EXHIBIT 10.1
AMENDMENT NO. 3
TO THE
VISUAL CONTENT SERVICES AGREEMENT
BETWEEN
EBAY AND IPIX
EFFECTIVE AS OF JUNE 27, 2003
This Amendment No. 3 ("Amendment") to the Visual Content Services Agreement
dated April 19, 2000, as previously amended ("Agreement"), by and between eBay
Inc. ("eBay") and Internet Pictures Corporation ("iPIX") modifies and amends the
Agreement as set forth below.
WHEREAS, the Agreement is scheduled to expire on September 30, 2003, subject to
certain post-termination obligations; and
WHEREAS, eBay is in the process of developing technology to support image
services ("eBay Image Services"); and
WHEREAS, eBay and iPIX desire to migrate eBay's customer base from the
eBay-specific "Rimfire" technology-based service currently operated by iPIX to
the eBay Image Services; and
WHEREAS, eBay and iPIX desire to minimize any risks of service degradation
during this transition;
NOW, THEREFORE, eBay and iPIX agree to amend the Agreement as follows:
Unless otherwise defined herein, all terms used in this Amendment shall retain
the same meanings as defined in the Agreement.
1. DEFINITIONS. The following Sections 1.15.1, 1.15.2, 1.22.1, 1.22.2,
and 1.25.1, and the attached Schedule L, are hereby added to the Agreement:
"1.15.1 'eBay Rimfire Technology' means the current server and client
technology deployed in production or used by iPIX (including without
limitation the existing applicable object code, source code, scripts,
Plug-Ins, Help Tools, specifications, architecture description, and
documentation) to provide the Basic Service and the Enhanced Services
(the "eBay Rimfire Services") on the effective date of Amendment No. 3,
and on the two subsequent delivery dates set forth in Section 2.6(c)
(Delivery of Technology), including without limitation the technology
described in detail on Schedule L, Sections A and D.
1.15.2 'Rimfire Technology' means the next generation of server and
client Rimfire technology currently deployed in pre-production and
available for eBay (including without limitation the applicable object
code, source code, scripts, Plug-Ins, Help Tools, specifications,
architecture description, and documentation) on the effective date of
Amendment No. 3, and on the two subsequent delivery dates set forth in
Section 2.6(c) (Delivery of Technology), including without limitation
the technology described in detail on Schedule L, Sections B and D.
1.15.3 'Photo-Album Technology' means the technology (including without
limitation any object code, source code, scripts, specifications,
architecture description, and documentation) developed by iPIX in
conjunction with eBay and for the benefit of eBay as of the effective
date of Amendment No. 3 that was intended to enable end users to manage
multiple digital images and to relate those images to their respective
eBay auction listings, including without limitation the technology
described in detail on Schedule L, Section C.
1.22.1 'Parallel Transition Services' means the services to be provided
by iPIX to eBay described in Section 2.3 (Parallel Transition
Services).
1.22.2 'Migration Services' means the services to be provided by iPIX
to eBay described in Section 2.4 (Migration Services).
1.22.3 'Support Services' means the services to be provided by iPIX to
eBay described in Section 2.5 (Support Services).
1.25.1 'Operations Termination Date' means the date on which any
Service Extension services, Parallel Transition Services, Migration
Services and Support Services have been completed."
2. TRANSITION SERVICES. The following Sections 2.3, 2.4, 2.5, 2.6, and
2.7, and the attached Schedule K, are hereby added to the Agreement, and
Sections 3.1 and 3.2 are amended as set forth below:
(A) New Sections:
"2.3 Parallel Transition Services.
(a) Timing. Beginning on the effective date of Amendment No. 3, iPIX
will begin providing the services described in this Section 2.3 to eBay
and will continue during the Term of this Agreement to provide such
services until the date eBay provides formal notice to iPIX that eBay
will no longer route Customer Image submissions to iPIX and that iPIX
will service only view requests for previously submitted Customer
Images (the "Cut-Over Date"), subject to extension at eBay's option
pursuant to Section 2.7 (Service Extension). As of the effective date
of Amendment No. 3, the parties expect the Cut-Over Date to be on or
before September 30, 2003.
(b) Services.
(i) iPIX will cooperate fully and promptly with eBay to (A) develop and
implement a detailed, reasonable technical plan mutually agreeable to
the parties, in accordance with Schedule K, Section A, for the parallel
operation of the eBay Rimfire Services with the eBay Image Services
(the "Parallel Processing Plan") in order to enable a smooth, orderly,
and effective transition of services for Customers to the eBay Image
Services and (B) operate the eBay Rimfire Services (including without
limitation support for submission and viewing) in parallel with eBay's
operation of the eBay Image Services, in accordance with the Parallel
Processing Plan and in compliance with the Performance Standards.
(ii) iPIX will provide the Parallel Transition Services described in
this Section 2.3, in Schedule K, Section A, in the Parallel Processing
Plan, and in any amendments to the Parallel Processing Plan that eBay
may reasonably request, in a manner that ensures that the eBay Rimfire
Services continue to meet the Performance Standards through the end of
any Service Extension.
Without limiting the foregoing, iPIX will (A) assist eBay in
implementing the Parallel Processing Plan and (B) with respect to any
agreement between iPIX and any third party that may conflict with
iPIX's obligations under this Agreement as amended, use its
commercially reasonable efforts to so amend, or obtain such a waiver or
consent as required to enable iPIX's performance hereunder.
2.4 Migration Services.
(a) Migration Path. Beginning on the effective date of Amendment No. 3
or a subsequent date (if so requested by eBay), through the Operations
Termination Date, iPIX will (i) collaborate with eBay to develop and
implement a detailed, reasonable technical plan mutually agreeable to
the parties, in accordance with Schedule K, Section B, for the
Migration Services ("Migration Plan"), (ii) collaborate with eBay to
map the locations of any data (including Images) stored by iPIX after
the Cut-Over Date to the systems used by eBay for the eBay Images
Services, (iii) assist eBay in migrating data from iPIX's servers to
eBay's servers (including "re-list" data), as requested by eBay, (iv)
electronically or photonically deliver to eBay, in the format(s) and at
the times reasonably requested by eBay, copies of all of the Images and
related data stored by iPIX and train eBay regarding the types of data
it stores as well as the procedures for modifying or reformatting such
data, (v) otherwise perform the services set forth in the Migration
Plan, and (vi) when requested by eBay at the end of the migration and
transition process, disassemble the systems used for providing the eBay
Rimfire Services ("eBay Rimfire Systems") and deliver the Other Assets
which eBay has elected to purchase and the components of the eBay
Rimfire Systems which eBay already owns to eBay, unless eBay has
invoked the "Go Green Contingency," as defined below. IPIX shall not be
in breach of any of the obligations in this Section to the extent its
failure to perform results from any action or inaction by eBay.
(b) Go-Green Contingency. eBay shall have the option to request, at any
time after September 1, 2003 and before October 31, 2003, that iPIX
extricate those systems used to provide services for other iPIX
customers from the eBay Rimfire Systems and provide the eBay Rimfire
Systems (as an operating whole and in their current location) to eBay
and provide eBay employees with any additional training regarding the
operation of the eBay Rimfire Systems reasonably requested by eBay (the
"Go-Green Contingency"). The parties have not prepared a Go-Green
Contingency implementation plan as of the effective date of Amendment
No. 3. Immediately upon request by eBay, the parties will use their
best efforts to promptly agree on a Go-Green Contingency plan (the
"Go-Green Contingency Plan") to be implemented in accordance with the
following framework:
(i) In order to invoke the Go-Green Contingency, eBay must also invoke
a Service Extension in accordance with Section 2.7 (Service Extension)
for a period which shall be the shorter of four months from the date of
eBay's invocation of the Go-Green Contingency or until February 1,
2004.
(ii) eBay shall additionally pay iPIX two million dollars ($2,000,000)
to implement the Go-Green Contingency, which payment includes the
acquisition of any hardware or software needed to replicate portions of
the eBay Rimfire Systems used to provide services to other iPIX
customers.
(iii) eBay shall purchase any asset on Schedule N ("Other Assets")
which is part of the eBay Rimfire Systems when eBay invokes the
Go-Green Contingency. The then-current version of Schedule N may only
be modified by iPIX, in the event eBay invokes the Go-Green
Contingency, to account for repair and maintenance requirements, such
as reconfiguring or adding equipment to remedy an equipment failure.
eBay shall be responsible for purchasing, and will own, any additional
equipment necessary to scale the capacity of the eBay Rimfire Systems
to eBay's then-current needs.
(iv) iPIX shall provide (1) knowledge transfer services regarding
operation of the eBay Rimfire Systems and (2) software and hardware
maintenance and support related to the eBay Rimfire Technology in
conformance with the performance criteria and the service level
guarantees in Schedule K, Section D.1 in a manner that is designed to
enable the eBay Rimfire Services to continue to meet the Performance
Standards when operated by eBay.
2.5 Support Services. Beginning on the effective date of Amendment No.
3 through the end of the Term:
(a) Consulting. iPIX will provide consulting services related to the
eBay Rimfire Technology, the Rimfire Technology, and the Photo-Album
Technology in accordance with Schedule K, Section C.
(b) Code Walk-Through. Upon request by eBay (but no more than a total
of three times and not after the Operations Termination Date), iPIX
will perform a "code walk-through" (anticipated not
to exceed two days) of the eBay Rimfire Technology, the Rimfire
Technology, and the Photo-Album Technology with technical
representatives of eBay.
(c) Delivery of Technology. iPIX will electronically or photonically
deliver a copy of each of the eBay Rimfire Technology, the Rimfire
Technology, and the Photo-Album Technology to eBay in all its current
forms (i.e., object code, source code and script forms, etc.) and in
its then-current version on or about each of the following dates: upon
execution of Amendment No. 3, upon one request by eBay at any time
prior to the termination or expiration of the Agreement, and on the
Operations Termination Date. Unless eBay invokes the Go-Green
Contingency, iPIX will have no further obligation to deliver any
versions of the eBay Rimfire Technology, the Rimfire Technology, and
the Photo-Album Technology or any corrections, modifications, updates
or enhancements thereof.
2.6 iPIX Employees. In addition to its other obligations in the
Agreement, iPIX will ensure that it retains sufficient personnel to
provide the services described in the Agreement through the Operations
Termination Date. Although the Parallel Transition Services, the
Migration Services and the Support Services may require significant
commitment and attention by iPIX personnel, neither party contemplates
that such services will require iPIX to hire additional personnel
(other than in order to replace personnel whose employment terminates)
or to incur significant incremental expenses outside the ordinary
course of business.
2.7 Service Extension. eBay may, in its discretion, extend the Cut-Over
Date or any or all of the services after September 30, 2003 upon
fifteen days notice for the first extension and thirty days notice
thereafter, on a month to month basis, for up to four months (the
"Service Extension"). Upon any such extension, iPIX will (continue to)
provide the applicable service to eBay for the applicable period for
the fees set forth in Section 5.10(b); provided however, that, during
any Service Extension, iPIX will not be required to accept submissions
of (a) more than 2.5 million images per day or (b) more than a maximum
of 66,106 image submissions per peak 15-minute period."
(B) Amendment of Sections 3.1 and 3.2:
(1) Section 3.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
"3.1 Performance Standards. iPIX will ensure that the provision of
the Services meets the criteria described in Exhibits A and B."
(2) Section 3.2 of the Agreement is hereby deleted in its entirety.
3. EQUIPMENT AND FACILITIES.
3.1 MASTER LEASE EQUIPMENT. Subject to (a) iPIX `s performance to
eBay's reasonable satisfaction of the Parallel Transition Services, the
Migration Services, and the Support Services and (b) iPIX's timely
payment of the fees required to reduce the outstanding principal under
the parties' Master Lease Agreement dated September 26, 2001 (including
all the leases scheduled thereunder ("Master Lease")) to the balance
due on September 30, 2003 (which as of the effective date of Amendment
No. 3 is $1,197,838.00, but which will be adjusted in accordance with
the terms of the Master Lease to account for the value of certain
equipment decommissioned by iPIX), iPIX's obligation to make any
additional payments under the Master Lease after such payment will be
suspended. In addition, subject to iPIX's performance to eBay's
reasonable satisfaction of the Parallel Transition Services, Migration
Services and the Support Services during any Service Extension, upon
the Operations Termination Date, eBay will waive its right to receive
any additional lease payments under the Master Lease and execute a
document (in a mutually agreeable form to be attached as Schedule M
within two weeks of the effective date of Amendment No. 3) terminating
the Master Lease as of the completion of the Migration Services.
3.2 OTHER ASSETS. eBay will review the inventory of other assets
(including equipment, software, and maintenance agreements) used by
iPIX to provide the eBay Rimfire Services as described on Schedule N
("Other Assets"). Schedule N, which is a complete list (as of the
effective date of Amendment No. 3) of each of the Other Assets and the
applicable net book value of same, is hereby added to the Agreement.
iPIX may amend Schedule N at any time on reasonable written notice to
eBay. eBay will have the right, but not the obligation, to purchase all
or some of the Other Assets at each of such Other Assets' net book
value as of the Operations Termination Date in accordance with an
appropriate purchase agreement to be negotiated and executed by the
parties. iPIX will maintain its then-current eBay Rimfire Services
systems hardware, software, facilities and telecommunications
environment (as a whole) until the Operations Termination Date. iPIX
will not sell or transfer operation of the Other Assets to any third
party until after the Operations Termination Date.
3.3 IPIX OBLIGATIONS TO QWEST. eBay will, in good faith, use its
reasonable efforts to assist iPIX in terminating or renegotiating its
contractual obligations to Qwest Communications International, Inc.
("Qwest") under iPIX's Qwest Total Advantage Agreement with Qwest dated
January 16, 2003 ("Qwest Agreement") to be effective as of September
30, 2003. The parties shall cooperate to approach Qwest as soon as
possible to begin discussions of such renegotiation or termination. If
such obligations are not terminated as of the Operations Termination
Date, eBay may choose, in its discretion, to assume some or all of
iPIX's contractual obligations to Qwest under the Qwest Agreement.
3.4 REFERENCE ACCOUNT. eBay agrees to serve as a reference
customer for iPIX's TSG business, subject to eBay's prior written
approval of any materials in which iPIX may refer to eBay.
4. EXCLUSIVITY WAIVER. The following provision is added to the end of
Section 4.3 of the Agreement:
"iPIX waives the application of the provisions of Section 4.3 and
Exhibit D with respect to any of the eBay activities contemplated by
Amendment No. 3."
5. PAYMENTS. Each party will continue to pay the fees otherwise due and
payable to such party under the Agreement through September 30, 2003. eBay has
no intention of changing any of the fees it currently charges for image
services, or imposing fees on any image services it currently offers at no
charge, through September 30, 2003, and will pay iPIX for Enhanced Services in
accordance with Section 5.3 (Enhanced Services Payments) through September 30,
2003. Except as provided under Section 3.1 (Master Lease Equipment) of Amendment
No. 3, Section 3.2 (Other Assets) of Amendment No. 3, or new Sections 2.4(b)
(Go-Green Contingency), 5.9 (License and Transition Services Fees) or 5.10
(Miscellaneous Fees), no fees will accrue to either party after September 30,
2003. The following Sections 5.9 and 5.10 are hereby added to the Agreement:
"5.9 License and Transition Services Fees. eBay will pay iPIX an
aggregate total of eight million dollars ($8,000,000), in consideration
for the licenses granted and services provided to eBay under this
Agreement, as provided in this Section 5.9.
(a) License Fee. eBay will pay iPIX a first license fee payment of
three million dollars ($3,000,000) upon execution of Amendment No. 3 to
the Agreement, eBay's receipt of a legal opinion in a form satisfactory
to eBay and the release of all liens on the eBay Rimfire Technology,
Rimfire Technology and Photo-Album Technology in a form satisfactory to
eBay. Upon payment of this fee, the license granted under Section 7.6
(License to Rimfire Technology and Photo-Album Technology) will be
perpetual and irrevocable, notwithstanding any other provision in this
Agreement to the contrary.
(b) Additional License Fees. eBay will pay iPIX a second license fee
payment of three million dollars ($3,000,000) on October 1, 2003,
subject to iPIX's performance to eBay's reasonable satisfaction through
such date of the Parallel Transition Services, the Migration Services
or the Support Services. eBay will pay iPIX a third license fee payment
of two million dollars ($2,000,000) upon completion of the Migration
Services.
5.10 Miscellaneous Fees.
(a) iPIX Bandwidth Fees. iPIX will be solely responsible for payment of
all bandwidth costs associated with any and all services provided by it
under this Agreement.
(b) Service Extension Fees. If eBay exercises its Service Extension
option described in Section 2.7 (Service Extension), eBay will pay iPIX
(i) $450,000 for each month eBay elects to extend the services provided
by iPIX and (ii) $0.015 for each Image submitted in excess of 12
million per month. If applicable, iPIX will invoice eBay for the
foregoing fees at the end of each month of the Service Extension. eBay
will pay such invoices within 20 days of receipt."
6. TERMINATION. Section 6 of the Agreement is hereby amended as follows:
6.1 Section 6.1 of the Agreement is hereby deleted and replaced
with the following:
"6.1 Term. The term of the Agreement will commence on the
Effective Date and shall continue until the Operations
Termination Date, with the first `Deal Quarter' commencing on
April 1, 2000."
6.2 iPIX hereby waives all of its rights under Section 6.2 of the
Agreement.
6.3 Section 6.3 is hereby deleted in its entirety and replaced
with:
"6.3 Termination for Breach. Unless otherwise agreed in
writing between the parties, a party may terminate this
Agreement in the event the other party breaches a material
term, condition or representation of this Agreement, and fails
to remedy such default within 30 days after being notified by
the non-breaching party of such breach or failure. The failure
by iPIX to meet any of the Performance Standards, other than
from a failure resulting from eBay's act or failure to act,
shall constitute a material breach of this Agreement, subject
to the following additional exception:
(a) The parties will cooperate to minimize the potential
impact of any Parallel Transition Services or Migration
Services on the performance of the eBay Rimfire Services or
iPIX's ability to meet the Performance Standards. iPIX will
promptly notify eBay if iPIX believes an eBay request for
specific Parallel Transition Services or Migration Services
will have a potentially adverse impact on the eBay Rimfire
Services or iPIX's ability to meet the Performance Standards,
specifying in reasonable detail the expected causes and scope
of such potential degradation. If eBay then requests that iPIX
nevertheless perform the applicable service, any failure by
iPIX to meet the Performance Standards caused by performing
the applicable service as requested by eBay shall not
constitute a material breach of this Agreement and shall not
constitute grounds for eBay to determine that iPIX has not
performed any Parallel Transition Services or Migration
Services to eBay's reasonable satisfaction in connection with
the suspension or waiver of iPIX's payments under the Master
Lease in accordance with Section 3.1 or eBay's payment
obligations in Section 5.9."
6.4. Section 6.4(b) of the Agreement is hereby deleted in its entirety.
Section 6.4(c) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"(c) Except for the eBay Rimfire Technology, the Rimfire
Technology, and the Photo-Album Technology, eBay will cease
all use of the iPIX Technology."
Section 6.4(d) of the Agreement is hereby deleted in its entirety and
replaced with the following:
"(d) Each party will promptly destroy or return any
Confidential Information of the other party in its possession,
including, in iPIX's case, eBay's Customer Information.
Notwithstanding the foregoing sentence, however, eBay may
indefinitely retain copies of the eBay Rimfire Technology, the
Rimfire Technology, the Photo Album Technology, and any other
information provided as part of the Parallel Transition
Services or the Migration Services or the Support Services."
The paragraph at the end of Section 6.4 of the Agreement is hereby
deleted.
6.5 Section 6.5 of the Agreement is hereby deleted in its entirety
and replaced with the following:
"6.5 Survival of Certain Terms. The provisions of the following
sections will survive any expiration or termination of the Agreement: 1
(Definitions), 5.6 (Payment Terms; Taxes), 5.8 (Inspection of Records),
6.4 (Effects of Termination), 6.5 (Survival of Certain Terms), 7.1(a)
(Ownership), 7.2(a), 7.2(b)(iii), 7.2(b)(iv), 7.3(a)(i), 7.3(a)(iii),
7.3(b)(i), 7.4 (Limitation on Grant of Rights), 7.6 (License to Rimfire
Technology and Photo-Album Technology), 8 (Confidentiality), 9
(Representations and Warranties), 10 (Indemnification), 11 (Limitation
of Liability), and all of 13 (General Provisions) except for Section
13.1. Except as otherwise expressly provided herein, all other rights
and obligations of the parties will cease upon expiration or
termination of the Agreement."
7. LICENSES.
7.1 MODIFICATION TO EXISTING LICENSES. Section 7.1(a) is hereby
deleted in its entirety and replaced with the following:
"(a) Ownership. All iPIX Technology (including the eBay Rimfire
Technology, the Rimfire Technology, and the Photo-Album Technology),
all Images created prior to the Operations Termination Date ("iPIX
Images"), and Help Tools (as well as any modifications to the foregoing
made by eBay prior to the effective date of Amendment No. 3) are, and
at all times will remain, the exclusive property of iPIX (or, in the
case of iPIX Images, their submitters), and no provision of this
Agreement implies any transfer to eBay of any ownership interest in the
iPIX Technology, Help Tools, or iPIX Images. The licenses set forth in
this Agreement confer neither title to, nor ownership in, the iPIX
Technology, Help Tools or iPIX Images and are not a sale of any rights
therein. Subject to iPIX's ownership of the iPIX Technology, Help
Tools, and iPIX Images, any modifications or derivative works, made by
eBay at any time after the effective date of Amendment No. 3, of the
eBay Rimfire Technology, the Rimfire Technology, the Photo-Album
Technology, or Images ("eBay Modifications"), shall be owned by eBay,
including without limitation all right, title and interest (including
any copyrights, trade secrets, patent rights, moral rights, contract
rights and licensing rights worldwide) in and to the foregoing. iPIX
represents and warrants that it has all rights necessary to grants the
licenses granted under this Agreement, except that it makes no
representation or warranty with respect to iPIX Images, which are the
property of the Customers submitting them."
7.2 RESTRICTIONS. Sections 7.1(b)(i) and 7.1(b)(iii) are hereby
deleted in their entirety. Former Section 7.1(b)(ii) is hereby renumbered as
7.1(b)(i) and former Section 7.1(b)(iv) is hereby renumbered as Section
7.1(b)(ii).
7.3 RIMFIRE AND PHOTO-ALBUM TECHNOLOGY. The following Section
7.6 and the attached Schedule O (Companies) are hereby added to the Agreement:
"7.6 License to Rimfire Technology and Photo-Album Technology. As a
license grant that is separate and independent of any license granted
under Section 7.1, iPIX hereby grants eBay a perpetual, irrevocable
(subject solely to payment of the license fee in Section 5.9(a) and
notwithstanding any provision in the Agreement to the contrary),
nonexclusive, fully-paid, royalty-free, worldwide license, including
without limitation, any copyrights, trade secrets, patent rights, moral
rights, contract rights and licensing rights worldwide, to use,
reproduce, distribute, display, perform and digitally perform, modify,
create derivative works of, and in any way exploit the eBay Rimfire
Technology, the Rimfire Technology, the Photo-Album Technology, and the
Images to make, have made, sell, offer to sell, import, and use any
product or service as a part of eBay's or its affiliates' business,
including the right (a) to sublicense such rights to eBay affiliates
and third parties for the purpose of providing support to eBay or its
affiliates and (b) to sublicense any eBay customer to use the Images
and the object code version of any end user components (including
without limitation Scripts, Help Tools, and Plug-Ins) in such
technology. Notwithstanding anything to the contrary herein, eBay will
not sublicense or resell to any third parties the eBay Rimfire
Technology, the Rimfire Technology or the Photo-Album Technology
(except as permitted in clauses (a) and (b) above) in the form of
software code unless such technology is an integral part of a larger
eBay product to which eBay has contributed the majority of the value.
For a period of three years after the effective date of Amendment No.
3, iPIX agrees not to (y) use the eBay Rimfire Technology, the Rimfire
Technology, the Photo-Album Technology or any other
functionally-equivalent technology to itself directly enable the
posting by end users of images to eBay and eBay affiliate marketplaces
whose domains are in use as of the effective date of Amendment No. 3,
or (z) license the eBay Rimfire Technology, the Rimfire Technology, the
Photo-Album Technology or any functionally-equivalent technology to the
companies listed in Schedule O (Companies)."
7.4 TRADEMARKS. The following Section 7.3(a)(iii) is hereby added
to the Agreement:
"(iii) iPIX hereby grants eBay a nonexclusive, perpetual, irrevocable
(notwithstanding any provision in the Agreement to the contrary),
worldwide, royalty-free, fully paid right (with the right to sublicense
to eBay affiliates) to use the iPIX Marks (a) solely as a part of any
iPIX watermarks that may appear in any of the Images stored as of the
termination of the Agreement or (b) as may incidentally appear on
eBay's (or its affiliates') sites for a reasonable time after eBay's
transition to the eBay Image Services. In addition, iPIX agrees that it
will cooperate with eBay to remove, and hereby permits eBay to remove,
any such iPIX watermarks from any Images."
7.5 BANKRUPTCY. The last sentence of Section 11 (Bankruptcy Code)
of Amendment No. 2 is hereby deleted in its entirety and replaced with
the following: "Upon written request of eBay to iPIX or the bankruptcy
trustee, iPIX or the bankruptcy trustee will not interfere with, and
will fully comply with any restrictions on iPIX with respect to, the
rights of eBay as provided in this Agreement."
8. CONFIDENTIALITY. The following Section 8.3 is hereby added to the
Agreement:
"8.3 Source Code. The parties acknowledge that the source code being
provided to eBay under the Agreement ("Source Code") is the valuable
intellectual property of iPIX. eBay shall maintain the Source Code in
strictest confidence. In addition to the other obligations of
confidentiality between the parties, eBay shall take at least those
measures that eBay takes to protect its own most highly confidential
source code to protect the Source Code, which procedures eBay
represents are consistent with best industry practices."
9. REPRESENTATIONS AND WARRANTIES.
The following is added at the end of Section 9.1 of the Agreement:
"iPIX further represents and warrants that the eBay Rimfire Technology
is all of the software and documentation used by iPIX to perform the
eBay Rimfire Services and that the eBay Rimfire Technology, when
operated in the eBay Rimfire Systems environment's then-current
hardware, software, facilities and telecommunications configuration, is
capable of meeting the Performance Standards."
The parties agree that Section 9.2 of the Agreement applies to the eBay
Rimfire Technology, Rimfire Technology and Photo-Album Technology.
10. INDEMNITY. The following new Section 10.4 is hereby added to the
Agreement:
"10.4 Any Claim arising from facts and circumstances in existence as of
the Operations Termination Date, including claims with respect to
Services, shall not be affected by this Section. With respect to Claims
of third parties arising after the Operations Termination Date, the
indemnification provisions of Section 10.1 shall apply only to Claims
arising from the infringement or alleged infringement of a third
party's worldwide patent, trademark, copyright, trade secret or other
intellectual property right by the eBay Rimfire Technology, Rimfire
Technology and Photo-Album Technology licensed under this Agreement as
delivered to eBay on or before the Operations Termination Date. In
addition, after the Operations Termination Date, the indemnification
provisions of Section 10.1 shall not apply to (a) eBay's use of such
licensed technologies to provide any services other than the Basic
Service and Enhanced Services as conducted as of effective date of
Amendment No. 3, (b) to any Claim arising from the combination of such
licensed technologies with other technologies where such combination is
the object of the Claim, or (c) any Claim relating solely to any
modifications or derivative works made by eBay of such licensed
technologies after their delivery to eBay hereunder."
11. LIMITATION OF LIABILITY. Section 11 of the Agreement is hereby deleted
in its entirety and replaced with the following:
"Except with respect to each party's indemnification obligations set
forth in Section 10 or a breach by either party of its obligations
described in Section 8 or a breach by eBay of the scope of the license
granted by iPIX in Section 7.6, in no event will either party be liable
to the other for lost profits or any form of indirect, special,
incidental, or consequential damages of any character from any causes
of action of any kind with respect to this Agreement whether based on
breach of contract, tort (including negligence), or otherwise, and
whether or not the other party has been advised of the possibility of
such damage. Except with respect to each party's indemnification
obligations set forth in Section 10 or a breach by either party of its
obligations described in Section 8, and excluding amounts due and
payable hereunder, neither party's liability under or in connection
with this Agreement, shall exceed an amount equal to $16,000,000. This
limitation of each party's liability is cumulative, with all payments
for claims or damages under or in connection with this Agreement being
aggregated to determine satisfaction of the limit. The existence of one
or more claims will not enlarge the limit.
Notwithstanding any inconsistent provision in any agreement between the
parties (including without limitation this Agreement), except with
respect to each party's indemnification obligations in Section 10 or a
breach by either party of its obligations as described in Section 8
solely with respect to the disclosure of the other party's Confidential
Information to third parties, each party hereby agrees that the other
party shall have no liability of any kind to the other, and releases
all claims against the other party and its affiliates and its and their
employees, shareholders, directors, officers, agents, representatives,
administrators, predecessors, successors and assigns, whether in
contract or tort, or known, unknown or unsuspected, for any activities
related to developing, providing, using, or in connection with, the
iPIX Images, iPIX Technology, Services, eBay Image Services, eBay
Rimfire Technology, Rimfire Technology, Photo-Album Technology or
transitioning the eBay Rimfire Services to eBay that occurred prior to
the effective date of Amendment No. 3, other than liability for
payments due and payable in accordance with Section 5. Each party
hereby waives any and all rights and benefits conferred by the
provisions of Section 1542 of the Civil Code of the state of California
("Section 1542") and any other similar provision under applicable law.
Section 1542 reads as follows:
`A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor.' "
12. ADDITIONAL PRESS RELEASE. The following new Section 13.3.1 is hereby
added to the Agreement:
"13.3.1 Additional Press Release. Any proposed press release concerning
the substance of Amendment No. 3 must be pre-approved by both parties,
which approval shall not be unreasonably withheld. A reasonable time,
which shall not be less than three business days, before the press
release is to be released, iPIX will provide eBay with a draft of such
proposed press release, and eBay will then promptly review and comment
on same."
13. ASSIGNMENT. The following text is hereby added to the end of Section
13.8:
"Upon the expiration date or the effective date of termination, the
foregoing restrictions shall no longer apply. Thereafter, this
Agreement may not be assigned by either party, except as part of a
corporate reorganization, consolidation, merger or sale of
substantially all assets reasonably related to the subject matter of
this Agreement or all stock of the assigning party, and the assigning
party shall provide notice of such assignment to the other party. In
any sale, transfer, assignment, or other disposition of the technology
licensed to eBay hereunder, iPIX shall assign this Agreement to the
acquiror of such technology and the acquiror will expressly agree in
writing to be bound by the provisions hereof. Any attempted transfer or
assignment in violation of the provisions of this Section will be void.
This Agreement shall inure to the benefit of and be binding upon the
successors of the parties."
14. NAMED CONTACTS. In addition to modifications to the Agreement, the
parties hereby amend their March 17, 2003 Mutual Nondisclosure
Agreement ("NDA") to delete the second paragraph of Section 2 of the
NDA.
15. Except as provided in this Amendment, all terms and conditions set
forth in the Agreement shall remain in full force and effect. In the
event any provision or term of this Amendment conflicts with a
provision or term in the Agreement or any prior Amendments thereto, the
provision(s) or term(s) of this Amendment shall control and supercede
any such conflicting provision(s) or term(s).
IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to the
Agreement as of the effective date set forth above.
eBay: iPIX:
eBay Inc. Internet Pictures Corporation
/s/ Xxxx Xxxxxx /s/ Xxxx Xxxxxx
------------------------------ ------------------------------------
Authorized Signature Authorized Signature
Xxxx Xxxxxx Xxxx Xxxxxx
------------------------------ ------------------------------------
Printed Name Printed Name
Senior Vice President Chief Financial Officer
------------------------------ ------------------------------------
Title Title
June 27, 2003 June 27, 2003
------------------------------ ------------------------------------
Date Date
