Strategic Development Agreement (8/31/2001)

Exhibit 10.4


[*] PORTIONS OF THIS EXHIBIT HAVE BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


STRATEGIC DEVELOPMENT AGREEMENT
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BETWEEN iPRINT TECHNOLOGIES AND WOOD ASSOCIATES
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THIS AGREEMENT (the "Agreement") is made and entered into as of this 30th day of August, 2001 (the "Effective Date") by and between iPrint Technologies, inc. ("iPrint"), a Delaware Corporation with its headquarters located at 255 Constitution Drive, Menlo Park, CA 94025 and Wood Alliance, Inc., d/b/a Wood Associates ("WA"), a California corporation with its principal office at 3073 Corvin Drive, Santa Clara, CA 95051.


WHEREAS, WA would like to engage iPrint to provide certain Internet-related services as described herein; and


WHEREAS, iPrint would like to provide such services to WA, subject to and in accordance with the terms and conditions set forth herein;


NOW, THEREFORE, in consideration of the mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, iPrint and WA (referred to herein individually, as a "Party" and collectively, as the "Parties") hereby agree as follows:


1. Definitions


All defined terms in this Agreement shall have the meaning assigned to them herein. All definitions shall apply both to their singular or plural forms, as the context may require. "Days" shall mean calendar days, unless otherwise specified. All references to "Paragraph" shall refer to paragraphs of this Agreement, unless otherwise specified.


1.1 "Additional Entities" means all Customers other than the ones listed in
Exhibit B attached hereto and incorporated herein by this reference.


1.2 "Affiliate" means, with respect to either Party, a third party directly
or indirectly controlling, controlled by, or under common control with such
Party. For purposes of this definition, "control" shall mean ownership of a
majority of the voting shares or voting interests of a third party.


1.3 "WA Content" means any and all Content owned or licensed by WA and
provided by WA to iPrint hereunder, including, without limitation,
Merchandise Catalog Items.


1.4 "Customers" means any client that contracts with WA to activate a
branded iPrint licensed Store.


1.5 "Consumer" means any visitor on WA Site that purchases a Product
through the Store.


1.6 "Company Store" means an internal Store or eStorefront which will
allows Customer's employees or certain designated persons to purchase
Customer-specific Products and is a simple, static electronic catalog
e-commerce website with no more than 100 products with approximately the
same functionality as existing WA Company Stores. (See Exhibit C for
specification.)


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1.7 "WA Marks" means any and all Marks owned or licensed by WA and
provided by WA to iPrint hereunder.


1.8 "Content" means data, text, graphics, pictures, artwork, designs,
sound, graphics, logos, symbols, video, streaming video / audio clips,
articles, original works, original writings, and other textual,
audiovisual, and multimedia items.


1.9 "Entities" means the Additional Entities and Initial Entities,
collectively.


1.10 "Initial Entities" means the list of Customers in Exhibit B.


1.11 "Intellectual Property Rights" means, on a world-wide basis, any and
all now known or hereafter known tangible and intangible (a) rights
associated with works of authorship including, without limitation,
copyrights, moral rights and mask-works, (b) trademark and trade name
rights and similar rights, (c) trade secret rights, (d) patents, designs,
algorithms and other industrial property rights, (e) all other intellectual
and industrial property rights of every kind and nature and however
designated, whether arising by operation of Law, contract, license or
otherwise, and (f) all registrations, initial applications, renewals,
extensions, continuations, divisions or reissues thereof now or hereafter
made, existing, or in force (including any rights in any of the foregoing).


1.12 "Law" means any law, statute, ordinance, rule, regulation, judgment,
decree, requirement, order, procedure, or public policy of any national,
federal, regional, state, or local governmental body, department, or
agency.


1.13 "Link" means an identifying logo and/or graphic(s) button whereby
users may directly traverse from one web site to another by clicking the
pointer icon on such logo and/or button.


1.14 "Marks" means names, trademarks, service marks, trade names, service
names, logos, icons, graphic images, and other such items.


1.15 "Merchandise Catalog Items" means the Products and any and all related
text descriptions, product pictures, illustrations, information, graphics,
streaming audio / video clips, digital pictures, prices, sizes, logos,
designs, and color schemes.


1.16 "Products" means any and all products and/or services of WA which are
marketed, promoted, offered for sale, sold, purchased and/or distributed
through the Store hereunder.


1.17 "iPrint Content" means any and all Content owned or licensed by iPrint
and provided by iPrint to WA hereunder. iPrint Content does not include
Content placed by a Consumer on any website developed, managed, supported
or hosted by iPrint.


1.18 "iPrint Marks" means any and all Marks owned or licensed by iPrint and
provided by iPrint to WA hereunder.


1.19 "iPrint Site" means the Internet website owned by iPrint and all
successors thereto.


1.20 "iPrint Tools" means any and all Tools which iPrint has independently
or previously developed or licensed from a third party, or which iPrint
develops or licenses from a third party, whether in connection with this
Agreement or otherwise.


1.21 "Related Parties" means any and all directors, officers, shareholders,
employees, representatives, consultants, and agents of an individual or
entity.


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1.22 "Services" means the set-up, management, and support provided by
iPrint for a Customer's Store, including providing the software and
hardware environment.


1.23 "Store" or "eStorefront" means the software functionality developed
and installed by iPrint hereunder, which will allow Consumers to purchase
Products, as further described herein and in Exhibit C attached hereto.


1.24 "Tool Box" and "Builder" means the software application, templates,
and mechanism containing iPrint's Tools which WA may use to build
individual eStorefronts for its Customers pursuant to the terms and
conditions of this Agreement.


1.25 "Tools" means any and all software and tools and any modifications,
enhancements or updates thereto, both in object code and source code form,
including, without limitation, subroutines, command structures, algorithms,
processes, design and coding, menus, development tools and programming
techniques, search engines and techniques, toolbars, Java applets, and
ActiveX controls.


2. iPrint Obligations


2.1 Scope of Services. iPrint shall set-up, manage, and support Customer
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Company Stores as more particularly set forth in Exhibit C.


2.2 Development of ASP Solution. Allow WA access to and the use of
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iPrint's future administrative template/tool which will allow WA to input
data into iPrint's ASP solution ("ASP Solution") in a way that WA can
create and deploy additional e-storefront's similar to the Initial Entity's
describe above with minimal supplemental deployment services of iPrint;


2.3 Maintenance and Support of ASP Solution. Offer WA product management
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services consistent with iPrint's planned ASP offering for Entities'
e-storefronts (including product management tools and product data
architecture). Supplemental deployment assistance for new e-storefront's
created by WA with the administrative template/tool described above.


2.4 Hosting. Offer application and network hosting services for the
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Initial Entities' e-storefronts and all subsequent e-storefronts launched
by WA using iPrint's ASP Solution within the term of this Agreement. This
includes a physical hosting facility, network connectivity, necessary
software and hardware purchases, installation and configuration of hardware
and software, management of hardware and software, and web site visitor
data reporting.


2.5 Method for Performing Services; Nonexclusivity. iPrint shall, in its
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sole discretion, determine the method, details, and means of performing the
Services hereunder, in accordance with the terms and conditions of this
Agreement. iPrint, in its sole discretion, may engage subcontractors to
perform any of the Services provided hereunder. iPrint shall have the
right, in its sole discretion, to directly or indirectly market, promote,
offer, sell, provide, and make available any products, services and/or
deliverables to other parties, including, without limitation, to any
individual or entity that directly or indirectly competes with WA,
regardless of whether such products, services and/or deliverables are the
same as or similar to any products, Services and/or deliverables provided
by iPrint hereunder.


2.6 Changes to Exhibit C.
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(a) Notwithstanding anything to the contrary expressed or
implied by this Agreement or any Exhibit hereto, no
changes to Exhibit C (whether in original or amended
form) shall become effective unless and until the Parties
execute a revised Exhibit C (whether in original or
amended form), numbered "C-2", "C-3", etc. and describing
such changes and


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their impact on the affected Exhibit. iPrint shall have no
obligation to perform any Services described in any proposed
or requested revisions to Exhibit C (whether in original or
amended form), unless and until such revised Exhibit has
been executed by both Parties.


(b) If, during the term of this Agreement, WA wishes to
implement any changes that deviate in any material respect
from Exhibit C (whether in original or amended form), WA
shall submit the requested changes to iPrint in a writing
specifying such changes in detail. iPrint shall review such
requested changes and, if such requested changes are
acceptable to iPrint, shall submit to WA a written proposal
for implementing such requested changes, including, without
limitation, any price or schedule changes. WA shall have
five (5) business days from receipt of iPrint's proposal to
accept or reject such proposal in writing. Upon WA's
acceptance of such proposal, the Parties shall execute a
revised Exhibit C (whether in original or amended form), as
provided in Paragraph 2.3(a).


(c) If an event occurs during the term of this Agreement which
is beyond iPrint's reasonable control and which would affect
iPrint's performance of its obligations hereunder or under
Exhibit C (whether in original or amended form), including,
without limitation, with respect to performance or delivery
schedule or pricing (a "Material Change"), iPrint shall, as
soon as practicable after becoming aware of such Material
Change, submit iPrint's proposed changes to this Agreement
or Exhibit C (whether in original or amended form) to WA in
writing. Notwithstanding anything to the contrary expressed
or implied by this Agreement or any Exhibit hereto, in no
event shall iPrint be penalized or held liable for any
Material Change, and any failure or delay by iPrint in
meeting the applicable performance or delivery schedule
hereunder or under Exhibit C (whether in original or amended
form) (the "Schedule") due to a Material Change caused, in
whole or in part, by WA's failure or delay in performing any
of its obligations under this Agreement and/or such Exhibit
(a "Delay"), shall result in an automatic extension of such
Schedule by the period of such Delay, plus any additional
time period reasonably necessary due to such Delay.


2.7 iPrint's Marks and Logo Display. While this Agreement is in effect, WA
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shall use best efforts to obtain from its Customers for iPrint the right to
display its logo Link on each Entity Store, identifying iPrint as the
E-Commerce services provider for the Store. While this agreement is in
effect, WA shall have no right to move, modify, edit, reduce, remove, or in
any way change iPrint's logo Link without iPrint's express prior written
consent.


2.8 Upgrade Notification. In the event that iPrint materially upgrades the
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Tools running the Entity Stores, then iPrint shall notify WA in writing of
whether such upgrades are required or optional thirty (30) days in advance
of the scheduled upgrade, and shall disclose to WA whether or not there is
any impact on the customization of the Entity Stores.


3. WA Obligations


3.1 WA will contract with iPrint to exclusively build and maintain at least
fifty (50) Fortune 1000 Company Stores, unless mutually agreed upon in
writing otherwise for specific Entity/Company Store exceptions. WA will
grant to iPrint the exclusive right to build, manage, or maintain any
additional Entity/Company Store or e-commerce websites upon the same terms
as contemplated in this Agreement until the term of this Agreement is
complete, unless also mutually agreed upon in writing otherwise for
specific Entity/Company Store exceptions.


3.2 All agreements between WA and its Customers for the establishment and
maintenance of a Entity/Company Store or e-commerce websites shall be in
writing and shall include the terms and conditions


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of iPrint's standard Corporate Site agreement attached in Exhibit D to
protect iPrint Content, iPrint Marks, Tool Box, iPrint Tools, and any other
iPrint technology provided to Customer. No Customer of WA shall be granted
access to the ASP Solution. If a breach of any terms of such agreement
occurs, then WA shall take prompt, corrective action to remedy the breach
and shall, in addition, notify iPrint in writing of the breach and the
corrective action taken. In the event that any Customer ceases to be
entitled to use of a Entity/Company Store or e-commerce websites shall take
immediate action to remove the website or notify iPrint to remove the
website. WA will indemnify and hold iPrint harmless from any and all
losses, damages, costs and expenses arising, whether directly or
indirectly, from WA's failure to comply with the provisions of this Section
3.2.


3.3 WA agrees to use best efforts to provide iPrint with sales and
marketing support to expand Entities/Company Stores from supplying
promotional products to also supply paper-based products. WA agrees that
iPrint will have exclusive access to all of WA's paper-based products
Customers and WA will not work with any other paper-based product company
within these accounts.


3.4 Upon the earlier of (i) WA's payment to iPrint of all outstanding
principal and interest under the Loan and Security Agreement between iPrint
and Wood dated August 30, 2001 (the "Loan"), or (2) the aggregate total
payments made to iPrint pursuant to this Agreement equalling or exceeding
ten million dollars ($10,000,000), WA's obligations under paragraphs 3.1,
3.3, 3.5, 3.6, 3.7 shall terminate and WA will be released from any and all
obligations thereunder.


3.5 If Wood defaults on its Strategic Development Agreement obligations and
if the total number of transferred stores is less than 50 at the time of
default or by the end of the term, Wood may, at Wood's sole option, either
use its best efforts to continue transferring in a timely manner an
additional number of its top ranked (by sales volume) and active (recent
sales and frequency) Fortune 1000 Company Store accounts to iPrint until
iPrint is servicing a minimum of 50 Fortune 1000 Company Stores or Wood
will pay iPrint the two thousand dollar ($2,000) development fee per
delinquent Entity/Company Store within thirty days (30) notice.


3.6 If Wood defaults on its Strategic Development Agreement obligations and
has ceased operations in Company Stores, Wood will use its best efforts to
transfer in a timely manner all ownership of Company Stores and underlying
corporate relationship to iPrint such that iPrint can continue servicing
the promotional requirements of all Company Store accounts. If the total
number of transferred stores is less than 50 at the time of default, Wood
may, at iPrint's sole option, either use its best efforts to continue
transferring in a timely manner an additional number of its top ranked (by
sales volume) and active (recent sales and frequency) Fortune 1000 Company
Store accounts to iPrint until iPrint is servicing a minimum of 50 Fortune
1000 Company Stores or Wood will pay iPrint the two thousand dollar
($2,000) development fee per delinquent Entity/Company Store within thirty
days (30) notice as decided solely by iPrint.


3.7 If Wood defaults on its Loan and Security Agreement, Wood will use its
best efforts to transfer in a timely manner all ownership of Company Stores
and underlying corporate relationship to iPrint such that iPrint can
continue servicing the promotional requirements of all Company Store
accounts. If the total number of transferred stores is less than 50 at the
time of default or by the end of the term, Wood may, at iPrint's sole
option, either use its best efforts to continue transferring in a timely
manner an additional number of its top ranked (by sales volume) and active
(recent sales and frequency) Fortune 1000 Company Store accounts to iPrint
until iPrint is servicing a minimum of 50 Fortune 1000 Company Stores or
Wood will pay iPrint the two thousand dollar ($2,000) development fee per
delinquent Entity/Company Store within thirty days (30) notice as decided
solely by iPrint.


3.8 WA Content and WA Marks. WA shall, in a timely manner, provide iPrint
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with any and all WA Content and WA Marks necessary for the implementation
of this Agreement, in the format(s) specified by iPrint from time to time
in its sole discretion.


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3.9 Advisory Counsel Obligations. WA agrees that it shall designate
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one senior level executive from its organization (the "Designee") to
serve on iPrint's Advisory Counsel, in order to assist iPrint in
providing quality services to its clients.


3.10 Case Studies. iPrint shall not conduct a Case Study on any
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Customer without its prior written permission. Notwithstanding the
foregoing, and upon request by iPrint, WA shall request both permission
and reasonable assistance from any specified Entity, so that iPrint may
conduct a Case Study on such Customer.


3.11 Additional Obligations. In addition to any payment or other
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obligations imposed on WA under this Agreement and/or any incorporated
Exhibits herein, WA shall: (a) provide iPrint with any and all
information and assistance, and make available and provide access to
facilities, resources, and personnel, as may be reasonably requested by
iPrint from time to time in order for iPrint to perform its obligations
hereunder; (b) provide all WA Content and WA Marks necessary for iPrint
to perform its obligations hereunder, in accordance with the applicable
agreed-upon delivery schedule and the format(s) specified by iPrint
from time to time in its sole discretion; and (c) cooperate with any
other reasonable iPrint request to enable iPrint to perform its
obligations hereunder. Any charges or expenses incurred by iPrint,
pre-approved in writing with WA not unreasonably withheld, due to any
delay or otherwise due to WA's failure to perform any of its
obligations under this Agreement and/or any Statement of Work shall be
paid by WA.


4. Payment


4.1 Fees. In consideration of the Services to be performed hereunder,
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WA shall compensate iPrint in accordance with the rate and payment
schedule set forth in Exhibit A. iPrint may suspend performance at any
time in the event of WA's failure to timely pay fees due hereunder if
(1) iPrint has given WA written notice of such failure to pay and (2)
WA fails to make such payment within five (5) days of receipt of such
written notice.


4.2 Expenses. In addition, iPrint shall invoice WA for reasonable
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out-of-pocket non-overhead costs and expenses incurred in the course of
iPrint's performance of its obligations hereunder (as evidenced by
appropriate receipts or other documentary evidence), including, without
limitation, travel, meals, and lodging, and material and supply costs,
at cost. All estimated out-of-pocket non-overhead expenses including
travel, meals and lodging must be pre-approved by WA in writing.


4.3 Invoices. All invoices submitted to WA hereunder shall be sent to
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the following address: 3073 Corvin Drive Santa Clara, CA 95051. All
invoices are due and payable thirty (30) days after receipt thereof.
All payments made to iPrint hereunder shall be sent to the following
address: 255 Constitution Drive, Menlo Park, CA 94025.


4.4 Taxes; Late Payment. WA shall pay all sales, use, excise and other
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taxes, duties and tariffs that may be levied upon either Party in
connection with this Agreement, except for taxes based on iPrint's net
income. WA shall reimburse iPrint for all reasonable costs incurred by
iPrint in connection therewith, including, without limitation, attorney
fees and collection fees.


5. Term and Termination


5.1 Initial Term. This Agreement will continue in full force and
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effect for a period of two (2) calendar years commencing from the
Effective Date hereof (the "Initial Term"), unless otherwise terminated
by either Party as provided herein.


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5.2 Renewal Term. After the Initial Term, this Agreement shall
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automatically renew for successive one (1) year terms (the "Renewal
Terms"), unless one of the Parties, no later than ninety (90) days
prior to the end of the Initial Term or any Renewal Term, gives written
notice to the other Party that this Agreement shall terminate at the
end of the Initial Term or such Renewal Term (as applicable).


5.3 Termination for Breach. Either Party may terminate this Agreement
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at any time prior to the end of the Initial Term or any Renewal Term,
upon thirty (30) days' prior written notice to the other Party
(specifying in reasonable detail the nature of the material breach), if
such other Party materially breaches any term or condition of this
Agreement and fails to cure such breach within such thirty (30) day
period.


5.4 Termination For Convenience. Either Party may terminate this
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Agreement, without cause, at any time after the Initial Term by
providing the other Party with a least one hundred and eighty (180)
days' prior written notice of such Party's intent to terminate, without
any obligation or liability for doing so, except as provided in
Paragraph 5.5.


5.5 Effects of Termination. Promptly upon the notice of termination of
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this Agreement for any reason: (i) WA shall pay to iPrint any and all
amounts then due and outstanding in connection with any applicable
Services performed hereunder through the effective date of termination
(last day of service); (ii) all rights and licenses granted hereunder
and all obligations and covenants imposed hereunder shall cease, except
as otherwise expressly set forth herein; (iii) WA shall dismantle all
Customer Stores and erase all Customer Stores from its server; (iv)
each Party shall: (A) stop using all Confidential Information, Marks,
Content and/or Tools (as applicable) of the other Party then under its
possession or control; (B) erase or destroy all such Confidential
Information, Marks, Content and/or Tools residing in any computer
memory or data storage apparatus; and (C) at the option of such other
Party, either destroy or return to such other Party all ...