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EXHIBIT 10.2
MAGAZINE CONTENT LICENSE AND HOSTING AGREEMENT
THIS MAGAZINE CONTENT LICENSE AND HOSTING AGREEMENT (the "Agreement") is
made and entered into as of the 27th day of January, 1999 (the "Effective
Date"), by and between XXXXX.XXX NETWORKS, LLC a Delaware limited liability
company ("Xxxxx.xxx, LLC"), and HEARST COMMUNICATIONS, INC., a Delaware
corporation ("Hearst").
RECITALS
WHEREAS, Xxxxx.xxx, LLC is in the business of, among other things,
developing and maintaining a network of interrelated Web sites, which Web sites
contain content focused primarily on topics of interest to women.
WHEREAS, Hearst is the sole and exclusive owner of certain magazines
that contain content focused primarily on topics of interest to women, each of
which magazines currently maintains, or intends to develop and maintain, an
affiliated Web site.
WHEREAS, Xxxxx.xxx, LLC and Hearst mutually desire: (i) to incorporate
the magazine Web sites into the network of sites maintained by Xxxxx.xxx, LLC;
(ii) for Xxxxx.xxx, LLC to provide Internet hosting services for all such
magazine Web sites, and to produce certain of such sites; and (iii) that
Xxxxx.xxx, LLC have the right to use and publish content from the magazines on
and in connection with the Xxxxx.xxx, LLC network.
NOW, THEREFORE, in consideration of the mutual covenants and
representations set forth herein, the parties hereby agree as follows.
AGREEMENT
1. DEFINITIONS.
1.1 "ADVERTISEMENT" means any banner advertisements, site sponsorship
arrangements, performance-based advertising, referrals, click-throughs, leads
and bounties, and all other similar activities which do not produce revenues
through direct selling, sold with respect to any Magazine Site.
1.2 "CONTENT" means the text, pictures, sound, video, graphical elements
and other data contained in any Web site, excluding all Marks.
1.3 THE "COPYRIGHT ACT" means Title 17 of the United States Code, as
amended from time-to-time, or any successor statute thereto.
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1.4 "DERIVATIVE WORK" is original Content contained on a Network site
that is based upon Hearst Content or Magazine Content, such as a translation,
musical arrangement, dramatization, fictionalization, motion picture version,
sound recording, art reproduction, abridgment, condensation, or any other form
in which a work may be recast, transformed, or adapted.
For purposes of this Agreement, excerpts made pursuant to Section 3.3 or
formatting revisions to Hearst Content made by Xxxxx.xxx, LLC in the normal
course of producing or hosting any Magazine Site shall not be deemed a
Derivative Work.
1.5 THE "HEARST CONTENT" means the Content that is proprietary to Hearst
or its third party licensors, which Content Hearst provides for inclusion on any
Magazine Site, whether before or after the Effective Date. As used in this
Agreement, "Hearst Content" specifically excludes Derivative Works.
1.6 "HOSTING SERVICES" means those Internet hosting services to be
performed by Xxxxx.xxx, LLC on behalf of Hearst under the terms of this
Agreement, all as more fully described on Exhibit A.
1.7 "INTERNET" means that certain worldwide system of computer networks,
conceived by the Advanced Research Projects Agency of the United States
Government in 1969 and originally known as ARPANet, which is as of the Effective
Date a public, cooperative and self-sustaining facility accessible to millions
of people worldwide, and is distinguished by its use of TCP/IP protocols, and
hypertext links, and incorporates, among other features, the World Wide Web.
1.8 THE "MAGAZINES" means the U.S. edition of each of the following
print publications (so long as such publications are published by Hearst):
Xxxxxx'x Bazaar; Cosmopolitan; Country Living; Country Living Gardener; Country
Living's Healthy Living; Good Housekeeping; House Beautiful; Redbook; Town &
Country; and Victoria, each of which is wholly owned by Hearst. If following the
Effective Date, Hearst becomes the sole owner of any other magazine(s), such
magazine(s) may be added to the foregoing list upon the mutual agreement of the
parties. Further, the parties may, by mutual written agreement, add any or all
of the international versions of any of the foregoing Magazines to the scope of
this Agreement. The "Magazines" shall also include Xxxxx-Xxxxxx (which is
operated as a joint venture between Hearst and Xxxxx-Xxxxxx Album S.A., if
following the Effective Date Hearst obtains the consent of Xxxxx-Xxxxxx Album
S.A. to include Xxxxx-Xxxxxx within the scope of this Agreement, which consent
Hearst agrees to use commercially reasonable efforts to obtain.
1.9 "MAGAZINE CONTENT" means any and all content (other than advertising
and advertorials) published in any of the Magazines, whether prior to or
following the Effective Date, and including, by way of example and without
limitation, articles, reportage, features, editorials, letters to the editor,
reviews and commentary, provided, however, that Magazine Content shall only
include material with respect to which Hearst owns sufficient electronic rights
to license the use and display of such material for use on the Network.
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1.10 "MAGAZINE SITE" means the U.S. edition of a Web site that is
provided by or on behalf of Hearst as an on-line version of a Magazine and/or is
maintained as an on-line adjunct to a Magazine, including all Hearst Content
contained on such site. If following the Effective Date, Hearst becomes the sole
owner of any other magazine(s) which are appropriate for incorporation in the
Network or obtains the consent of Xxxxx-Xxxxxx Album S.A. as described in
Section 1.7, the related Magazine Site(s) may be added to the scope of this
Agreement upon the mutual written agreement of the parties. Notwithstanding
anything contained herein to the contrary, in no event shall xxxxxx000.xxx be
deemed to be a Magazine Site for purposes of this Agreement.
1.11 "XXXX" means any and all trademarks, trade names, service marks,
trade dress, logos, URLs, or identifying slogans of a party, whether or not
registered.
1.12 "NET ADVERTISING REVENUES" means gross revenues recognized by
Xxxxx.xxx, LLC from the sale of Advertisements on (a) the Magazine Sites, (b)
any page of the Network that primarily contains Hearst Content (other than
teasers), and (c) any other page of the Network on which any article or feature
that is Hearst Content is reproduced or duplicated substantially in its
entirety, less agency fees (which shall not exceed fifteen percent (15%) of
gross revenues from the sale of Advertisements), commissions (which shall not
exceed eight percent (8%) of gross revenues from the sale of Advertisements),
credits due to cancellations, and provision for bad debt.
1.13 THE "NETWORK" means that network of Web sites operated by
Xxxxx.xxx, LLC and each bearing the Xxxxx.xxx, LLC brand and directly linked to
the Network Portal Site, including any Web sites that may be added to the
Network during the term of this Agreement.
1.14 "NETWORK PORTAL SITE" means the portal site for the Network, which
site is currently located at xxx.xxxxx.xxx, or any successor URL.
1.15 "PRODUCTION SERVICES" means those Magazine Site production services
to be performed by Xxxxx.xxx, LLC on behalf of Hearst under the terms of this
Agreement, all as more fully described on Exhibit B.
1.16 "PROMOTIONAL ACTIVITY" means the placing of Advertisements, or the
provision of headlines or teasers (e.g. excerpts of Hearst Content or Magazine
Content).
1.17 THE "WEB" means the World Wide Web portion of the Internet.
1.18 "XXXXX.XXX, LLC COMPETITOR" means: (a) any Women's Portal Site and
(b) any Web site that primarily provides content, substantially competes with a
Xxxxx.xxx, LLC site, is targeted specifically to women and is used primarily by
women; or (c) any channel or area of an online content aggregation service (such
as AOL, Compuserve, Yahoo, Excite, etc.), which channel or area substantially
competes with a Xxxxx.xxx, LLC site, is targeted specifically to women and is
used primarily by women.
1.19 "WOMEN'S PORTAL SITE" means a Web site that is meant to function as
an anchor site or entry point for users to the Internet and offers a broad array
of resources and services such as articles, e-mail, discussion forums, search
engines, weather information, stock quotes, phone and map information, and
on-line shopping malls that contains content of interest primarily to women, is
primarily targeted specifically to women and is used primarily by women (e.g.:
iVillage, Oxygen Media and LookSmart).
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2. INCORPORATION OF THE MAGAZINE SITES INTO THE NETWORK.
2.1 GENERAL. The incorporation of the Magazine Sites into the Network is
to be accomplished by way of the rights and obligations described in this
Agreement. In addition to such rights and obligations, the parties agree that
they shall, during the term of this Agreement, work together in good faith and
take whatever other actions are reasonably necessary or prudent to accomplish
the goals of this Agreement.
2.2 LINKING AND DISTRIBUTION.
(a) During the term of this Agreement, Xxxxx.xxx, LLC agrees that
it will place direct links to at least four Magazine Sites (to be mutually
agreed upon by Hearst and Xxxxx.xxx, LLC) on the Network. These links will be
placed on the homepage of the Network Portal Site if links to any non-Magazine
Site appear on such page. These links and additional links will also be placed
individually or grouped, throughout the Network on appropriate homepages and any
other appropriate pages on the Network, including, without limitation, any
appropriate pages where other relevant non-Magazine site links appear, and will
be no less favorable in terms of size, placement, rotation, prominence,
frequency and ease of use, than any other link, brand or name of any other site
on the Network. Without limiting the generality of the foregoing, in the event
any Magazine Site link or links appear on the Network together with any
non-Magazine site link that is in the form of a logo, such Magazine Site link or
links shall also be in the form of a logo. During the term of this Agreement,
Hearst shall create and place links to the Network Portal Site homepage from the
homepage of each Magazine Site (and elsewhere within each such Magazine Site, as
the parties may mutually determine).
(b) Xxxxx.xxx, LLC shall distribute the Magazine Sites throughout
the Network in a manner no less favorable than any other site on the Network.
2.3 BRANDING. Hearst shall prominently place Xxxxx.xxx, LLC's branding
above the fold, adjacent to the masthead on each Magazine Site. All Xxxxx.xxx,
LLC branding on each Magazine Site must comply with Xxxxx.xxx, LLC's branding
standards as communicated to Hearst from time to time, and shall be subject to
the prior approval of Xxxxx.xxx, LLC, which shall be deemed given if Xxxxx.xxx,
LLC does not respond within five (5) business days of receipt of request for
approval. Xxxxx.xxx, LLC shall provide navigation capabilities on the Network to
and from each of the Magazine Sites. Such navigation capabilities shall be at
least equal (including, without limitation, with respect to size, placement,
prominence, frequency and ease of use) to the navigation capabilities provided
by Xxxxx.xxx, LLC on the Network with respect to non-Magazine sites. Without
limiting the foregoing, navigation from the Network to each of the Magazine
Sites shall exist from every place on the Network where navigation to all other
non-Magazine site exists. In addition, where a navigational tool is used to link
to a majority of non-Magazine Sites exists, relevant Magazine Sites will also be
linked with such navigational tool. All Hearst and Magazine branding on the
Network must comply with applicable branding standards as communicated by Hearst
to Xxxxx.xxx, LLC from time to
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time, and shall be subject to the prior approval of Hearst, which shall be
deemed given if Hearst does not respond within five (5) business days of receipt
of request for approval.
2.4 DEVELOPMENT SCHEDULE. Following the Effective Date, the parties
shall work together in good faith in order to complete all tasks necessary or
desirable to incorporate the Magazine Sites into the Network (the
"Implementation"). Within thirty (30) days following the Effective Date, the
parties shall develop a mutually acceptable schedule ("Schedule") that will
cover each party's respective tasks and obligations with respect to the
Implementation and establish a targeted launch date for each Magazine Site. Each
party shall assign a project manager to be the primary point of contact between
the parties with respect to such efforts. The parties agree to use commercially
reasonable efforts to complete their respective Implementation obligations with
respect to each Magazine Site by the launch date set forth for such in the
Schedule.
2.5 LICENSE. During the term of this Agreement, Hearst hereby grants to
Xxxxx.xxx, LLC a non-exclusive (except as provided in Section 2.7(a)),
royalty-free, worldwide license, with no right to sublicense or to sell, to:
(a) electronically reproduce and distribute, and publicly perform
and display the Hearst Content on the Web, all in connection with the Hosting
Services to be provided by Xxxxx.xxx, LLC pursuant to Section 3 and the
incorporation of the Magazine Sites into the Network as contemplated by this
Agreement; and
(b) electronically reproduce and distribute, and publicly perform
and display the Hearst Content both (i) on the Network, and (ii) otherwise on
the Web in connection with Xxxxx.xxx, LLC's fulfillment of its distribution
commitments to its on-line distribution partners (e.g. America OnLine); and
(c) electronically reproduce and distribute, and publicly perform
and display Magazine Content both (i) on the Network, and (ii) otherwise on the
Web in connection with Xxxxx.xxx, LLC's fulfillment of its distribution
commitments to its on-line distribution partners (e.g. America OnLine);
provided, that electronic publishing rights have been obtained by Hearst with
respect to such Magazine Content (it being understood that Hearst shall not have
any obligation to obtain such rights on behalf of Xxxxx.xxx, LLC); and provided,
further, that Hearst shall not be obligated to deliver to Xxxxx.xxx, LLC any
Magazine Content that was published, in print or electronically, prior to the
Effective Date, where the cost of delivery to Xxxxx.xxx, LLC would, in Hearst's
reasonable estimation, be economically impractical; and
(d) reproduce and distribute through any media now known or
hereafter developed excerpts of the Hearst Content in advertisements for and
marketing and promotional materials related to the Network and the Magazine
Sites; and
(e) subject to Section 8.2 and obtaining the written agreement of
Hearst, make Derivative Works, and to reproduce, publicly perform and display,
and distribute such Derivative Works through the Network and in any media now
known or hereafter developed; and
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(f) electronically reproduce and distribute on the Web, and
publicly perform and display on the Web any banner advertisements delivered by
Hearst to Xxxxx.xxx, LLC for placement on the Magazine Site(s) and/or the
Network.
2.6 MAGAZINE SPECIFIC RESTRICTIONS. The rights granted pursuant to
Section 2.5 are subject to any guidelines that may be established by Hearst or
each Magazine from time-to-time with respect to Hearst Content or Magazine
Content. Further, Hearst and each Magazine shall have the right to request,
based on reasonable objections, the removal of, or editorial revisions to, any
of its Hearst Content or Magazine Content that is published through the Network.
Xxxxx.xxx, LLC agrees to take appropriate remedial action with respect to any
such request within twenty four (24) hours after receipt of such request;
provided, that after taking such remedial action, Xxxxx.xxx, LLC shall have the
right to appeal such request directly to the designated personnel at the
applicable Magazine.
2.7 ADDITIONAL RIGHTS AND RESTRICTIONS.
(a) EXCLUSIVITY. During the term of this Agreement, Hearst agrees
that it will not: (i) grant Internet distribution or Interact publication rights
to any of the Hearst Content or Magazine Content to any Xxxxx.xxx, LLC
Competitor including, without limitation, through a direct data feed, cobranding
arrangement, or premium placement arrangement; (ii) advertise or promote the
Magazine Sites on or in connection with any Xxxxx.xxx, LLC Competitor, or (iii)
license any of its Magazine Marks for use on the Web site of any Xxxxx.xxx, LLC
Competitor. Further, Hearst agrees that during the term of this Agreement (x) it
will not license to any Xxxxx.xxx, LLC Competitor the right to use, any URL
incorporating either the name of a Magazine or derivative or diminutive form of
the name of a Magazine (e.g. "Cosmo", "T&C", "Healthy Living", etc.) and (y) it
will not use any URL incorporating either the name of a Magazine or derivative
or diminutive form of the name of a Magazine except, (1) on a site that is part
of the Network, and (2) in connection with any projects with which Hearst or the
Magazines may become involved in compliance with Section 2.8(b).
(b) MAGAZINE-SPECIFIC OFFERINGS. Hearst agrees that during the
term of this Agreement, Xxxxx.xxx, LLC will have the right, subject to the
mutual agreement of the parties, to enter into arrangements specific to each
individual Magazine in order to: (i) develop Magazine-branded offerings to be
made available on areas of the Network other than the associated Magazine Site
and through product and service offerings of Xxxxx.xxx, LLC other than the
Network; and (ii) to distribute the Magazine Content to third parties on the
Web. Xxxxx.xxx, LLC shall have no right to sublicense or to sell the Hearst
Content or the Magazine Content to anyone without Hearst's prior written
consent.
(c) RIGHT OF FIRST OFFER. During the term of this Agreement,
Hearst agrees that Xxxxx.xxx, LLC shall have a right of first offer on all new
Internet-based development projects ("Projects") initiated by the Hearst
Magazine Group or any of the Magazines or Magazine Sites that are appropriate
for placement on the Network, based on the Network's demographics, Content and
similar factors. If Xxxxx.xxx, LLC expresses an interest in any such Project,
the Hearst Magazine Group (or the applicable Magazine or Magazine Site) shall
negotiate the terms of such Project with Xxxxx.xxx, LLC in good faith. In the
event the parties are not able to enter into a definitive agreement, letter of
intent, memorandum of understanding
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or like document within thirty (30) days (or such longer period as the parties
may agree to) following Xxxxx.xxx, LLC's receipt of notice of such Project from
the Hearst Magazine Group or the applicable Magazine or Magazine Site, the
Hearst Magazine Group (or the applicable Magazine or Magazine Site) shall have
the right to offer the Project to a third party; provided, however that prior to
executing a definitive agreement with such third party with respect to the
applicable Project, the Hearst Magazine Group (or the applicable Magazine or
Magazine Site) shall provide Xxxxx.xxx, LLC with a summary of the general terms
of the proposed agreement and discuss with Xxxxx.xxx, LLC ways in which
Xxxxx.xxx, LLC might participate in the Project.
2.8 RESERVATION OF RIGHTS BY HEARST.
(a) FOR PROMOTIONAL PURPOSES. Notwithstanding anything to the
contrary in this Agreement, Hearst retains the right to conduct Promotional
Activities with respect to each of the Magazine Sites in conjunction with any
party that is not a Women's Portal Site, provided that none of Hearst, the
Magazines or the Magazine Sites receives payments for those Promotional
Activities.
(b) OTHER ONLINE PROJECTS. Subject only to the requirements of
Section 2.7(c), Hearst retains the right on behalf of the Magazines to permit
the Magazines to enter into agreements of any nature with any third party that
is not a Xxxxx.xxx, LLC Competitor with respect to projects focused on specific
topics or applications.
2.9 EXCLUSIVITY OBLIGATIONS OF XXXXX.XXX, LLC. Xxxxx.xxx, LLC hereby
agrees that during the term of this Agreement it will not, without the prior
written consent of Hearst, enter into any agreement to produce and/or include as
part of the Network any magazine site or content related to a print publication
that is not a Hearst Publication, if such magazine site may reasonably be
construed to be competitive with any of the Magazines. Notwithstanding the
foregoing, nothing herein shall prohibit Xxxxx.xxx, LLC from performing under or
renewing its agreements with Rodale Press regarding (i) Prevention and (ii) New
Woman Magazine with respect to their Web site, which agreements are in effect as
of the Effective Date.
3. MAGAZINE SITE DEVELOPMENT AND MAINTENANCE.
3.1 HOSTING SERVICES. Hearst agrees that during the term of this
Agreement, Xxxxx.xxx, LLC will provide Internet Hosting Services for each
Magazine Site, regardless of the source of production of such site. In
connection therewith, and independent of the source of production of each
Magazine Site, Xxxxx.xxx, LLC will provide to Hearst during the term of this
Agreement Hosting Services with respect to each Magazine Site. Xxxxx.xxx, LLC
shall make the Hearst Content publicly available to Internet users on a basis
consistent with the performance standards set forth on Exhibit A, which may be
amended from time to time. Xxxxx.xxx, LLC shall upload all Hearst Content,
including updates. Xxxxx.xxx, LLC shall, using industry standard methods,
prevent unauthorized access to any shadow site of any Magazine Site, any
restricted areas of each Magazine Site and any databases or other sensitive
material generated from or used in conjunction with such Magazine Site, as
required by Hearst. Xxxxx.xxx, LLC agrees that Xxxxx.xxx, LLC will host selected
non-Magazine sites for Hearst during a transition period not to exceed ninety
(90) days from and after the Effective Date
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(the "Transition Hosting Services"). Hearst agrees that it shall pay Xxxxx.xxx,
LLC the sum of six thousand six hundred dollars ($6,600.00) for each period of
thirty (30) days during which Xxxxx.xxx, LLC provides Transition Hosting
Services. In the event the final period during which Xxxxx.xxx, LLC provides
Transition Hosting Services consists of fewer than thirty (30) days, then Hearst
shall pay Xxxxx.xxx, LLC for such final period of Transition Hosting Services at
the rate of two hundred and twenty dollars ($220.00) per day.
3.2 DELIVERY OF HEARST CONTENT. Except as set forth in Section 3.4,
Hearst will deliver, and will be solely responsible for providing, to Xxxxx.xxx,
LLC all of Hearst Content that Hearst intends to be published and distributed on
each Magazine Site. [At its option, Hearst may electronically transmit or upload
the Hearst Content directly to the Web site.] Unless otherwise agreed to by
Xxxxx.xxx, LLC, the Hearst Content will be in the format(s) specified by
Xxxxx.xxx, LLC in Exhibit A and conform to any other technical specifications
required by Xxxxx.xxx, LLC from time to time. Hearst will bear all costs
associated with the telecommunications and computer hardware, software and
services necessary to generate the Hearst Content and deliver it to Xxxxx.xxx,
LLC.
3.3 HEARST CONTENT CONTROL. Notwithstanding anything to the contrary
contained herein, Hearst retains complete editorial and creative control over
all aspects, including Content, of the Magazine Sites. Hearst will be solely
responsible for creating, managing, editing, reviewing, deleting and otherwise
controlling all Content, including the Hearst Content, Magazine Content and all
user-generated content, with respect to the Magazine Sites. Xxxxx.xxx, LLC shall
not supplement, modify, alter or excerpt the Hearst Content (other than
modifications strictly necessary to upload the Hearst Content to the Web site),
without Hearst's prior written consent; provided, however, that Xxxxx.xxx, LLC
may, without seeking Hearst's prior written consent, use reasonable excerpts of
the Hearst Content both on and off the Network in connection with its promotion,
marketing and advertising of the Magazine Sites and the Network and other
activities calculated to draw traffic to the Magazine Sites and the Network. No
article, excerpt or other subset of subject matter of the Hearst Content or
Magazine Content may be reproduced on the Network without the proper attribution
to the Magazine in which such Hearst Content or Magazine Content appeared in
print form and to the author or authors (where required) and the copyright owner
to the same extent and in the same manner set forth in the original form of the
Hearst Content or Magazine Content provided by Hearst. Hearst acknowledges that,
by only providing Hearst with the ability to publish and distribute its own
Hearst Content and the content of third parties, Xxxxx.xxx, LLC is acting as a
passive conduit for the distribution and publishing of such content. As a
conduit, Xxxxx.xxx, LLC will give Hearst complete discretion over all Content
reproduced on the Magazine Sites. Xxxxx.xxx, LLC has no obligation to Hearst,
and undertakes no responsibility, to review the Hearst Content or user-generated
content to determine whether any such content may incur liability to third
parties. Notwithstanding anything to the contrary contained herein, if
Xxxxx.xxx, LLC reasonably believes that any Hearst Content on a Magazine Site
may create liability for Xxxxx.xxx, LLC, Hearst agrees that, after prior notice
to Hearst (if reasonably possible under the circumstances), Xxxxx.xxx, LLC may
remove such Hearst Content and/or the applicable Web site(s) as Xxxxx.xxx, LLC
believes is prudent or necessary to minimize or eliminate Xxxxx.xxx, LLC's
potential liability.
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3.4 PRODUCTION SERVICES.
(a) From the date of this Agreement until such time when the
parties agree to the final terms of the Production Services to be provided
pursuant to Section 3.4(b), Xxxxx.xxx, LLC shall assume and perform all
obligations of the HomeArts business unit of the New Media and Technology
Division of Hearst ("HomeArts") to provide Production Services to the Magazine
Sites, in the manner provided by HomeArts at the date hereof. Xxxxx.xxx, LLC
shall be paid for: (i) Xxxxx.xxx, LLC staff employees -- the sum of (1) direct
cost of salary and benefits of those personnel performing the Production
Services, plus (2) the cost of overhead expenses, up to a maximum amount equal
to 15% of the salary and benefit costs described in (1), plus (3) 15% of the sum
of the amounts described in (1) and (2); and (ii) for subcontracted services,
including but not limited to manuscripts, art, photography, software
development, and talent -- the actual cost of the services plus a 15% profit
margin. All amounts paid to Xxxxx.xxx, LLC shall be credited to amounts to be
paid to Xxxxx.xxx, LLC pursuant to Section 3.4(b).
(b) WORK ORDERS. Hearst hereby agrees to purchase from Xxxxx.xxx,
LLC and Xxxxx.xxx, LLC agrees to provide to Hearst, no fewer than three million
dollars ($3,000,000.00) worth of Production Services (including the Production
Services provided under Section 3.4(a) above during the first year of the term
of this Agreement, and no fewer than six million dollars ($6,000,000.00) worth
of such services (including the Production Services provided under Section
3.4(a) above) during the first two years of the term of this Agreement. The
precise Production Services to be performed with respect to each Magazine Site
shall be determined by mutual agreement of the parties as soon as reasonably
practicable following the mutual execution of this Agreement and shall be
consistent with the performance standards set forth in Exhibit B. A written work
order, signed by both parties, shall be issued with respect to all Production
Services to be rendered. The parties acknowledge that as soon as reasonably
possible following the Effective Date, they shall identify those Magazine Sites
for which Xxxxx.xxx, LLC will have primary production responsibility during the
term of this Agreement, including any renewals thereof.
(c) PERFORMANCE STANDARDS. Hearst understands and agrees that any
Magazine Site that is not produced by Xxxxx.xxx, LLC must conform to the
technical and production standards as may be promulgated by Xxxxx.xxx, LLC from
time-to-time. Hearst shall be solely responsible for ensuring that such sites
meet such requirements, all at Hearst's sole cost and expense. All Magazine
Sites produced by Xxxxx.xxx, LLC pursuant to Section 3.5 shall conform to the
same technical and production standards as those imposed by Xxxxx.xxx, LLC with
respect to third party-produced Magazine Sites.
4. PROMOTION.
4.1 Both parties shall actively promote the rollout and availability of
the Magazine Sites via the Network. Hearst, for its part, agrees to provide the
cable and broadcast television and the print promotion described in Section 3.02
of the Limited Liability Company Agreement of Xxxxx.xxx, LLC. Further, the
parties shall from time-to-time work together in good faith to identify, develop
and pursue joint marketing and promotional activities that are designed to
enhance the value of the Magazine Sites and the Network. The parties shall
mutually agree on the budget, content and development schedule of any such
activities prior to the launch thereof.
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Each party shall assign a point of contact within such party's organization to
coordinate any joint marketing or promotional activities. Costs and expenses
incurred in support of such joint marketing and promotional activities shall be
determined by mutual agreement of the parties.
4.2 PRESS RELEASES. The parties shall issue a joint press release
describing the parties' relationship pursuant to this Agreement and any xxxxxx
xxxxx releases relating to this Agreement, which press releases shall be
mutually approved in writing by the parties prior to any distribution thereof.
5. XXXXX.XXX, LLC SOFTWARE AND TECHNOLOGY.
Hearst understand and agrees that Xxxxx.xxx, LLC, in performing its
obligations hereunder, may incorporate or use in connection with the Hosting
Services, Production Services and incorporation of the Magazine Sites into the
Network such software tools or programs or other technology that Xxxxx.xxx, LLC
has developed as of the Effective Date, or which Xxxxx.xxx, LLC may hereafter
develop ("Xxxxx.xxx, LLC Tools"). By way of example, Xxxxx.xxx, LLC Tools could
include without limitation toolbars for maneuvering between pages, search
engines, and Java applets. In the event any Xxxxx.xxx, LLC Tools are
incorporated by Xxxxx.xxx, LLC into or are used by Xxxxx.xxx, LLC in connection
with any Magazine Site, or any Xxxxx.xxx, LLC Tools are used to manipulate
Hearst Content for distribution on the Magazine Site or through the Network,
then Xxxxx.xxx, LLC hereby grants to Hearst during the terms of this Agreement a
worldwide, non-exclusive, nontransferable, royalty-free, free right to use the
Xxxxx.xxx, LLC Tools on and in connection with the Magazine Sites solely in
connection with such use. In the event Hearst would like to license any
Xxxxx.xxx, LLC Tools for any other purpose or after the termination of this
Agreement, Xxxxx.xxx, LLC agrees to negotiate such licenses in good faith with
Hearst; provided, however, that nothing herein shall be deemed to obligate
Xxxxx.xxx, LLC to enter into any such license in the event the parties are
unable to reach mutually agreeable terms within thirty (30) days of the
commencement of such negotiations, or in the event Xxxxx.xxx, LLC reasonably
believes that under such a license, Hearst would be able to use the Xxxxx.xxx,
LLC tools in a manner that may compete with any then-existing or reasonably
anticipated products and/or services of Xxxxx.xxx, LLC.
6. ADVERTISING.
6.1 NET REVENUE SPLIT. Xxxxx.xxx, LLC agrees that Hearst shall be
entitled to receive from Xxxxx.xxx, LLC no later than forty-five (45) days
following the termination of each calendar quarter a royalty (the "Royalty")
computed on Net Advertising Revenues from the preceding quarter. The Royalty
payable to Hearst shall be equal to twenty percent (20%) of the aggregate Net
Advertising Revenues from the applicable quarter, until such time as Hearst has
recouped the cumulative production costs incurred from and after the Effective
Date in the ongoing production of the Magazine Sites as set forth on Exhibit D,
whether or not such Magazine Sites are produced by Xxxxx.xxx, LLC, plus
interest, calculated at an annual rate equal to six percent (6%). Thereafter,
the Royalty shall equal eight percent (8%) of the aggregate Net Advertising
Revenues from the applicable quarter, until such time as the gross revenues
recognized by Xxxxx.xxx, LLC in any period of twelve (12) consecutive months
exceed forty million dollars ($40,000,000.00), whereupon the Royalty payable to
Hearst shall be
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reduced to seven percent (7%) of the aggregate Net Advertising Revenues from the
applicable quarter, until such time as the gross revenues recognized by
Xxxxx.xxx, LLC in any calendar year exceeds sixty million dollars
($60,000,000.00). Thereafter, the Royalty payable to Hearst shall be reduced to
six percent (6%) of the aggregate Net Advertising Revenues from the applicable
quarter through and including the expiration or earlier termination of this
Agreement.
6.2 SALES BY HEARST. Hearst may only sell Advertisements (which sales
are to be made by the Hearst Magazine Division) on the Magazine Sites with the
prior written approval of Xxxxx.xxx, LLC, which approval shall not be
unreasonably withheld. Xxxxx.xxx, LLC shall pay to Hearst a commission with
respect to such sales in an amount to be mutually agreed upon by the parties.
6.3 ADVERTISING POLICIES AND COOPERATION. In the allocation and sale of
Advertisements throughout the Network, Xxxxx.xxx, LLC agrees to treat the
Magazine Sites at least as favorably as the other non-Magazine sites. Xxxxx.xxx,
LLC agrees not to place any advertising on the Magazine Sites or any other place
on the Network where Hearst Content or Magazine Content appears that is in
violation of the then current and applicable advertising policies and standards
established by the applicable Magazine; provided, that such policies have been
communicated to Xxxxx.xxx, LLC in advance. Further, the parties agree to
coordinate their advertising sales efforts as permitted under this Agreement to
ensure that none of such efforts conflict with either party's contractual
arrangements with third parties.
7. E-COMMERCE.
Notwithstanding anything in this Agreement to the contrary, Hearst
reserves the right to sell goods and services on any Internet site or area,
including, without limitation, through the Magazine Sites, both directly and
through third party commerce partners ("e-commerce"), and in connection
therewith, Hearst retains the right to conduct Promotional Activities with
respect to such e-commerce; provided, however that for the benefit of Xxxxx.xxx,
LLC, Hearst agrees that all e-commerce shall be conducted in accordance with
applicable local, state and Federal law including, without limitation, consumer
protection laws. Further, with respect to e-commerce, the parties hereby agree
as follows:
7.1 MAGAZINE SUBSCRIPTIONS. Xxxxx.xxx, LLC shall be entitled to a
commission equal to thirty percent (30%) of gross revenues (less credit for
returns, and provision for bad debt) derived from the sale of Magazine
subscriptions made through the Network, whether or not such sales are made
through the Magazine Sites or any non-Magazine site of the Network, including,
without limitation, the Network Portal Site, and without regard to the entity
actually making such sale.
7.2 DIRECT SALES. Xxxxx.xxx, LLC shall be entitled to a commission equal
to five percent (5%) of gross revenues (less shipping and handling charges,
credit for returns, and provision for bad debt) derived from the direct sale of
goods and services on the Magazine Sites (other than Magazine subscriptions)
("Direct Sales"), i.e. where the applicable sale is made directly between the
customer and the applicable Hearst entity, and not between the customer and any
non-Hearst entity (e.g. Xxxxxx.xxx, Music Boulevard, etc.). Unless otherwise
agreed to in writing by Xxxxx.xxx, LLC, it shall be the sole responsibility of
Hearst to provide all
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services related to Direct Sales. Hearst will bear full responsibility for all
customer service, including without limitation, order processing, billing,
fulfillment, shipment, collection and other customer service associated with any
Direct Sales offered, sold or licensed through each Magazine Site, and
Xxxxx.xxx, LLC will have no obligations whatsoever with respect thereto. Hearst
will, using no less than industry standard methods for online-order fulfillment,
ensure that all Direct Sales are received, processed, fulfilled and delivered on
a timely and professional basis.
7.3 COMMERCE PARTNERS. The parties agree that for purposes of this
Agreement royalties paid to Hearst (or any entity that controls, is controlled
by, or under common control with Hearst (any such entity, a "Hearst Affiliate"))
by Hearst's third party commerce partners (e.g. Xxxxxx.xxx), which royalties are
attributable to the sale of goods or services arising from traffic on the
Magazine Sites, shall be deemed to be performance-based advertising and,
consequently, shall contribute to Net Advertising Revenues. For purposes hereof,
the terms "controls", "is controlled by", and "under common control with" refer
to the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a business entity, whether through
ownership of voting securities, by contract, or otherwise.
7.4 PAYMENT. All amounts due Xxxxx.xxx, LLC from Hearst pursuant to this
Section 7 shall be paid on a quarterly basis within thirty (30) days following
the end of the quarter in which the applicable Commerce Revenues are generated
and shall be accompanied by a report detailing the calculation of the applicable
payment.
7.5 NON-MAGAZINE SITE TRANSACTIONS. Hearst understands and agrees that,
except as explicitly set forth in Section 6 or this Section 7, neither Hearst,
nor any Hearst Affiliate, shall be entitled to any commission, royalty or
payment of any sort by virtue of the sale of goods or services on the Network.
8. OWNERSHIP.
8.1 HEARST CONTENT AND MAGAZINE CONTENT. Title to and ownership of all
intellectual property rights embodied by or otherwise incorporated into the
Hearst Content and Magazine Content shall remain with Hearst and/or its third
party licensors, if any. Nothing herein shall be construed to grant to Hearst
any right, title or interest in or to any other Content that may be published on
or through the Network, including any Content supplied by Xxxxx.xxx, LLC for use
on or in connection with the Magazine Sites.
8.2 DERIVATIVE WORKS. Neither Xxxxx.xxx, LLC nor Hearst shall create a
Derivative Work without the prior agreement of the other of them, or the
applicable Magazine or Magazine Site. All Derivative Works made or developed by
Xxxxx.xxx, LLC as permitted by Section 2.5(e) shall be jointly owned by Hearst
and Xxxxx.xxx, LLC, each such work being a "joint work" as defined in Section
101 of the Copyright Act, and the parties shall be co-owners of the copyrights
in such works as set forth in Section 201(a) of the Copyright Act.
Notwithstanding anything contained herein or in the Copyright Act to the
contrary, the parties agree that neither party shall make any commercial use of
any Derivative Work without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, however, that
such consent may be conditioned upon the parties' reaching agreement with
respect to the accounting
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for and division of profits, if any, arising from such proposed use.
Notwithstanding the foregoing, during the term of this Agreement Xxxxx.xxx, LLC
may, without payment of any kind to Hearst, use any and all Derivative Works in
any manner that it is permitted to use the Hearst Content and Magazine Content
pursuant to the terms of Section 2.5.
8.3 XXXXX.XXX, LLC TOOLS. All Xxxxx.xxx, LLC Tools, including all
intellectual property rights and other proprietary rights embodied therein or
otherwise applicable thereto, are and shall remain the sole and exclusive
property of Xxxxx.xxx, LLC and/or its licensors. All rights not specifically
granted to Hearst herein with respect to the Xxxxx.xxx, LLC Tools are retained
by Xxxxx.xxx, LLC.
8.4 OTHER CONTENT. All Content used on or in connection with the Network
(inclusive of any Content that Xxxxx.xxx, LLC may provide for use on the
Magazine Sites), exclusive of the Hearst Content, Magazine Content and
Derivative Works, is and shall remain the sole and exclusive property of
Xxxxx.xxx, LLC and/or its third party licensors and content providers. Nothing
herein shall be construed to grant to Hearst any right, title or interest in or
to any such Content, and Hearst agrees that it shall not at any time make any
claim to any right, title or interest in or to the such Content.
8.5 URL'S. The Magazine Site URL's shall be the sole and exclusive
property of Hearst. The Network Portal Site URL is and shall remain the sole and
exclusive property of Xxxxx.xxx, LLC. All other Network URL's shall remain the
property of Xxxxx.xxx, LLC or its Network partners, as the case may be.
8.6 USER INFORMATION. The parties agree that any and all user data that
is collected through any user registration process (e.g. name, address, e-mail
address, etc.) ("User Data") on the Magazine Sites shall be jointly owned by
Xxxxx.xxx, LLC and Hearst; provided, however, that despite such joint ownership
each party shall be free to use such information without the consent of the
other party for any lawful purpose and in any lawful manner and free of any duty
to account to the other party for profits arising from such use. Further, the
parties agree that any and all other User Data shall be the sole and exclusive
property of Xxxxx.xxx, LLC and that Hearst shall have no right, title or
interest in or to such User Data. Each party agrees that it shall use any and
all User Data owned by such party only in a manner that is consistent with any
applicable privacy policy or other policy respecting the use of such
information. Xxxxx.xxx, LLC agrees that it will deliver all jointly-owned User
Data, in a mutually agreed upon format, to Hearst within thirty (30) following
the quarter in which such User Data is collected.
9. WARRANTIES.
9.1 HEARST WARRANTIES. Hearst hereby warrants to and for the benefit of
Xxxxx.xxx, LLC that Hearst shall not provide any Hearst Content to Xxxxx.xxx,
LLC or publish any Hearst Content that: (a) infringes on any third party's
copyright, patent, trademark, trade secret or other proprietary rights or rights
of publicity or privacy; (b) violates any law, statute, ordinance or regulation
(including without limitation the laws and regulations governing export
control); (c) is defamatory, trade libelous, unlawfully threatening or
unlawfully harassing; (d) is obscene or pornographic or contains child
pornography; (e) violates any laws regarding unfair competition,
antidiscrimination or false advertising, or (f) to the best of Hearst's
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knowledge, contains any viruses, trojan horses, worms, time bombs, cancelbots or
other computer programming routines that are intended to damage, detrimentally
interfere with, surreptitiously intercept or expropriate any system, data or
personal information. Furthermore, Hearst warrants that to the best of its
knowledge, based on representations and warranties made by third parties,
technology used or supplied by or on behalf of Hearst pursuant to this Agreement
(exclusive of technology supplied by Xxxxx.xxx, LLC) ("Hearst Technology") shall
be Year 2000 Compliant. As used in this Section 9.1, "Year 2000 Compliant" means
that the Hearst Technology is designed to be used prior to, during and after the
calendar Year 2000 A.D., and will accurately receive, provide and process
date/time data (including, but not limited to, calculating, comparing and
sequencing) from, into and between the 20th and 21st centuries, including the
years 1999 and 2000, and leap-year calculations and will not malfunction, cease
to function, or provide invalid or incorrect results as a result of date/time
data; provided that all other hardware, software or firmware used in conjunction
with the Hearst Technology properly exchange accurate and properly formatted
date data with the Hearst Technology being evaluated for Year 2000 Compliance.
Hearst agrees to use commercially reasonable practices (including without
limitation periodic inspections of each Magazine Site) to ensure that
user-generated content published or distributed on such Magazine Sites does not
create liability for Xxxxx.xxx, LLC.
9.2 XXXXX.XXX, LLC WARRANTIES. Xxxxx.xxx, LLC hereby warrants to and for
the benefit of Hearst that Xxxxx.xxx, LLC shall not use any Content excluding
Hearst Content or Magazine Content in any manner that (a) infringes on any third
party's copyright, patent, trademark, trade secret or other proprietary rights
or rights of publicity or privacy; (b) violates any law, statute, ordinance or
regulation (including without limitation the laws and regulations governing
export control); (c) is defamatory, trade libelous, unlawfully threatening or
unlawfully harassing; (d) is obscene or pornographic or contains child
pornography; (e) violates any laws regarding unfair competition,
antidiscrimination or false advertising; or (f) to the best of Xxxxx.xxx, LLC's
knowledge, contains any viruses, trojan horses, worms, time bombs, cancelbots or
other computer programming routines that are intended to damage, detrimentally
interfere with, surreptitiously intercept or expropriate any system, data or
personal information. Furthermore, Xxxxx.xxx, LLC warrants that to the best of
its knowledge, based on representations and warranties made by third parties,
the software, hardware and equipment (the "Information Technology") owned,
leased or licensed by Xxxxx.xxx, LLC on the date hereof is Year 2000 Compliant.
As used in this Section 9.2, "Year 2000 Compliant" means the Information
Technology is designed to be used prior to, during and after the calendar Year
2000 A.D., and the Information Technology used during each such time period will
accurately receive, provide and process date/time data (including, but not
limited to, calculating, comparing and sequencing) from, into and between the
20th and 21st centuries, including the years 1999 and 2000, and leap-year
calculations and will not malfunction, cease to function, or provide invalid or
incorrect results as a result of date/time data; provided that all other
hardware, software or firmware used in conjunction with the Information
Technology properly exchange accurate and properly formatted date data with the
Information Technology being evaluated for Year 2000 Compliance. Xxxxx.xxx, LLC
agrees to use commercially reasonable practices (including without limitation
periodic inspections of the Network) to ensure that user-generated content
published or distributed on Network sites (other than the Magazine Sites) does
not create liability for Hearst.
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9.3 RECOURSE AND REMEDIES. Each party agrees that its sole and exclusive
remedy for a breach of any warranty made by the other party pursuant to this
Section 9 shall be indemnification as set forth in Section 11 hereof.
10. TRADEMARKS.
Each party acknowledges and agrees for all purposes that all Marks
associated with the other party and/or the other party's services, products,
literature, promotional materials or otherwise, whether or not registered,
constitute the other party's exclusive property. Each party ("Licensor") hereby
grants to the other party ("Licensee") a non-exclusive, non-transferable,
non-assignable, royalty-free license to use those Marks of Licensor set forth on
Exhibit C solely for purposes of performing Licensee's obligations under this
Agreement including, without limitation, in connection with any advertising,
marketing and promotional activities undertaken and materials developed pursuant
to this Agreement. All uses by Licensee of Licensor's Marks shall be in
accordance with such quality control standards as the Licensor may promulgate
from time to time, and Licensee agrees to refrain from all uses of Licensor's
Marks to which Licensor objects. All uses of Licensor's Marks by Licensee,
including all goodwill arising therefrom shall inure solely to the benefit of
Licensor. All promotional literature and other materials prepared by either
party in connection with its promotional obligations hereunder shall bear
appropriate copyright and/or trademark notices as prescribed by the party whose
content or branding is included therein. Licensee agrees it will not use,
register or attempt to register in any jurisdiction, or otherwise appropriate or
adopt any name, xxxx or logo that is confusingly similar to Licensor's Marks.
Licensor retains all rights with respect to Licensor's Marks that are not
specifically granted to Licensee herein. At no time during the term of the
Agreement or thereafter shall Licensee attack, challenge or file any application
with respect to any Licensor Xxxx.
11. INDEMNITY.
11.1 Hearst agrees to defend, indemnify and hold harmless Xxxxx.xxx, LLC
and its directors, officers, agents and employees from and against any and all
claims, suits, damages, losses, costs, liabilities, expenses and fees (including
without limitation reasonable attorneys' and expert witnesses' fees) incurred or
arising from (a) any breach of the warranties set forth in Section 9.1, (b) any
Hearst Content, Magazine Content, or user-generated content on the Magazine
Sites, except to the extent arising from Xxxxx.xxx, LLC's unauthorized or
unapproved use of Hearst Content or Magazine Content on the Magazine Sites, or
(c) e-commerce conducted on any Magazine Site. Xxxxx.xxx, LLC may, at its own
expense, participate in any defense or settlement negotiations with respect to
any claim to which it is entitled to indemnification with counsel of its own
choosing. Hearst agrees not to enter into any settlement of any claim without
the prior written consent of Xxxxx.xxx, LLC, which consent shall not be
unreasonably withheld or delayed.
11.2 Xxxxx.xxx, LLC agrees to defend, indemnify and hold harmless Hearst
and its directors, officers, agents and employees from and against any and all
claims, suits, damages, losses, costs, liabilities, expenses and fees (including
without limitation reasonable attorneys' and expert witnesses' fees) incurred or
arising from (a) any breach of the warranties set forth in Section 9.2, (b) any
Content (excluding Hearst Content, Magazine Content or user-generated
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content on the Magazine Sites) created, developed, published or distributed by
Xxxxx.xxx, LLC (c) the manner in which Xxxxx.xxx, LLC uses any of the Hearst
Content or Magazine Content on the Network, other than on the Magazine Sites and
(d) e-commerce conducted other than on a Magazine Site. Hearst may, at its own
expense, participate in any defense or settlement negotiations with respect to
any claim to which it is entitled to indemnification with counsel of its own
choosing. Xxxxx.xxx, LLC agrees not to enter into any settlement of any claim
without the prior written consent of Hearst, which consent shall not be
unreasonably withheld or delayed.
12. LIMITATIONS ON LIABILITY.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT (INCLUDING BUT NOT LIMITED TO SUCH DAMAGES
ARISING FROM TORT, INCLUDING NEGLIGENCE AND STRICT LIABILITY, BREACH OF CONTRACT
OR WARRANTY), INCLUDING WITHOUT LIMITATION DAMAGES FOR INTERRUPTED
COMMUNICATIONS, LOST DATA OR LOST PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF (OR KNOWS OR SHOULD KNOW OF) THE POSSIBILITY OF SUCH DAMAGES AND
NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY.
13. TERM AND TERMINATION.
13.1 THE TERM. This Agreement shall be effective from and after the
Effective Date for a period of six consecutive years (the "Initial Term").
Following the Initial Term, this Agreement shall automatically renew for three
consecutive terms of six (6) years each (each, a "Renewal Term"); provided that
prior to the commencement of each Renewal Term the parties shall reach agreement
as to any modifications to be made to the royalties or commissions to be paid
hereunder. In the event the parties do not reach such agreement, the applicable
Renewal Term shall, nevertheless, commence on a month-to-month basis under the
then-existing terms of the Agreement until such time as the parties agree to any
new terms or either party provides the other with no less than ninety (90) days
notice of termination of this Agreement.
13.2 TERMINATION FOR CAUSE. In the event either party materially
breaches this Agreement, the other party may terminate this Agreement by
providing the breaching party with no fewer than ninety (90) days notice of
termination; provided, that in the event of breaches capable of cure, the
breaching party shall have the right to cure the default within such period (or
such longer period as then non-breaching party may agree to in writing) and
thereby forestall termination of this Agreement.
13.3 EFFECT OF TERMINATION. Upon the expiration or termination of this
Agreement, Xxxxx.xxx, LLC shall (i) download all Hearst Content and Magazine
Content to a medium of Hearst's choosing and deliver such Hearst Content and
Magazine Content to Hearst within five (5) business days following such
expiration or termination, (ii) immediately cease using the Hearst Content and
Magazine Content, including but not limited to, all electronic copies and
reproductions on the Network, (iii) within forty-five (45) days of such
termination, pay to Hearst any amounts of Royalty that as of the effective date
of termination were due and owed to Hearst pursuant to this Agreement and (iv)
after receipt by Hearst of the Hearst Content and Magazine
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Content in the manner requested, upon the direction of Hearst, delete all Hearst
Content and Magazine Content from the entire Network, including the Magazine
Sites and any other place in which such Content appears as promptly as
practicable.,
13.4 SURVIVAL. The terms of Sections 1, 8, 9, 11, 12, 13.3, 13.4, 14,
15, and 16 shall survive the expiration or earlier termination of this Agreement
for any reason.
14. CONFIDENTIAL INFORMATION.
14.1 DEFINITION OF CONFIDENTIAL INFORMATION. "Confidential Information"
as used in this Agreement shall mean any and all technical and non-technical
information of a party (the "Disclosing Party") to this Agreement (including,
without limitation, patents, copyrights and works of authorship, trade secrets,
and proprietary information, techniques, sketches, drawings, models, inventions,
know-how, processes, apparatus, equipment, algorithms, software programs, and
software source documents) related to the current, future and proposed business,
products and services of such party, and its suppliers and customers, and
includes, without limitation, information concerning development, design details
and specifications, engineering, customer lists, business forecasts, sales, and
marketing plans and any other similar information or data which is disclosed to
the other party (the "Recipient") or to which the Recipient otherwise gains
access as a result of performing under this Agreement. "Confidential
Information" also includes proprietary or confidential information of any third
party that may disclose such information to the Disclosing Party in the course
of the Disclosing Party's business. Confidential Information does not include
information, technical data or know-how which: (i) is in the Receiving Party's
possession at the time of disclosure as shown by the Receiving Party's files and
records immediately prior to the time of disclosure; (ii) before or after it has
been disclosed to the Receiving Party, enters the public domain, not as a result
of any action or inaction of the Receiving Party; (iii) is approved for release
by written authorization of the Disclosing Party; (iv) is disclosed to the
Receiving Party by a third party not in violation of any obligation of
confidentiality; or (v) is independently developed by the Receiving Party
without reference to the Disclosing Party's Confidential Information.
14.2 USE AND DISCLOSURE. The Receiving Party agrees not to use the
Confidential Information of the Disclosing Party for any purpose except to the
extent necessary to fulfill its obligations under this Agreement. The Receiving
Party agrees not to copy, alter, modify, disassemble, reverse engineer or
&compile any of the materials comprising Confidential Information, unless
permitted in writing by the Disclosing Party. The Receiving Party agrees not to
disclose the Confidential Information to any third parties or to any of its
employees, contractors or agent except those of whom who have a need to know the
Disclosing Party's Confidential Information to enable the Receiving Party to
fulfill its obligations under this Agreement; provided, that such parties shall
be made aware that such Confidential Information is confidential to the
Disclosing Party and shall be under a written contractual restriction on
nondisclosure and proper treatment of Confidential Information that is
consistent with and no less restrictive than the terms of this Section 15.
Notwithstanding the foregoing, the Receiving Party may disclose the Disclosing
Party's Confidential Information to the extent required by a valid order of a
court or other governmental body or by applicable law; provided, however, that
the Receiving Party will use all reasonable efforts to notify the Disclosing
Party of the obligation to make such disclosure in advance so that the
Disclosing Party will have a reasonable
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opportunity to object to such disclosure. The Receiving Party agrees that it
shall treat the Confidential Information with the same degree of care as it
accords its own Confidential Information of a similar nature; provided that in
no event shall the Receiving Party exercise less than reasonable care to protect
the Disclosing Party's Confidential Information. The Receiving Party agrees to
advise the Disclosing Party in writing of any misappropriation or misuse by any
person of the Disclosing Party's Confidential Information of which the Receiving
Party may become aware. The Receiving Party will not communicate any information
to the Disclosing Party in violation of the proprietary rights of any third
party.
14.3 RETURN OF MATERIALS. Any Confidential Information furnished to the
Receiving Party, and all copies thereof, at the earlier of the Disclosing
Party's request, or the termination of the business relationship between the
Disclosing Party and the Receiving Party, at the Disclosing Party's option, will
either be: (i) promptly returned to the Disclosing Party; or (ii) destroyed by
the Receiving Party (with the Receiving Party providing written certification of
such destruction to the Disclosing Party).
15. BOOKS AND RECORDS.
15.1 RECORDS. Each party shall during the term of this Agreement and for
a period of three years thereafter, keep and maintain full and complete records
and books of account, maintained in accordance with generally accepted
accounting principals, related to its activities under this Agreement
("Records") including, without limitation, relating to any payments of any kind
to be made to the other party pursuant to this Agreement.
15.2 AUDIT RIGHT. During the term of this Agreement and for a period of
three years thereafter, each party shall have the right, on no more than one
occasion in any consecutive twelve (12) month period, to audit, or to engage a
third party auditor, reasonably acceptable to the other party, to audit the
Records of the other party to ensure compliance with the terms of this Agreement
and the accuracy of all amounts paid to the auditing party pursuant to this
Agreement; provided, that the auditing party provide the other party with no
fewer than fifteen (15) days notice of such audit and conducts such audit in a
manner calculated to minimize interference with the other party's business.
Unless otherwise agreed to by the parties, any such audit shall be conducted on
the audited party's premises. The auditing party shall bear the cost of the
audit; provided, however, that in the event the audit reveals an underpayment to
the auditing party in excess of five percent (5%), the audited party shall
reimburse the auditing party for the cost of the audit.
16. GENERAL PROVISIONS.
16.1 TAXES. Each party shall be responsible for, and shall indemnify and
hold the other party harmless from and against, any and all taxes, customs,
duties or other amounts that may be imposed by any governmental authority on any
amount paid to such party by the other party hereunder, except for taxes based
upon the other party's net income or gross receipts.
16.2 LATE PAYMENTS. Each party reserves the right to charge the other
party interest at the lower of 1 1/2% per month or the highest rate permissible
under applicable law on any amount due such party from the other party under
this Agreement, which amount is not paid when due.
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16.3 GOVERNING LAW/JURISDICTION/VENUE. This Agreement will be governed
and interpreted in accordance with the laws of the State of New York as applied
to agreements made, entered into and performed entirely in New York and solely
by New York residents. The parties hereby agree that all causes of action
brought in connection with this Agreement shall be brought in the State or
Federal Courts located in New York County, New York, and each party hereby
irrevocably consents to the personal jurisdiction of such courts for such
purpose.
16.4 EXPENSES. Unless otherwise set forth herein to the contrary, each
party shall be solely responsible for payment of any expenses such party incurs
in connection with its performance under this Agreement.
16.5 SEVERABILITY; WAIVER. If any provision of this Agreement is held to
be invalid or unenforceable for any reason, the remaining provisions will
continue in full force without being impaired or invalidated in any way. The
parties agree to replace any invalid provision with a valid provision that most
closely approximates the intent and economic effect of the invalid provision.
The waiver by either party of a breach of any provision of this Agreement will
not operate or be interpreted as a waiver of any other or subsequent breach.
16.6 HEADINGS. Headings used in this Agreement are for reference
purposes only and in no way define, limit, construe or describe the scope or
extent of such section, or in any way affect this Agreement.
16.7 SUCCESSORS AND ASSIGNS. The parties' rights and obligations will
bind and inure to the benefit of their respective successors, heirs, executors
and administrators and permitted assigns. Xxxxx.xxx, LLC may subcontract all or
any portion of its service obligations hereunder; provided that Xxxxx.xxx, LLC
remains primarily responsible for such subcontracted service obligations and
that Hearst reserves the right to remove and/or have a subcontractor replaced if
Hearst is not reasonably satisfied with such subcontractor's performance.
16.8 ATTORNEYS' FEES. If any legal action is brought to construe or
enforce any provision of this Agreement, the prevailing party shall be entitled
to receive its reasonable attorneys' fees and court costs in addition to any
other relief it may receive.
16.9 FORCE MAJEURE. If the performance of this Agreement, or any
obligation hereunder, except the making of payments hereunder, is prevented,
restricted or interfered with by any act or condition whatsoever beyond the
reasonable control of the affected party, the party so affected, upon giving
prompt notice to the other party, shall be excused from such performance to the
extent of such prevention, restriction or interference.
16.10 INDEPENDENT CONTRACTORS. The parties to this Agreement are
independent contractors, and no agency, partnership, joint venture or
employee-employer relationship is intended or created by this Agreement.
16.11 NOTICE. Any notices required or permitted hereunder shall be given
to the appropriate party at the address specified below or at such other address
as the party shall specify in writing. Such notice shall be deemed given: upon
personal delivery; if sent by telephone
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facsimile, upon confirmation of receipt; if sent by electronic mail, upon
confirmation of delivery; or if sent by certified or registered mail, postage
prepaid, five (5) days after the date of mailing.
16.12 MODIFICATIONS. This Agreement may only be modified or revised by a
written agreement or amendment hereto that is executed by both of the parties.
16.13 ENTIRE AGREEMENT. This Agreement, including the Exhibits attached
hereto, sets forth the complete and final statement of the agreement between the
parties with respect to the subject matter hereof, and supersedes any and all
oral or written agreements, negotiations or understandings between the parties
as to such subject matter. Any terms on any Hearst work order that purport to
modify the terms of this Agreement, or that are in addition to or different from
the terms of this Agreement shall be void and of no force or effect,
notwithstanding Xxxxx.xxx, LLC's provisions of the services requested in such
work order, unless specifically agreed to in writing by Xxxxx.xxx, LLC.
Wheresoever the terms of any mutually executed work order differ from or
conflict with the terms of this Agreement, the terms of the work order shall
prevail, but only to the extent of the specific project covered by such work
order.
IN WITNESS WHEREOF, each of the parties hereto have executed this
Agreement as of the date first written above.
XXXXX.XXX, LLC: HEARST:
By: /s/ Xxxxxxx X. XxXxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------- ----------------------------
Xxxxxxx X. XxXxxxxx Xxxxxx X. Xxxxx
Title: President Title: Vice President
Street Address: Street Address:
0000 Xxxxxxx Xxxxx 000 Xxxxxx Xxxxxx
Xxxxx 000 Xxx Xxxx, XX 00000
Xxx Xxxxx, XX 00000
Mail Address: Mail Address:
0000 Xxxxxxx Xxxxx 000 Xxxxxx Xxxxxx
Xxxxx 000 Xxx Xxxx, XX 00000
Xxx Xxxxx, XX 00000
Fax: 000-000-0000 Fax: 000-000-0000
E-Mail: E-Mail: Xxxxxx@Xxxxxx.xxx
20.
21
Exhibit A
HOSTING SERVICES
Hearst agrees that during the term of this Agreement, Xxxxx.xxx, LLC
will provide Internet hosting services for each Magazine Site, regardless of the
source of production of such site.
Xxxxx.xxx, LLC shall provide Internet hosting services that are equal
to, or improve on, the quality of Internet hosting services currently available
to the Magazines through the Internet hosting facility maintained for the Hearst
New Media and Technology Center ("Hearst New Media") at Exodus Communication's
Internet Data Center in Jersey City, New Jersey. The specific hardware
configuration, software and connectivity shall be mutually agreed upon by the
parties as soon as reasonably practicable following the Effective Date.
Hosting services provided by Xxxxx.xxx, LLC to Hearst shall be fully
managed services that conform to Network operational standards established by
Xxxxx.xxx, LLC. Fully managed means that, in addition to providing all hardware,
software, connectivity and bandwidth required to insure that Hearst Content is
publicly available to Internet users, Xxxxx.xxx, LLC will provide appropriate
monitoring of all systems, and full systems' administration support for all
Magazine Sites hosted by Xxxxx.xxx, LLC.
Xxxxx.xxx, LLC shall, using industry standard methods, prevent
unauthorized access to any production system, Magazine Site, any restricted area
of a Magazine Site and any database or other sensitive material generated from
or used in conjunction with a Magazine Site, as required by Hearst. As part of
this security consideration, Xxxxx.xxx, LLC shall have periodic security audits
performed by an independent third party, the frequency of which audits shall be
mutually agreed upon.
Xxxxx.xxx, LLC will provide and fully manage both live servers and
staging servers used for the production of Magazine Sites, whether Content is
produced by Xxxxx.xxx, LLC or a third party. Xxxxx.xxx, LLC shall also put in
place and support promotion scripts for the timely updating of Content to the
sites by production teams employed to produce Magazine Sites, whether at
Xxxxx.xxx, LLC or at third party location. The specific requirements for
promotion of Content shall be mutually agreed to as soon as reasonably
practicable following the Effective Date.
Xxxxx.xxx, LLC shall insure that the best commercially available service
level agreement is in place for hosting services provided to Hearst and the
Magazines. In particular, the terms of the Xxxxx.xxx, LLC service level
agreement shall be at least as favorable to Hearst as the service level
agreement which is currently in place between Exodus Communications and Hearst
New Media, including, without limitation, the terms regarding remedies for
interruption of services.
As part of its hosting services, Xxxxx.xxx, LLC shall make available to
the Magazine Sites all core functionality of the Network, whether the Content
for the Magazine Sites is produced by Xxxxx.xxx, LLC or a third party. The scope
of this functionality shall be mutually agreed as soon as reasonably practicable
following the Effective Date. Core
A-1.
22
functionality of the Network shall include, but not be limited to, all
functionality currently available to the Magazines through the HomeArts Network,
e.g., engineering functionality (i.e. registration, ad management, surveys,
polls, quizzes, use of relational database systems, user profiling,
personalization techniques for delivery of content or advertising, and standard
user tracking reports made available to Magazines in an online format), and
third party functionality (i.e. search, chat, forums, email, listserve, ad
serving, and third party auditing).
Additionally, Xxxxx.xxx, LLC shall make available to the Magazine Sites
any new functionality at the time it is introduced to the Network; provided,
that some production or third party fees may arise for the Magazine Sites if
they choose to implement the functionality offered.
Hearst agrees that all Magazine Sites, whether produced by Xxxxx.xxx,
LLC or a third party, shall be produced in compliance with Network standards.
Xxxxx.xxx, LLC will make available to Hearst documentation of Network standards
and permit Hearst to provide the documentation to all third parties producing
Content for Magazine Sites.
Xxxxx.xxx, LLC shall provide Magazine Site-specific maintenance and end
user support, periodic technical consulting as required by Hearst, and technical
phone support for any third parties contracted to produce Content for Magazine
Sites that will be hosted by Xxxxx.xxx, LLC.
A-2.
23
Exhibit B
PRODUCTION SERVICES
Xxxxx.xxx, LLC will collaborate with designated Magazines in the
development of a Magazine Web strategy, plan and budget.
Xxxxx.xxx, LLC will make available Production Services to Hearst upon
request at rates pre-established for the first two years of the Agreement. The
rates shall be mutually agreed upon as soon as possible following the Effective
Date; however, the basis for the rate structure shall be as follows: (i) for
Xxxxx.xxx, LLC staff employees -- the sum of (1) direct cost of salary and
benefits of those personnel performing the Production Services, plus (2) the
cost of overhead expenses up to a maximum equal to 15% of the salary and benefit
costs described in (1), plus (3) 15% of the sum of the amounts described in (1)
and (2); and (ii) for subcontracted services, including but not limited to
manuscripts, art, photography, software development, and talent -- the actual
cost of the services plus a 15% profit margin.
The number of sites to be produced by Xxxxx.xxx, LLC and the development
plan and budget for those sites will be mutually agreed upon as soon as
reasonably practicable following the Effective Date.
Xxxxx.xxx, LLC will provide full Production Services for the selected
Magazine Sites. These services shall include, but shall not be limited to:
1. overall management and direction of the site;
2. creation of editorial features for the site, including original and
interactive Content;
3. software/coding support for all features;
4. conversion of Hearst Content to HTML or other formats
appropriate for Web presentation, as designated by Hearst;
5. all site quality control;
6. interactive design and navigation;
7. all graphic design work and conversions, including art, photos
and illustration;
8. rich media production support; and
9. all production tools, processes, and systems necessary to support
production personnel, which are part of the Network standard,
including template-based production systems, e.g., Inso Dynabase,
used to streamline or automate production. The production tools,
processes and systems that are part of the Network standard shall
be available and supported for all Magazine Site
B-1.
24
production whether provided by Xxxxx.xxx, LLC or a third party,
so long as the Magazine Site is hosted by Xxxxx.xxx, LLC.
The management of the Hearst Magazine Division and its representatives
will be viewed by Xxxxx.xxx, LLC as a "customer" of Xxxxx.xxx, LLC and as such
will provide ongoing input and direction to Xxxxx.xxx, LLC regarding all aspects
of the Magazine Sites.
Hearst will secure electronic rights and inform Xxxxx.xxx, LLC regarding
any limitations to these rights for content supplied by Hearst for inclusion on
the Magazine Sites. The formats in which Hearst will deliver content to
Xxxxx.xxx, LLC and the methods of transmission or transport, and timing, will be
mutually agreed during the production planning process.
In supporting Xxxxx.xxx, LLC's production of Magazine Sites, the
editorial staff of the applicable Magazines will:
1. provide all appropriate content in formats to be mutually agreed;
2. provide ongoing direction to and liaison with Xxxxx.xxx, LLC, and
3. be responsible for final approval of their brand's on-line
representation.
In providing these Production Services, Xxxxx.xxx, LLC will assign
dedicated personnel for the production of Magazine Sites, including editorial,
creative, production and technical support to production. The exact structure of
the terms will be mutually agreed between Xxxxx.xxx, LLC and the Magazines. As
part of that organizational structure, primary points of contact and liaison
will also be established between Xxxxx.xxx, LLC and the Magazines to facilitate
efficient communications between Hearst and Xxxxx.xxx, LLC regarding production
of the Magazine Sites.
For Magazine Sites not produced by Xxxxx.xxx, LLC, Xxxxx.xxx, LLC will
provide management and technical resources to ensure the efficient integration
of the site into the Network. These services shall include:
1. ongoing assistance in the efficient application of Network standards
and tools;
2. assistance in the development of special features;
3. assistance in marketing and distribution programs; and
4. support for other needs as appropriate.
B-2.
25
EXHIBIT C
TRADEMARKS
I. Xxxxx.xxx, LLC Marks:
II. Hearst Marks:
C-1.
26
I - HEARST TRADEMARKS
REGISTRATION TRADEMARKS
After College
Bedside Astrologer
Better Way (The)
Cosmopolitan
Cosmopolitan All About Men
Country Living Country Travels
Country Living Restoration
Cosmopolitan (stylized)
Good Housekeeping
Good Housekeeping Decorating & Home Improvement
Good Housekeeping Editors Entertain
Good Housekeeping Holiday Best
Good Housekeeping Smart Cooking
Green Watch
House Beautiful
House Beautiful Building Manual
House Beautiful Holidays
House Beautiful Home Remodeling & Decorating
House Beautiful's Home Remodeling
Houses & Plans
Life After College
Redbook
Stylewatch
Town & Country
APPLIED FOR
Country Living's Healthy Living
Easy Cooking
Fun-Fearless-Female
Good Housekeeping Family Adventures
COMMON LAW
Country Living
Victoria
27
EXHIBIT D
RECOUPABLE MAGAZINE-SPECIFIC INITIAL PRODUCTION COSTS
Up to five million dollars ($5,000,000) of production costs may be recouped on
account of the first year of the term of the Agreement. For each subsequent year
of the term, such amount shall equal 110% of the recoupable production costs for
the prior year of the term
D-1.
