Exhibit 3.1
CO-BRANDED FREE ISP AGREEMENT
This Co-Branded Free ISP Agreement (the "Agreement") is entered into as of
January 24, 2000 (the "Effective Date") by and between Spin Media Network, Inc.,
a California corporation with its principal place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxxx Xxxx, XX 00000 ("Spinway"), and Xxxxxxx.xxx, inc., a Delaware
corporation with a principal place of business at 00000 Xxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxx 00000 ("Company") (collectively, the "Parties" and each a "Party").
Whereas, Spinway is an advertising solution and free Internet Service Provider
("ISP") that owns and operates a service that allows people to receive free
access to the Internet (the "Spinway Service");
Whereas, Company (i) owns and operates: a site on the Internet at
xxxx://xxx.xxxxxxx.xxx (the "Company Site") with a base of users; and (ii) has
contracted with a related company to utilize ISP infrastructure providing dial-
up internet access to various markets in Central and South America (the "Company
Network");
Whereas, Spinway desires to co-brand and operate the Spinway Service on behalf
of Company;
Now, Therefore, Spinway and Company hereby agree, for and in consideration of
the mutual covenants set forth herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, as
follows:
1. Definitions
1.1 "Spinway Service" shall mean Spinway's advertising solution.
1.2 "Company Marks" shall mean all Company trademarks and logos to be
licensed for Spinway to perform under this Agreement, and listed on Exhibit A
("Company Marks"), and as such Exhibit A may be updated from time to time by
Company in its sole discretion.
1.3 "Company Site" shall mean all the Internet pages located at
xxxx://xxx.xxxxxxx.xxx, or any successor Internet pages. 1.4 "Company User"
shall mean any registered or unregistered user of the Company Site, but
excluding Service Users
1.5 "Company Network" shall mean the ISP infrastructure, owned by a
related party, which the Company utilizes to offer dial-up internet access for
the Service.
1.6 "Confidential Information" shall mean any confidential or proprietary
information, including, without limitation, the terms of this Agreement, any
source code, software tools, designs, schematics, plans or any other information
relating to any research project, work in process, future development,
scientific, engineering, manufacturing, marketing or business plan, or financial
or personnel matter relating to either party, its present or future products,
sales, suppliers, pricing, business model, customers, employees, investors or
business partners, identified by the disclosing party as Confidential
Information, whether in oral form, or in written, graphic or electronic form and
marked as confidential. If disclosed in oral form, such information must be
identified as confidential at the time of disclosure and must be reduced to
writing,
marked as confidential and delivered to the receiving party within thirty (30)
days following disclosure to be deemed Confidential Information for purposes of
this Agreement.
1.7 "Launch Date" shall mean March 15, 2000, which shall be no less than
forty-five (45) days from the Effective Date.
1.8 "Implementation Requirements" shall mean all the graphics, logos,
links and other information that Company must provide to Spinway in
order to launch the Service as set forth in Exhibit H "Company
Implementation Requirements."
1.9 "Marks" shall mean either the Company Marks or the Spinway Marks, as
applicable.
1.10 "Service" shall mean the Spinway Service that is co-branded for
Company under the terms of this Agreement, as further described in Exhibit B
("Description & Specifications of the Service").
1.11 "Service User" shall mean a Company User who registers for the
Service.
1.12 "Spinway Marks" shall mean all Spinway trademarks and logos to be
licensed for Company to perform under this Agreement, and listed on Exhibit C
("Spinway Marks"), and as such Exhibit C may be updated from time to time by
Spinway in its sole discretion.
1.13 "Spinway Site" shall mean the Internet pages located on the Internet
at xxxx://xxx.xxxxxxx.xxx, or any successor Internet pages. 1.14 "User" shall
mean Company Users and Service Users, collectively.
1.15 "Service User Data" shall mean all Registration Information gathered
from a Service User during registration for the Service as well as all
information collected during the course of the Service.
1.16 "Spinway Client" shall mean Spinway's proprietary Client-based
Application software that (i) allows Service Users to establish a dialup
connection to the Internet, (ii) serves as the delivery medium for the
advertisements, and (iii) serves as the user interface that the Service User
sees the entire time they are connected to the Internet.
1.17 "Co-Branded Client" shall mean the Spinway Client that is co-branded
for Company for the Service in accordance with the terms of this Agreement 1.18
"Client-based Application" shall mean a persistent information/advertising bar
that serves as a user interface.
1.19 "Advertising Revenue" shall mean actual amounts received by Company
for the sale of all banner advertising, full motion video, and button/link
sponsorship on the Co-Branded Client and excludes any Barter Transactions.
1.20 "Barter Transactions" shall mean solely the trading of advertising
inventory on the Co-Branded Client for advertising of another form. Any trading
of advertising on the Co-
branded Client for other tangible non-monetary consideration may be subject to
the Revenue Sharing provision in Exhibit F.
1.21 "Total Monthly Impressions" shall mean the total number of Service
User Hours multiplied by 120.
1.22 "Service User Hours" shall mean the aggregate number of hours that
all Service Users are on the Service during a calendar month.
1.23 "Unique Service User Registration" shall mean the sum of all
registrations for the Service by a single individual user of the Service. For
example, if an individual registers for the Service on more than one occasion
under one or more user names, all such registrations shall collectively equal
one Unique Service User Registration.
2. Development, Registration and Implementation.
2.1 Co-Branded Client. The Parties shall, on or before the Launch Date,
develop and implement the Co-Branded Client according to the Specifications
contained in Exhibit B ("Description & Specifications of the Service"). The
Launch Date is contingent upon the completion and timely satisfaction of the
following milestones set forth below as well as in Exhibit H "Company
Implementation Requirements":
(i) At least 45 days prior to the Launch Date: Agreement executed
and Implementation Requirements provided to Company by Spinway; (set forth
herein as Exhibit H to this Agreement)
(ii) At least 40 Days Prior to Launch Date: Company provides Spinway
with all completed information pursuant to the Implementation Requirements
and any other agreed upon implementation procedures;
(iii) Timely completion of any other requirements agreed upon by
Spinway and Company.
Spinway agrees that it will make an English version of the Co-branded
Client available to Company for release within fourteen (14) days of receipt of
all information pursuant to the Implementation Requirements. Company
acknowledges that certain other agreed upon implementation procedures must be
completed prior to release of any version of the Co-branded Client in Central or
South America in order to ensure operability.
2.2 Advertising. Spinway reserves the right, at any time, to take over
control and sell 20% of the Run of Site ("ROS") advertising inventory on the Co-
branded Client. Company shall retain and have the right to control all other
advertising. Company agrees not to sell advertising on the Co-branded Client or
the Service to any competitor of Spinway as defined in Exhibit J. Spinway agrees
not to sell advertising on the Co-branded Client (i) to any competitor of
Company as defined in Exhibit K or (ii) to any advertiser with which the Company
has entered into an advertising exclusivity agreement. Company shall provide a
complete list of any such advertisers to Spinway and shall provide timely
updates to any such list.
2.3 Registration Information. All Service Users shall be required to
register and to provide the information set forth in Schedule G "Registration
Questions." Spinway and Company may modify the required information fields from
time to time. All of the foregoing information is collectively "Registration
Information". Spinway and Company shall work together to develop a mutually
agreeable registration process.
2.4 Ownership of Registration Information. Spinway and Company shall
jointly own all Registration Information, with no duty to account to the other
party, for all Service Users. Company shall be permitted to use such
Registration Information for marketing and other purposes without notice to or
approval of Spinway, provided such Registration Information is used in a manner
consistent with the privacy statements of the parties disclosed to the users in
connection with the collection of the Registration Information. Spinway shall be
permitted to use such Registration Information for marketing and other purposes
without notice to or approval of the Company, provided such Registration
Information is used in a manner consistent with the privacy statements of the
parties disclosed to the users in connection with the collection of the
Registration Information.
2.5 Usage Agreement. Each user shall be required to agree to Spinway's
standard terms and conditions for use of the Service, which terms and conditions
shall be accessible by hyperlink from one or more registration pages (set forth
herein in Exhibit I "Xxxxxxx.xxx Terms of Use"). Such terms and conditions will
be modified to reflect the Company's and Spinway's joint ownership of
Registration Information.
3. Company Obligations
3.1 Promotion and Marketing. Company shall actively and affirmatively
advertise, market and otherwise promote the Service in order to maximize the
number of users of the Service, including but not limited to the activities
listed in Exhibit E ("Company Promotional Activities"). Upon prior approval by
Spinway, which approval shall not be unreasonably withheld, promotion of the
Service by Company may include the bundling or preloading of the Co-Branded
Client. Spinway may review Company's marketing activities on a quarterly basis
in order to assess performance and suggest additional activities in order to
increase the number of Service Users of the Services.
3.2 Limited Exclusivity. Company agrees that, during the Term of this
Agreement and any Renewal Terms (as defined below), Company shall not provide
Internet access services or other Client-based applications (as defined above)
to any Company Users except through the Service.
3.3 Company Network. Company agrees that execution of this Agreement is
contingent upon simultaneous execution of the agreement granting Spinway access
to the Company Network ("The ISP Network Agreement").
4. Spinway Obligations
4.1 Service. Spinway shall use commercially reasonable efforts to provide
the Service to Service Users in accordance with the specifications described in
Exhibit B ("Description & Specifications of the Service"). The network
infrastructure and access costs are the sole
responsibility of Company. Spinway will not pay for any portion of the network
infrastructure or access costs under this Agreement.
5. Licenses
5.1 Trademarks. Spinway hereby grants to Company a non-exclusive,
worldwide, non-transferable and non-sublicensable license to use the Spinway
Marks solely to advertise and promote the Service. Company hereby grants to
Spinway a non-exclusive, worldwide, non-transferable and non-sublicensable
license to use Company Marks to develop, implement and maintain the Co-Branded
Client and the Service, and advertise and promote the Service.
5.2 Trademark Restrictions. The Xxxx owner may terminate the foregoing
trademark license if, in its reasonable discretion, the licensee's use of the
Marks tarnishes, blurs or dilutes the quality associated with the Marks or the
associated goodwill and such problem is not cured within ten (10) days of notice
of breach; alternatively, instead of terminating the license in total, the owner
may specify that certain licensee uses may not contain the Marks. Title to and
ownership of the owner's Marks shall remain with the owner. The licensee shall
use the Marks exactly in the form provided and in conformance with any trademark
usage policies. The licensee shall not take any action inconsistent with the
owner's ownership of the Marks, and any benefits accruing from use of such Marks
shall automatically vest in the owner. The licensee shall not form any
combination marks with the other party's Marks
5.3 No Implied Licenses. There are no implied licenses under this
Agreement, and any rights not expressly granted to a licensee hereunder are
reserved by the licensor or its suppliers. Neither Party shall exceed the scope
of the licenses granted hereunder.
6. Payment and Revenue Shares
6.1 Payments. The Parties shall make all payments described in Exhibit F
("Payments and Revenue Shares").
6.2 Inspection Rights.
(i) Company shall maintain accurate records with respect to the
calculation of all payments due under this Agreement. Spinway shall have
the right, at its expense (except as provided below) to audit the Company's
books and records for the purpose of verifying revenues and advertising
sold on the Co-branded Client and Service. If the auditor's figures reflect
Advertising Revenues higher than those reported by the Company, then the
Company shall pay the difference to Spinway and Company shall also pay the
reasonable cost of the audit.
(ii) Company shall maintain accurate records with respect to the
costs associated with its use of Company Network and amounts charged to
Spinway for use of Company Network as provided for under the ISP Network
Agreement. Spinway shall have the right, at its expense (except as
provided below) to audit the Company's books and records for the purpose of
verifying costs of the Company Network. If the auditor's figures reflect
costs lower than those reported by the Company and charged to Spinway, then
the Company shall pay the difference to Spinway and the Company shall also
pay the reasonable cost of the audit.
(iii) Company shall maintain accurate records with respect to all
amounts spent on marketing and promotion of the Service. Spinway shall have the
right, at its expense (except as provided below) to audit the Company's books
and records for the purpose of verifying amounts spent on marketing and
promotion of the Service. If the auditor's figures reflect amounts lower than
those reported by the Company, then Spinway may elect to terminate the agreement
subject to the provisions of Section 12.3 and Company shall pay the reasonable
cost of the audit.
7. Ownership
7.1 By Spinway. As between Spinway and Company, Spinway shall retain all
rights, title and interest in and to, embodied in or associated with the Spinway
Service, Spinway Marks and the Spinway Site, including but not limited to all
worldwide intellectual property rights.
7.2 By Company. As between Spinway and Company, Company shall retain all
rights, title and interest in and to, embodied in or associated with the Company
Site, the Company Users and the Company Marks, including but not limited to all
worldwide intellectual property rights.
7.3 Co-Ownership. The Parties shall co-own all rights, title and interest
in and to, embodied in or associated with the Service, Service Users, Service
User Data and Registration Information.
8. Confidentiality
8.1 Confidentiality Terms. Each Party hereto will maintain in confidence
all Confidential Information disclosed by the other Party hereto. Neither Party
will use, disclose or grant use of such Confidential Information except as
expressly authorized by this Agreement. To the extent that disclosure is
authorized by this Agreement, the disclosing Party will obtain prior agreement
from its employees, agents or consultants to whom disclosure is to be made to
hold in confidence and not make use of such information for any purpose other
than those permitted by this Agreement. Each Party will use at least the same
standard of care as it uses to protect its own most confidential information
(and in no event less than reasonable care) to ensure that such employees,
agents or consultants do not disclose or make any unauthorized use of such
Confidential Information. Each Party will promptly notify the other upon
discovery of any unauthorized use or disclosure of the Confidential Information.
8.2 Exceptions. The obligations of confidentiality contained in Section
8.1 will not apply to the extent that it can be established by the receiving
Party by competent proof that such Confidential Information: (a) was already
known to the receiving Party, other than under an obligation of confidentiality,
at the time of disclosure by the other Party; (b) was generally available to the
public or otherwise part of the public domain at the time of its disclosure to
the other Party; (c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement; (d) was disclosed
to the receiving Party, other than under an obligation of confidentiality, by a
third party who had no obligation to the other party not to disclose such
information to others; (e) is independently developed by the receiving Party; or
(f) is required to be disclosed under operation of law or governmental process.
In the event either Party is required
to disclose the other's Confidential Information under operation of law or
government process, such Party agrees to provide the disclosing Party with
reasonable advance notice prior to such disclosure. Neither Party shall use any
Confidential Information for any purpose other than the performance of this
Agreement
8.3 Return of Confidential Information. Upon the expiration or termination
of this Agreement, all Confidential Information, upon the disclosing Party's
written request (i) shall be returned to the disclosing Party or (ii) the
recipient shall execute a written certification that all confidential
information has been destroyed.
8.4 Remedies. The Parties agree that the breach of any of the obligations
contained in this section 8 is a material breach of this Agreement that may
cause irreparable harm to the nonbreaching Party justifying both legal and
equitable relief.
9. Warranties
9.1 By Spinway. Spinway hereby represents and warrants to Company that
neither the Spinway Marks nor the Spinway Site contain any materials that
infringe any third party patent, copyright, trademark, trade secret or other
proprietary or intellectual property rights.
9.2 By Company. Company hereby represents and warrants to Spinway that:
(a) neither the Company Marks nor the Company Site contain any materials that
infringe any third party patent, copyright, trademark, trade secret or other
proprietary or intellectual property rights; and (b) that the Company has made
all privacy notifications and acquired all rights from Users to the extent
provided in Xxxxxxx.xxx Terms of Use and to the extent permissible under local
law.
9.3 Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES CONTAINED IN THIS
SECTION 9, EACH PARTY PROVIDES ALL MATERIALS AND SERVICES TO THE OTHER PARTY "AS
IS," WITHOUT ANY WARRANTY OF ANY KIND, INCLUDING WITHOUT LIMITATION, ANY
WARRANTIES (EXPRESS, IMPLIED, OR STATUTORY) OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE.
9.4 Each Party acknowledges that it has not entered into this Agreement in
reliance upon any warranty of representation except those specifically set forth
herein.
10. Limitation of Liability
10.1 NEITHER PARTY SHALL BE LIABLE FOR LOST PROFITS OR SPECIAL,
INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (HOWEVER ARISING, INCLUDING
NEGLIGENCE) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE
PARTIES ARE AWARE OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY IN AN AMOUNT GREATER THAN THE AGGREGATE
AMOUNT SPINWAY ACTUALLY PAYS TO COMPANY DURING THE SIX (6) MONTHS PRECEDING THE
EVENT THAT GAVE RISE TO THE CLAIM OR ACTION. NEITHER PARTY SHALL BE LIABLE FOR
THE COST OF PROCUREMENT OF SUBSTITUTE SERVICES, TECHNOLOGY, DATA OR CONTENT.
11. Indemnities
11.1 Indemnity. Each Party (the "Indemnifying Party") shall indemnify the
other Party (the "Indemnified Party") against any and all claims, losses, costs
and expenses, including reasonable attorneys' fees, which the Indemnified Party
may incur as a result of claims in any form by third parties arising from: (a)
the Indemnifying Party's acts, omissions or misrepresentations to the extent
that the Indemnifying Party is deemed an agent of the Indemnified Party, or (b)
the Indemnifying Party's breach of any warranties contained in Section 9.
11.2 Conditions. The foregoing obligations are conditioned on the
Indemnified Party: (i) giving the Indemnifying Party notice of the relevant
claim, (ii) cooperating with the Indemnifying Party, at the Indemnifying Party's
expense, in the defense of such claim, and (iii) giving the Indemnifying Party
the right to control the defense and settlement of any such claim, except that
the Indemnifying Party shall not enter into any settlement that affects the
Indemnified Party's rights or interest without the Indemnified Party's prior
written approval. The Indemnified Party shall have the right to participate in
the defense at its expense.
12. Term and Termination
12.1 Term. This Agreement will become effective on the Effective Date and
will continue in effect for two (2) years following the Effective Date (the
"Initial Term"). This Agreement shall automatically renew for one (1) year
renewal terms (each, a "Renewal Term"), unless either Party gives notice of its
intent not to renew the Agreement at least ninety (90) days prior to the end of
the then current term.
12.2 Termination for Failure to Perform. Either Party may terminate this
agreement upon material breach of this Agreement by the other party, provided
such breach remains uncured by the breaching party for thirty (30) days after
written notice from the non-breaching party.
12.3 Early Termination. This Agreement may be terminated by Spinway thirty
(30) days after written notice to Company of Company's failure to meet or exceed
the Minimum Requirements as set forth in Exhibit E.
12.4 Other Termination. Either Party may terminate this Agreement (a) if
the other Party files a petition for bankruptcy, becomes insolvent, or makes
assignment for the benefit of its creditors or (b) by mutual consent of both
Parties.
12.5 Effects of Termination. Upon expiration or termination of this
Agreement for any reason, all licenses granted hereunder shall terminate.
Sections 1, 5, 6, 7, 8, 9.3, 10, 11, 12.3 and 13, and any obligation to pay any
owed but unpaid amounts, shall survive any expiration or termination of this
Agreement. Upon termination, (i) Company shall immediately cease all use of and
references to the Service and the Spinway Service and (ii) Company shall no
longer have any right to license, use, or market the Service or the Spinway
Service.
13. Miscellaneous.
13.1 Governing Law. This Agreement will be governed and construed in
accordance with the laws of the State of California without giving effect to
conflict of laws principles. Both Parties submit to personal jurisdiction in
California and further agree that any cause of action arising under this
Agreement shall be brought in a court in Santa Xxxxx County, California.
13.2 Publicity. Neither Party shall issue any press release or similar
publicity statement regarding this Agreement without the prior approval of both
Parties (not to be unreasonably withheld) or as required by law. Neither Party
will make any public disclosure of the specific business terms of this Agreement
without the prior consent of the other Party.
13.3 Legal Fees and Prevailing Party. The prevailing Party in any legal
action brought by one Party against the other and arising out of this Agreement
shall be entitled, in addition to any other rights and remedies it may have, to
reimbursement for its expenses, including court and arbitration costs, as well
as reasonable attorneys' fees.
13.4 Independent Contractors. The Parties are independent contractors, and
no agency, partnership, franchise, joint venture or employment relationship is
intended or created by this Agreement. Neither Party shall make any warranties
or representations on behalf of the other Party.
13.5 Assignment. Neither Party shall assign its rights or delegate its
obligations under this Agreement (except to an affiliated company, or to a
successor in interest in the event of a merger, sale of assets of the business
to which this Agreement is related, or consolidation) without the prior written
consent of the other Party and any purported attempt to do so is null and void,
provided that Spinway may assign or transfer all its rights and obligations to a
successor in interest upon a merger, reorganization, change of control,
acquisition or sale of all or substantially all its assets. All terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective permitted transferees, successors and
assigns.
13.6 Right to Market. Nothing in this Agreement shall impair Spinway's
right to license, market, co-market, brand, or co-brand the Spinway Service or
develop a similar relationship as contemplated by this Agreement with any other
party.
13.7 Ambiguities. Each Party and its counsel have participated fully in
the review and revision of this Agreement. Any rule of construction to the
effect that ambiguities are to be resolved against the drafting Party shall not
apply in interpreting this Agreement. The language in this Agreement shall be
interpreted as to its fair meaning and not strictly for or against any Party.
13.8 Severability; Headings. If any provision herein 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. Headings
are for reference purposes only and in no way define, limit, construe or
describe the scope or extent of such section.
13.9 Counterparts. This Agreement may be executed in counterparts, each of
which will be considered an original, but all of which together will constitute
the same instrument.
13.10 Force Majeure. Except as otherwise provided, if performance
hereunder (other than payment) is interfered with by any condition beyond a
Party's reasonable control, the affected Party, upon giving prompt notice to the
other Party, shall be excused from such performance to the extent of such
condition. However, if a force majeure detrimentally affects a Party's
performance of a material covenant hereunder for thirty (30) days or more, the
other Party can terminate this Agreement. Each Party acknowledges that website
operations may be affected by numerous factors outside of a Party's control.
13.11 Notice. Any notice under this Agreement will be in writing and
delivered by personal delivery, overnight courier, confirmed facsimile,
confirmed email, or certified or registered mail, return receipt requested, and
will be deemed given upon personal delivery, 1 day after deposit with an
overnight courier, five (5) days after deposit in the mail, or upon confirmation
of receipt of facsimile or email. Notices shall be sent to a Party at its
address set forth above as well as at the contact information below or such
other address as that Party may specify in writing pursuant to this Section
13.11.
Xxxxxxx.xxx
Attn: Xxxxx XxXxxx
VP, Business Development & Corporate
Counsel
Xxxxxxx.xxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
To Company: ____________________________
____________________________
____________________________
____________________________
13.12 Entire Agreement; Amendment & Waiver. This Agreement and all
Exhibits attached hereto set forth the entire understanding and agreement of the
parties, and supersedes any and all oral or written agreements or understandings
between the Parties, as to the subject matter of the Agreement. This Agreement
may be changed only by a writing signed by both Parties. The waiver of a breach
of any provision of this Agreement will not operate or be interpreted as a
waiver of any other or subsequent breach.
Spin Media Network, Inc.: Company:
By: By:
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Name: Name:
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Title: Title:
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