EXHIBIT 10.9
EXECUTION DRAFT
DISTRIBUTION AGREEMENT
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THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of May 10,
1999 (the "Effective Date"), between xxxxxx.xxx, Inc., a Delaware corporation
with an office located at 000 Xxxxxxxxxx Xxxxxx #000, Xxxx Xxxx, XX 00000
("xxxxxx.xxx"), and Xxxxx.xxx, a division of PCL Media Limited, a Florida
corporation with an office located at 0000 Xxxxxxx Xxxxxx XX, Xxxxxxxxxxx, XX
00000 ("Company").
Xxxxxx.xxx uses the Xxxxxx.xxx Technology and provides the Production
Services. Xxxxxx.xxx desires to provide virtual tour technology and Production
Services for the Company Site. In consideration of the mutual promises and
covenants contained herein, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS
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1.1 "Xxxxxx.xxx Image" means an electronic image of a property produced by
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or on behalf of xxxxxx.xxx.
1.2 "Xxxxxx.xxx Technology" means software and hardware, including the
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Xxxxxx.xxx for Java Software, used to capture, process and view Xxxxxx.xxx
Images.
1.3 "Basic Package" means up to four scenes captured at a designated
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property, converted to a corresponding number of Xxxxxx.xxx Images, and linked
to Company Site.
1.4 "Customer" means any realtor, real estate Customer, real estate agent,
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property manager or any other agent or representative acting in a similar
capacity, whether an individual or some other type of entity, representing a
seller or renter of a property.
1.5 "Company Originated Order" means any order received by xxxxxx.xxx for
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Production Services via telephone, facsimile or electronic or paper order form
from a Customer referencing Company's assigned sales origination partner code.
1.6 "Company Site" means the collection of HTML documents residing on
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servers operated by or for Company or its affiliate and accessible on or after
the Effective Date by Customers or the public via the Internet, including those
currently accessible at the URL xxxx://xxx.xxxxx.xxx, xxx.xxxxxxxxxxxxxx.xxx and
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Company private label sites and OEM websites.
1.7 "Confidential Information" means any trade secrets, confidential data
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or other confidential information oral or written relating to or used in the
business of the other party (the "Disclosing Party"), that a party may obtain
from the Disclosing Party during the Term (the "Confidential Information"). The
terms of this Agreement will constitute Confidential Information, except to the
extent that such information is disclosed in good faith to a legitimate
potential, or actual, strategic investor, investment banker, venture capital
firm, or consultant, or as required by statute, regulation or other law.
1.8 "Initial Linking Date" means the date on which xxxxxx.xxx will
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commence providing Production Services and Company will begin linking the
Company Site to the Xxxxxx.xxx Images under this Agreement.
1.9 "Net Revenues" means the gross amount received by xxxxxx.xxx from
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Customers for sales of the Basic Packages less Twenty-Five percent (25%)
covering: (i) refunds, discounts, promotions, credits and allowances, (ii)
packaging, handling fees and freight, (iii) sales taxes and other governmental
charges, and (iv) reasonable provisions for doubtful collections determined in
accordance with GAAP.
1.10 "Production Services" means the services provided by or on behalf of
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xxxxxx.xxx.
1.11 "Service Provider Network" means the network of individuals
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throughout our service area with whom xxxxxx.xxx has entered into agreements to
capture images at designated sites on xxxxxx.xxx's behalf.
1.12 "Term" means the Initial Term of this Agreement and the Renewal Terms,
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if any, as set forth in Section 6.
1.13 "Transaction Fee" means the quarterly fee xxxxxx.xxx will pay to
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Company during the Term based on sales of Xxxxxx.xxx Virtual Tour Images as
provided in Section 4.1.
1.14 "Virtual Tour Images" means 360, three-dimensional, virtual reality,
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virtual tour, virtual walkthrough or other similar images, or production
services for such images.
2. PROVISION OF PRODUCTION SERVICES;
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2.1 Sales and Billing. Xxxxxx.xxx will be responsible for receiving and
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fulfilling orders. Xxxxxx.xxx will assume all costs and responsibility for
invoicing and collecting revenues for all sales, provided, however, that
xxxxxx.xxx does not assume the risk of collection. Company will be responsible
for, and shall work with xxxxxx.xxx regarding, providing a mechanism for
Customers to order Production Services at the same time listings are created on
the Company Site.
2.2 Image Capturing, Processing and Linking. Xxxxxx.xxx will have sole
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responsibility for, and will bear all costs associated with, capturing images at
designated sites through its Service Provider Network and processing captured
images to create Xxxxxx.xxx Images. Company will permit linking of the Company
Site to Xxxxxx.xxx Images for both Rental Properties (as defined below) and Sale
Properties (as defined below), and the parties will use best efforts to work
together to expeditiously implement within 45 days of the Effective Date, and
maintain throughout the Term, a system whereby Company will be capable of
linking the Company Site to Xxxxxx.xxx Images.
2.3 Preferred Vendor. Xxxxxx.xxx will be the preferred provider of
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Virtual Tour Images for the Company Site for rental properties ("Rental
Properties"). Company agrees to give xxxxxx.xxx preferred vendor status in
Company's rental-related marketing materials and other direct sales efforts,
whether printed, oral or on the Company Site, by listing xxxxxx.xxx first before
listing any other providers of virtual tours. Xxxxxx.xxx will be a nonexclusive
provider of Virtual Tour Images for the Company Site for residential sale
properties ("Sale Properties").
2.4 Agreement to Negotiate. Within the [*] following the Effective Date,
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and in any event prior to Company's renewal of the current agreement or
relationship between Company and [*], and prior to Company's entering into any
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
agreement or relationship with any third party Virtual Tour Images provider with
respect to [*], Company agrees to negotiate in good faith with xxxxxx.xxx for
the exclusive provision of Virtual Tour Images to Company by xxxxxx.xxx with
respect to [*].
3. MARKETING AND PROMOTION
3.1 Company. Subject to xxxxxx.xxx's ongoing approval, Company agrees to
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consistently promote xxxxxx.xxx as Company's preferred provider of Virtual Tour
Images for Rental Properties and nonexclusive provider of Virtual Tour Images
for Sale Properties, and to market, promote and facilitate orders of the
Production Services, as follows:
(a) Company Site. Company agrees to prominently market and promote
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the Production Services on the Company Site. Company will provide the capability
for Customers to order Production Services on the Member Access Panel which is
the user interface for customers to manage and access their content on the
Company Site. Additionally, Company will provide a description of the Production
Services in the appropriate area(s) of the Company Site, including use of the
xxxxxx.xxx logo. Description and logo will be at least the same size and
positioning as other partner descriptions and logos. Such logo, when clicked on,
will link directly to an electronic order form permitting Customers to submit
orders for Production Services for both Sales Properties and Rental Properties
to xxxxxx.xxx via the Internet.
(b) Gallery of Xxxxxx.xxx Images. Company agrees to include on the
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Company Site (i) Xxxxxx.xxx Images produced on behalf of Customers for Sales
Properties in its current gallery for residential properties, and (ii) a co-
branded gallery of Xxxxxx.xxx Images produced on behalf of Customers for Rental
Properties (the "Rental Gallery"). Each page of the Rental Gallery will include
a Xxxxxx.xxx Xxxx (as defined below) that, when clicked on, links directly to an
electronic order form permitting Customers to submit orders for Production
Services for Rental Properties to xxxxxx.xxx via the Internet.
(c) Introduction of Services. Within sixty (60) days of the
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Effective Date, Company will send an announcement, reasonably satisfactory to
xxxxxx.xxx, highlighting the availability and features of the Production
Services to its Customers, OEMs, Resellers, and Associate Publishers via its
current communications including e-mail, newsletters, Company Site, and general
mailings.
(d) Print Advertising. To the extent Company creates and distributes
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print advertising to Customers and potential Customers, including without
limitation print advertising in magazines, flyers, newsletters and general
mailings, Company will include, as appropriate and from time to time, in such
advertising a xxxxxx.xxx logo and a brief, suitable reference to the
availability of the Production Services. Marketing materials for Production
Services will be included in the materials sent to Customers for tips and
training information ("Member Kit") for Rental Properties versions of the
Preferred Pages product. Marketing materials for Production Services may be
included, as deemed appropriate by Company, in the Member Kit for Sales
Properties versions of the Preferred Pages product.
(e) Email and Direct Marketing. Company agrees to include in email
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and direct marketing that it generates and sends to Customers and potential
Customers, as appropriate and from time to time a section, reasonably
satisfactory to xxxxxx.xxx, highlighting the availability and features of the
Production Services. Xxxxxx.xxx agrees to include in email and direct marketing
that it generates and sends to Customers and potential Customers, as appropriate
and from time to time a section, reasonably satisfactory to Company,
highlighting the availability and features of Company products and services.
(f) Seminars and Trade Shows. Company or its sales representatives
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will distribute marketing materials created by xxxxxx.xxx that promote the
Production Services to rental Customers at (i) regional trade shows attended by
Company and (ii) seminars, presentations, training sessions and follow-up
meetings sponsored by Company. Company will ensure that any third-party speaker
hired by Company to promote rental-related Web products and services will
mention, in a positive manner, xxxxxx.xxx when referencing Virtual Tour Images
and Internet marketing.
(g) Joint Press Release. Company will participate with xxxxxx.xxx in
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issuing (i) a joint press release on or around the Effective Date regarding the
relationship established through this Agreement and (ii) a joint press release
on or around the date the service is launched. Each party shall agree on the
form and content of such press release and will furnish its written acceptance
of, or comments on, the proposed announcement within 48 hours; otherwise such
proposed announcement will be deemed approved. Any other press announcement by
either party regarding the subject matter of this Agreement will be subject to
the other party's approval, which shall not be withheld or delayed unreasonably.
3.2 Additional Obligations. Xxxxxx.xxx and Company agree to discuss joint
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marketing opportunities, and the parties will use reasonable efforts to
cooperate in any such joint marketing efforts as they may mutually agree upon.
Each party will assign a project manager to act as the primary liaison with
respect to the relationship.
4. FEES
4.1 Transaction Fees. During the Term, xxxxxx.xxx will pay quarterly
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Transaction Fees to Company as follows:
(a) With respect to all Company Originated Orders fulfilled by
xxxxxx.xxx during the Term through which Xxxxxx.xxx Images are linked to
xxx.xxxxx.xxx, xxxxxx.xxx will pay to Company for each calendar quarter [*] of
Net Revenues collected from sales for which xxxxxx.xxx has received payment on
during the quarter.
(b) No Transaction Fees will be due hereunder (i) with respect to
Production Services sold to third parties other than as expressly set forth
above and (ii) with respect to any Production Services xxxxxx.xxx distributes on
a promotional basis free of charge or at a discounted price.
4.2 Payment of Fees. Calculation of quarterly Transaction Fees will
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commence immediately for the calendar month in which the Initial Linking Date
occurs. Xxxxxx.xxx will make all payments of Transaction Fees net thirty (30)
days from the end of each quarter. To the extent the parties have not
implemented a system to automatically track the originating Company Customer for
each order of Production Services, xxxxxx.xxx will include with each payment of
Transaction Fees a report stating such information for orders covered by such
payment.
4.3 Inspection of Records. Company will have the right, at its own
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expense and not more than once in any twelve (12) month period, to authorize an
independent auditor reasonably acceptable to both parties to inspect those
accounting records of xxxxxx.xxx necessary to verify the accuracy of fees paid
or invoiced by xxxxxx.xxx under the terms of this Agreement,
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
provided that such independent auditor has executed a confidentiality agreement
with respect to such records that is reasonably acceptable to xxxxxx.xxx. Such
inspections will take place during xxxxxx.xxx's normal business hours, upon not
less than twenty (20) days' prior written to xxxxxx.xxx and on a date mutually
agreed upon by the parties. In the event any such auditors find an underpayment
in Transaction Fees paid to Company of more than five percent (5%) of the total
Transaction Fees due and payable to Company for the period at issue, xxxxxx.xxx
shall pay such shortfall to Company within thirty (30) days and shall reimburse
Company for the cost of such audit. In the event such audit identifies an
overpayment of Transaction Fees, Company shall remit payment of the overpayment
to xxxxxx.xxx within thirty (30) days of written notification from xxxxxx.xxx.
5. PROPRIETARY RIGHTS
5.1 Xxxxxx.xxx Technology.
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(a) All Xxxxxx.xxx Images and Xxxxxx.xxx Technology, whether or not
produced for Customers and whether or not linked to the Company Site, are, and
at all times will remain, the exclusive property of xxxxxx.xxx, and no provision
of this Agreement implies any transfer to Company or Customers of any ownership
interest in any Xxxxxx.xxx Image or Xxxxxx.xxx Technology.
(b) Xxxxxx.xxx hereby grants to Company a nonexclusive, worldwide,
royalty-free, nontransferable license to include on the Company Site links to
Xxxxxx.xxx Images on xxxxxx.xxx's servers solely for the purposes contemplated
in this Agreement. The foregoing license does not include any right to grant or
authorize sublicenses.
5.2 Trademarks.
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(a) Xxxxxx.xxx owns and at all times will continue to own the
trademarks, service marks and/or trade names XXXXXX.XXX and the xxxxxx.xxx logo,
as well as any name or xxxx xxxxxx.xxx may subsequently adopt as a trade name or
to designate the Production Services (collectively, the "Xxxxxx.xxx Marks"), and
Company will not take any actions inconsistent with xxxxxx.xxx's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the Term
(the "Company Marks"), and xxxxxx.xxx will not take any actions inconsistent
with Company' ownership rights. Each party's use of the other party's marks will
not create in the using party any right, title or interest therein or thereto,
and all such use will inure to the exclusive benefit of other party.
(b) Subject to the restrictions set forth herein, xxxxxx.xxx hereby
grants Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Xxxxxx.xxx Marks, during the Term, with
xxxxxx.xxx's prior written approval, which xxxxxx.xxx will not unreasonably
withhold or delay, solely in connection with promotion and marketing and/or
financing of the Production Services and Company as provided in Section 3.
Subject to the restrictions set forth herein, Company hereby grants xxxxxx.xxx a
nonexclusive, worldwide, royalty-free, fully paid up, nontransferable right to
use the Company Marks, during the Term, solely in connection with promotion and
marketing and/or financing of the Production Services and xxxxxx.xxx. At the
reasonable request of either party, the other party will provide assistance with
the protection and maintenance of the marks of the requesting party. Each party
may only use the marks of the other party as expressly permitted herein and
agrees to use the marks of the other party in a manner commensurate with the
style, appearance and quality of the other party's services and/or products
bearing such marks.
5.3 Limitation on Grant of Rights. Except as expressly provided herein,
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neither party receives any other right or license to the technology or
intellectual property of the other party.
6. TERM AND TERMINATION
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6.1 Term. Unless earlier terminated as set forth below, this Agreement
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will become effective upon the Effective Date and continue for a period of
eighteen (18) months (the "Initial Term"). Thereafter, this Agreement will be
automatically renewed for successive one (1) year periods (each such period a
"Renewal Term") unless either party notifies the other in writing not less than
ninety (90) days prior to the end of the then-current term of its intention to
terminate this Agreement as of the end of such term. Upon termination, (i)
Company and xxxxxx.xxx will cease all use of marks of the other party and (ii)
Company will cease all use of the Xxxxxx.xxx Technology and Xxxxxx.xxx Images
and will purge all such Xxxxxx.xxx Technology and Xxxxxx.xxx Images from its
servers, systems and products.
6.2 Termination for Breach. This Agreement will terminate in the event a
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party materially breaches any material term, condition or representation of this
Agreement or materially fails to perform any of its material obligations or
undertakings hereunder, and fails to remedy such default within sixty (60) days
after being notified by the non-breaching party of such breach or failure;
provided, however, that the non-breaching party will not unreasonably withhold
or delay its consent to extend the cure period if the breaching party has
commenced cure during the sixty-day notice period and pursues cure of the breach
in good faith.
6.3 Survival of Certain Terms. The provisions of Sections 5.1(a), 5,2(a),
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5.3, 6.1, 6.3, 7, 8, 9 and 10 will survive the expiration or termination of this
Agreement for any reason. All other rights and obligations of the parties will
cease upon expiration or termination of this Agreement.
7. CONFIDENTIALITY
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Each party agrees to treat the other party's Confidential Information with
the same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care.
8. REPRESENTATIONS AND WARRANTIES
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Each party represents and warrants to the other that (i) it is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) it has full right, power and
authority to enter into this Agreement and to perform all of its obligation
hereunder; (iii) this Agreement constitutes its valid and binding obligation,
enforceable against it in accordance with its terms; and (iv) its execution,
delivery and performance of this Agreement will not result in a breach of any
material agreement or understanding to which it is a party or by which it or any
of its material properties may be bound. THE WARRANTIES PROVIDED BY THE PARTIES
HEREIN ARE THE ONLY WARRANTIES PROVIDED HEREIN AND ARE IN LIEU OF ALL OTHER
WARRANTIES BY THE PARTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT.
9. Indemnification by xxxxxx.xxx. Xxxxxx.xxx warrants that xxxxxx.xxx or its
affiliates own, or have sufficient interest in, xxxxxx.xxx's business to fulfill
xxxxxx.xxx's obligations under this Agreement. Xxxxxx.xxx shall defend or
settle, at its own expense, any claim made against Company or any of its
affiliates, and/or Company's Customers that xxxxxx.xxx's business and applicable
data infringes upon any United States patent, copyrights,
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trade secret or other proprietary rights and shall indemnify and hold harmless
Company, any of Company's affiliated companies, and/or any of Company's
Customers against any final judgement including an award of attorney's fees that
may be awarded by a court of final jurisdiction against Company, any of
Company's affiliated companies, and/or Company's Customers as a result of the
foregoing for all costs, damages, losses, and expenses arising from a breach of
the warranties set forth in this Agreement.
10. Indemnification by Company. The Company warrants that Company or its
affiliates own, or have sufficient interest in, Company's business, Company
Marks and the Company Site as a compilation to fulfill Company's obligations
under this Agreement. Company shall defend or settle, at its own expense, any
claim made against xxxxxx.xxx or any of xxxxxx.xxx affiliates or customers that
Company's business, Company Marks, Company Site and applicable data infringes
upon any United States patent, copyrights, trade secret or other proprietary
rights and shall indemnify and hold harmless xxxxxx.xxx, any of xxxxxx.xxx's
affiliated companies, and/or any of xxxxxx.xxx's customers against any final
judgement including an award of attorney's fees that may be awarded by a court
of final jurisdiction against xxxxxx.xxx, any of xxxxxx.xxx's affiliated
companies, and/or xxxxxx.xxx's customers as a result of the foregoing for all
costs, damages, losses, and expenses arising from a breach of the warranties set
forth in this Agreement.
11. LIMITATION OF LIABILITY
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EXCEPT WITH RESPECT TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS
DESCRIBED IN SECTION 2.3 OR 7, 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.
12. GENERAL PROVISIONS
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12.1 Notices. Any notice required or permitted by this Agreement will be
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deemed given if sent by registered mail, postage prepaid, addressed to the other
party at the address set forth at the top of this Agreement. Delivery will be
deemed effective three (3) days after deposit with postal authorities.
12.2 Miscellaneous. Nonperformance of either party will be excused to the
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extent that performance is rendered impossible by storm, lockout or other labor
trouble, riot, war, rebellion, strike, fire, flood, accident or other act of
God, governmental acts, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the gross negligence
or willful misconduct of the non-performing party. The relationship of
xxxxxx.xxx and Company established by this Agreement is that of independent
contractors. This Agreement will be governed by and construed under the laws of
the State of California without reference to conflict of laws principles. This
Agreement, together with all exhibit and attachments hereto, sets forth the
entire agreement and understanding of the parties relating to the subject matter
herein and merges all prior discussions between them. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing signed by the party to be charged, and the
waiver of any breach or default will not constitute a waiver of any other right
hereunder or any subsequent breach or default. Neither party may assign this
Agreement, or assign or delegate any right or obligation hereunder, without the
prior written consent of the other party; provided, however, that either party
may assign this Agreement or assign or delegate its rights and obligations under
this Agreement to a successor to all or substantially all of its business or
assets relating to this Agreement whether by sale, merger, operation of law or
otherwise. Notwithstanding anything to the contrary herein, in the event that
PCL Media Limited [*] or otherwise [*] Xxxxx.xxx, and Xxxxx.xxx [*] a [*]; in
such event this Agreement may be assigned to Xxxxx.xxx. The parties' rights and
obligations will bind and inure to the benefit of their respective successors,
heirs, executors and administrators and permitted assigns. Company shall have
the right to substitute replacement tradenames and trademarks during the term of
this Agreement. This Agreement may be executed by exchange of signature pages by
facsimile and/or in any number of counterparts, each of which shall be an
original as against any party whose signature appears thereon and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
XXXXXX.XXX, INC. XXXXX.XXX, a division of PCL Media Limited
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxx
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Title: SVP, Biz Dev Title: CAO
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Date: 5/10/99 Date: 5/10/99
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
