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* The confidential portion has been so omitted
and filed with the Commission.
EXHIBIT 10.12
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CONFIDENTIAL
INTERACTIVE MARKETING AGREEMENT
This Interactive Marketing Agreement (the "Agreement"), dated as of
December 22 1999 (the "Effective Date"), is between ICQ, Inc. ("ICQ"), a
Delaware corporation, with offices at 00000 XXX Xxx, Xxxxxx, Xxxxxxxx 00000, and
Xxxxxxxxxxxx.xxx Inc. ("Marketing Partner" or "MP"), a Delaware corporation,
with offices at 0000 X Xxxxxx, X.X. 0xx Xxxxx Xxxxxxxxxx, X.X. 00000. ICQ and MP
may be referred to individually as a "Party" and collectively as the "Parties."
INTRODUCTION
ICQ and MP each desires to enter into an interactive marketing
relationship whereby ICQ will promote and distribute an interactive site
referred to (and further defined) herein as the Affiliated MP Site and services
related thereto. This relationship is further described below and is subject to
the terms and conditions set forth in this Agreement. Defined terms used but not
defined in the body of the Agreement will be as defined on Exhibit B attached
hereto.
TERMS
1. PROMOTION, DISTRIBUTION AND MARKETING.
1.1. ICQ PROMOTION OF MP AREAS. ICQ will provide MP with the
Promotions described herein in the areas specified in Exhibit A.
Subject to MP's reasonable approval, ICQ will have the right to
fulfill its promotional commitments with respect to any of the
foregoing by providing MP comparable promotional placements in
appropriate alternative areas of the ICQ Network so long as such
alternative areas have demographic and audience reach comparable
to the ICQ Service . In addition, if ICQ is unable to deliver any
particular Promotion, ICQ will work with MP to provide MP, as its
sole remedy, a comparable promotional placement. ICQ reserves the
right to redesign or modify the organization, structure, Look and
Feel navigation and other elements of any part of the ICQ Network
at any time, including without limitation, by adding or deleting
channels, subchannels and/or screens and/or making fundamental
changes to the look and feel, navigation or other elements of the
ICQ Service. In the event such modifications materially and
adversely affect any specific Promotion, ICQ will work with MP to
provide MP, as its sole remedy, a comparable promotional
placement. Except to the extent expressly described herein
(including but not limited to in Exhibit A), the exact form,
placement, integration and nature of such Promotions shall be
determined by ICQ in it's reasonable editorial discretion. As
used throughout this Agreement, the phrases "comparable
promotional placements" or "comparable promotions" shall mean
placements which are of comparable overall value, to be
determined based on a variety of factors, including size,
quality, type (e.g., integrated or banner), location (i.e., page
or screen and the subject matter thereof), demographically
targeted relevance, and audience reach (taking into account the
targeted nature of the placement). The Parties agree that
comparable placements for integrated promotional placements shall
be other integrated placements.
1.2. IMPRESSIONS COMMITMENT. During the Term, ICQ shall deliver *
Impressions to MP through the Promotions, as described on Exhibit
A (the "Impressions Commitment"). With respect to the Impressions
targets specified on Exhibit A, ICQ will not be obligated to
provide in excess of any Impressions target amounts in any year.
In the event ICQ provides an excess of any annual Impressions
target amounts in any year, the Impressions target for the
subsequent year will be reduced by the amount of such windfall.
Any shortfall in Impressions at the end of a year will not be
deemed a breach of the Agreement by ICQ; instead such shortfall
will be added to the Impressions target for the subsequent year.
In the event there is (or will be in ICQ's reasonable judgment) a
shortfall in Impressions as of the end of the Initial Term (a
"Final Shortfall"), ICQ will
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provide MP, with advertising placements through "run of service"
advertising on the ICQ Network which have a total value, based on
the advertising rate applicable to this Agreement, equal to the
value of the Final Shortfall (determined by multiplying the
percentage of Impressions that were not delivered by the
guaranteed payment attributable for such promotions provided for
below).
1.3. INTEGRATED PROMOTIONAL PLACEMENTS. In addition to the Impressions
described above, MP shall receive integrated Promotions within
the ICQ Service, as more fully described on Exhibit A attached
hereto (the "Integrated Placements"). Except to the extent
expressly described herein, such integration into the ICQ Service
shall be subject to standard ICQ policies on partner integration.
Except to the extent expressly described herein, the exact form,
placement, integration and nature of such Promotions shall be
determined by ICQ in it's reasonable editorial discretion.
1.4. CONTENT OF PROMOTIONS WITHIN THE ICQ NETWORK. Promotions for MP
will link only to the MP Areas and will promote only the MP
Services described on Exhibit D attached hereto (and shall not
promote any third party or any Interactive Service). The specific
MP Content to be contained within the Promotions (including,
without limitation, text within the advertising banners and
contextual promotions residing within the ICQ Network (the "Promo
Content")) will be determined by MP, subject to ICQ's technical
limitations, the terms of this Agreement and ICQ's
then-applicable policies relating to advertising and promotions
(and, in the case of the Integrated Placements, subject also to
the terms of Sections 1.3 and 2.1). MP will submit in advance to
ICQ for its review semiannually an online marketing plan with
respect to the Integrated Placements. The Parties will meet in
person or by telephone at least monthly to review operations and
performance hereunder, including a review of the Promo Content to
mutually agree if there are improvements that can be made to
enhance performance. MP will consistently update the Promo
Content on a regular basis. Except to the extent expressly
described herein, the specific form, placement, duration and
nature of the Promotions will be as determined by ICQ in its
reasonable editorial discretion (consistent with the editorial
composition of the applicable screens).
1.5 MP PROMOTION OF MP AREAS AND ICQ. MP will provide ICQ with the
promotions provided for on Exhibit C attached hereto. MP will not
implement or authorize any promotion similar in any respect
(including, without limitation, in scope, purpose, amount,
prominence or regularity) to the promotion required or provided
pursuant to Exhibit C for any other Interactive Service.
2. MP AREAS.
2.1 AFFILIATED MP SITE; CONTENT OF MP AREAS. MP will create a
customized, cobranded version of MP's primary Interactive Site to
be linked to the ICQ Network for the purpose of marketing and
promoting the sale of Products (the "Affiliated MP Site"). Except
as mutually agreed in writing by the Parties or as otherwise set
forth in this Agreement, the only products or services offered on
the Affiliated MP Sites or included within the Promo Content
(collectively the "MP Areas") will be the MP Products described
on Exhibit D. In addition, the Affiliated MP Sites shall comply
with the ICQ cobranding requirements set forth on Exhibit D. The
MP Areas will not in any respect, (i) except as expressly
permitted under this Agreement, promote, advertise, market or
distribute the products, services or content of any other
Interactive Service, or (ii) otherwise provide promotions,
advertisements, products or services which violate ICQ's
then-standard advertising or other policies, any third party
copyright, trademark, US patent, or any other third party right,
including without limitation, any music performance or related
music right, or any law, rule or regulation.
2.2 PRODUCTION WORK. Except as agreed to in writing by the Parties
pursuant to the "Production Work" section of the Standard Online
Commerce Terms & Conditions
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attached hereto as Exhibit F, MP will be responsible for all
production work and maintenance associated with the MP Areas,
including all related costs and expenses. ICQ will be responsible
for all operations and other support necessary to display the
Promo Content and otherwise meet its obligations under this
Agreement at no additional charge to MP.
2.3 HOSTING; COMMUNICATIONS. As described more fully in Exhibit E, MP
will be responsible for all communications, hosting and
connectivity costs and expenses associated with the Affiliated MP
Sites. MP will bear responsibility for the implementation,
management and cost of the Affiliated MP Site. MP will utilize a
dedicated high speed connection to maintain transport of
information to and from the MP data center and ICQ's designated
data center.
2.4 TECHNOLOGY. MP will take commercially reasonable steps necessary
to conform its promotion and sale of Services through the MP
Areas to the then-existing technologies identified by ICQ (with
reasonable advance notice to MP) which are optimized for the ICQ
Service. ICQ will be entitled to require reasonable changes to
the Content (including, without limitation, the features or
functionality) within any linked pages of the MP Areas to the
extent such Content will, in ICQ's good faith judgment, adversely
affect any operational aspect of the ICQ Network. ICQ reserves
the right to review and test the MP Areas from time to time to
determine whether the site is compatible with ICQ's
then-available ICQ client and host software and the ICQ Network.
2.5 SERVICE OFFERING. MP will include in the MP Areas substantially
similar Services and other Content (including, without
limitation, any features, offers, contests, functionality or
technology) that are then made available by or on behalf of MP
through any Additional MP Channel, except to the extent any such
Services or other Content are (i) subject to exclusive,
proprietary or other preferential obligations in favor of third
parties and such obligations cannot be reasonably duplicated for
ICQ or for which generally comparable benefits for ICQ Users
cannot be provided for ICQ, or (ii) are otherwise prohibited from
inclusion in the MP Areas pursuant to this Agreement; provided,
however, that (i) such inclusion will not be required where it is
commercially or technically impractical to either Party (i.e.,
inclusion would cause either Party to incur substantial
incremental costs or cause a breach of another agreement); and
(ii) the specific changes in scope, nature and/or offerings
required by such inclusion will be subject to the terms of this
Agreement.
2.6 PRICING AND TERMS. The prices, terms and conditions for Services
in the MP Areas shall be (i) no less favorable in any respect
than the prices, terms and conditions for the Services or
substantially similar Services offered by or on behalf of MP
through any Additional MP Channel (other than non-permanent
special offers offered through Additional MP Channels other than
xxx.xxxxxxxxxxxx.xxx, that cannot be reasonably duplicated for
ICQ Users) and (ii) in the aggregate generally competitive with
similarly situated Section 3.5 Entities in the same market space.
2.7 EXCLUSIVE OFFERS/USER BENEFITS. MP will (a) provide through the
MP Areas special promotions that are generally comparable to
promotions made available by or on behalf of MP through any
Additional MP Channel to the extent MP's agreements with third
parties permit it to do so; and (b) provide through the MP Areas
on a regular basis special promotions or other unique programming
and services exclusively available to ICQ Users (collectively,
the "Special Promotions"). Through such Special Promotions, MP
will be eligible for promotions in addition to the Promotions
described on Exhibit A. In the event that MP conducts a promotion
with another Interactive Service, MP will make available to ICQ
Users a Special Promotion providing a similar discount or benefit
to ICQ Users. MP will provide ICQ with reasonable prior notice of
Special Promotions so that ICQ can market the availability of
such Special Promotions in the manner ICQ deems appropriate in
its editorial discretion.
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2.8 OPERATING SUPPORT AND STANDARDS. ICQ will provide MP with the
operational support described on Exhibit E. The MP Areas shall
comply at all times with the standards and specifications set
forth in Exhibit E. To the extent site standards are not
established in Exhibit E with respect to any aspect or portion of
the MP Areas (or the Services or other Content contained
therein), MP will provide such aspect or portion at a level of
accuracy, quality, completeness, and timeliness which meets or
exceeds prevailing standards in the college textbook industry. In
the event MP fails to comply with the requirements of Exhibit E
attached hereto, (a) ICQ will have the right, as its sole remedy,
to decrease the Promotions it provides to MP until such time as
MP corrects its non-compliance (and in such event, ICQ will be
relieved of the proportionate amount of any promotional
commitment and/or cease any such integrated placements made to MP
by ICQ hereunder corresponding to such decrease in promotion).
Notwithstanding the foregoing, ICQ shall have the right to
terminate this Agreement in the event that the Affiliated MP Site
is non-operational for fourteen (14) days (counted in the
aggregate) during any six (6) month period.
2.9 TRAFFIC FLOW. It is the Parties' mutual intention to work
together and take reasonable efforts to keep ICQ Network traffic
either within the MP Areas or channeled back into the ICQ
Network. The Parties will work together on implementing mutually
acceptable links from the MP Areas back to the ICQ Network.
3 ICQ EXCLUSIVITY OBLIGATIONS.
3.1 During the term specified in Section 3.6 below, MP will be the
Exclusive College-Targeted Commerce Partner on the ICQ Service
and XXX.xxx.
3.2 During the term specified in Section 3.6 below, MP will be the
exclusive promoter, advertiser, marketer and distributor of
college textbooks expressly promoted on the ICQ Service and
XXX.xxx.
3.3 During the term specified in Section 3.6 below, ICQ may enter
into arrangements with an entity except any of the Section 3.5
Entities * on the ICQ Service and XXX.xxx, provided that no such
third party may (during such term) * .
3.4 During the term specified in Section 3.6 below, MP will be ICQ's
exclusive college marketing channel. Under this provision, MP
will be the exclusive promoter, advertiser, marketer and
distributor of the ICQ Service and XXX.xxx (other than ICQ
itself) on U.S. college campuses; provided, however, that this
provision shall not apply * .
3.5 The "Section 3.5 Entities" are: * .
3.6 The exclusivity obligations set forth in Sections 3.1, 3.2, 3.3
and 3.4 (subject to Section C of Exhibit C) above will commence
upon the Effective Date and continue until December 31, 2000.
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3.7 "Exclusive College-Targeted Commerce Partner" shall mean solely
that, except otherwise expressly permitted hereunder, ICQ will
not enter into any promotion, advertising, marketing or
distribution arrangement with any Section 3.5 Entity on the ICQ
Service or XXX.xxx.
3.8 The foregoing shall not preclude ICQ from (a) enabling
ICQ Users to access any website whatsoever, including websites
competitive with MP and/or covered by the foregoing exclusivity
through standard web access, personalization features or similar
means; (b) promoting a party through the ICQ service which
markets multiple products or services so long as the promotions
appearing on the ICQ Service for such party do not (x) promote
any of the products or services specified in Section 1 of Exhibit
D specifically to college students or (y) are not for textbooks.
Further (and without limiting any actions which may be taken by
ICQ without violation of MP's rights hereunder), no provision of
this Agreement will limit ICQ's ability (on or off the ICQ
Network) to (i) undertake activities or perform duties pursuant
to existing arrangements as of the Effective Date with third
parties (or pursuant to any agreements to which ICQ becomes a
party subsequent to the Effective Date as a result of Change of
Control, assignment, merger, acquisition or other similar
transaction to the extent necessary for ICQ to perform its
obligations under such agreements and provided that this clause
(i) will not limit from the rights of MP under this Agreement),
(ii) create editorial commentary relating to any third party
marketer of products or services covered by Sections 3.1 or 3.2
above, or (iii) post or allow ICQ Users to post Content,
messages, contextual links or editorial commentary relating to
any third party marketer of the Exclusive Service, to the extent
created by such ICQ User and not by ICQ.
4 PAYMENTS.
4.1 GUARANTEED PAYMENTS. MP will pay ICQ a non-refundable guaranteed
payment of Nine Million Dollars ($9,000,000) (the "Guaranteed
Payment Amount") as follows:
(i) * shall be paid on *
;
(ii) * shall be paid on *
;
(iii) * shall be paid on *
;
(iv) * shall be paid on *
;
(v) * shall be paid on *
;
(vi) * shall be paid on *
;
(vii) * shall be paid on *
;
(viii) * shall be paid on *
;
(ix) * shall be paid on *
;
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(x) * shall be paid on *
;
(xi) * shall be paid on *
;
(xii) * shall be paid on *
;
(xiii) * shall be paid on *
;
4.2 LATE PAYMENTS; WIRED PAYMENTS. All amounts owed hereunder not
paid when due and payable will bear interest from five days after
the date such amounts are due and payable at the prime rate in
effect at such time as published in the Wall Street Journal. All
payments required hereunder will be paid in immediately
available, non-refundable U.S. funds wired to the "America
Online" account, Account Number * at the Chase Manhattan
Bank, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000
(ABA:000000000) (with the following notation in the reference
field: "For credit to ICQ, Inc").
4.3 TAXES. MP will collect and pay and indemnify and hold ICQ harmless from
any sales, use, excise, telecommunication or similar tax
including any penalties and interest, as well as any costs
associated with the collection or withholding thereof, including
attorney's fees which arises out of any transaction between MP
and customers. ICQ will collect and pay and indemnify and hold MP
harmless from any sales, use, excise, internet access,
telecommunication or any other similar tax or fee solely to the
extent arising out of ICQ's operation of the ICQ Network,
including any penalties and interest, as well as any costs
associated with the collection or withholding thereof, including
attorney's fees which arises in connection with actions taken, or
transactions engaged in, by ICQ other than those taxes that
directly relate to any transaction between MP and its customers.
4.4 REPORTS.
4.4.1 Sales Reports. MP will provide ICQ in an automated manner
with a monthly report in a mutually agreeable format,
detailing the following activity in such period (and any
other information mutually agreed upon by the Parties or
reasonably required for measuring revenue activity by MP
through the Affiliated MP Site): (i) summary information
for sales generated through the Affiliated MP Site (i.e.,
total aggregate transaction revenues); (ii) revenue by
category of promotion and product for such sales, and
(iii) purchaser name and screenname for such sales
(collectively, "Sales Reports"). ICQ will be entitled to
use the Sales Reports in its business operations, subject
to the terms of this Agreement; provided, however, that
ICQ agrees that (a) such Sales Reports will contain
Confidential Information and such information shall only
be disclosed in aggregate reports which do not identify or
segregate information provided by MP, and (b) ICQ will not
use the information contained in such Sales Reports to
target advertisements, promotions or any other
communications of any party to MP's customers .
4.4.2 Usage Reports. ICQ shall provide MP with standard monthly
usage information related to the Promotions (e.g., a
schedule of the Impressions delivered by ICQ at such time)
which are similar in substance and form to the reports
provided by ICQ to other interactive marketing partners
similar to MP. The information shall be
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subject to third-party audit in accordance with ICQ's
routine business practice and ICQ shall provide MP with a
summary of all results of such audits upon request.
4.4.3 Fraudulent Transactions. To the extent permitted by
applicable laws, MP will provide ICQ with a report of any
fraudulent order made through the Affiliated MP Site,
including, if practicable, the date, screenname or email
address and amount associated with such order, promptly
following MP obtaining knowledge that the order is, in
fact, fraudulent.
5 TERM; RENEWAL; TERMINATION.
5.1 Term. Unless earlier terminated as set forth herein, the initial
term of this Agreement will be three (3) years from the Effective
Date (the "Term").
5.2 Continued Links. Upon expiration of the Term, ICQ may, at its
discretion, continue to promote one or more "pointers" or
links from the ICQ Network to the homepage of MP and continue
to use MP's trade names, trade marks and service marks in
connection therewith (collectively, a "Continued Link"). So
long as ICQ maintains a Continued Link, (a) MP shall pay ICQ*
percent of gross revenue generated by ICQ Users, and (b)
Sections 4.3 and 4.4, along with the terms of Sections 7 and
8 of Exhibit F and the terms of Exhibit G hereto shall
continue to apply with respect to the Continued Link and any
transactions arising therefrom. Notwithstanding the
foregoing, in the event that ICQ materially and adversely
changes the nature of the ICQ Service after the Term, MP may,
upon written notice to ICQ, require that ICQ discontinue the
Continued Link.
5.3 Termination for Breach. Except as expressly provided elsewhere
in this Agreement, either Party may terminate this Agreement
at any time in the event of a material breach of the Agreement
by the other Party which remains uncured after thirty (30)
days written notice thereof to the other Party (or such
shorter period as may be specified elsewhere in this
Agreement); provided that the cure period with respect to any
scheduled payment will be fifteen (15) days from the date for
such payment provided for herein, regardless of when notice is
given to MP.
5.4 Termination for Bankruptcy/Insolvency. Either Party may
terminate this Agreement immediately following written notice
to the other Party if the other Party (i) ceases to do
business in the normal course, (ii) becomes or is declared
insolvent or bankrupt, (iii) is the subject of any proceeding
related to its liquidation or insolvency (whether voluntary or
involuntary) which is not dismissed within ninety (90)
calendar days or (iv) makes an assignment for the benefit of
creditors.
5.5 Termination on Change of Control. In the event of (i) prior to
MP's initial public offering of its common stock (the "IPO"),
any Change of Control of MP, (ii) after the IPO, any Change of
Control of MP, if such Change of Control results in any
Interactive Service, or other entity reasonably competitive to
AOL or ICQ, obtaining a controlling interest in MP,or (ii) a
Change of Control of ICQ or AOL, ICQ may terminate this
Agreement by providing thirty (30) days prior written notice
of such intent to terminate. In the event of a termination of
this Agreement pursuant to Section 5.5(iii), ICQ shall pay MP
a pro-rata refund of the Guaranteed Payment.
6 MANAGEMENT COMMITTEE/ARBITRATION.
6.1 Management Committee. The Parties meet to promptly resolve any
claim, dispute, claim, controversy or disagreement (each a
"Dispute") between the Parties or any of their respective
subsidiaries, affiliates, successors and assigns under or
related to this Agreement or any document executed pursuant to
this Agreement or any of the transactions contemplated hereby
within ten (10) days of written notice from one to the
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other of the Dispute. If the Parties cannot resolve the Dispute
within such time frame, the Dispute will be deemed to be
immediately submitted to the Management Committee (as defined
below) for resolution. For ten (10) days following such
submission of the Dispute to the Management Committee, the
Management Committee will have the exclusive right to resolve
such Dispute. If the Management Committee is unable to amicably
resolve the Dispute during the ten-day period, then the dispute
will be referred for the resolution mechanisms described below.
"Management Committee" will mean a committee made up of a senior
executive from each of the Parties for the purpose of resolving
Disputes under this Section 6 and generally overseeing the
relationship between the Parties contemplated by this Agreement.
Neither Party will seek, nor will be entitled to seek, binding
outside resolution of the Dispute unless and until the Parties
have been unable amicably to resolve the Dispute as set forth in
this Section 6 and then, only in compliance with the procedures
set forth in this Section 6.
6.2 Arbitration. Except for Disputes relating to issues of
proprietary rights, including but not limited to intellectual
property and confidentiality, any Dispute not resolved by
amicable resolution as set forth in Section 6.1 will be finally
settled by arbitration. Such arbitration will be conducted by the
American Arbitration Association ("AAA") in Washington, D.C. and
will be initiated and conducted in accordance with the Commercial
Arbitration Rules ("Commercial Rules") of the AAA, as such rules
will be in effect on the date of delivery of a demand for
arbitration ("Demand"), except to the extent that such rules are
inconsistent with the provisions set forth herein.
6.3 Selection of Arbitrators. The arbitration panel will consist
of three (3) arbitrators. Each Party will name an arbitrator
within ten (10) days after the delivery of the Demand. The two
(2) arbitrators named by the Parties may have prior relationships
with the naming Party, which in a judicial setting would be
considered a conflict of interest. The third arbitrator, selected
by the first two, should be a neutral participant, with no prior
working relationship with either Party. If the two arbitrators
are unable to select a third arbitrator within ten (10) days, a
third neutral arbitrator will be appointed by the AAA. If a
vacancy in the arbitration panel occurs after the hearings have
commenced, the remaining arbitrator or arbitrators may not
continue with the hearing and determination of the controversy,
unless the Parties agree otherwise.
6.4 Governing Law. The Federal Arbitration Act, 9 U.S.C. Secs.
1-16, and not state law, will govern the arbitrability of all
Disputes. The Federal Rules of Evidence will apply in toto. The
arbitrators may enter a default decision against any Party who
fails to participate in the arbitration proceedings.
6.5 Arbitration Awards. The arbitrators will have the authority
to award compensatory damages only. The award rendered by the
arbitrators will be final, binding and non-appealable, and
judgment upon such award may be entered by any court of competent
jurisdiction. The Parties agree that the existence, conduct and
content of any arbitration will be kept confidential and no Party
will disclose to any person any information about such
arbitration, except as may be required by law or by any
governmental authority or for financial reporting purposes in
each Party's financial statements.
6.6 Fees. Each Party will pay the fees of its own attorneys,
expenses of witnesses and all other expenses and costs in
connection with the presentation of such Party's case
(collectively, "Attorneys' Fees").
6.7 Non Arbitratable Disputes. Any Dispute that is not subject to
final resolution by the Management Committee or to arbitration
under this Section 6 or by law (collectively, "Non-Arbitration
Claims") will be brought in a court of competent jurisdiction in
the Commonwealth of Virginia. Each Party irrevocably consents to
the exclusive jurisdiction of the courts of the Commonwealth of
Virginia and the federal courts situated in the
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Commonwealth of Virginia, over any and all Non-Arbitration Claims
and any and all actions to enforce such claims or to recover
damages or other relief in connection with such claims.
6.8 Injunctive Relief. Either party will have the right to apply
at any time to a judicial authority for injunctive or other
interim or provisional relief, and will not by doing so be deemed
to have breached its agreement to arbitrate or to have affected
the powers reserved to the arbitrators.
7 COMPLIANCE WITH LAWS. Nothing herein shall be deemed to require either party
to violate any rule, law or regulation, including, without limitation, the
Securities Act of 1933 or the Securities Exchange Act of 1934. In the event
that a Party can demonstrate to the reasonable satisfaction of the other
Party that a provision herein would require it to violate any such rule, law
or regulation, then the Parties shall restate such provision so as to comply
with the applicable laws and regulations at issue, while maintaining, to the
maximum extent possible, the original effect of such provision (consistent
with the applicable legal and regulatory requirements).
8 PRESS RELEASES. Each Party will submit to the other Party, for its prior
written approval, which will not be unreasonably withheld or delayed, any
press release or any other public statement ("Press Release") regarding the
transactions contemplated hereunder; provided, however, that, following the
initial public announcement of the business relationship between the Parties
in accordance with the foregoing, either Party's subsequent factual
reference to the existence of a business relationship between the Parties
will not require the approval of the other Party. Notwithstanding the
foregoing, either Party may issue Press Releases and other disclosures as
required by law without the consent of the other Party and in such event,
the disclosing Party will provide at least five (5) business days prior
written notice of such disclosure. Because it would be difficult to
precisely ascertain the extent of the injury caused to the non-breaching
party, in the event of a material breach of this Section 8 that results in a
material and adverse effect on the non-breaching party, the non-breaching
party may elect to either (a) terminate this Agreement immediately upon
notice to the other Party (without the other Party having any cure period),
or (b) as liquidated damages, elect to modify the Impression Commitment
hereunder by fifteen percent (15%) (either an increase in Impressions if AOL
has materially breached the Agreement or a decrease in Impressions if MP has
materially breached the Agreement). The Parties agree that the liquidated
damages set forth are a reasonable approximation of the injury that would be
suffered by the non-breaching Party.
9 WARRANTS. In connection with the obligations of the Parties hereunder, and
subject to the provisions hereof, ICQ's obligations under this Agreement
shall be contingent upon MP's delivery within one day of the Effective Date
of (i) a Stock Subscription Warrant in the form of Exhibit H attached hereto
(the "Warrant Agreement") and (ii) an Investor Rights Agreement in a form
reasonably acceptable to ICQ.
10 EXHIBITS. All Exhibits attached hereto are each hereby made a part of this
Agreement.
[the next page is a signature page]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
ICQ, INC. XXXXXXXXXXXX.XXX INC.
By: /s/ ICQ, INC. By: /s/ XXXXXXXXXXXX.XXX INC.
---------------------------------- -----------------------------
Name Name:
Title: Title:
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EXHIBIT A
PLACEMENT/PROMOTION
By March 1, 2000, ICQ and MP will complete a detailed Program Plan ("the Plan")
for the integration of MP into the ICQ Service and on XXX.xxx which will detail
the schedule for the accomplishment of the Specifics which follow below. ICQ
will make available appropriate IT, marketing and operations personnel to work
on the Plan. MP will have the option to send relevant personnel to ICQ's Tel
Aviv offices to work on the development and implementation of the Plan. ICQ
will work in good faith with MP to maximize the placement of XxxxxxxXxxxx.xxx
banner promotions and Integrated Placements on XXX.xxx and within the ICQ
Service.
SPECIFICS: Subject to Sections 1.1 and 1.3 above, ICQ will:
- *. Integrated Placements within the ICQ Client will be * including, but
not limited to, (i) *, (ii) * (i.e., to the extent retailers are named MP
will always be named (except in the case of rotational placements, in
which case MP shall be included within all such rotations), and * (i.e.,
relating to a material offering of the Affiliated MP Site) *, and (iii) *.
The Integrated Placements described in this paragraph will appear on the
ICQ Service on or about *. Notwithstanding any provision hereof to the
contrary, at all times during the Term, * (i) in the case of fixed
placements, * and (ii) in the case of rotational placements, *.
- *. Such Placements will begin by January 14, 2000; provided that MP is in
compliance with the terms of this Agreement.
- * (featuring such MP Products as the Parties shall mutually agree), in
the appropriate channels on XXX.xxx which will be *. This feature will
not count toward the Impressions Commitment due under Section 1.2. So
long as MP has provided ICQ with all necessary materials to construct
such area, * will be operational by a mutually agreeable date.
- * (except to the extent permitted otherwise under Section 1.1 of the
Agreement) and *.
- * (served based on search terms).
- * (served based on URL terms).
- * - served to areas/topics relevant to MP.
- *
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*. This feature will be available on or about June 15, 2000 (the *).
Notwithstanding the foregoing, if the * is not delivered by the *,
ICQ shall extend the Term by a number of days equal to the difference
between the * and the actual date on which such * is delivered; provided,
however, that in no event shall the Term be extended for more than six (6)
months pursuant this provision and provided, further, that no extension of
the Term shall increase the number of Impressions to be delivered pursuant
to the Carriage Plan below. In the event that the * is not delivered prior
to January 15, 2001, MP shall have the right to terminate this Agreement
upon written notice to MP and receive a pro-rata refund of the Guaranteed
Payment and no further Warrant Shares (as defined in the Warrant
Agreement) shall vest after the date of such termination.
- *
- *. This feature and its use by ICQ users will not count toward the
Impressions Commitment due under Section 1.2.
- *
- *
- *
CARRIAGE PLAN (banner ads)
Year 1 Year 2 Year 3
Endemic * * *
Broad Reach * * *
*Endemic promotions include banner ads that are placed in or near relevant
portal channels, search results, co-browsing ads and web directory areas.
Placements on the Service and Integrated Placements do not impact the
impressions total due under Section 1.2.
13
EXHIBIT B
DEFINITIONS
The following definitions will apply to this Agreement:
ADDITIONAL MP CHANNEL. Any other distribution channel (e.g., an Interactive
Service other than ICQ) through which MP makes available an offering comparable
in nature to the MP Areas.
AFFILIATED MP SITE. "Affiliated MP Site" shall have the meaning set forth in
Section 2.1.
ALERTS. Any communication from MP directed at an ICQ User (whether by e-mail,
instant message, or otherwise) as a result of such ICQ User's expressly
requested opt-in to receive such communication, requested via an ICQ controlled
registration process, which such registration process (i) clearly and
prominently notifies all registrants of the nature and frequency of the
communications that will or may be received as a result thereof, and (ii)
requires such registrant to expressly reconfirm such election to receive such
communications, and which such communications each offer a clear and prominent
opportunity for such ICQ User to subsequently opt-out at any time.
(1) AOL. "AOL" shall mean America Online, Inc., a
Delaware corporation.
CHANGE OF CONTROL. (a) The consummation of a reorganization, merger or
consolidation or sale or other disposition of substantially all of the assets
of a party or (b) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1933, as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either (i) the then outstanding
shares of common stock of such party; or (ii) the combined voting power of the
then outstanding voting securities of such party entitled to vote generally in
the election of directors.
CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the
course of the Agreement, which is or should be reasonably understood to be
confidential or proprietary to the disclosing Party, including, but not limited
to, the material terms of this Agreement, information about ICQ Members
(including without limitation their ICQ number or other unique identifying
data), ICQ Users, and MP customers, technical processes and formulas, source
codes, product designs, sales, cost and other unpublished financial
information, product and business plans, projections, and marketing data.
"Confidential Information" will not include information (a) already lawfully
and non-confidentially known to or independently developed without use or
access to such information by the receiving Party, (b) disclosed in published
materials, (c) generally known to the public (through no breach of the
confidentiality obligations of this Agreement), or (d) lawfully and
non-confidentially obtained from any third party.
CONTENT. Text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data,
Services, advertisements, promotions, links, pointers and software, including
any modifications, upgrades, updates, enhancements and related documentation.
ICQ INTERACTIVE SITE. Any Interactive Site which is managed, maintained, owned
or controlled by ICQ or its agents.
14
ICQ LOOK AND FEEL. The elements of graphics, design, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with Interactive Sites within the ICQ Service or XXX.xxx.
ICQ MEMBERS. Any authorized user of the ICQ Service, including any sub-accounts
using the ICQ Service under an authorized master account.
ICQ NETWORK. *
ICQ SERVICE. *
ICQ USER. Any user of the ICQ Service, XXX.xxx or the ICQ Network.
XXX.XXX. *
IMPRESSION. User exposure to the applicable Promotion, as such exposure may be
reasonably determined and measured by ICQ in accordance with its standard
methodologies and protocols (including without limitation standard
impressions).
IMPRESSIONS COMMITMENTS. As defined in Section 1.2 hereof.
INTEGRATED PLACEMENTS. As defined in Section 1.3 hereof.
INTERACTIVE SERVICE. An entity offering one or more of the following: (i)
online or Internet connectivity services (e.g., an Internet service provider);
(ii) an interactive site or service featuring a broad selection of aggregated
third party interactive content (or navigation thereto) (e.g., an online
service or search and directory service) and/or marketing a broad selection of
products and/or services across numerous interactive commerce
15
categories (e.g., an online mall or other leading online commerce site); (iii)
a persistent desktop client; or (iv) communications software capable of serving
as the principal means through which a user creates, sends and receives
electronic mail or real time or "instant" online messages (whether by
telephone, computer or other means), including without limitation greeting
cards.
INTERACTIVE SITE. Any interactive site or area, including, by way of example
and without limitation, (i) an MP or ICQ site on the World Wide Web portion of
the Internet or (ii) a channel or area delivered through a "push" product such
as the Pointcast Network or interactive environment such as Microsoft's Active
Desktop or interactive television service such as WebTV.
LICENSED CONTENT. All Content offered through the MP Areas pursuant to this
Agreement or otherwise provided by MP or its agents in connection herewith
(e.g., offline or online promotional Content, Promotions, "slideshows", etc.),
including in each case, any modifications, upgrades, updates, enhancements, and
related documentation.
MP AREAS. The Affiliated MP Site and any portions of the Integrated Placements
which are managed, maintained, owned or controlled predominately by MP or its
agents (rather than by ICQ).
MP INTERACTIVE SITE. Any Interactive Site (other than the MP Areas) which is
managed, maintained, owned or controlled by MP or its agents.
MP PROGRAMMING. The (a) MP Areas and all Content thereon (including, without
limitation, Content within the stock ticker or any other Integrated
Placements, and any message boards, chat and other ICQ Member-supplied
content areas contained therein, if and to the extent permitted herein)
and (b) Licensed Content.
PROMOTIONS. Any of the promotions described herein (including without
limitation (a) (i) the standard Impressions described in Section 1.2, and (ii)
any Integrated Placements as described in Section 1.3 (in each case, as more
fully described on Exhibit A and including without limitation any advertising
banners, buttons, contextual promotions, searches or other promotions residing
within the ICQ Network, which may link to the MP Areas); (b) any Alerts or
other permitted communications as set forth herein; and (c) any comparable
promotions provided herein.
SERVICE. Any product, good or service which MP (or others acting on its behalf
or as distributors) offers, sells, provides, distributes or licenses to ICQ
Members directly or indirectly through (i) the MP Areas (including through any
Interactive Site linked thereto), (ii) any other electronic means directed at
ICQ Members (e.g., e-mail offers), or (iii) an "offline" means (e.g., toll-free
number) for receiving orders related to specific offers within the MP Areas
requiring purchasers to reference a specific promotional identifier or tracking
code.
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EXHIBIT C
MP CROSS-PROMOTION
A. "Try ICQ" Button. Within each MP Interactive Site (including without
limitation during any MP customer registration process), MP shall include a
prominent "Try ICQ" feature (at least 90 x 30 pixels or 70 x 70 pixels in
size) (the "ICQ Promo") through which users can obtain promotional
information about ICQ products or services mutually designated by both
Parties and download the then-current version of MP purposed client software
for such products or services. ICQ will provide the creative content to be
used in the ICQ Promo (including designation of links from such content to
other content pages), subject to the reasonable approval of MP. MP shall
post (or update, as the case may be) the creative content supplied by ICQ
within the spaces for the ICQ Promo within ten business days of its receipt
of such content from ICQ. Without limiting any other reporting obligations
of the Parties contained herein, MP shall provide ICQ with monthly written
reports specifying the number of impressions to the pages containing the ICQ
Promo during the prior month so long as it is technically feasible to do so.
In the event that ICQ elects to serve the ICQ Promo to the MP Interactive
Site from an ad server controlled by ICQ or its agent, MP shall take all
reasonable operational steps necessary to facilitate such ad serving
arrangement including, without limitation, inserting HTML code designated by
ICQ on the pages of the MP Interactive Site on which the ICQ Promo will
appear.
B. For the purposes of this Section B, the following definitions will apply:
"Tier 1 Communications Tools" means communications tools for e-mail, instant
messaging, and Internet search functionality.
"Tier 2 Communication Tools" means communications tools for yellow pages,
chat, calendaring, homesteading, and message board functionality.
MP will use commercially reasonable efforts to incorporate communication
tools provided by ICQ into the Affiliated MP Site to the extent MP elects to
offer corresponding communications functionality to users of the Affiliated
MP Site.
MP will not use any Instant Messaging tool other than one provided by ICQ.
With respect to the other Tier 1 Communications Tools, if MP elects to use
in the Affiliated MP Site a communications tool from a third party because
it is not commercially reasonable to implement a communication tool provided
by ICQ, then MP will not brand, or permit the provider of the tool to brand,
the service offered using the tool with the provider's brand, nor will MP
provide a link from the Affiliated MP Site to an Interactive Site of the
provider in connection with the service offered using the tool. With respect
to Tier 2 Communications Tools, if MP elects to use a communications tool
from a third party in the Affiliated MP Site because it is not commercially
reasonable to use a communications tool provided by ICQ, MP may co-brand the
service offered using the tool with the brand of the provider (provided that
the provider is not an Interactive Service with the exception of any entity
solely described by subsection (iv) of the definition of Interactive
Service) but will not link from the Affiliated MP Site to Interactive Sites
of the provider in connection with the service offered using the tool.
B. C. On-Campus Marketing Cross-Promotion
II. DELIVERABLES
By March 1, 2000, XxxxxxxXxxxx.xxx ("VB.C") and ICQ will have completed a
marketing and promotional campaign for ICQ/VB.C for the Year 2000 that
will include at least:
- * co-branded impressions
17
- At least * Promotional e-mails to VB.C customer base
- Permanent fixed position on VB.C
- At least * Promotional e-mails to VB.C affiliates
- At least * Inserts in VB.C boxes(1)
- Use of VB.C Campus Rep Network
The Campus Reps will perform the following marketing activities (or
some comparable marketing activity) on behalf of ICQ/VB.C:
- Postering
- Fliering
- Chalking
- Class Announcements
- Announcements to clubs, sports teams, fraternities/sororities and other
campus groups
- Distribution of premiums (premiums to be provided by ICQ at ICQ's
expense)
III.EXPENSES
VB.C will responsible for all costs associated with the impressions
(except for creative to be provided by ICQ); promotional e-mails to
customers and affiliates; the permanent fixed position on VB.C; and
inserts in VB.C boxes (except for cost of actual insert).
ICQ will make appropriate personnel available to help lead training
calls for the Campus Rep Network and to perform any other necessary
tasks to ensure the timely and successful roll-out of this campaign.
IV.TERMINATION
On June 1, 2000, the Parties will evaluate performance under the
co-marketing plan as described above (the "Plan") for a period of up
to seven (7) days. In the event that ICQ believes in good-faith that
the Plan (and/or the performance of the Plan) has not been reasonably
satisfactory to the marketing goals of ICQ, ICQ shall provide MP with
written notice of such. The Parties shall meet within seven (7) days
of such notice to discuss in good-faith an appropriate course of
action, and, in the event that the Parties are unable to mututally
agree on such appropriate course of action, ICQ may, prior to July 1,
2000, upon written notice to VB.C, terminate VB.C's exclusivity as its
exclusive college marketing channel. Such a termination election will
have no effect on any of ICQ's other obligations under the exclusivity
provision or any other provisions of this Agreement.
D. Communications Promos. In * of any online or offline promotions by MP or
over which MP exercises at least partial editorial control, when promoting
solely the communications aspects of MP (each, a "Communications Promo"),
MP will include specific references or mentions (verbally where possible)
of the ICQ Service (e.g., a reference to the availability of the ICQ
Service through the MP Areas or vice versa) during the period in which MP
is ICQ's exclusive college marketing channel . For purposes of this
paragraph, an "offline promotion" shall include without limitation, MP's
television, radio, print and "out of home" (e.g., buses and billboards)
advertisements and in editorial
----------------------------
(1) Inserts will be delivered as products are ordered.
18
content in any publications, programs, features or other forms of media
over which MP exercises at least partial editorial control.
19
EXHIBIT D
DESCRIPTION OF SERVICES AND OTHER CONTENT
1. Products and Services Which MP May Promote on the Affiliated MP Site.
MP may promote and offer any of the following products or services on the
Affiliated MP Site: *
On the homepage of the Affiliated MP Site, MP will only be able to
promote the categories of products or services identified as "Restricted" in
Section 2 (i) so long as the amount of Content on the homepage of the Affiliate
MP Site relating to such products or services is not significant relative to
the Unlimited Products or Services on the homepage, or (ii) is highlighted only
through the use of a tab or navigational icon which directs the user to another
page on the Affiliated MP Site or any MP Interactive Site.
2. Products and Services Which MP May Promote in the Promo Content.
MP may promote and offer only the Unlimited and Qualified Products or
Services identified below through the Promo Content for the duration specified
below. For the purposes of this Section 2:
"Unlimited Products or Services" means the following products or services
can be promoted or offered for the term of this Agreement: *
"Qualified Products or Services" means the following products or services
can be promoted or offered for the term of this Agreement until, and except to
the extent which, ICQ executes an agreement with a third party for the
exclusive promotion of any such product or service with another party on the
ICQ Service or XXX.xxx: *. ICQ will provide MP with reasonable advance written
notice of any such arrangement with a third party.
"Restricted Products or Services" means the following products or services
cannot be promoted or offered during the term of this Agreement: *.
3. CO-BRANDING REQUIREMENTS. The co-branded Affiliated MP Site shall be
operational by March 15, 2000 and MP shall display on each page of such site
headers and footers each of 600x30 pixel size consisting of creative content
provided by ICQ (subject to MP's approval, not to be unreasonably withheld,
conditioned or delayed).and containing both ICQ and MP branding and links to
the ICQ Network. The Parties agree that the home page of the Affiliated MP Site
shall reside on a joint URL structured in a manner to provide MP with user and
unique visitor credit (i.e., xxx.xxx.xxxxxxxxxxxx.xxx). Internal pages within
the Affiliated MP Site shall reside on a joint URL structured in a manner to
provide
20
ICQ with credit for time spent on the Affiliated MP Site (i.e.,
xxx.xxxxxxxxxxxx.xxx.xxx), unless such URL structuring would not be technically
feasible.
21
EXHIBIT E
OPERATING STANDARDS
1. Affiliated MP Site Infrastructure. Within a reasonable time after the
execution of this Agreement, ICQ will provide MP with the technical
requirements needed by MP to integrate the ICQ software referred to in this
Agreement into the Affiliated MP Site. MP will be responsible for all
communications, hosting and connectivity costs and expenses associated with
the Affiliated MP Site. MP will provide all hardware, software,
telecommunications lines and other infrastructure necessary to meet traffic
demands on the Affiliated MP Site from the ICQ Network. MP will design and
implement its connectivity to the Internet such that (i) no single component
failure will have a materially adverse impact on ICQ Users seeking to reach
the Affiliated MP Site from the ICQ Network and (ii) no single line will run
at more than 70% average utilization for a 5-minute peak in a daily period.
2. Optimization; Speed. MP will use commercially reasonable efforts to see
that: (a) the functionality and features within the Affiliated MP Site are
compatible with the client software then in use by ICQ Users; and (b) the
Affiliated MP Site is designed and populated in a manner that minimizes
delays when ICQ Users attempt to access such site. At a minimum, MP will
ensure that the Affiliated MP Site's data transfers initiate within fewer
than fifteen (15) seconds on average; except where such inability is due to
problems with the ICQ Network. MP will permit ICQ to conduct reasonable
performance and load testing of the Affiliated MP Site (in person or through
remote communications).
3. Technical Problems. MP agrees to use commercially reasonable efforts to
address material technical problems (over which MP exercises control)
affecting use by ICQ Users of the Affiliated MP Site (an "MP Technical
Problem") promptly following notice thereof.
4. Monitoring. MP will monitor the performance and availability of the
Affiliated MP Site on a Continuous basis. MP will provide ICQ with contact
information (including e-mail, phone, pager and fax information, as
applicable, for both during and after business hours) for MP's principal
business and technical representatives, for use in cases when issues or
problems arise with respect to the Affiliated MP Site.
5. Security. MP will utilize Internet standard encryption technologies (e.g.,
Secure Socket Layer - SSL) to provide a secure environment for conducting
transactions and/or transferring private member information (e.g. credit
card numbers, banking/financial information, and member address information)
to and from the Affiliated MP Site. MP will provide ICQ with periodic
reviews of the Affiliated MP Site in order to allow ICQ to evaluate the
security risks of such site. MP will promptly remedy any security risks or
breaches of security as may be identified by ICQ's Operations Security team
and verified by MP.
6. Technical Performance.
i. MP will design the Affiliated MP Site to support the most recent two (2)
Windows version of the Microsoft Internet Explorer browser (currently,
versions 3.0 and 4.0) as well as any browser that represents more than two
percent (2%) of aggregate Affiliated MP Sites' traffic. In addition, ICQ and
MP shall work together with the goal of preventing any caching by ICQ's
proxy servers (where applicable, including preventing caching of any banner
advertisements served by MP). To the extent the Affiliated MP Site do not
support older ICQ browsers, MP shall have the option of (A) using MP's ad
serving technology and the information contained in
"http://"xxxxxxxxx.xxxx.XXX.xxx", to restrict an ICQ User's access to
incompatible features on the Affiliated MP Site and serve a mutually agreed
upon promotional message to such users, or (B) add alternative features
which may be chosen by a user depending on the type of operating system
and/or browser a user employs.
ii. To the extent MP creates customized pages on the Affiliated MP Site for
ICQ Users or restricts access to advertising by ICQ Users, MP will configure
the server from which it serves the site to examine the HTTP User-Agent
field in order to identify the "ICQ Member-Agents" listed at:
"xxxx://xxxxxxxxx. Xxxx.XXX.xxx."
iii. MP will periodically review the technical information made available by
ICQ at xxxx://xxxxxxxxx.xxxx.XXX.xxx.
iv. MP will design its site to support HTTP 1.0 or later protocol as defined
in RFC 1945 (available at "xxxx://xx.xxxxxxxx.xxx/xxx/xxx0000.xxxx").
v. Prior to releasing material, new functionality or features through the
Affiliated MP Site ("New Functionality"), MP will use commercially
reasonable efforts to test the New Functionality to confirm its
compatibility with ICQ Service client software. With respect to any major
implementation of significant new technology, MP will provide ICQ with
written notice of the new technology so that ICQ can perform tests of the
new technology to confirm its compatibility with the ICQ Service client
software.
vi. ICQ may notify MP of any problems with respect to New Functionality or
new technology on the Affiliated MP Site, and MP will work in good faith to
resolve such problems. ICQ will be entitled to request reasonable changes to
the Content (including, without limitation, the features or functionality)
within any pages of the Affiliated MP Site linked to from the ICQ Network to
the extent such Content will materially and adversely affect any operational
aspect of the ICQ Network. If MP is unable to adequately resolve such
problems, MP shall have the option of (A) using MP's ad serving technology
to restrict an ICQ User's access to such Content and serve a mutually agreed
upon promotional message to such users, or (B) add alternative features
which may be chosen by a user depending on the type of operating system a
user employs. If MP does not restrict access to such Content or add
applicable alternative features,
22
ICQ shall have the right to terminate the link to such Content from the ICQ
Network.
7. ICQ Internet Services Partner Support. ICQ will provide MP with access to
the highest level of online resources, standards and guidelines documentation,
technical phone support, monitoring and after-hours assistance that ICQ makes
generally available to ICQ's web-based partners. ICQ support will not, in any
case, be involved with Content creation on behalf of MP or support for any
technologies, databases, software or other applications which are not supported
by ICQ or are related to any MP area other than the Affiliated MP Site. Support
to be provided by ICQ is contingent on MP providing to ICQ demo account
information (where applicable), a detailed description of the Affiliated MP
Site's software, hardware and network architecture and access to the Affiliated
MP Site for purposes of such reasonable performance and load testing. ICQ will
use commercially reasonable efforts to respond to MP's requests for technical
support within three (3) business day of the making of the request by MP. In
addition, ICQ will provide MP with timely access to appropriate technical
resources to allow MP to integrate the ICQ software to be provided by ICQ under
this Agreement into the Affiliated MP Site.
23
EXHIBIT F
STANDARD ONLINE COMMERCE TERMS & CONDITIONS
24
1. ICQ Network Distribution. MP will not authorize or permit any third party
to distribute or promote the Services or any MP Interactive Site through
the ICQ Network absent ICQ's prior written approval, which approval will
not be unreasonably withheld. The Promotions and any other promotions or
advertisements purchased from or provided by ICQ will link only to the MP
Areas, will be used by MP solely for its own benefit and will not be
resold, traded, exchanged, bartered, brokered or otherwise offered to any
third party.
2. Provision of Other Content. In the event that MP includes any Content
within the MP Areas that violates ICQ's then-standard Terms of Service
(including without limitation, the terms of the ICQ End User License
Agreement, and the ICQ Privacy Policy) (the "Terms of Service"), the
terms of this Agreement, then ICQ will notify MP in writing of its
objection and, MP will take commercially reasonable steps to block access
by ICQ Users to such Content using MP's then-available technology or take
such other remedial action which cures the violation. In the event that
MP cannot, through its commercially reasonable efforts, block access by
ICQ Users to the Content in question, then MP will provide ICQ prompt
written notice of such fact. ICQ may then, at its option, restrict
access from the ICQ Network to the Content in question using technology
available to ICQ. MP will cooperate with ICQ's reasonable requests to
the extent ICQ elects to implement any such access restrictions.
3. Contests. Any contest, sweepstakes or similar promotion conducted or
promoted through the MP Areas (a "Contest") shall comply with all
applicable federal, state and local laws and regulations.
4. Navigation. In cases where an ICQ User performs a search for MP through
any search or navigational tool or mechanism that is accessible or
available through the ICQ Network (e.g., Promotions, search terms, or any
other promotions or navigational tools), ICQ shall have the right to
direct such ICQ User to the MP Areas, or any other MP Interactive Site
determined by ICQ in its reasonable discretion.
5. Disclaimers. Upon ICQ's request, MP agrees to include within the MP Areas
a product disclaimer (the specific form and substance to be mutually
agreed upon by the Parties) indicating that transactions are solely
between MP and ICQ Users purchasing Services from MP.
6. ICQ Look and Feel. MP acknowledges and agrees that ICQ will own all
right, title and interest in and to the elements of graphics, design,
organization, presentation, layout, user interface, navigation and
stylistic convention (including the digital implementations thereof)
which are generally associated with online areas contained within the ICQ
Network, subject to MP's (or its licensors') ownership rights in any
non-ICQ trademarks or copyrighted material within the MP Areas. ICQ
acknowledges that MP retains all right, title and interest in and to the
elements of graphics, design, organization, presentation, layout, user
interface, navigation and stylistic convention (including the digital
implementations thereof) which are generally associated with the MP Areas
and the MP Interactive Service, subject to any third-party trademarks and
copyrighted material contained therein.
7. Management of the MP Areas. MP will manage, review, delete, edit,
create, update and otherwise manage all Content available on or through
the MP Areas, in a timely and professional manner and in accordance with
the terms of this Agreement. MP will use commercially reasonable efforts
to cause the MP Areas to be current, accurate and well-organized at all
times. MP agrees that the Services and other Licensed Content : (i) will
not infringe on or violate any copyright, trademark, U.S. patent or any
other third party right, including without limitation, any music
performance or other music-related rights; and (ii) will not violate any
applicable law or regulation of the United State or any other country or
jurisdiction. Additionally, MP represents and warrants that it owns or
has all rights to any Licensed Content required to perform under this
Agreement. MP also warrants that a reasonable basis exists for all
Service performance or comparison claims expressly made by MP and
appearing in the MP Areas. Except as provided herein, MP shall not in
any manner, including, without limitation in any Promotion, the Licensed
Content or promotional materials state or imply that ICQ recommends or
endorses MP or MP's Services (e.g., no statements that MP is an
"official" or "preferred" provider of products or services for ICQ)
without the prior authorization of ICQ. ICQ will have no obligations
with respect to the Services available on or through the MP Areas,
including, but not limited to, any duty to review or monitor any such
Services.
8. Management of ICQ Network. ICQ will manage, review, delete, edit,
create, update and otherwise manage all Content available on or through
the ICQ Network, in a timely and professional manner and in accordance
with the terms of this Agreement. ICQ will use commercially reasonable
efforts to see that the ICQ Network remains current, accurate and
well-organized at all times. ICQ agrees that the ICQ Service and XXX.xxx
and any Content available on them: (i) will not infringe on or violate
any third-party copyright, trademark, U.S. patent which exists on the
effective date of this agreement, or any other third party right,
including without limitation, any music performance or other
music-related rights; (ii) will not violate ICQ's then-applicable Terms
of Service or any other standard, written ICQ policy or license; and
(iii) will not violate any applicable law or regulation of the United
State or any other country or jurisdiction, including those relating to
contests, sweepstakes or similar promotions. ICQ also warrants that a
reasonable basis exists for all ICQ Service performance or comparison
25
claims expressly made by ICQ and appearing through the ICQ Network.
Except as provided herein, ICQ shall not in any manner state or imply
that MP recommends or endorses ICQ or the ICQ Network (e.g., no
statements that ICQ is an "official" or "preferred" provider of products
or services for MP) without the prior authorization of MP. MP will have
no obligations with respect to the ICQ Services available on or through
the ICQ Network other than the MP Areas, including, but not limited to,
any duty to review or monitor any such ICQ Services.
9. Duty to Inform. MP will promptly inform ICQ of any information related to
the MP Areas which could reasonably lead to a claim, demand, or liability
of or against ICQ and/or its affiliates by any third party. ICQ will
promptly inform MP of any information related to the ICQ Network which
could reasonably lead to a claim, demand, or liability of or against MP
and/or its affiliates by any third party.
10. Customer Service. It is the sole responsibility of MP to provide
customer service to persons or entities purchasing Services through the
ICQ Network ("Customers"). MP will bear full responsibility for all
customer service, including without limitation, order processing,
billing, fulfillment, shipment, collection and other customer service
associated with any Services offered, sold or licensed through the MP
Areas, and ICQ will have no obligations whatsoever with respect thereto.
MP will receive all emails from Customers via a computer available to
MP's customer service staff and generally respond to such emails within
three (3) days from receipt. MP will receive all orders electronically
and generally process all orders within three (3) days from receipt,
provided Services ordered are not advance order items. MP will use
commercially reasonable efforts to receive, process, fulfill and deliver
all orders of Services on a timely and professional basis. MP will offer
ICQ Users who purchase Services through such MP Areas a money back
satisfaction guarantee, to the same extent offered by MP generally MP
will bear all responsibility for compliance with federal, state and local
laws in the event that Services are out of stock or are no longer
available at the time an order is received. MP will also comply with the
requirements of any federal, state or local consumer protection or
disclosure law. Payment for Services will be collected by MP directly
from customers.
11. Production Work. In the event that MP requests ICQ's production
assistance for activities outside the scope of ICQ's obligations under
this Agreement in connection with (i) ongoing programming and maintenance
related to the MP Areas, (ii) a redesign of or addition to the MP Areas
(e.g., a change to an existing screen format or construction of a new
custom form), (iii) production to modify work performed by a third party
provider or (iv) any other type of production work, MP will work with ICQ
to develop a detailed production plan for the requested production
assistance (the "Production Plan"). Following receipt of the final
Production Plan, ICQ will notify MP of (i) ICQ's availability to perform
the requested production work, (ii) the proposed fee or fee structure for
the requested production and maintenance work and (iii) the estimated
development schedule for such work. ICQ will make commercially
reasonable efforts to respond to MP promptly and to undertake in good
faith the production assistance requested by MP. To the extent the
Parties reach agreement regarding implementation of the agreed-upon
Production Plan after good faith negotiations, such agreement will be
reflected in a separate work order signed by the Parties. To the extent
MP elects to retain a third party provider to perform any such production
work, work produced by such third party provider must generally conform
to ICQ's standards & practices (and any standard ICQ "styleguide"). The
specific production resources which ICQ allocates to any production work
to be performed on behalf of MP will be as determined by the Parties in
the work order. With respect to any routine production, maintenance or
related services which are necessary for ICQ to perform in order to
support the proper functioning and integration of the MP Areas ("Routine
Services"), MP will pay the then-standard fees charged by ICQ for such
Routine Services provided that ICQ notifies MP in advance of incurring
these charges (providing MP an explanation of the basis for them) and
obtains MP's prior approval for them.
12. Bookmarking. To the extent ICQ allows ICQ Users to "bookmark" the URL or
other locator for the MP Areas, such bookmarks will be subject to ICQ's
control at all times. Upon the termination of this Agreement, MP's rights
to any Keyword Search Terms and bookmarking will terminate.
13. Merchant Certification Program. MP will be provided the opportunity to
participate in any generally applicable "Certified Merchant" program
operated by ICQ or its authorized agents or contractors. Such program
may require merchant participants on an ongoing basis to meet certain
reasonable, generally applicable standards relating to provision of
electronic commerce through the ICQ Network (including, as a minimum, use
of 40-bit SSL encryption and if requested by ICQ, 128-bit encryption) and
may also require the payment of certain reasonable certification fees to
the applicable entity operating the program. Each Certified Merchant in
good standing will be entitled to place on its affiliated Interactive
Site an ICQ designed and approved button promoting the merchant's status
as an ICQ Certified Merchant.
14. Message Boards; Chat Rooms and Comparable Vehicles. Any Content
submitted by MP or its agents within message boards, chat rooms or any
comparable vehicles will be subject to the license grant relating to
submissions to "public areas" set forth in the ICQ Terms of Service. MP
26
acknowledges that it has no rights or interest in ICQ Member submissions
to message boards within the ICQ Network. MP will refrain from editing,
deleting or altering, without ICQ's prior approval (which shall not be
unreasonably withheld or delayed), any opinion expressed or submission
made by an ICQ Member within MP Programming except in cases where MP has
a good faith belief that the Content in question violates an applicable
law, regulation, third party right or the applicable ICQ Terms of
Service.
27
EXHIBIT G
STANDARD LEGAL TERMS & CONDITIONS
1. Promotional Materials/Press Releases. Each Party will submit to the other
Party, for its prior written approval, which will not be unreasonably
withheld or delayed, any marketing, advertising, or other promotional
materials, excluding Press Releases, related to the MP Areas and/or
referencing the other Party and/or its trade names, trademarks, and
service marks (the "Promotional Materials"); provided, however, that
either Party's use of screen shots of the MP Areas for promotional
purposes will not require the approval of the other Party so long as
America Online(R) is clearly identified as the source of such screen
shots; and provided further, however, that, following the initial public
announcement of the business relationship between the Parties in
accordance with the approval and other requirements contained herein,
either Party's subsequent factual reference to the existence of a
business relationship between the Parties in Promotional Materials, will
not require the approval of the other Party. Each Party will solicit and
reasonably consider the views of the other Party in designing and
implementing such Promotional Materials. Once approved, the Promotional
Materials may be used by a Party and its affiliates for the purpose of
promoting the MP Areas and the content contained therein and reused for
such purpose until such approval is withdrawn with reasonable prior
notice. In the event such approval is withdrawn, existing inventories of
Promotional Materials may be depleted.
2. License. MP hereby grants ICQ a non-exclusive worldwide license to
market, license, distribute, reproduce, display, perform, translate,
transmit, and promote the Licensed Content (or any portion thereof)
through such areas or features of the ICQ Network as required for ICQ to
perform under this Agreement. MP acknowledges and agrees that the
foregoing license permits ICQ to distribute portions of the Licensed
Content in synchronism or timed relation with visual displays prepared by
MP or ICQ (e.g., as part of an ICQ "slideshow"). In addition, ICQ Users
will have the right to access and use the MP Areas.
3. Trademark License. In designing and implementing the promotional
materials and subject to the other provisions contained herein, MP will
be entitled to use such trade names, trademarks, and service marks of ICQ
as designated by ICQ and ICQ; and its affiliates will be entitled to use
such trade names, trademarks, and service marks of MP as designated by MP
(collectively, together with the ICQ marks listed above, the "Marks");
provided that each Party: (i) does not create a unitary composite xxxx
involving a Xxxx of the other Party without the prior written approval of
such other Party; and (ii) displays symbols and notices clearly and
sufficiently indicating the trademark status and ownership of the other
Party's Marks in accordance with applicable trademark law and practice.
4. Ownership of Trademarks. Each Party acknowledges the ownership right of
the other Party in the Marks of the other Party and agrees that all use
of the other Party's Marks will inure to the benefit, and be on behalf,
of the other Party. Each Party acknowledges that its utilization of the
other Party's Marks will not create in it, nor will it represent it has,
any right, title, or interest in or to such Marks other than the licenses
expressly granted herein. Each Party agrees not to do anything contesting
or impairing the trademark rights of the other Party.
5. Quality Standards. Each Party agrees to supply the other Party, upon
request, with a reasonable number of samples of any promotional materials
publicly disseminated by such Party which utilize the other Party's
Marks. Each Party will comply with all applicable laws, regulations, and
customs and obtain any required government approvals pertaining to use of
the other Party's marks.
6. Infringement Proceedings. Each Party agrees to promptly notify the other
Party of any unauthorized use of the other Party's Marks of which it has
actual knowledge. Each Party will have the sole right and discretion to
bring proceedings alleging infringement of its Marks or unfair
competition related thereto; provided, however, that each Party agrees to
provide the other Party with its reasonable cooperation and assistance
with respect to any such infringement proceedings.
7. Representations and Warranties. Each Party represents and warrants to the
other Party that: (i) such Party has the full corporate right, power and
authority to enter into this Agreement and to perform the acts required
of it hereunder; (ii) the execution of this Agreement by such Party, and
the performance by such Party of its obligations and duties hereunder, do
not and will not violate any agreement to which such Party is a party or
by which it is otherwise bound; (iii) when executed and delivered by such
Party, this Agreement will constitute the legal, valid and binding
obligation of such Party, enforceable against such Party in accordance
with its terms; and (iv) such Party acknowledges that the other Party
makes no representations, warranties or agreements related to the subject
matter hereof that are not expressly provided for in this Agreement
(including its Exhibits). MP hereby represents and warrants that, except
where failure to possess would not materially affect its ability to
perform hereunder, it possesses all authorizations, approvals, consents,
licenses, permits, certificates or other rights and permissions necessary
to sell the Services. ICQ represents and warrants that, except where
failure to possess would not materially affect its ability to perform
hereunder, it possesses all authorizations, approvals, consents,
licenses, permits, certificates or other rights and permissions necessary
to offer and operate the ICQ Network.
8. Confidentiality. Each Party acknowledges that Confidential Information
may be disclosed to the other Party during the course of this Agreement.
Each Party agrees that it will take reasonable steps, at least
substantially equivalent to the steps it takes to protect its own
proprietary information, during the term of this Agreement, and for a
period of three years following expiration or termination of this
28
Agreement, to prevent the duplication or disclosure of Confidential
Information of the other Party, other than by or to its employees or
agents who must have access to such Confidential Information to perform
such Party's obligations hereunder, who will each agree to comply with
this section. Notwithstanding the foregoing, either Party may issue a
press release or other disclosure containing Confidential Information
without the consent of the other Party, to the extent such disclosure is
required by law, rule, regulation or government or court order, provided
that such Party shall first make every reasonable effort to avoid the
disclosure. In such event, the disclosing Party will provide at least
five (5) business days prior written notice of such proposed disclosure
to the other Party. Further, in the event such disclosure is required of
either Party under the laws, rules or regulations of the Securities and
Exchange Commission or any other applicable governing body, such Party
will (i) redact mutually agreed-upon portions of this Agreement to the
fullest extent permitted under applicable laws, rules and regulations and
(ii) submit a request to such governing body that such portions and other
provisions of this Agreement receive confidential treatment under the
laws, rules and regulations of the Securities and Exchange Commission or
otherwise be held in the strictest confidence to the fullest extent
permitted under the laws, rules or regulations of any other applicable
governing body.
9. Limitation of Liability; Disclaimer; Indemnification.
9.1 LIABILITY. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES), ARISING FROM BREACH OF THE AGREEMENT,
THE SALE OF SERVICES, THE USE OR INABILITY TO USE THE ICQ NETWORK,
THE ICQ SERVICE, XXX.XXX OR THE MP AREAS, OR ARISING FROM ANY OTHER
PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF
REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS (COLLECTIVELY,
"DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL REMAIN LIABLE
TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED
BY A THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT TO
SECTION 9.3. EXCEPT AS PROVIDED IN SECTION 9.3, (I) LIABILITY
ARISING UNDER THIS AGREEMENT WILL BE LIMITED TO DIRECT, OBJECTIVELY
MEASURABLE DAMAGES, AND (II) THE MAXIMUM LIABILITY OF ONE PARTY TO
THE OTHER PARTY FOR ANY CLAIMS ARISING IN CONNECTION WITH THIS
AGREEMENT WILL NOT EXCEED THE AGGREGATE PAYMENTS MADE UNDER THIS
AGREEMENT; PROVIDED THAT EACH PARTY WILL REMAIN LIABLE FOR THE
AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY
PURSUANT TO THE AGREEMENT.
9.2 NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY
SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING THE ICQ NETWORK, THE ICQ SERVICE, XXX.XXX,
THE SERVICES OR THE MP AREAS, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED
WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ICQ SPECIFICALLY
DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY OF THE MP AREAS.
9.3 Indemnity. Either Party will defend, indemnify, save and hold
harmless the other Party and the officers, directors, agents,
affiliates, distributors, franchisees and employees of the other
Party from any and all third party claims, demands, liabilities,
costs or expenses, including reasonable attorneys' fees
("Liabilities"), resulting from the indemnifying Party's breach of
its warranty under Section 7 or 8 of Exhibit F, as applicable.
9.4 Claims. If a Party entitled to indemnification hereunder (the
"Indemnified Party") becomes aware of any matter it believes is
indemnifiable hereunder involving any claim, action, suit,
investigation, arbitration or other proceeding against the
Indemnified Party by any third party (each an "Action"), the
Indemnified Party will give the other Party (the "Indemnifying
Party") prompt written notice of such Action. Such notice will (i)
provide the basis on which indemnification is being asserted and
(ii) be accompanied by copies of all relevant pleadings, demands,
and other papers related to the Action and in the possession of the
Indemnified Party. The Indemnifying Party will have a period of ten
(10) business days after delivery of such notice to respond. If the
Indemnifying Party elects to defend the Action or does not respond
within the requisite ten (10) business day period, the Indemnifying
Party will be obligated to defend the Action, at its own expense,
using counsel of its choosing. The Indemnified Party will
cooperate, at the expense of the Indemnifying Party, with the
Indemnifying Party and its counsel in the defense and the
Indemnified Party will have the right to participate fully, at its
own expense, in the defense of such Action. If the Indemnifying
Party responds within the required ten (10) business day period and
elects not to defend such Action, the Indemnified Party will be
free, without prejudice to any of the Indemnified Party's rights
hereunder, to compromise or defend (and control the defense of)
such Action. In such case, the Indemnifying Party will cooperate,
at its own expense, with the Indemnified Party and its counsel in
the defense against such Action and the Indemnifying Party will
have the right to participate fully, at its own expense, in the
defense of such Action. Any compromise or settlement of an Action
will require the prior written consent of both Parties hereunder,
such consent not to be unreasonably withheld or delayed.
29
9.5 Acknowledgment. ICQ and MP each acknowledges that the provisions of
this Agreement were negotiated to reflect an informed, voluntary
allocation between them of all risks (both known and unknown)
associated with the transactions contemplated hereunder. The
limitations and disclaimers related to warranties and liability
contained in this Agreement are intended to limit the circumstances
and extent of liability. The provisions of this Section 9 will be
enforceable independent of and severable from any other enforceable
or unenforceable provision of this Agreement.
10. Solicitation of ICQ Users. During the term of the Agreement and for a two
year period thereafter, MP will not use the ICQ Network (including,
without limitation, the e-mail network contained therein) to solicit ICQ
Users on behalf of another Interactive Service. More generally, MP will
not send unsolicited, commercial e-mail (i.e., "spam") or other online
communications through or into ICQ's products or services, absent a Prior
Business Relationship. For purposes of this Agreement, a "Prior Business
Relationship" will mean that the ICQ User to whom commercial e-mail or
other online communication is being sent has voluntarily either (i)
engaged in a transaction with MP or (ii) provided information to MP
through a contest, registration, or other communication, which included
clear notice to the ICQ User that the information provided could result
in commercial e-mail or other online communication being sent to that ICQ
User by MP or its agents. Any commercial e-mail communications to ICQ
Users which are otherwise permitted hereunder, will (a) include a
prominent and easy means to "opt-out" of receiving any future commercial
e-mail or other online communications from MP, and (b) shall also be
subject to ICQ's then-standard restrictions on distribution of bulk
e-mail (e.g., related to the time and manner in which such e-mail can be
distributed through or into the ICQ product or service in question).
11. ICQ User Communications. To the extent that MP is permitted to
communicate with ICQ Users under Section 10 of this Exhibit G, in any
such communications to ICQ Users on or off the MP Areas (including,
without limitation, e-mail solicitations), MP will not encourage ICQ
Users to take any action inconsistent with the scope and purpose of this
Agreement, including without limitation, the following actions: (i) using
an Interactive Site other than the MP Areas for the purchase of Services,
or (ii) bookmarking of Interactive Sites. Additionally, with respect to
such ICQ User communications, in the event that MP encourages an ICQ User
to purchase products through such communications, MP shall ensure that
(a) the ICQ Network is promoted as the primary means through which the
ICQ User can access the MP Areas and (b) any link to the MP Areas will
link to a page which indicates to the ICQ User that such user is in a
site which is affiliated with the ICQ Network.
12. Collection and Use of User Information. The collection, use and
disclosure by MP of information obtained from ICQ Users under this
Agreement ("User Information") shall comply with (i) all applicable laws
and regulations and (ii) ICQ's standard privacy policies, available on
the Interactive Site XXX.xxx (or, in the case of the MP Areas, MP's
standard privacy policies so long as such policies are prominently
published on the site and provide adequate notice, disclosure and choice
to users regarding MP's collection, use and disclosure of user
information). MP will not disclose User Information collected hereunder
to any third party in a manner that identifies ICQ Users as end users of
an ICQ product or service or use Member Information collected under this
Agreement to market another Interactive Service.
13. Statements through ICQ Network. Neither Party shall make, publish, or
otherwise communicate through the ICQ Network or the MP Areas any
deleterious remarks concerning the other Party or its affiliates,
directors, officers, employees, or agents (including, without limitation,
the other Party's business projects, business capabilities, performance
of duties and services, or financial position) which remarks are based on
the relationship established by this Agreement or information exchanged
hereunder.
14. Excuse. Neither Party will be liable for, or be considered in breach of
or default under this Agreement on account of, any delay or failure to
perform as required by this Agreement as a result of any causes or
conditions which are beyond such Party's reasonable control and which
such Party is unable to overcome by the exercise of reasonable diligence.
15. Independent Contractors. The Parties to this Agreement are independent
contractors. Neither Party is an agent, representative or employee of the
other Party. Neither Party will have any right, power or authority to
enter into any agreement for or on behalf of, or incur any obligation or
liability of, or to otherwise bind, the other Party. This Agreement will
not be interpreted or construed to create an association, agency, joint
venture or partnership between the Parties or to impose any liability
attributable to such a relationship upon either Party.
16. Notice. Any notice, approval, request, authorization, direction or other
communication under this Agreement will be given in writing and will be
deemed to have been delivered and given for all purposes (i) on the
delivery date if delivered by electronic mail on the ICQ Network (to the
e-mail address "XXXXxxxxx@xxx.xxx" in the case of ICQ) or by confirmed
facsimile; (ii) on the delivery date if delivered personally to the Party
to whom the same is directed; (iii) one business day after deposit with a
commercial overnight carrier, with written verification of receipt; or
(iv) five (5) business days after the mailing date, whether or not
actually received, if sent by U.S. mail, return receipt requested,
postage and charges prepaid, or any other means of rapid mail delivery
for which a receipt is available. In the case of ICQ, such notice will be
30
provided to both the President for Business Affairs (fax no.
000-000-0000) and the Deputy General Counsel (fax no. 000-000-0000), each
at the address of ICQ set forth in the first paragraph of this Agreement.
In the case of MP, except as otherwise specified herein, the notice
address will be the address for MP set forth in the first paragraph of
this Agreement, with the other relevant notice information, including the
recipient for notice and, as applicable, such recipient's fax number or
ICQ e-mail address, to be as reasonably identified to ICQ by MP.
17. No Waiver. The failure of either Party to insist upon or enforce strict
performance by the other Party of any provision of this Agreement or to
exercise any right under this Agreement will not be construed as a waiver
or relinquishment to any extent of such Party's right to assert or rely
upon any such provision or right in that or any other instance; rather,
the same will be and remain in full force and effect.
18. Return of Information. Upon the expiration or termination of this
Agreement, each Party will, upon the written request of the other Party,
return or destroy (at the option of the Party receiving the request) all
confidential information, documents, manuals and other materials
specified the other Party.
19. Survival. Sections 4.1, 4.2, 4.3, 5.2 and 6 of the body of the Agreement,
Sections 7 and 8 of Exhibit F and Sections 8 through 29 of this Exhibit,
will survive the completion, expiration, termination or cancellation of
this Agreement.
20. Entire Agreement. This Agreement sets forth the entire agreement and
supersedes any and all prior agreements of the Parties with respect to
the transactions set forth herein. Neither Party will be bound by, and
each Party specifically objects to, any term, condition or other
provision which is different from or in addition to the provisions of
this Agreement (whether or not it would materially alter this Agreement)
and which is proffered by the other Party in any correspondence or other
document, unless the Party to be bound thereby specifically agrees to
such provision in writing.
21. Amendment. No change, amendment or modification of any provision of this
Agreement will be valid unless set forth in a written instrument signed
by the Party subject to enforcement of such amendment signed by an
executive of at least the same standing to the executive who signed the
Agreement.
22. Further Assurances. Each Party will take such action (including, but not
limited to, the execution, acknowledgment and delivery of documents) as
may reasonably be requested by any other Party for the implementation or
continuing performance of this Agreement.
23. Assignment. MP will not assign this Agreement or any right, interest or
benefit under this Agreement without the prior written consent of ICQ,
which consent shall not be unreasonably withheld or delayed.. ICQ shall
not assign this Agreement to any Section 3.5 Entity without the prior
written consent of MP, which consent shall not be unreasonably withheld
or delayed. Subject to the foregoing, this Agreement will be fully
binding upon, inure to the benefit of and be enforceable by the Parties
hereto and their respective successors and assigns.
24. Construction; Severability. In the event that any provision of this
Agreement conflicts with the law under which this Agreement is to be
construed or if any such provision is held invalid by a court with
jurisdiction over the Parties to this Agreement, (i) such provision will
be deemed to be restated to reflect as nearly as possible the original
intentions of the Parties in accordance with applicable law, and (ii) the
remaining terms, provisions, covenants and restrictions of this Agreement
will remain in full force and effect.
25. Remedies. Except where otherwise specified, the rights and remedies
granted to a Party under this Agreement are cumulative and in addition
to, and not in lieu of, any other rights or remedies which the Party may
possess at law or in equity; provided that, in connection with any
dispute hereunder, MP will be not entitled to offset any amounts that it
claims to be due and payable from ICQ against amounts otherwise payable
by MP to ICQ.
26. Applicable Law. Except as otherwise expressly provided herein, this
Agreement will be interpreted, construed and enforced in all respects in
accordance with the laws of the Commonwealth of Virginia except for its
conflicts of laws principles.
27. Export Controls. Both Parties will adhere to all applicable laws,
regulations and rules relating to the export of technical data and will
not export or re-export any technical data, any products received from
the other Party or the direct product of such technical data to any
proscribed country listed in such applicable laws, regulations and rules
unless properly authorized.
28. Headings. The captions and headings used in this Agreement are inserted
for convenience only and will not affect the meaning or interpretation of
this Agreement.
29. Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original and all of which together will
constitute one and the same document
31
EXHIBIT H
WARRANT AGREEMENT
32
CONFIDENTIAL
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT OR LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
XXXXXXXXXXXX.XXX INC.
STOCK SUBSCRIPTION WARRANT
December 22, 1999
1. GENERAL.
(a) THIS CERTIFIES that, for value received, AMERICA ONLINE, INC.
("AOL"), or assigns, is entitled to subscribe for and purchase from
XXXXXXXXXXXX.XXX INC., a Delaware corporation (the "Corporation"), at any time
or from time to time commencing as set forth in Section 1(b) and ending on the
seventh (7th) anniversary of the date hereof (the "Exercise Period"), on the
terms and subject to the provisions hereinafter set forth, up to 463,246 shares
(subject to adjustment as provided herein) (the "Warrant Shares") of fully paid
and non-assessable shares of Common Stock, $0.0001 par value, of the
Corporation (the "Common Stock") as shall be determined in accordance with the
provisions of Section 1(b) hereof, at a price per share (the "Warrant Price")
equal to the per share initial public offering price of the IPO (as hereinafter
defined); provided that if the Stipulated Event (as defined below) occurs prior
to the IPO Date, the Warrant Price shall be equal to the fully-diluted per
share valuation established in the Corporate Transaction (as defined below).
The Corporation represents, warrants and covenants that, as of the date hereof,
the maximum Warrant Shares issuable hereunder shall constitute three percent
(3%) of the number of shares of voting capital stock of the Corporation
outstanding immediately prior to the closing of the IPO (as hereinafter
defined) after giving effect to the exercise, exchange or conversion of all
outstanding securities, rights, options, warrants (including this Warrant),
calls, commitments or agreements of any nature or character (whether debt or
equity) that are, directly or indirectly, exercisable or exchangeable for, or
convertible into or otherwise represent the right to purchase or otherwise
receive, directly or indirectly, any such capital stock or other arrangement to
acquire at any time or under any circumstance, voting capital stock of the
Corporation or any such other securities and assuming that all stock options
and/or shares of capital stock reserved for grant or issuance to officers,
1
33
CONFIDENTIAL
directors, employees and consultants under all agreements, plans or
arrangements theretofore approved by the Board of Directors of the Corporation
have been so granted or issued (as the case may be) (collectively, the
"Fully-Diluted Shares"). In the event that the number of Warrant Shares listed
above does not constitute three percent (3%) of the Fully-Diluted Shares
existing immediately prior to the closing of the IPO, the number of Warrant
Shares initially issuable hereunder (the "Initial Number") shall be adjusted
accordingly to cause the Initial Number to constitute three percent (3%) of the
Fully-Diluted Shares existing immediately prior to the closing of the IPO. As
used in this Agreement, the term "IPO Date" shall mean the date on which the
Corporation closes the initial public offering of its Common Stock (the "IPO").
This Warrant is being issued pursuant to an Interactive Marketing
Agreement dated as of the date hereof (the "Agreement"), between the
Corporation and ICQ, Inc. All terms used but not defined herein shall have the
meanings set forth in the Agreement.
(b) This Warrant shall become exercisable as to that number of
Warrant Shares, and at such times, as are determined in accordance with Exhibit
A attached hereto; provided, however, that this Warrant shall become
exercisable as to all unvested Warrant Shares immediately upon the occurrence
of a Stipulated Event. As used herein, the term "Stipulated Event" shall mean
(a) a Corporate Transaction (as hereinafter defined) or (b) a termination of
the Agreement that results from a material breach by the Corporation of the
Agreement. "Corporate Transaction" means (A) any consolidation or merger of the
Corporation with or into any other corporation or other entity, other than any
merger or consolidation resulting in the holders of the capital stock of the
Corporation entitled to vote for the election of directors holding a majority
of the capital stock of the surviving or resulting corporation or other entity
entitled to vote for the election of directors, (B) any person or entity
(including any affiliates thereof) becoming the holder of a majority of the
capital stock of the Corporation entitled to vote for the election of
directors, or (C) any sale or other disposition by the Corporation of all or
substantially all of its assets or capital stock.
2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part, at any time or from time
to time during the Exercise Period, by the surrender of this Warrant (properly
endorsed) at the office of the Corporation at 0000 X Xx., XX, 0xx Xxxxx,
Xxxxxxxxxx, XX 00000, or at such other agency or office of the Corporation in
the United States of America as it may designate by notice in writing to the
holder hereof at the address of such holder appearing on the books of the
Corporation, and by payment (either in cash, by check, by cancellation of
indebtedness and/or in shares of capital stock of the Corporation valued at
Fair Market Value (as hereinafter defined) on the date of such exercise) to the
Corporation of the Warrant Price for each Warrant Share being purchased. In the
event of the exercise of the rights represented by this Warrant, a certificate
or certificates for the Warrant Shares so purchased, registered in the name of
the holder, and if this Warrant shall not have been exercised for all of the
Warrant Shares, a new Warrant, registered in the name of the holder hereof, of
like tenor to this Warrant, shall be delivered to the holder hereof within a
reasonable time, not exceeding ten days, after the rights represented by this
Warrant shall have been so exercised. The person in whose name any
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CONFIDENTIAL
certificate for Warrant Shares is issued upon exercise of this Warrant shall
for all purposes be deemed to have become the holder of record of such shares
on the date on which the Warrant was surrendered and payment of the Warrant
Price and any applicable taxes was made, irrespective of the date of delivery
of such certificate, except that, if the date of such surrender and payment is
a date when the stock transfer books of the Corporation are closed, such person
shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are
open.
3. EXCHANGE OF WARRANT.
(a) In addition to, and independent of, the rights of the holder
of this Warrant set forth in Section 2 hereof, the holder hereof may at any
time or from time to time elect to receive, without the payment by the holder
of any additional consideration, that number of Warrant Shares determined as
hereinafter provided in this Section 3 by the surrender of this Warrant or any
portion hereof to the Corporation, accompanied by an executed Notice of
Exchange in substantially the form thereof attached hereto (the "Net Issue
Election"). Thereupon, the Corporation shall issue to the holder hereof such
number of fully paid and nonassessable Warrant Shares as is computed using the
following formula:
X = Y (A-B)
-------
A
where X = the number of Warrant Shares to be issued to the holder pursuant to
this Section 3.
Y = the number of Warrant Shares covered by this Warrant in respect of
which the Net Issue Election is made pursuant to this Section 3.
A = the Fair Market Value (as hereinafter defined) of one Warrant Share
determined at the time the Net Issue Election is made pursuant to
this Section 3 (the "Determination Date").
B = the Warrant Price in effect under this Warrant at the time the Net
Issue Election is made pursuant to this Section 3.
For purposes of the above calculation, "Fair Market Value" of one Warrant Share
as of the Determination Date shall mean:
(i) (A) if the Common Stock of the Corporation is not then traded
on a national securities exchange, the average of the closing prices
quoted on the National Association of Securities Dealers, Inc. Automated
Quotation National Market System, if applicable, or the average of the
last bid and asked prices of the Common Stock quoted in the
over-the-counter-market or (B) if the Common Stock is then traded on a
national securities exchange, the average of the high and low prices of
the Common Stock listed on the principal national securities exchange on
which the Common Stock is so traded, in each case for the twenty
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(20) trading days immediately preceding the Determination Date or, if such
date is not a business day on which shares are traded, the next
immediately preceding trading day;
(ii) in the event of a Warrant Exchange in connection with a
Corporate Transaction, the value per share of Common Stock received or
receivable by each holder thereof (assuming for purposes of this
determination, in the case of a sale of assets, the Corporation is
liquidated immediately following such sale and the consideration paid to
the Corporation is immediately distributed to its stockholders); and
(iii) in all other circumstances, the fair market value per share
of Common Stock as determined by a nationally recognized independent
investment banking firm jointly selected by the Corporation and the
holder of this Warrant or, if such selection cannot be made within five
business days after delivery of the Notice of Exchange referred to above,
by a nationally recognized independent investment banking firm selected
by the American Arbitration Association then obtaining.
The closing of any Warrant Exchange shall take place at the offices of the
Corporation on the date specified in the Notice of Exchange (the "Exchange
Date"), which shall be not less than five and not more than 30 days after the
delivery of such Notice. At such closing, the Corporation shall issue and
deliver to the holder or its designee a certificate or certificates for the
Warrant Shares to be issued upon such Warrant Exchange, registered in the name
of the holder or such designee, and if such Warrant Exchange shall not have
been for all Warrant Shares, a new Warrant, registered in the name of the
holder, of like tenor to this Warrant for the number of shares still subject to
this Warrant following such Warrant Exchange.
4. ADJUSTMENT OF WARRANT PRICE.
(a) The Warrant Price shall be subject to adjustment from time to
time as follows:
(i) If the Corporation shall at any time or from time to time
during the Exercise Period, issue any shares of Common Stock (or be
deemed to have issued any shares of Common Stock as provided herein),
other than Excluded Securities (as defined in Section 4(a)( v)) without
consideration or for a consideration per share less than the Fair Market
Value (determined in accordance with the formula set forth in Section 3)
of a share of Common Stock in effect immediately prior to the issuance of
Common Stock, the Warrant Price in effect immediately prior to such
issuance shall forthwith be lowered to a price equal to the quotient
obtained by dividing: (x) an amount equal to the sum of (1) the total
number of shares of Common Stock outstanding (including any shares of
Common Stock deemed to have been issued pursuant to Section 4(a)(ii)(D))
immediately prior to such issuance multiplied by the Warrant Price in
effect immediately prior to such issuance, plus (2) the consideration
received by the Corporation upon such
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issuance, by (y) the total number of shares of Common Stock outstanding
(including any shares of Common Stock deemed to have been issued pursuant
to Section 4(a)(ii)(D)) immediately after the issuance of such Common
Stock.
(ii) For the purposes of any adjustment of the Warrant Price
pursuant to Section 4(a)(i), the following provisions shall be
applicable:
(A) In the case of the issuance of Common Stock for cash,
the consideration shall be deemed to be the amount of cash paid therefor
before deducting therefrom any discounts, commissions or other expenses
allowed, paid or incurred by the Corporation for any underwriting or
otherwise in connection with the issuance and sale thereof.
(B) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors of the Corporation,
irrespective of any accounting treatment.
(C) In the case of the issuance of Common Stock without
consideration, the consideration shall be deemed to be $0.01 per share.
(D) In the case of the issuance of (x) options to purchase
or rights to subscribe for Common Stock, (y) securities by their terms
convertible into or exchangeable for Common Stock or (z) options to
purchase rights to subscribe for such convertible or exchangeable
securities:
(1) the aggregate maximum number of shares of Common
Stock deliverable upon exercise of such options to purchase or rights to
subscribe for Common Stock shall be deemed to have been issued at the
time such options or rights were issued and for a consideration equal to
the consideration (determined in the manner provided in subdivisions
(A), (B) and (C) above), if any, received by the Corporation upon the
issuance of such options or rights plus the minimum purchase price
provided in such options or rights for the Common Stock covered thereby;
(2) the aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities or upon the exercise of options
to purchase or rights to subscribe for such convertible or exchangeable
securities and subsequent conversion or exchange thereof shall be deemed
to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
consideration received by the Corporation for any such securities and
related options or rights (excluding any cash received on account of
accrued interest or accrued dividends), plus the additional
consideration, if any, to be received by the Corporation upon the
conversion or exchange of such
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securities or the exercise of any related options or rights (the
consideration in each case to be determined in the manner provided
in subdivisions (A), (B) and (C) above);
(3) on any change in the number of shares or exercise
price of Common Stock deliverable upon exercise of any such options
or rights or conversions of or exchanges for such securities, other
than a change resulting from the antidilution provisions thereof,
the applicable Warrant Price shall forthwith be readjusted to such
Warrant Price as would have resulted had the adjustment made upon
the issuance of such options, rights or securities not converted
prior to such change (or options or rights related to such
securities not converted prior to such change) been made upon the
basis of such change; provided, however, that such readjustment
shall not result in a Warrant Price that is greater than the
original Warrant Price; and
(4) on the expiration of all such options or rights,
the termination of all such rights to convert or exchange or the
expiration of all options or rights related to such convertible or
exchangeable securities in each case having been issued by the
Corporation for the same consideration (as determined pursuant to
subdivision (A), (B) and (C) above), the applicable Warrant Price
shall forthwith be readjusted to such Warrant Price as would have
resulted had the adjustment made upon the issuance of such options,
rights, securities or options or rights related to such securities
not been made; provided, however, that such readjustment shall not
result in a Warrant Price that is greater that the original Warrant
Price.
(iii) If, at any time during the Exercise Period, the number
of shares of Common Stock outstanding is increased by a stock dividend
payable in shares of Common Stock or by a subdivision or split-up of shares
of Common Stock, then, following the record date fixed for the determination
of holders of Common Stock entitled to receive such stock dividend,
subdivision or split-up, the Warrant Price shall be appropriately decreased
and the number of shares of Common Stock issuable upon exercise of this
Warrant shall be appropriately increased, in each case in proportion to such
increase in outstanding shares.
(iv) If, at any time during the Exercise Period, the number
of shares of Common Stock outstanding is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date for such
combination, the Warrant Price shall be appropriately increased and the
number of shares of Common Stock issuable upon exercise of this Warrant
shall be appropriately decreased, in each case, in proportion to such
decrease in outstanding shares.
(v) For purposes of Section 4(a), the term "Excluded
Securities" shall mean (A) shares of Common Stock (subject to equitable
adjustment
6
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CONFIDENTIAL
for stock splits, dividends, combinations and like occurrences) issued to
officers, employees or directors of Corporation, pursuant to any agreement,
plan or arrangement approved by the Board of Directors of the Corporation,
or options to purchase or rights to subscribe for such Common Stock, or
securities by their terms convertible into or exchangeable for such Common
Stock, or options to purchase or rights to subscribe for such convertible or
exchangeable securities pursuant to such agreement, plan or arrangement; (B)
shares of Common Stock issued as a stock dividend or upon any stock split or
other subdivision or combination of shares of Common Stock; (C) securities
issued pursuant to the acquisition of another corporation or other entity by
the Corporation by merger or purchase of stock or purchase of all or
substantially all of such other corporation's or other entity's assets
whereby the Corporation owns not less than a majority of the voting power of
such other corporation or other entity following such acquisition or
purchase; or (D) securities issued in an underwritten public offering
approved by the Board of Directors.
(vi) All calculations under this Section 4 shall be made to
the nearest one tenth (1/10) of a cent or to the nearest one tenth (1/10) of
a share, as the case may be.
(b) Whenever the Warrant Price shall be adjusted as provided in
this Section 4 the Corporation shall forthwith file, at the office of the
Corporation or any transfer agent designated by the Corporation for the Common
Stock, a statement, signed by its chief financial officer, showing in detail
the facts requiring such adjustment and the adjusted Warrant Price. The
Corporation shall also cause a copy of such statement to be sent by first-class
certified mail, return receipt requested, postage prepaid, to each holder of a
Warrant at his or its address appearing on the Corporation's records. Where
appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions set forth immediately below.
(c) In the event the Corporation shall propose to take any action
of the types described in Section 4(a)(iii) or (iv) or Section 11, the
Corporation shall give notice to each holder of a Warrant in the manner set
forth herein, which notice shall specify the record date, if any, with respect
to any such action and the date on which such action is to take place. Such
notice shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Warrant Price then in
effect and the number, kind or class of shares or other securities or property
which shall be delivered or purchasable upon the occurrence of such action or
deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed, and in case of all other action, such
notice shall be given at least 20 days prior to the taking of such proposed
action. Failure to give such notice, or any defect therein, shall not affect
the legality or validity of any such action.
5. ADJUSTMENT OF WARRANT SHARES. Upon each adjustment of the Warrant
Price as provided in Section 4, the holder hereof shall thereafter be entitled
to subscribe
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39
CONFIDENTIAL
for and purchase, at the Warrant Price resulting from such adjustment, the
number of Warrant Shares equal to the product of (i) the number of Warrant
Shares existing prior to such adjustment and (ii) the quotient obtained by
dividing (A) the Warrant Price existing prior to such adjustment by (B) the new
Warrant Price resulting from such adjustment. No fractional shares of Common
Stock shall be issued as a result of any such adjustment, and any fractional
shares resulting from the computations pursuant to this paragraph shall be
eliminated without consideration.
6. COVENANTS AS TO COMMON STOCK. The Corporation covenants and agrees
that all shares of Common Stock that may be issued upon the exercise of the
rights represented by this Warrant, will, upon issuance, be validly issued,
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issuance thereof. The Corporation further covenants and agrees
that the Corporation will from time to time take all such action as may be
requisite to assure that the stated or par value per share of Common Stock is
at all times equal to or less than the then effective Warrant Price per share
of Common Stock issuable upon exercise of this Warrant. The Corporation further
covenants and agrees that the Corporation will at all times have authorized and
reserved, free from preemptive rights, a sufficient number of shares of Common
Stock to provide for the exercise of the rights represented by this Warrant.
The Corporation further covenants and agrees that if any shares of capital
stock to be reserved for the purpose of the issuance of shares of Common Stock
upon the exercise of this Warrant require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon exercise, then the Corporation will in good
faith and expeditiously as possible endeavor to secure such registration or
approval, as the case may be. If and so long as the Common Stock issuable upon
the exercise of the rights represented by this Warrant is listed on any
national securities exchange, the Corporation will, if permitted by the rules
of such exchange, list and keep listed on such exchange, upon official notice
of issuance, all shares of such capital stock.
7. NO SHAREHOLDER RIGHTS. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a shareholder of the
Corporation.
8. RESTRICTIONS ON TRANSFER. The holder of this Warrant acknowledges
that neither this Warrant nor the Warrant Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act") and the holder of
this Warrant agrees that no sale, transfer, assignment, hypothecation or other
disposition of this Warrant or the Warrant Shares shall be made in the absence
of (a) current registration statement under the Securities Act as to this
Warrant or the Warrant Shares and the registration or qualification of this
Warrant or the Warrant Shares under any applicable state securities laws is
then in effect or (ii) an opinion of counsel reasonably satisfactory to the
Corporation to the effect that such registration or qualification is not
required. Each certificate or other instrument for Warrant Shares issued upon
exercise of this Warrant shall, if required under the Securities Act or the
rules promulgated thereunder, be imprinted with a legend substantially to the
foregoing effect.
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CONFIDENTIAL
9. Investor Rights Agreement. Anything contained herein to the
contrary notwithstanding, the Warrant Shares shall be entitled to all rights
and benefits accorded thereto in that certain Third Amended and Restated
Investors' Rights Agreement, dated as of December 22, 1999, by and among the
Corporation and the Investors (as defined therein) .
10. TRANSFER OF WARRANT; AMENDMENT. Subject to the restriction set
forth in Section 8, this Warrant and all rights hereunder are transferable, in
whole, or in part, at the agency or office of the Corporation referred to in
Section 2, by the holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant properly endorsed. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant,
when endorsed, in blank, shall be deemed negotiable, and, when so endorsed the
holder hereof may be treated by the Corporation and all other persons dealing
with this Warrant as the absolute owner hereof for any purposes and as the
person entitled to exercise the rights represented by this Warrant, or to the
transfer hereof on the books of the Corporation, any notice to the contrary
notwithstanding; but until each transfer on such books, the Corporation may
treat the registered holder hereof as the owner hereof for all purposes.
11. REORGANIZATIONS, ETC. In case, at any time during the Exercise
Period, of any capital reorganization, of any reclassification of the stock of
the Corporation (other than a change in par value or from par value to no par
value or from no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Corporation with or into another corporation (other than a consolidation
or merger in which the Corporation is the continuing operation and which does
not result in any change in the Common Stock) or of the sale of all or
substantially all the properties and assets of the Corporation as an entirety
to any other corporation, this Warrant shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind
and number of shares of stock or other securities or property of the
Corporation or of the corporation resulting from such consolidation or
surviving such merger or to which such properties and assets shall have been
sold to which such holder would have been entitled if he had held the Common
Stock issuable upon the exercise hereof immediately prior to such
reorganization, reclassification, consolidation, merger or sale. In any such
reorganization or other action or transaction described above, appropriate
provision shall be made with respect to the rights and interests of the holder
of this Warrant to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the Warrant Price and of the number
of shares purchasable and receivable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof.
The Corporation will not effect any such consolidation, merger or sale unless,
prior to the consummation thereof, the successor corporation or entity (if
other than the Corporation) resulting from such transaction or the corporation
or entity purchasing such assets shall assume by written instrument, executed
and mailed or delivered to the registered holder hereof at the last address of
such holder appearing on the books of the Corporation, the obligation to
deliver to such holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
purchase.
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CONFIDENTIAL
12. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Corporation may, on such terms as to
indemnity or otherwise as it may in its discretion impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Corporation, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
13. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
14. NOTICES. All notices, advices and communications to be given or
otherwise made to any party to this Agreement shall be deemed to be sufficient
if contained in a written instrument delivered in person or by telecopier or
duly sent by first class registered or certified mail, return receipt
requested, postage prepaid, or by overnight courier, or by electronic mail,
with a copy thereof to be sent by mail (as aforesaid) within 24 hours of such
electronic mail, addressed to such party at the address set forth below or at
such other address as may hereafter be designated in writing by the addressee
to the addresser listing all parties:
If to the Corporation, to:
XxxxxxxXxxxx.xxx Inc.
0000 X Xx., XX
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Telecopier: 000-000-0000
Electronic mail: xxxx@xxxxxxxxxxxx.xxx
With a copy to:
Xxxx Xxxxxxx
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Telecopier: 000-000-0000
Electronic mail: xxxx.xxxxxx@xxxxxxxxxxx.xxx
and
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CONFIDENTIAL
If to AOL as follows:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
Electronic mail: XXXxxx@xxx.xxx
Or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith. Any
such notice or communication shall be deemed to have been delivered and
received (i) in the case of personal delivery or delivery by telecopier, on the
date of such deliver, (ii) in the case of nationally-recognized overnight
courier, on the next business day after the date when sent and (ii) in the case
of mailing, on the third business day following that on which the piece of mail
containing such communication is posted. As used in this Section 14, "business
day" shall mean any day other than a day on which banking institutions in the
Commonwealth of Virginia are legally closed for business.
15. BINDING EFFECT ON SUCCESSORS; SURVIVAL. This Warrant shall be
binding upon any corporation succeeding the Corporation by merger,
consolidation or acquisition of all or substantially all of the Corporation's
assets. All of the obligations of the Corporation relating to the Common Stock
issuable upon the exercise of this Warrant shall survive the exercise and
termination of this Warrant. All of the covenants and agreements of the
Corporation shall inure to the benefit of the successors and assigns of AOL.
16. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of Delaware.
17. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Corporation shall, in lieu of issuing any
fractional share, pay the holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then Fair Market Value of one Warrant Share.
* * *
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43
CONFIDENTIAL
IN WITNESS WHEREOF, the undersigned have caused this Warrant and Warrant
Agreement to be executed by their duly authorized officers on the date first
above written.
XXXXXXXXXXXX.XXX INC.
By: /s/ XXXXXXXXXXXX.XXX INC.
----------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Executive Officer
ATTEST:
---------------------------
SECRETARY
AMERICA ONLINE, INC.
By: /s/ AMERICA ONLINE, INC.
----------------------------------------
Name:
Title:
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44
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FORM OF SUBSCRIPTION
[To be signed upon exercise of Warrant]
The undersigned, the holder of the Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _________ shares of _________ of Xxxxxxxxxxxx.xxx Inc.,
and herewith makes payment of $_________ therefor, and requests that the
certificates for such shares be issued in the name of and delivered to,
_________________________________, whose address is
_________________________________________________.
Dated:
--------------
---------------------------------
(Signature)
---------------------------------
(Address)
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NOTICE OF EXCHANGE
(To be executed by the Holder in
order to exchange the Warrant.)
The undersigned hereby irrevocably elects to exchange this Warrant
into __________ shares (the foregoing number constituting the number of Warrant
Shares to be issued pursuant to Section 3 of this Warrant) of ________ of
Xxxxxxxxxxxx.xxx Inc., minus any shares to be deducted from the foregoing
number in accordance with the terms of this Warrant, according to the
conditions thereof. The undersigned desires to consummate such exchange on
________________.
Dated:
-----------------------------
Name of Holder:
By:
--------------------------
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46
CONFIDENTIAL
FORM OF ASSIGNMENT
[To be signed only upon transfer of Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto the right represented by the Warrant to purchase _______ shares
of _________ of Xxxxxxxxxxxx.xxx Inc., to which the Warrant relates, and
appoints [Name of Attorney] to transfer such right on the books of [ISSUER],
with full power of substitution in the premises.
Dated:
-------------
---------------------------------------------
(Signature)
Signed in the presence of:
------------------------------
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47
ADDENDUM NUMBER 1 TO XXXXXXXXXXXX.XXX INC. STOCK SUBSCRIPTION WARRANT
This Addendum (this "Addendum") to that certain XxxxxxxXxxxx.xxx Inc.
Stock Subscription Warrant (the "Warrant") dated December 22, 1999, by and
between America Online, Inc. ("AOL"), and XxxxxxxXxxxx.xxx Inc. (the
"Corporation") is made as of December 22, 1999, by and between AOL and the
Corporation. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Warrant.
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties desire to amend certain provisions of the
Warrant as follows:
Exhibit A of the Warrant shall be amended and restated in its entirety
to read as set forth on Exhibit A attached hereto.
In witness whereof the Parties have executed this Addendum as of the
date written hereinabove.
AMERICA ONLINE, INC.
BY:
---------------------------------
TITLE:
------------------------------
XXXXXXXXXXXX.XXX INC.
BY:
---------------------------------
TITLE:
------------------------------
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48
EXHIBIT A
NUMBER OF SHARES FOR WHICH THE
WARRANT SHALL BE EXERCISABLE:
Up to a maximum 463,246 Warrant Shares (subject to adjustment in accordance
with the terms of this Warrant) shall vest as follows:
---------------------------------------------------------------------------------------------------
Number of Warrant Shares Vesting
---------------------------------------------------------------------------------------------------
(A) 154,414 Fully vested as of the date hereof.
---------------------------------------------------------------------------------------------------
(B) * Shall vest and become exercisable upon the
attainment between the Effective Date and March 31,
2000 of * "click-thrus" of the Promotions;
provided, however, that if the * threshold is
not attained prior to March 31, 2000, no Warrant
Shares shall vest pursuant to this Exhibit A,
Section (B) and these Warrant Shares shall not vest
in subsequent periods.
---------------------------------------------------------------------------------------------------
(C) * Shall vest and become exercisable upon the
attainment between April 1, 2000 and June 30, 2000
of * "click-thrus" of the Promotions;
provided, however, that if the * threshold is
not attained between April 1, 2000 and June 30,
2000, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (C) and these Warrant Shares shall
not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(D) * Shall vest and become exercisable upon the
attainment between July 1, 2000 and September 30,
2000 of * "click-thrus" of the Promotions;
provided, however, that if the * threshold is
not attained between July 1, 2000 and September 30,
2000, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (D) and these Warrant Shares shall
not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(E) * Shall vest and become exercisable upon the
attainment between October 1, 2000 and December 31,
2000 of * "click-thrus" of the Promotions;
provided, however, that if the * threshold is
not attained between October 1, 2000 and December
31, 2000, no Warrant Shares shall vest pursuant to
this Exhibit A, Section (E) and these Warrant Shares
shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(F) * Shall vest and become exercisable upon the
attainment between the January 1, 2001 and March 31,
2001 of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between January 1, 2001 and March 31,
2000, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (F) and these Warrant Shares
shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(G) * Shall vest and become exercisable upon the
attainment between April 1, 2001 and June 30, 2001
of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between April 1, 2001 and June 30,
2001, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (G) and these Warrant Shares shall
not vest in subsequent periods.
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(H) * Shall vest and become exercisable upon the
attainment between July 1, 2001 and September 30,
2001 of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between July 1, 2001 and September 30,
2001, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (H) and these Warrant Shares shall
not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(I) * Shall vest and become exercisable upon the
attainment between October 1, 2001 and December 31,
2001 of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between October 1, 2001 and December
31, 2001, no Warrant Shares shall vest pursuant to
this Exhibit A, Section (I) and these Warrant Shares
shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(J) * Shall vest and become exercisable upon the
attainment between the January 1, 2002 and March 31,
2002 of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between January 1, 2002 and March 31,
2002, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (J) and these Warrant Shares
shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(K) * Shall vest and become exercisable upon the
attainment between April 1, 2002 and June 30, 2002
of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between April 1, 2002 and June 30,
2002, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (K) and these Warrant Shares shall
not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(L) * Shall vest and become exercisable upon the
attainment between July 1, 2002 and September 30,
2002 of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between July 1, 2002 and September 30,
2002, no Warrant Shares shall vest pursuant to this
Exhibit A, Section (L) and these Warrant Shares shall
not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(M) * Shall vest and become exercisable upon the
attainment between October 1, 2002 and December 22,
2002 of ** "click-thrus" of the Promotions;
provided, however, that if the ** threshold is
not attained between October 1, 2002 and December
31, 2002, no Warrant Shares shall vest pursuant to
this Exhibit A, Section (M) and these Warrant Shares
shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
* Notwithstanding any provision of this Exhibit A to the contrary, in event
that ICQ shall fail to deliver the * required to be delivered under the
Agreement prior to January 15, 2001, (i) the "click-thru" thresholds required
under each of Sections (F), (G), (H) and (I) of this Exhibit A shall be
increased from * and (ii) the "click-thru" thresholds required under each of
Sections (J), (K), (L) and (M) of this Exhibit A shall be increased from *
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