any services or performing any tasks not specifically set forth in Exhibit 1 or
--------- Exhibit 2. ---------


2. Web Site Development


2.1. Specifications and Client Content. VCI, in consultation with the
--------------------------------- Client's reasonable requests, shall prepare detailed written specifications (the "Specifications") for the Web Site. Client agrees to respond promptly to all of VCI's reasonable requests for information during the preparation of the Specifications and for the remainder of this Agreement. The Specifications shall consist of, among other things, a design for the Web Site, a flow-chart of the pages for the Web Site, programming and interactive feature requirements, modules, and the placement of any content or other materials which are to be incorporated into the Web Site. The Specifications shall be subject to any restrictions or limitations set forth in Exhibit 1 or Exhibit 2. The
--------- --------- Specifications shall be delivered to the Client within thirty (30) days of the Effective Date (the "First Milestone"), and upon being agreed to by the Parties in writing (the "Specifications Approval"), shall be attached hereto as Exhibit
------- 3. Upon such First Milestone, Client shall pay to -


VCI the fees contemplated by Section 6.1 hereof. If the Parties are unable to agree in writing to mutually acceptable Specifications, after using good faith efforts, on or before sixty (60) days after the Effective Date, either party may terminate this Agreement by providing ten (10) business days advanced written notice to the other party. Such termination shall not relieve Client from the obligation of paying VCI for all unpaid and outstanding fees due VCI through the effective date of such termination.


2.2. Delivery of Client Content. "Client Content" shall mean any materials
-------------------------- provided to VCI by Client for incorporation in the Web Site, including, but not limited to, any images, photographs, illustrations, graphics, audio clips, video clips or text. Client shall deliver all Client Content to VCI, prior to VCI's commencement of the Template as set forth in Section 2.3 hereof, in an electronic file standard graphic format commonly used in Internet Web site development as specified by, and accessible by, VCI, which formats may include, but are limited to, .GIF, .JPG, Adobe Illustrator EPS and TIFF or any other formats mutually agreed to between the parties. Any services performed by, or at the direction of, VCI that are required to convert Client Content shall be charged to Client as Additional Services.


2.3. Delivery of Templates Following the Specifications Approval, and upon
--------------------- VCI's receipt of the requisite Client Content necessary to design and develop the Web Site (as determined by both Parties) and any fees (the "Fees") specified in Exhibit 4 (Fee and Payment Schedule) due and owing from Client to VCI, VCI
--------- shall commence (the "Commencement") the tasks associated with the development and design of the sample pages of the Web Site (the "Templates") and notify the Client of the URL (Uniform Resource Locator) or other Web address of the Templates. VCI shall use the combinations of technology and designs as VCI, in consultation with the Client's reasonable requests, deems appropriate to develop the Web Site. Within the later of thirty (30) days from the Commencement or sixty (60) days from the Effective Date (the "Template Delivery"), VCI shall have substantially completed the development and design of the Templates, but for any revisions, Change Orders or Order Forms as contemplated by Section 2 hereof.


2.4. Initial Version. Within the later of forty (40) days from the
--------------- Template Delivery or one hundred (100) days from the Effective Date (the "Second Milestone"), VCI shall have substantially completed the development and design of the initial version (the "Initial Version"), but for any revisions, Change Orders or Order Forms as contemplated by Section 2 hereof, and upon such Second Milestone, Client shall pay to VCI the fees contemplated by Section 6.1 hereof. If VCI does not attain the Second Milestone within the later of such periods, then Client may terminate this Agreement as set forth in Section 10 hereof.


2.5. Revisions. (a) Client shall have five (5) business days from the date
--------- of a written notice of completion of both the Templates and the Initial Version provided by VCI to review and request, in a detailed writing, revisions to the Templates and the Initial Version. Upon receipt of such written request, VCI shall use commercially reasonable efforts to implement such revision requests that are within the scope of, and consistent with, the Specifications, as


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reasonably determined by both Parties. Client shall also have five (5) business days from the date of a written notice of completion of the first revision to both the Templates and the Initial Version provided by VCI to review and request, in a detailed writing, revisions to the first revision of the Templates and the Initial Version. Upon receipt of such second written request, VCI shall use commercially reasonable efforts to implement such revision requests that are within the scope of, and consistent with, the Specifications, as reasonably determined by both Parties.


(b) If Client wishes VCI to implement any revisions to the Web Site that, in both Parties' discretion, are deemed to deviate in any material respect from the Specifications, or if the Client requests more than two (2) revisions to the Templates, or if the Client requests more than two (2) revisions to the Initial Version, or if the Client requests more than one (1) revision to any Change Order (as hereinafter defined), then Client shall submit to VCI a written change order (the "Change Order") containing (i) such requested revisions in detail, and (ii) a request for a price quote from VCI for each revision requested. VCI shall promptly evaluate the Change Order and submit to Client for its written acceptance a proposal (the "Proposal") for undertaking the applicable revisions and a price quote reflecting the associated fees related to Client's Change Order. Client shall have five (5) business days from receipt of VCI's Proposal to accept or reject VCI's Proposal in writing.


(c) If Client accepts VCI's Proposal to undertake the revisions specified in the Change Order, then the Change Order, as supplemented and/or modified by VCI's Proposal, shall be deemed to amend and become a part of the Specifications and Exhibit 4, and VCI shall use commercially reasonable efforts to implement
--------- such revisions in accordance with the Specifications and the revised Exhibit 4.
--------- Client shall have five (5) business days from the date of a written notice of completion of the Change Order provided by VCI, to review and request, in a detailed writing, revisions to the Change Order, the implementation and review of which shall be treated by VCI and the Client in the same manner as the revision to either the Templates or the Initial Version (as if such revision was requested). In the event that the Client requests additional revisions to any Change Orders, it shall be made pursuant to additional Change Orders.


(d) If Client rejects VCI's Proposal to undertake the revisions specified in the Change Order, then VCI shall be under no obligation to amend or resubmit to Client a new proposal, and Client may, at its option, either terminate this Agreement by providing five (5) business days advanced written notice to VCI, or accept the current iteration of the Web Site and continue this Agreement pursuant to its terms and conditions; provided, however, that such termination shall not relieve Client from the obligation of paying VCI for all unpaid and outstanding fees due VCI through the effective date of such termination. Notwithstanding the same, in the event Client elects to terminate the Agreement on or after VCI's delivery of the Initial Version in accordance with this section, VCI shall deliver to Client in working order the Web Site pursuant to the original Specifications and any Change Orders subsequently agreed to by the parties and implemented by VCI. Upon its receipt of same, Client shall pay VCI the amounts due to VCI pursuant to Exhibit 4, Section (A) (I) (iii) and (iv).


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(e) In the case of the Templates, if Client has not made any requests for revisions by the earlier of: (i) the end of five (5) business days from the date of written notice of completion of the Templates provided by VCI; (ii) such time as otherwise agreed by the Parties in writing; (iii) the end of five (5) business days from the date of written notice of completion of the first or second (if applicable) revision to the Templates provided by VCI or (iv) the end of five (5) business days from the date of VCI's completion of the Change Order, then the Templates shall be deemed accepted by Client.


(f) In the case of the Initial Version, if Client has not made any requests for revisions by the earlier of: (i) the end of five (5) business days from the date of written notice of completion of the Initial Version provided by VCI; (ii) such time as otherwise agreed by the Parties in writing; (iii) the end of five (5) business days from the date of written notice of completion of the first or second (if applicable) revision to the Initial Version provided by VCI or (iv) the end of five (5) business days from the date of VCI's completion of the Change Order, then the Initial Version shall be deemed accepted by Client ("Acceptance"). Upon the date of such Acceptance, the Web Site Services to be provided by VCI shall be deemed complete (the "Completion") and Client shall pay to VCI, the fees contemplated by Section 6.1 hereof.


2.6. Work Order Forms. Subsequent to the Acceptance of the Web Site by
---------------- Client, in the event VCI and Client agree that VCI is to perform additional tasks related to the Web Site or modify any Work (as defined in Section 3.1 hereof), then the Parties shall execute a work order form (each an "Order Form") in the form attached hereto as Schedule I, upon which each such Schedule I shall
---------- ---------- be incorporated into and shall become a part of this Agreement and shall be subject to the terms and conditions hereof.


3. Proprietary Rights


3.1. Proprietary Rights of Client. As between Client and VCI, Client
---------------------------- Content shall remain the sole and exclusive property of Client, including, without limitation, all copyrights, trademarks, servicemarks, patents, trade secrets, and any other proprietary rights. Nothing in this Agreement shall be construed to grant VCI any ownership right in, or license to, the Client Content, except as provided in Section 4.1 of this Agreement. In addition, all work product delivered to Client by VCI in connection with the Services and accepted by Client pursuant to Section 2 hereof (the "Work") shall be deemed a "work made for hire" and shall be the exclusive property of Client with the exception of Work related to the modification of software or other services received by VCI through licenses from third parties which shall remain the ownership of such third parties.


3.2. Proprietary Rights of VCI. Notwithstanding Section 3.1 hereof, all
------------------------- materials created by VCI which are of general applicability and non-Web Site specific, including, without limitation, any computer software (in object code, byte code or source code form), script, programming code, data, information or HTML script developed or provided by VCI or its suppliers under this Agreement, and any trade secrets, know-how, methodologies and processes


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related to VCI's products or services, shall remain the sole and exclusive property of VCI or its suppliers, including, without limitation, all copyrights, trademarks, servicemarks, patents, trade secrets, and any other proprietary rights inherent therein and appurtenant thereto (collectively "VCI Materials"). To the extent, if any, that ownership of the VCI Materials does not automatically vest in VCI by virtue of this Agreement or otherwise, Client hereby transfers and assigns to VCI all rights, title and interest which Client may have in and to the VCI Materials. Client acknowledges and agrees that VCI is in the business of, among other things, designing, developing and hosting Web sites, and that VCI shall have the right to provide to third parties services which are the same or similar to the Services, and to use or otherwise exploit any VCI Materials in providing such services.


3.3. Confidentiality. The Parties agree that during the course of this
--------------- Agreement, information that is confidential or proprietary may be disclosed to the other party, including, but not limited to software, technical processes and formulas, source codes, product designs, sales, cost and other unpublished financial information, product and business plans, advertising revenues, usage rates, advertising relationships, projections, and marketing data (collectively, the "Confidential Information"). Confidential Information shall not include information that the receiving party can demonstrate (a) is, as of the time of its disclosure, or thereafter becomes, part of the public domain through a source other than the receiving party, (b) was known to the receiving party as of the time of its disclosure, (c) is independently developed by the receiving party, or (d) is subsequently learned from a third party not under a confidentiality obligation to the providing party. Except as provided for in this Agreement, the Parties shall not make any disclosure of the Confidential Information to anyone other than its employees who have a need to know in connection with this Agreement; provided, however, that VCI may disclose the Confidential Information to any third party that VCI is obligated to disclose such information where such obligation arose prior to the Effective Date. The Parties shall notify their employees of their confidentiality obligations with respect to the Confidential Information and shall require their employees to comply with these obligations. Except as provided in Section 10.4 of this agreement and Exhibit 4 attached hereto, the Parties agree that, upon written
--------- request by either party, all Confidential Information given by one party to the other party shall immediately be returned to the party which owns, controls or developed the same and no part thereof shall be retained by the other party or such other party's representatives in any form or for any reason. The confidentiality obligations of the Parties and its employees shall survive the expiration or termination of this Agreement.


3.4. VCI Notices. Unless otherwise agreed in writing by the Parties, VCI
----------- shall have the right to place proprietary notices of VCI and its suppliers (including hypertext links related thereto) on the VCI Materials, the Work and on the Web Site, including design and developer attribution and hypertext links to VCI's web sites, and to change or update such notices from time to time upon notice to Client; provided, however, that such notices, attributions and links shall be subject to Client's reasonable prior approval, which approval shall not be unreasonably withheld; and provided further that, VCI shall be entitled in its sole discretion to place a notice stating "Powered by VCI" and any notice that VCI previously agreed or in the future may agree


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to place on the VCI Materials, the Work and on the Web Site. Furthermore, in no event may Client remove or alter any VCI proprietary notice from the VCI Materials or the Web Site without VCI's prior written consent.


4. License


4.1. Grant of License - Client. Client hereby grants to VCI a limited,
------------------------- non-exclusive, worldwide, royalty-free license for the Initial Term and any Renewal Term (as hereinafter defined) to edit, modify, adapt, translate, exhibit, publish, transmit, participate in the transfer of, reproduce, create derivative works from, distribute, perform, display, and otherwise use the Client Content as necessary only to render the Services to Client under this Agreement.


4.2. Grant of License - VCI. VCI hereby grants to Client a limited, non-
---------------------- exclusive, worldwide, perpetual, royalty-free, non-transferable license to use the VCI Materials, the Work which shall include, without limitation, the Content Management System (CMS) in its runtime and source code form, which are incorporated in the Web Site and which are required for the operation of the Web Site, but only as a part of the Web Site; provided, however, that (i) Client shall not have any right to modify, copy, publish, distribute or change any element of the VCI Materials ("Modifications") without VCI's prior written consent, other than Modifications permitted to be made pursuant to any end user license or Software Development Kit ("SDK") which shall be provided to Client by VCI or a third party for any element included in the VCI Materials and Work and (ii) with respect to CMS, Client shall adhere to the terms set forth in Exhibit 5 hereto. Any enhanced features developed by Client that are derived from the VCI Materials (other than CMS), shall be jointly owned by Client and VCI. To eliminate doubt, VCI shall provide Client with SDK upon Acceptance of the Initial Version by Client in accordance with Section 2.5 (f). VCI hereby reserves for itself all rights in and to the VCI Materials not expressly granted to Client . In no event shall Client use any trademarks or servicemarks of VCI without VCI's prior written consent. Such license to use VCI Materials shall survive the termination of this Agreement (provided that VCI has not terminated the Agreement pursuant to a decision under section 12.8 herein) except with respect to licenses for those elements incorporated in the Client Web Site which were licensed to VCI on the condition such elements be used only on web sites residing on VCI's server. In the event that the Client's Web Site is removed therefrom as a result of termination or otherwise, Client shall be responsible for obtaining such licenses directly from the licensors thereof or Client shall remove such elements from the Client Web Site upon removal of the Client's Web Site from the Host Server.


5. Client Content


5.1. Accuracy and Review of Client Content. Client assumes sole
------------------------------------- responsibility for (a) acquiring any authorization necessary for use of the Client Content on the Web Site, (b) acquiring any authorization(s) necessary for hypertext links to third party Web sites and (c) the accuracy of materials provided to VCI, including, without limitation, Client Content, descriptive


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claims, warranties, guarantees, nature of business, and address where business is conducted and (d) ensuring that the Client Content does not infringe or violate any right of any third party.


5.2 Limitations on Client Content. Client shall provide Client Content
----------------------------- that to the best of Client's knowledge does not contain any content or materials which infringe on or violate any applicable law or regulation or any proprietary, contract, moral, privacy or other third party right, or which otherwise exposes VCI to civil or criminal liability. The delivery of any materials by Client to VCI which do not satisfy the foregoing requirements in this Section 5.2 shall be deemed to be a material breach of this Agreement.


6. Fees and Taxes


6.1. Web Site Services Fees. In consideration for the Web Site Services to
---------------------- be rendered by VCI, Client shall pay to VCI the fees identified in Exhibit 4 in
--------- accordance with the terms and payment schedule set forth therein.


6.2. Maintenance Fees. To the extent that VCI is to provide Maintenance
---------------- under Exhibit 2, Client shall pay to VCI the fees identified in Exhibit 2 in
--------- --------- accordance with the terms and payment schedules set forth therein.


6.3. Change Orders and Order Forms. To the extent that VCI is to perform
----------------------------- services under Change Orders or Order Forms pursuant to Section 2 hereof, Client shall pay VCI for all fees for such Change Orders and Order Forms as indicated thereon.


6.4. Additional Services Fees. To the extent that VCI is to provide
------------------------ Additional Services under Exhibit 2, Client shall pay VCI for all fees for
--------- Additional Services on a time and materials basis, as invoiced by VCI.


6.5. Invoices and Late Payment. VCI shall bill Client quarterly for all
------------------------- fees due for Services rendered, provided that: (i) Maintenance fees contemplated by Section 6.2 hereof shall be billed and paid quarterly in advance; and (ii) all fees specifically itemized on Exhibit 4 shall not be billed, and are due and
--------- payable upon the date set forth therein.. All VCI invoices are due and payable upon receipt. If Client fails to pay any fees when due, late charges of the lesser of one and one half percent (1 1/2%) per month or the maximum allowable under applicable law shall also become payable by Client to VCI. In addition, Client acknowledges and agrees that the failure of Client to fully pay any fees within ten (10) days after the applicable due date shall be deemed a material breach of this Agreement, and VCI shall not be liable to Client or any third party for missing any agreed upon deadlines as a result of any delays or otherwise as set forth in Section 9 hereof. To eliminate doubt, such material breach of the Agreement shall not entitle VCI to unilaterally suspend performance of the Services, rather the parties shall refer to arbitration to settle such dispute in accordance with Section 12.8 herein. Any such breach does not relieve Client from paying past due fees plus interest and in event of collection enforcement, Client shall be liable for any costs associated with such collection, including, but not limited to, legal costs, attorney's fees, court costs, and collection agency fees.


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6.6. Taxes. Client shall pay, or promptly reimburse, VCI for all sales,
----- use, tr ...