EXHIBIT 10.8
December 23, 1998
VIA AIR BOURNE EXPRESS
----------------------
VIA FASCIMILE (000) 000-0000
Xx. Xxxxx Xxxxxx
LookSmart, Ltd.
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Re: DEVELOPMENT AGREEMENT BETWEEN XXX INTERACTIVE MEDIA, INC.
--------------------------------------------------------
AND LOOKSMART, LTD.
------------------
Dear Xxxxx:
Enclosed herewith is one fully executed copy of the above-referenced
agreement.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
General Counsel/Acting Director of Business Development
Enclosures
Cc: Xxxxx Xxxxx
Xxxx Xxxxxx
EXHIBIT 10.8
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") is entered into with an
effective date as of July 27, 1998 by and between Xxx Interactive Media, Inc., a
Delaware corporation ("CIM") with offices at The Carriage Works, 000 Xxxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxx, Xxxxxxx, and LookSmart, Ltd., a Delaware
corporation ("LookSmart") with offices at 000 Xxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx (CIM and LookSmart being referred to sometimes herein individually as
a "Party" and collectively as the "Parties").
WHEREAS, CIM and LookSmart are parties to that certain Development,
Licensing and Affiliation Agreement, dated as of May 7, 1998 (the "Affiliation
Agreement"), the terms of which are incorporated by reference herein to the
fullest extent not otherwise inconsistent with the terms hereof; and
WHEREAS, in furtherance of the purposes of the Affiliation Agreement, the
Parties have determined to initiate the development of Local Databases and Local
Ontologies for [**] in the United States for use in the Localized Category
Search functionalities that will be made available to users of LookSmart's web
site or any other web site utilizing LookSmart's search functionality; and
WHEREAS, CIM and LookSmart have agreed that, subject to the terms and
conditions set forth herein, LookSmart shall be responsible for the creation and
development of such Local Databases and Local Ontologies for [**] of such
[**] (such Local Databases and Local Ontologies for those [**] markets being
referred to sometimes herein as the "Deliverables"), while CIM shall be
responsible for the creation and development of Local Databases and Local
Ontologies for the remaining [**] such markets; and
WHEREAS, the Parties wish to set forth herein their agreement regarding
certain specific terms and conditions relating to LookSmart's development of the
Deliverables;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS.
-----------
Capitalized words used herein and not otherwise defined shall have the meanings
given them in the Affiliation Agreement.
SECTION 2. DEVELOPMENT OF LOCAL DATABASES AND LOCAL ONTOLOGIES.
---------------------------------------------------
2.1 General. CIM and LookSmart shall undertake, on the terms and
-------
conditions set forth herein, to create and develop Local Databases and Local
Ontologies for the [**] United States markets (the "Markets") identified on
Exhibit A hereto, which Local Databases and Local Ontologies will be made
available to users of LookSmart's web site or any other web site utilizing
LookSmart's search functionality for use with Localized Category Searches to the
extent contemplated by the Affiliation Agreement. Subject to the terms and
conditions set forth herein, CIM hereby engages LookSmart to create and develop,
and LookSmart hereby accepts such engagement and agrees to create and develop,
Local Databases and Local Ontologies for the [**] Markets designated on Exhibit
B as "LookSmart Markets," and CIM shall be responsible for the creation and
development of the Local Databases and Local Ontologies for the [**] remaining
Markets, which are designated on Exhibit B as "CIM Markets."
2.2 Specifications for Deliverables.
-------------------------------
2.2.1 Local Databases. LookSmart shall research and analyze
---------------
Internet web sites in order to compile and develop a Local Database for each of
the LookSmart Markets containing a listing of web sites, identified and
hypertext-linked by their Universal Resource Locators ("URLs"), that focus on
information, entertainment or services specific or of particular interest to
each LookSmart Market. The Local Databases compiled and developed by LookSmart
for the LookSmart Markets shall contain, in the aggregate, not less than [**]
distinct URLs.
2.2.2 Local Ontologies. LookSmart shall research and develop
----------------
hierarchies to categorize the web sites in each Local Database to facilitate
Localized Category Searches by users from LookSmart's web site or
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
other web sites utilizing LookSmart's search functionality. The top thirteen
(13) categories (the "LookSmart General Categories") in each Local Ontology
shall be based on the ontology previously developed and mutually agreed to by
CIM and LookSmart for use with LookSmart's Category Search functionality. The
appearance and placement of categories other than the LookSmart General
Categories shall be based on the particular interests and preferences of users
in each of the LookSmart Markets, which LookSmart shall develop in consultation
with CIM as contemplated hereunder.
2.2.3 Formats for Deliverables. LookSmart shall use all
------------------------
commercially reasonable efforts to deliver the Deliverables to CIM as they are
completed in the formats specified in Exhibit C hereto.
2.3 Development and Delivery Schedule. LookSmart shall employ [**]
---------------------------------
teams (each a "Development Team" and collectively, the "Development Teams"),
consisting of approximately [**] developers and editors each. Each
Development Team shall undertake to create a Local Database and Local Ontology
for one (1) LookSmart Market per week. During the ninety (90) day period
commencing on July 27, 1998 and expiring on October 26, 1998 (the "Development
Period"), LookSmart shall develop, deliver and, if necessary, revise the
LookSmart Deliverables in a form that CIM deems acceptable pursuant to Section
2.4.3 below.
2.4 Acceptance of Deliverable. The parties acknowledge that, as of the
-------------------------
date CIM executes this Agreement, CIM shall thereby deem the Deliverables
to be acceptable.
2.5 Development Fees. In consideration for LookSmart's efforts in
----------------
developing the Local Databases and Local Ontologies for the LookSmart Markets in
accordance with this Agreement, CIM shall pay to LookSmart a total of
[**] (the "LookSmart Development Fee"), in accordance with the terms
described in this Section 2.5. The parties hereto acknowledge and agree that,
prior to the execution of this Agreement, CIM has paid to LookSmart a [**]
portion of the LookSmart Development Fee. The [**] balance of the LookSmart
Development Fee shall be paid by CIM to LookSmart as promptly as practicable
after LookSmart delivers the Deliverable to CIM.
2.6 Future Markets. If CIM and/or LookSmart should decide, at a future
--------------
date, to develop Local Databases and Local Ontologies for markets not covered in
this Agreement ("Future Markets"), the Parties agree to negotiate in good faith
regarding the terms and conditions for the creation and development of such
Future Sites.
SECTION 3. MAINTENANCE.
-----------
CIM shall use commercially reasonable efforts to maintain and update the
LookSmart Deliverables used with the Localized Category Searches in the
LookSmart Markets.
SECTION 4. OWNERSHIP.
---------
The Parties agree, consistent with the provisions of the Affiliation
Agreement, that all Intellectual Property Rights to the LookSmart Category
Search (including the Localized Category Search), the LookSmart Search Engine
and the LookSmart Tools are owned solely by LookSmart and that all Intellectual
Property Rights to the Local Ontologies and the Local Databases shall be owned
solely by CIM. Each Party agrees that it will make no claim to Intellectual
Property Rights in or to the Intellectual Property owned by the other Party.
Licenses for and restrictions on use of owned or licensed functionalities,
content and marks shall be granted by the Parties pursuant to the terms and
conditions contained in Section 4 of the Affiliation Agreement.
SECTION 5. DISPUTE RESOLUTION.
------------------
5.1 Informal Procedures. If any dispute arises between the parties
-------------------
relating to this Agreement, each of CIM and LookSmart shall (i) designate one
(1) representative (each a "Negotiator" and together, the "Negotiators") to
attempt to resolve, in good faith, such dispute. The Negotiators shall have
seven (7) days, beginning on the day on which a particular dispute arises, to
resolve the dispute. If the Negotiators fail to settle the dispute within seven
(7) days, then (ii) the dispute shall be presented by the CIM Negotiator and the
LookSmart Negotiator to the chief executive officers of CIM and LookSmart,
respectively, who shall have seven (7) days to resolve the dispute.
5.2 Other Remedies. If any dispute arising between the Parties is not
--------------
resolved pursuant to the terms of Section 5.1 above, the Parties shall each have
the right to pursue all available legal rights and remedies.
-2-
SECTION 6. CONFIDENTIALITY.
---------------
The Parties hereby acknowledge that each of them may have access to
confidential and proprietary information which relates to the other party's
business (the "Confidential Information"). Each Party agrees to preserve and
protect the confidentiality of the Confidential Information and not to disclose
any applicable Confidential Information without prior written consent of the
other Party; provided, however, that any Party hereto may disclose to any other
-------- -------
third-party any information which is: (i) already publicly known; (ii)
discovered or created independently by such party; or (iii) otherwise learned
through legitimate means other than from the other party to this Agreement.
Moreover, any Party hereto may disclose any Confidential Information hereunder
to such Party's agents, attorneys and other representatives who agree to
preserve the confidentiality thereof in accordance with this Agreement or
pursuant to the requirements of any court or government agency.
SECTION 7. MISCELLANEOUS.
-------------
7.1 Incorporation by Reference. All of the terms and provisions of the
--------------------------
Affiliation Agreement shall remain in full force and effect, except to the
extent the same have been expressly modified by this Agreement.
7.2 Notices. All notices and other communications given or made
-------
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered if delivered by hand, by telecopier device
(confirmed by hand delivery or overnight courier service) or by overnight
courier service to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to CIM: Xxx Interactive Media, Inc.
"The Carriage Works"
000 Xxxxx Xxxxxx, X.X. Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
with a copy to: Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. X'Xxxxxxx
Telecopier: (000) 000-0000
If to LookSmart: LookSmart, Ltd.
000 Xxxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy to: Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
7.3 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
-------------
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA WITHOUT REGARD TO
ITS LAWS PERTAINING TO CONFLICTS OF LAW.
-3-
7.4 Non-Infringement. LookSmart represents and warrants that the
----------------
Deliverable provided under this Agreement to CIM, will not, to LookSmart's
knowledge, under the federal or state laws of the United States, infringe in any
manner any intellectual property rights of a third party.
7.5 LIMITATION OF LIABILITY. EXCEPT WITH RESPECT TO LIABILITY ARISING
-----------------------
FROM A PARTY'S INDEMNIFICATION OBLIGATIONS HEREUNDER, GROSS NEGLIGENCE, OR
WILLFUL MISCONDUCT, NEITHER PARTY HERETO SHALL BE LIABLE TO THE OTHER FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) SUCH AS, BUT NOT
LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.
7.6 Entire Agreement; Amendment. This Agreement, and all documents and
---------------------------
certificates to be delivered by the parties pursuant hereto, together with the
Affiliation Agreement, collectively represent the entire understanding and
agreement between CIM and LookSmart with respect to the subject matter of this
Agreement. This Agreement cannot be amended, supplemented or modified except by
an agreement in writing which makes specific reference to this Agreement and
which is signed by the party against which enforcement of any such amendment,
supplement or modification is sought.
7.7 Counterparts. This Agreement may be signed in any number of
------------
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of
the date first above written.
CIM:
---
XXX INTERACTIVE MEDIA, INC.
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: General Counsel
Date: December 23, 1998
LOOKSMART:
---------
LOOKSMART, LTD.
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: VP/Bus. Dev.
Date: Dec. 10, 1998
-4-
EXHIBIT A
[**]
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
EXHIBIT B
CIM MARKETS AND LOOKSMART MARKETS
Initial CIM Markets
-------------------
[**]
EXHIBIT B
CIM MARKETS AND LOOKSMART MARKETS (Continued)
Initial LookSmart Markets
-------------------------
[**]
EXHIBIT B
CIM MARKETS AND LOOKSMART MARKETS (Continued)
Initial LookSmart Markets
-------------------------
[**]
EXHIBIT C
FORMATS FOR DELIVERIES FROM LOOKSMART TO CIM
The database produced by LookSmart will be reviewed by CIM. LookSmart will
notify CIM via e-mail when a batch of web sites is ready for review.
CIM will access this database via the standard LookSmart interface. The
content should be in finished form in the format as users view it. The database
will be delivered to CIM after it has been collected, edited, and the data
extracted so that it can be read from a standard Internet browser.
The database will be evaluated according to quality and quantity, and CIM
reserves the right to approve or reject the database according to either
criteria in line with the following guidelines.
Quality is determined by accuracy of grammar, typographical errors and
links. The database must be deemed acceptable according to reasonable standards
and the best judgment of CIM staff. CIM may randomly sample up to five percent
of the entries in the in the database for accuracy and relevance.
As for quantity, LookSmart and CIM agree that the database for each market
should consist of enough web sites and reviews to thoroughly cover each relevant
category. LookSmart at all times will adhere to the quality guidelines
referenced elsewhere in this Agreement.
