EXHIBIT 10.29
CONFIDENTIAL
LICENSE AGREEMENT
By and Between
AMERICA ONLINE, INC.
and
IMGIS, INC.
Dated as of July 15, 1998
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CONFIDENTIAL
TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS .................................................. 1
1.1 "Ad Serving Services" .................................. 1
1.2 "Affiliate" ............................................ 1
1.3 "AOL Affiliate" ........................................ 1
1.4 "AOL Brand Service" .................................... 2
1.5 "AOL Network" .......................................... 2
1.6 "AOL Partner" .......................................... 2
1.7 "Covered AOL Partner Site" ............................. 2
1.8 "Data Agreement Material Breach"........................ 2
1.9 "Demographic Data" ..................................... 2
1.10 "Demographic Data Agreement"............................ 2
1.11 "Deployment Date" ...................................... 2
1.12 "Development Services".................................. 2
1.13 "Fully Burdened Costs".................................. 3
1.14 "IMGIS AdForce System".................................. 3
1.15 "IMGIS Customer" ....................................... 4
1.16 "Implementation Date" .................................. 4
1.17 "Improvement" .......................................... 4
1.18 "Losses" ............................................... 4
1.19 "Materially Limit or Prohibit".......................... 4
1.20 "Party" ................................................ 4
1.21 "Permitted Purposes" ................................... 4
1.22 "Person" ............................................... 4
1.23 "Personnel" ............................................ 4
1.24 "Services" ............................................. 4
1.25 "Software" ............................................. 4
1.26 "Technical Support Services"............................ 5
1.27 "Technology" ........................................... 5
1.28 "Third Party" .......................................... 5
1.29 "Work Products" ........................................ 5
ARTICLE 2 GRANT OF LICENSE............................................... 5
2.1 License Grant........................................... 5
2.2 Exercise of Rights...................................... 6
2.3 Use of Personnel........................................ 6
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ARTICLE 3 DELIVERY....................................................... 7
3.1 Initial Delivery........................................ 7
3.2 Delivery of Improvements and Other Technology........... 7
ARTICLE 4 TECHNICAL SUPPORT SERVICES..................................... 8
4.1 Scope of Services....................................... 8
4.2 Fees for Technical Services Support..................... 8
4.3 Warranty................................................ 9
ARTICLE 5 DEVELOPMENT SERVICES........................................... 10
5.1 Scope of Services....................................... 10
5.2 Fees for Development Services........................... 10
5.3 Original Work........................................... 10
5.4 Work for Hire........................................... 11
5.5 Change Management Process............................... 11
ARTICLE 6 AD SERVING SERVICES............................................ 12
6.1 Scope of Services....................................... 12
6.2 Fees for Ad Serving Services............................ 12
6.3 Provision of Services to Other Sites of AOL Partners.... 13
6.4 Reimbursement for Ad Serving Services................... 13
ARTICLE 7 AOL MARKETING EFFORTS.......................................... 13
7.1 AOL Marketing Efforts................................... 13
7.2 Commissions............................................. 14
7.3 Commission Sharing...................................... 14
ARTICLE 8 SALE OF ADVERTISEMENTS ON BEHALF OF
IMGIS' CUSTOMERS............................................... 14
8.1 Obligations of IMGIS.................................... 14
8.2 Assignment of Rights to AOL............................. 15
8.3 Revenue Sharing and Other Consideration................. 15
ARTICLE 9 PAYMENT PROVISIONS............................................. 15
9.1 Payment Procedures...................................... 15
9.2 Late Payment............................................ 16
9.3 Application of Payments................................. 16
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9.4 Taxes................................................... 16
9.5 Books and Records....................................... 17
ARTICLE 10 REPRESENTATIONS AND WARRANTIES................................. 17
10.1 Mutual Representations and Warranties................... 17
10.2 Additional Representations and Warranties of IMGIS...... 18
10.3 No Other Warranties..................................... 19
ARTICLE 11 INDEMNIFICATION................................................ 19
11.1 Indemnity............................................... 19
11.2 Procedure............................................... 19
11.3 Abatement of Infringement............................... 20
ARTICLE 12 LIMITATION ON LIABILITY........................................ 20
ARTICLE 13 CONFIDENTIALITY................................................ 20
13.1 Confidentiality Obligation.............................. 20
13.2 Nondisclosure of Confidential Information............... 21
13.3 Exception .............................................. 21
13.4 Survival ............................................... 21
13.5 Source Code Protection.................................. 21
13.6 Other Business Activities............................... 22
ARTICLE 14 TERM AND TERMINATION........................................... 22
14.1 Term ................................................... 22
14.2 Termination............................................. 22
14.3 Effect of Termination................................... 23
14.4 Return of Confidential Information...................... 24
14.5 Survival................................................ 24
ARTICLE 15 MISCELLANEOUS.................................................. 25
15.1 Electronic Repossession ................................ 25
15.2 Periodic Discussions ................................ 25
15.3 Mutual Non-Solicitation ................................ 25
15.4 Failure to Assert Rights in Bankruptcy.................. 25
15.5 Further Assurances...................................... 25
15.6 Relationship of the Parties ............................ 26
15.7 Applicable Law ......................................... 26
15.8 Consent to Jurisdiction ................................ 26
15.9 Counterparts ........................................... 26
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15.10 Notices ................................................ 26
15.11 Force Majeure .......................................... 27
15.12 Binding Effect; Assignment.............................. 28
15.13 Entire Agreement........................................ 28
15.14 Recitals ............................................... 28
15.15 Amendment .............................................. 28
15.16 Severability ........................................... 29
15.17 Headings ............................................... 29
15.18 No Waiver of Rights..................................... 29
15.19 Remedies Cumulative; Specific Performance............... 29
15.20 Confidentiality of Agreement............................ 29
15.21 Usage .................................................. 30
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LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") is entered into as of July __,
1998 by and between AMERICA ONLINE, INC., a Delaware corporation having its
principal office at 00000 XXX Xxx, Xxxxxx, Xxxxxxxx 00000 ("AOL"), and IMGIS,
INC., a California corporation having its principal office at 00000 X. XxXxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000 ("IMGIS").
WITNESSETH:
WHEREAS, AOL desires to obtain, and IMGIS is willing to grant to AOL, a
worldwide, perpetual and nonexclusive license to use, and to serve interactive
advertisements using, IMGIS' ad serving, trafficking, targeting and related
technology on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants
and undertakings contained herein and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
In addition to other terms defined elsewhere herein, the following terms
will have the following meanings when used herein (any term defined in the
singular will have the same meaning when used in the plural and vice versa,
unless stated otherwise):
1.1 "AD SERVING SERVICES" has the meaning set forth in Section 6.1 below.
1.2 "AFFILIATE" of any specified Person means any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the specified Person.
1.3 "AOL AFFILIATE" means: (a) any Affiliate of AOL, where the term
"control" for purposes of Section 1.2 means the direct or indirect ownership or
control by AOL of twenty-five percent (25%) or more of the stock or other equity
interests of such Person entitled to vote for the election of members of the
Board of Directors or similar governing body of such Person; provided, however,
that such Person shall cease to be an AOL Affiliate if and when such equity
interest becomes less than twenty-five percent (25%) for any reason other than
as a result of dilution, and provided, further, that if such equity interest
becomes less than twenty-five percent (25%) as a result of dilution, such Person
shall cease to be an AOL Affiliate if and when such percentage equity interest
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reduced for any reason other than as a result of dilution; and (b) AOL
Bertelsmann Online France S.N.C.
1.4 "AOL BRAND SERVICE" means the America Online brand online and
information service, including future modifications to, implementations of,
successors of, and international versions of such service.
1.5 "AOL NETWORK" means: (a) the AOL Brand Service; (b) any other product
or service owned or operated by AOL or any AOL Affiliate (including, without
limitation, the Compuserve brand online and information service, XXX.xxx, and
any "offline" information browsing products of AOL or AOL Affiliates), excluding
mere links to Third Party products or services that are accessible through
distribution channels other than the AOL Brand Service and excluding any
products consisting of the Technology, or any repackaged or reengineered version
of the Technology, that are distributed commercially to Third Parties other than
AOL Affiliates; and (c) any other product or service distributed under the brand
name of AOL or any AOL Affiliate other than under a mere trademark license of
such brand name, provided that AOL or such AOL Affiliate contributes not
insubstantially to the creation or development of such product or service.
1.6 "AOL PARTNER" means any Person with which AOL or an AOL Affiliate has a
joint venture, partnership or other contractual relationship for the purposes of
commerce, advertising, online access, or the provision by such Person of content
or information for the AOL Network.
1.7 "COVERED AOL PARTNER SITE" means the interactive site of an AOL Partner
provided that: (a) such site is marketed or promoted, and intended to be
accessible, to AOL members only; and (b) AOL or an AOL Affiliate has the right
to serve and to sell the advertising inventory for such site.
1.8 "DATA AGREEMENT MATERIAL BREACH" has the meaning set forth in Section
14.2.2 below.
1.9 "DEMOGRAPHIC DATA" has the meaning set forth in the Demographic Data
Agreement.
1.10 "DEMOGRAPHIC DATA AGREEMENT" means the Demographic Data Agreement
between AOL and IMGIS being executed simultaneously with the execution of this
Agreement.
1.11 "DEPLOYMENT DATE" has the meaning set forth in Section 3.2 below.
1.12 "DEVELOPMENT SERVICES" has the meaning set forth in Section 5.1 below.
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1.13 "FULLY BURDENED COSTS" of IMGIS Personnel in the provision of Services
hereunder means, for each IMGIS Personnel providing any Services to AOL, an
amount equal to the sum of the following:
(a) (i) If such Personnel is an employee of IMGIS, the wages and
benefits payable by IMGIS to such employee multiplied by the
percentage of time spent by such employee in the provision of
such Services to AOL relative to the total amount of time spent
by such employee in his or her employment with IMGIS, as measured
on a daily basis and charged on an hourly basis, which amount
shall in no event exceed $100 per hour, or
(ii) if such Personnel is an independent contractor of IMGIS, the
fees (excluding out-of-pocket expenses paid to such contractor)
payable to such contractor by IMGIS multiplied by the percentage
of time spent by such contractor in the provision of such
Services to AOL relative to the total amount of time spent by
such contractor in the provision of services to IMGIS, as
measured on a daily basis and charged on an hourly basis, which
amount shall in no event exceed $100 per hour; plus
(b) IMGIS' direct out-of-pocket costs in the provision by such
Personnel of such Services to AOL but only to the extent that AOL
is not otherwise obligated hereunder to provide reimbursement to
IMGIS for such direct costs; plus
(c) An amount (representing a reasonable allocation of overhead
expenses) equal to ten percent (10%) of the direct out-of-pocket
costs provided for in subpart (b) above.
Out-of-pocket costs and expenses, for purposes of this definition, means travel,
lodging and other non-compensatory costs or expenses. The $100 per hour maximum
amount referred to in subparts (a)(i) and (a)(ii) above shall be adjusted by
mutual agreement of the Parties three years following the date hereof to reflect
any applicable increase or decrease in the cost of living.
1.14 "IMGIS ADFORCE SYSTEM" means any software owned and/or used by, and/or
licensed to, IMGIS that enables operators of interactive sites and interactive
advertisers to schedule, monitor, serve, traffic and/or target interactive
advertising, including the system used by IMGIS to provide services under the
AdForce service xxxx and any related or successor system (including, without
limitation, IMGIS' proposed system known as AdForce+ and IMGIS' proposed
"hybrid" system based on the StarPoint Ad System).
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1.15 "IMGIS CUSTOMER" means a Third Party that has contracted with IMGIS
for the serving and/or management of interactive advertisements using the IMGIS
AdForce System.
1.16 "IMPLEMENTATION DATE" means the date following the Commencement Date
(as such term is defined in the Demographic Data Agreement) as of which AOL
first Provides Demographic Data (as defined in the Demographic Data Agreement)
to IMGIS.
1.17 "IMPROVEMENT" means any modification, customization, upgrade, update,
enhancement, patch, "bug" fix or other improvement to the Technology.
1.18 "LOSSES" means losses, liabilities, suits, claims, costs, expenses
(including reasonable attorneys' fees), penalties, fines, judgments and/or
damages (including personal injury or property damages, but excluding indirect,
incidental, special or consequential damages suffered by the indemnified Party).
1.19 "MATERIALLY LIMIT OR PROHIBIT" has the meaning set forth in the
Demographic Data Agreement. In addition, for purposes of this Agreement, AOL
shall be deemed to "Materially Limit or Prohibit" the use by IMGIS of
Demographic Data: (a) six months following the expiration of the term (including
any renewal term) of the Demographic Data Agreement; or (b) six months following
the termination of the Demographic Data Agreement (other than as a result of
breach or nonperformance by AOL) provided that, if the event giving rise to such
termination is disputed by the Parties, there has been a final determination of
such termination event by a court of competent jurisdiction (excluding any
determination in connection with the granting of equitable relief).
1.20 "PARTY" means AOL or IMGIS, and "PARTIES" means AOL and IMGIS.
1.21 "PERMITTED PURPOSES" means to serve, traffic and/or target
advertisements or other information or materials, and to perform such other
functions as the Technology (including any Improvements) is capable of, for
AOL's own internal purposes or for or on behalf of any of the following networks
or sites, to users of such networks or sites: (a) the AOL Network; (b) the
interactive sites of AOL Affiliates; or (c) the Covered AOL Partner Sites.
1.22 "PERSON" means a natural person, a corporation, a partnership, a
trust, a joint venture, any governmental authority, or any other entity or
organization.
1.23 "PERSONNEL" means employees and/or independent contractors.
1.24 "SERVICES" means any services provided by IMGIS pursuant to this
Agreement, including Ad Serving Services, Development Services and Technical
Support Services.
1.25 "SOFTWARE" means software included in the Technology.
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1.26 "TECHNICAL SUPPORT SERVICES" has the meaning set forth in Section 4.1
below.
1.27 "TECHNOLOGY" means all software (in both source code and object code
form), inventions, discoveries, designs, tools, know-how and other technology,
including any Improvements thereto, now or hereafter developed, owned and/or
used by, and/or licensed to, IMGIS or any of its Affiliates relating to the
serving, trafficking and/or targeting of advertisements or other information or
materials (including all software, inventions, discoveries, designs, tools,
know-how and other technology comprising or used in connection with the IMGIS
AdForce System and all Third Party software and other Third Party technology
integrated in or necessary for the successful operation of such technology
(except for commercially available Third Party software that has not been
modified to meet IMGIS' needs, where IMGIS does not have the right to provide
such software to AOL)), and all documentation for such technology. Without
limiting the generality of the foregoing, in no event shall "Technology" include
(a) demographic data owned by or licensed to IMGIS from any Third Parties or (b)
Third Party software that is not integrated in or necessary for the successful
operation of such technology which is developed by IMGIS as a "work made for
hire" for a Third Party that is not an Affiliate of IMGIS. For purposes of the
foregoing definition, an "Affiliate" of IMGIS means any Affiliate of IMGIS where
the term "control" means the direct or indirect ownership or control by IMGIS of
twenty-five percent (25%) or more of the stock or other equity interests of such
Person entitled to vote for the election of members of the Board of Directors or
similar governing body of such Person.
1.28 "THIRD PARTY" means any Person that is not a Party to this Agreement.
1.29 "WORK PRODUCTS" means any Improvements, designs, drawings,
specifications, documentation, computer software, reports, training materials,
inventions, discoveries and other items made by or on behalf of IMGIS in
connection with the provision of Development Services.
ARTICLE 2
GRANT OF LICENSE
2.1 LICENSE GRANT.
(a) Subject to the terms and conditions hereof, IMGIS hereby grants to
AOL a perpetual, worldwide, nonexclusive, nontransferable (except as set forth
in Section 15.12 below), royalty-free license under all of IMGIS' patent,
copyright, trade secret and other proprietary rights to use, reproduce, adapt,
transmit, perform, display and otherwise practice the Technology or any part
thereof, other than commercially available Third Party software that IMGIS has
the right to provide to AOL only upon payment of a fee to the Third Party,
solely for the Permitted Purposes and to sublicense such rights to AOL
Affiliates solely for the Permitted Purposes.
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(b) If any Technology consists of commercially available Third Party
software that IMGIS has the right to provide to AOL only upon payment of a fee
to the Third Party, AOL may, by written notice to IMGIS and payment of such fee,
require IMGIS to grant to AOL a perpetual, worldwide, nonexclusive,
nontransferable (except as set forth in Section 15.12 below), royalty-free
(except for such fee) license under all applicable patent, copyright, trade
secret and other proprietary rights to use, reproduce, adapt, transmit, perform,
display and otherwise practice such Technology or any part thereof solely for
the Permitted Purposes and to sublicense such rights to AOL Affiliates solely
for the Permitted Purposes (but only to the extent of IMGIS' rights in such
Technology).
(c) In the event that AOL grants a sublicense to an AOL Affiliate
under any of the licenses granted in Section 2.1(a) or (b) above, AOL shall
enter into a sublicense agreement with such AOL Affiliate in a form to be
approved by IMGIS, which approval shall not be unreasonably withheld, and
included in such sublicense shall be the agreement of such AOL Affiliate to be
bound by the terms of this Agreement. AOL shall notify IMGIS of the grant of any
sublicense to an AOL Affiliate.
(d) AOL shall not disclose or transfer the source code for any
Software included in the Technology to any AOL Affiliate that is not a
wholly-owned subsidiary of AOL. If IMGIS includes trademark or other proprietary
rights notices on copies of the Technology delivered to AOL, AOL shall reproduce
such notices on copies of the Technology made by AOL.
(e) The Parties agree that neither the licenses granted in this
Section 2.1 nor any other provisions of this Agreement impose or shall be
construed to impose any obligation upon AOL to use or otherwise practice the
Technology. IMGIS agrees that it shall not bring any action in law or equity, or
any other judicial or nonjudicial proceeding, against AOL asserting that the use
by AOL of any patent rights claiming the Technology that are now or hereafter
owned by or licensed to IMGIS or any other Technology infringes or otherwise
violates any patent, copyright, trade secret or other proprietary rights of
IMGIS.
2.2 EXERCISE OF RIGHTS. AOL may exercise its rights in and to the
Technology at any location, on any hardware, and with respect to all, none or
any portion or combination of the Technology. Nothing in this Agreement shall
obligate AOL to use the Technology or to use a designated server or site in
connection with such Technology.
2.3 USE OF PERSONNEL. AOL may exercise its rights hereunder through
Personnel who are obligated by written agreement to maintain the Technology in
confidence and restrict their use of the Technology pursuant to terms comparable
to those set forth in Article 13.
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ARTICLE 3
DELIVERY
3.1 INITIAL DELIVERY. Within 45 days after the date hereof, IMGIS shall
deliver to AOL: (a) one machine-readable copy of the object code for the
Software; (b) one copy of available technical and user documentation for the
Technology in printed and machine-readable format as available; and (c) one
machine-readable copy of the source code for the Software. Such delivery shall
be transmitted electronically or by any other means agreed upon by IMGIS and
AOL.
3.2 DELIVERY OF IMPROVEMENTS AND OTHER TECHNOLOGY.
(a) IMGIS shall use commercially reasonable efforts regularly to
develop Improvements to adapt the Technology to changes in related technologies
and in market and user requirements and to remain competitive with alternative
technologies for the serving, trafficking and/or targeting of advertisements or
other information or materials.
(b) At such times as reasonably requested by AOL, IMGIS shall provide
AOL with any Improvements made by or on behalf of IMGIS and any other Technology
requested by AOL that is existing and not then in the possession of AOL. In
addition, commencing no later than 45 days after such time that AOL determines
to deploy the Technology in whole or in part (the "Deployment Date"), IMGIS
shall provide to AOL on a quarterly basis the then current version of the source
code for the Software and shall provide to AOL any and all Improvements,
including upgrades, updates, enhancements, patches and "bug" fixes, prior to or
concurrently with their installation or release, by any means requested by AOL
(including electronically), along with the applicable documentation related to
such Improvement.
(c) IMGIS shall provide all Improvements and other Technology, other
than Improvements provided in the provision of Development Services, to AOL
without any additional charge or fee provided that, in the case of any
Improvement, AOL is in compliance with all of its material obligations under the
Demographic Data Agreement and does not Materially Limit or Prohibit the use by
IMGIS of Demographic Data at the time such Improvement is developed. If AOL
ceases to be in compliance with all of its material obligations under the
Demographic Data Agreement or Materially Limits or Prohibits the use by IMGIS of
Demographic Data, and AOL desires to continue receiving Improvements from IMGIS,
then AOL shall pay to IMGIS on an annual basis a reasonable update fee to be
agreed upon by the Parties for all Improvements developed for so long as AOL is
not in compliance with all of its material obligations under the Demographic
Data Agreement or Materially Limits or Prohibits the use by IMGIS of Demographic
Data; provided that such fee shall not exceed (i) IMGIS' customary update fees
for such Improvements in arm's length transactions with its licensees, if IMGIS
then licenses the Technology to Third Parties, or (ii) update fees charged by
other licensors of comparable systems for serving, trafficking and/or targeting
of advertisements or other information or materials, but not less
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than IMGIS' cost of providing such Improvements, if IMGIS does not then license
the Technology to Third Parties.
(d) At AOL's request, IMGIS shall identify to AOL, and provide AOL
reasonable information and assistance in furtherance of AOL's efforts to
acquire, at AOL's own expense, commercially available Third Party software
licensed to IMGIS for use in connection with the Technology and not sublicensed
to AOL under Section 2.1(a) or (b) above.
ARTICLE 4
TECHNICAL SUPPORT SERVICES
4.1 SCOPE OF SERVICES.
(a) During the term of this Agreement, IMGIS shall provide to AOL, at
AOL's written request, reasonable technical training, support, documentation and
assistance relating to the interactive content (including interactive
advertisement) serving, trafficking, targeting and related functions of the
Technology (collectively, "Technical Support Services"). The Technical Support
Services shall, at a minimum, enable AOL, without the aid of IMGIS or any other
Person, to develop, enhance and maintain the Technology (including the source
code for the Software) for use by AOL to the same extent as IMGIS.
(b) Commencing no later than 45 days after the Deployment Date, the
Technical Support Services shall include, without limitation: (i) the regular
provision by IMGIS of qualified Personnel able to resolve problems in the
operation of the Technology on-site at AOL's data centers in the greater
Washington metropolitan area; and (ii) the provision by IMGIS of telephone
access 24 hours a day, seven days a week, to qualified Personnel able to resolve
problems in the operation of the Technology, via a designated telephone support
number.
4.2 FEES FOR TECHNICAL SERVICES SUPPORT.
(a) Provided that, at the time any Technical Support Services are
requested by AOL or are to be performed by IMGIS, AOL is in compliance with all
of its material obligations under the Demographic Data Agreement and does not
Materially Limit or Prohibit the use by IMGIS of Demographic Data, IMGIS shall
provide the Technical Support Services requested by AOL for no additional
consideration other than reimbursement of the Fully Burdened Costs of the
provision by IMGIS Personnel of such Technical Support Services.
(b) If, at the time any Technical Support Services are requested by
AOL or are to be performed by IMGIS: (i) the Implementation Date has not yet
occurred under the Demographic Data Agreement and no more than twelve months
have passed since the
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execution of the Demographic Data Agreement, then AOL shall pay to IMGIS the
Fully Burdened Costs of the provision by IMGIS Personnel of such Technical
Support Services plus twenty-five percent (25%) of such costs; or (ii) the
Implementation Date has not yet occurred under the Demographic Data Agreement
and more than twelve months have passed since the execution of the
Demographic Data Agreement, then AOL shall pay to IMGIS the Fully Burdened
Costs of the provision by IMGIS Personnel of such Technical Support Services
plus forty percent (40%) of such costs.
(c) If, following the occurrence of the Implementation Date, at the
time any Technical Support Services are requested by AOL or are to be performed
by IMGIS, AOL is not in compliance with all of its material obligations under
the Demographic Data Agreement or Materially Limits or Prohibits the use by
IMGIS of Demographic Data, then AOL shall pay to IMGIS the Fully Burdened Costs
of the provision by IMGIS Personnel of such Technical Support Services plus
twenty-five percent (25%) of such costs.
4.3 WARRANTY. In the event that the Technology fails to conform to or
perform in accordance with the technical or user documentation provided by IMGIS
(other than as a result of operator error, accident, or misuse or alteration of
the Technology by a Person not under IMGIS' direction or control) or in the
event of a breach of the warranties set forth in Section 10.2(e) or 10.2(f)
below, then IMGIS, at its expense and without any payment by AOL for Technical
Support or other Services, shall use commercially reasonable efforts to cure
such failure or breach as soon as practicable, but in any event:
(a) For a "critical" failure or breach, such as the Technology, or
other software, hardware or other technology with which the
Technology is interfacing or integrating, ceasing to execute a
function that AOL reasonably deems critical to its business,
IMGIS shall provide at least a temporary workaround or fix within
two hours of receiving notice of such failure or breach and shall
cure such failure or breach within three business days of
receiving notice of such failure or breach; and
(b) For any other failure or breach that is not a "critical" problem,
IMGIS shall provide at least a temporary workaround or fix within
three business days of receiving notice of such failure or breach
and shall cure such failure or breach within 15 days after
receiving notice of such failure or breach.
Without limiting the generality of the foregoing, IMGIS agrees, by way of
example, that it shall not be unreasonable for AOL to deem a failure or breach
"critical to its business" as provided in subpart (a) above if such failure or
breach results or would result in the breach or nonperformance by AOL of any
obligation to any advertiser on the AOL Network.
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ARTICLE 5
DEVELOPMENT SERVICES
5.1 SCOPE OF SERVICES. At AOL's written request, IMGIS shall undertake the
reasonable development of Improvements as necessary to customize the interactive
content (including interactive advertisement) serving, trafficking, targeting
and related functions of the Technology to meet AOL's needs, including, without
limitation, developing the functionality to serve the same advertisement to the
top and bottom of a page, scaling search term capabilities, and undertaking such
other work as may be specified by AOL (collectively, "Development Services").
Notwithstanding the foregoing, AOL shall have no obligation to request or to use
Development Services of IMGIS and may undertake similar work itself or through
independent contractors other than IMGIS, subject to the provisions of Section
2.3 above.
5.2 FEES FOR DEVELOPMENT SERVICES.
(a) Provided that, at the time any Development Services are requested
by AOL or are to be performed by IMGIS, AOL is in compliance with all of its
material obligations under the Demographic Data Agreement and does not
Materially Limit or Prohibit the use by IMGIS of Demographic Data, IMGIS shall
provide the Development Services requested by AOL for no additional
consideration other than reimbursement of the Fully Burdened Costs of the
provision by IMGIS Personnel of such Development Services.
(b) If, at the time any Development Services are requested by AOL
or are to be performed by IMGIS: (i) the Implementation Date has not yet
occurred under the Demographic Data Agreement and no more than twelve months
have passed since the execution of the Demographic Data Agreement, then AOL
shall pay to IMGIS the Fully Burdened Costs of the provision by IMGIS
Personnel of such Development Services plus twenty-five percent (25%) of such
costs; or (ii) the Implementation Date has not yet occurred under the
Demographic Data Agreement and more than twelve months have passed since the
execution of the Demographic Data Agreement, then AOL shall pay to IMGIS the
Fully Burdened Costs of the provision by IMGIS Personnel of such Development
Services plus forty percent (40%) of such costs.
(c) If, following the occurrence of the Implementation Date, at the
time any Development Services are requested by AOL or are to be performed by
IMGIS, AOL is not in compliance with all of its material obligations under the
Demographic Data Agreement or Materially Limits or Prohibits the use by IMGIS of
Demographic Data, then AOL shall pay to IMGIS the Fully Burdened Costs of the
provision by IMGIS Personnel of such Development Services plus twenty-five
percent (25%) of such costs.
5.3 ORIGINAL WORK. Any Work Products either shall be the original work of
IMGIS and its Personnel or shall be items licensed by Third Parties that IMGIS
has the right to provide to AOL and that IMGIS identifies as such to AOL in
writing. IMGIS shall
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not disclose to AOL, or induce AOL to use, the trade secrets or other
confidential information of any Third Parties, except to the extent that the
Technology includes Software licensed from Third Parties which IMGIS has the
right to provide to AOL.
5.4 WORK FOR HIRE.
(a) The Parties intend that each Work Product that is a work of
authorship shall be deemed a "work made for hire" within the meaning of the
copyright laws of the United States and any similar laws of other jurisdictions.
To the extent, if any, that IMGIS or its Personnel have rights in any Work
Product notwithstanding the foregoing, including because a Work Product does not
qualify as a "work made for hire," IMGIS hereby irrevocably assigns to AOL, and
agrees that AOL shall be the sole and exclusive owner of, all right, title and
interest in and to the Work Product, including all patent, copyright, trade
secret and other proprietary rights therein that may be secured in any place
under laws now or hereafter in effect.
(b) To the extent that IMGIS provides Development Services in support
of any modification of the Technology, AOL hereby grants to IMGIS a perpetual,
worldwide, nonexclusive, nontransferable license to use, reproduce, adapt,
transmit, perform and display such modification in connection with the provision
of such Development Services and for no other purpose without AOL's prior
written approval. In the event that IMGIS desires to integrate such modification
in the Technology and obtains AOL's approval thereto, then IMGIS shall reimburse
AOL for any payment made by AOL for such Development Services, or waive such
payment by AOL, in consideration for the grant of such license to IMGIS. IMGIS
may exercise its rights under the foregoing license through Personnel who are
obligated by written agreement to maintain such modification in confidence and
restrict their use of such modification pursuant to terms comparable to those
set forth in Article 13.
(c) IMGIS shall have valid and enforceable written agreements with all
of its Personnel providing Development Services hereunder containing
confidentiality and nondisclosure obligations comparable in scope to those set
forth in Article 13 and giving IMGIS all rights and authority necessary to
effectuate the provisions of this Section 5.4. IMGIS shall provide copies of
these agreements to AOL upon AOL's request.
(d) To the extent that IMGIS delivers to AOL any Improvements,
designs, drawings, specifications, documentation, computer software, reports,
training materials, inventions, discoveries and other items that are not Work
Products, such items shall be deemed included in the Technology and licensed
pursuant to Section 2.1 above.
5.5 CHANGE MANAGEMENT PROCESS. Notwithstanding the foregoing provisions of
this Article 5, in the event that AOL implements a version of the Technology
containing any modification to the source code for the Software that adds a
substantially new feature or function to the version of the Technology used by
IMGIS (in contrast to merely correcting what are colloquially known as "bugs" in
such Software or making any other
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minor modification to an existing feature or function) then: (a) IMGIS shall not
be obligated to provide Development Services or Technical Support Services for
such Improvement; and (b) in the event that AOL does not request, or IMGIS does
not agree to provide, such Services, the Parties shall work together to devise a
change management process to facilitate the technical support and maintenance of
AOL's version of the Technology containing such Improvement.
ARTICLE 6
AD SERVING SERVICES
6.1 SCOPE OF SERVICES. At AOL's discretion and upon AOL's written request
with the provision of reasonable advance notice to IMGIS, IMGIS shall provide to
AOL interactive advertisement serving, trafficking, targeting and related
services (collectively, "Ad Serving Services") for: (a) the AOL Network; (b) the
interactive sites of AOL Affiliates; and (c) the Covered AOL Partner Sites.
6.2 FEES FOR AD SERVING SERVICES.
(a) Provided that, at the time any Ad Serving Services are requested
by AOL or are to be performed by IMGIS, AOL is in compliance with all of its
material obligations under the Demographic Data Agreement and does not
Materially Limit or Prohibit the use by IMGIS of Demographic Data, IMGIS shall
provide the Ad Serving Services requested by AOL for no additional consideration
other than reimbursement of the Fully Burdened Costs of the provision by IMGIS
Personnel of such Ad Serving Services, provided, however, that in the event that
IMGIS agrees to provide any Ad Serving Services to any Third Party that is
similarly situated to AOL at a rate that is more favorable to such Third Party
than the consideration payable by AOL under this subpart (a), then IMGIS shall
provide the Ad Serving Services requested by AOL at such Third Party's rate.
(b) If, at the time any Ad Serving Services are requested by AOL or
are to be performed by IMGIS: (i) the Implementation Date has not yet
occurred under the Demographic Data Agreement and no more than twelve months
have passed since the execution of the Demographic Data Agreement, then AOL
shall pay to IMGIS the Fully Burdened Costs of the provision by IMGIS
Personnel of such Ad Serving Services plus twenty-five percent (25%) of such
costs; or (ii) if the Implementation Date has not yet occurred under the
Demographic Data Agreement and more than twelve months have passed since the
execution of the Demographic Data Agreement, then AOL shall pay to IMGIS the
Fully Burdened Costs of the provision by IMGIS Personnel of such Ad Serving
Services plus forty percent (40%) of such costs.
(c) If, following the occurrence of the Implementation Date, at the
time any Ad Serving Services are requested by AOL or are to be performed by
IMGIS, AOL is not in compliance with all of its material obligations under the
Demographic Data
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Agreement or Materially Limits or Prohibits the use by IMGIS of Demographic
Data, then AOL shall pay to IMGIS the Fully Burdened Costs of the provision by
IMGIS Personnel of such Ad Serving Services plus twenty-five percent (25%) of
such costs.
6.3 PROVISION OF SERVICES TO OTHER SITES OF AOL PARTNERS. In addition to
the foregoing, upon the request of an AOL Partner, IMGIS agrees to provide Ad
Serving Services to the interactive sites of such AOL Partner which are not
Covered AOL Partner Sites on terms and at rates no less favorable than those
offered by IMGIS to any Third Party that is similarly situated to such AOL
Partner in terms of the volume of advertisements to be served by IMGIS for such
Third Party.
6.4 REIMBURSEMENT FOR AD SERVING SERVICES. In addition to the fees for Ad
Serving Services provided for in Section 6.2 above, AOL shall reimburse the
following costs incurred by IMGIS in the provision of Ad Serving Services
requested by AOL for the purposes set forth in Section 6.1 above, and, at AOL's
option, shall provide financing to IMGIS for such costs on mutually agreeable
terms, but in any event on terms no less favorable to IMGIS than such terms as
are commercially available to entities similarly situated to IMGIS:
(a) Reimbursement for IMGIS' incremental costs for any modification
of the IMGIS AdForce System required to meet AOL's needs for the
provision of Ad Serving Services (other than capitalized costs,
which if financed at the time such costs are incurred, shall be
reimbursed at the time such costs are amortized), excluding any
modifications required to scale the Software or other Technology
to meet AOL's needs;
(b) Reimbursement for IMGIS' incremental costs for any additional
equipment that IMGIS must purchase or lease solely to meet AOL's
needs for the provision of Ad Serving Services for so long as
necessary to meet AOL's needs (and, if AOL provides financing for
such equipment, then, at AOL's option, AOL may become the lessor
of such equipment to IMGIS), unless AOL determines, in its sole
discretion, to lease such equipment on its own; and
(c) Reimbursement for any additional incremental bandwidth costs
incurred by IMGIS solely in connection with the provision of Ad
Serving Services to AOL.
ARTICLE 7
AOL MARKETING EFFORTS
7.1 AOL MARKETING EFFORTS. AOL shall use commercially reasonable efforts to
encourage AOL Partners (but AOL shall not be obligated to actively solicit AOL
Partners)
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to use the IMGIS AdForce System for the serving and management of Internet
advertisements, subject to agreement between IMGIS and such AOL Partners on the
terms and conditions of such use.
7.2 COMMISSIONS. If, as a result of marketing efforts by AOL, an AOL
Partner or any other Person enters into an agreement with IMGIS to utilize the
IMGIS AdForce System, then, provided that, as of the time that IMGIS enters into
such agreement with such AOL Partner or other Person, AOL is in compliance with
all of its material obligations under the Demographic Data Agreement and does
not Materially Limit or Prohibit the use by IMGIS of Demographic Data, IMGIS
shall pay to AOL on a quarterly basis the following commissions on the gross
amount of the consideration charged by IMGIS to such AOL Partner or other Person
for use of the IMGIS AdForce System:
(a) For the first year of such agreement, the greater of 4% and
the highest percentage commission granted by IMGIS at such time
to any employee or agent of IMGIS or to any Third Party for
similar marketing or sales efforts; and
(b) For each succeeding year of such agreement, the greater of 2%
and the highest percentage commission granted by IMGIS at such
time to any employee or agent of IMGIS or to any Third Party for
similar marketing or sales efforts.
7.3 COMMISSION SHARING. Notwithstanding the provisions of Section 7.2
above, if AOL and any employee or agent of IMGIS or any other Third Party claims
commissions with respect to the same Person (and such Person has not entered
into an agreement with IMGIS solely as a result of AOL marketing efforts), IMGIS
shall not be required to pay total commissions to AOL and such Third Party in
excess of the amount specified in Section 7.2 and IMGIS may apportion the
applicable commission specified in Section 7.2 between AOL and the Third Party
in such manner as IMGIS determines in good faith to be equitable.
ARTICLE 8
SALE OF ADVERTISEMENTS ON BEHALF OF IMGIS' CUSTOMERS
8.1 OBLIGATIONS OF IMGIS. IMGIS shall use commercially reasonable efforts
to encourage IMGIS Customers to grant to IMGIS the right to sell interactive
advertisements on their behalf and to obtain the right to assign to AOL the
right to sell such interactive advertisements. Prior to approaching an IMGIS
Customer about obtaining the right to sell interactive advertisements on behalf
of such IMGIS Customer, IMGIS shall discuss with AOL and with no other Person,
within a time period to be agreed upon by the Parties, whether AOL desires to
have IMGIS assign to AOL the right to sell interactive advertisements on behalf
of such IMGIS Customer.
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8.2 ASSIGNMENT OF RIGHTS TO AOL. In the event that IMGIS obtains the right
to sell interactive advertisements on behalf of any IMGIS Customer and AOL
agrees to have IMGIS assign such right to AOL, IMGIS shall grant to AOL, and AOL
shall obtain, the exclusive right (as to IMGIS and Persons deriving rights
through IMGIS) to sell interactive advertisements on behalf of such IMGIS
Customer to the same extent that IMGIS is entitled to sell such interactive
advertisements; provided, however, that (a) such right to sell interactive
advertisements shall convert to a nonexclusive right if AOL fails to meet
reasonable performance milestones for advertisement sales to be mutually agreed
upon by the Parties within 30 days after the date of IMGIS' assignment to AOL of
its right to sell interactive advertisements on behalf of such IMGIS Customer
and (b) such right shall revert to IMGIS in its entirety in the event that, and
for so long as, AOL ceases to be in compliance with all of its material
obligations under the Demographic Data Agreement or Materially Limits or
Prohibits the use by IMGIS of Demographic Data.
8.3 REVENUE SHARING AND OTHER CONSIDERATION. AOL shall pay to IMGIS, on a
quarterly basis, fifty percent (50%) of all revenues received by AOL from the
sale of interactive advertisements on behalf of an IMGIS Customer, net of
selling commissions, expenses related to sales, and amounts payable to operators
of the relevant interactive sites. As consideration for the satisfaction by AOL
of additional performance milestones for advertisement sales to be mutually
agreed upon by the Parties within 30 days after the date of IMGIS' assignment to
AOL of its right to sell interactive advertisements on behalf of such IMGIS
Customer, IMGIS and AOL shall agree to either (i) a reduction in the percentage
of revenues payable by AOL from the sale of interactive advertisements on behalf
of such IMGIS Customer or (ii) the issuance to AOL of warrants to purchase
IMGIS' common stock (in addition to those being issued to AOL simultaneously
with the execution of this Agreement), provided that IMGIS has conducted an
initial public offering of its common stock as of the time of such issuance.
ARTICLE 9
PAYMENT PROVISIONS
9.1 PAYMENT PROCEDURES.
(a) Unless otherwise agreed to in writing by the Parties, all payments
due by AOL for the provision of Services by IMGIS hereunder shall be due and
payable 30 days after the receipt by AOL of a proper invoice therefor from
IMGIS, which invoice shall include such detail and supporting documentation as
AOL may reasonably request.
(b) Unless otherwise agreed to in writing by the Parties: (i) all
payments due by IMGIS under Article 7 in connection with IMGIS' entrance into an
agreement for use of the IMGIS AdForce System with an AOL Partner or other
Person as a result of AOL marketing efforts shall be paid to AOL within 60 days
after the end of the calendar quarter during which such agreement is entered
into and within 60 days after the end of each succeeding calendar quarter
thereafter; and (ii) all payments due by AOL
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under Article 8 in connection with the sale of interactive advertisements on
behalf of an IMGIS Customer shall be paid to IMGIS within 60 days after the end
of the calendar quarter during which IMGIS assigns to AOL its right to sell
interactive advertisements on behalf of such IMGIS Customer and within 60 days
after the end of each succeeding calendar quarter thereafter.
(c) All payments due to the payee Party hereunder shall be paid to the
payee Party in U.S. Dollars by wire transfer, or by such other method mutually
agreed upon by the Parties, in each case at the expense of the payor Party, for
value no later than the due date thereof (with 24 hours advance notice of each
wire transfer) to such bank account or accounts as the payee Party shall
designate in writing within a reasonable period of time prior to such due date.
9.2 LATE PAYMENT. Without limiting the payee Party's rights to pursue any
other remedies at law or in equity, if the payor Party fails to pay any payment
required under this Agreement on or before the due date therefor, then the payor
Party shall pay annually compounded interest on such amount at an annual rate
equal to the lower of (a) the highest rate permitted by applicable law and (b)
the lowest prime rate as published by The Wall Street Journal on or nearest to
such due date plus three percent (3%), which interest shall accrue from the date
the payment not timely made became due until the date such payment is paid in
full.
9.3 APPLICATION OF PAYMENTS. Any payments received by the payee Party shall
be applied first to the satisfaction of the oldest of any unpaid, accrued
interest charges and, following payment of all such interest charges, to the
satisfaction of the oldest of any unpaid fees or other amounts due hereunder.
9.4 TAXES.
(a) All payments required to be made by the payor Party under this
Agreement shall be made free and clear of, and without deduction for, any and
all taxes that are levied on the transfer of such payments to the payee Party.
If any withholding or deductions are required by applicable law, payments shall
be made such that, after such withholding or deductions, the net amount that the
payee Party receives is equal to the amount due hereunder. The payor Party shall
file any information or tax returns with respect to such taxes, and the payor
Party shall indemnify the payee Party from any interest or other payments, fines
or penalties relating to or resulting from any failure, delay or error of the
payor Party in doing so.
(b) IMGIS shall be responsible for the payment of any and all
transfer, sales, use or similar taxes that are levied on or in connection with
the transfer of the Technology to AOL, including any Improvements.
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9.5 BOOKS AND RECORDS. Each Party shall keep full, true and accurate books
of account containing all particulars and reasonable supporting documentation,
in the case of IMGIS, in connection with the provision of Services hereunder and
the determination of any amounts payable to AOL under Article 7, and, in the
case of AOL, in connection with the determination of any amounts payable to
IMGIS under Article 8. All such books of account and reasonable supporting
documentation shall be located at the principal place of business of such Party
and shall be open for inspection by the other Party (the "auditing Party") or
any independent certified public accountant retained by the auditing Party, at a
time mutually acceptable to the Parties during normal business hours but no more
frequently than once each calendar year for three years following the end of the
calendar year to which they pertain (and access shall not be denied thereafter
if reasonably available). If such records are insufficient or any such
inspection discloses a discrepancy in favor of the auditing Party of five
percent (5%) or more of the amounts actually due for any period, then, in
addition to any other rights and remedies available to the auditing Party under
this Agreement, the audited Party shall pay or refund to the auditing Party the
amount of such discrepancy as well as the reasonable cost of such inspection
promptly following such Party's receipt from the auditing Party of the xxxx or
invoice for such inspection.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party represents and
warrants to the other Party that:
(a) Such Party has the full corporate right, power and authority to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby;
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
such Party;
(c) This Agreement has been duly executed and delivered by an
authorized officer of such Party, and is a legal, valid and
binding obligation of such Party enforceable against it in
accordance with its terms, except as enforcement may be limited
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity)
and the effect of applicable bankruptcy, insolvency, moratorium
and other similar laws of general application relating to or
affecting creditors' rights generally, including, without
limitation, the effect of statutory or other laws regarding
fraudulent conveyances and preferential transfers;
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(d) Such Party's execution, delivery and performance of this
Agreement shall not constitute a breach or default under any
contract or agreement to which such Party is a party or by which
it is bound or otherwise violate the rights of any Third Party;
and
(e) No consent, approval or authorization of or from any governmental
entity or any other Person not a Party to this Agreement, whether
prescribed by law, regulation, contract or agreement, is required
for such Party's execution, delivery and performance of this
Agreement or consummation of the transactions contemplated
hereby.
10.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF IMGIS. IMGIS further
represents and warrants to AOL that:
(a) WORKMANLIKE SERVICES. The Services shall be provided in a
workmanlike manner, in accordance with the standards of care and
diligence and the level of skill, knowledge and judgment normally
practiced by nationally-recognized information technology
services firms in performing services of a similar nature;
(b) NONINFRINGEMENT. The Technology does not, and any Improvements
provided by IMGIS, any Work Products and AOL's use of the
Technology and Work Products as authorized herein shall not,
infringe any copyright, trade secret or other proprietary rights
(except patent rights) of any Third Party or otherwise conflict
with the rights of any Third Party, and, to the best of IMGIS'
knowledge, the Technology does not, and any Improvements provided
by IMGIS, any Work Products and AOL's use of the Technology and
Work Products shall not, infringe any patent of any Third Party;
(c) NO LITIGATION. There is no action, suit, proceeding or
arbitration pending, and, to the best of IMGIS' knowledge, there
is no action, suit, proceeding, arbitration or claim threatened,
concerning the Technology;
(d) NO LIENS OR ENCUMBRANCES. Except for the security interest in
favor of Silicon Valley Bank that has been previously disclosed
to AOL, the Technology is free from any security interests and
other liens and encumbrances of Third Parties arising from the
actions or inactions of IMGIS;
(e) NO UNAUTHORIZED CODE. The Technology does not, and any
Improvements provided by IMGIS shall not, contain any back door,
time bomb, drop dead device, protect codes, data destruct keys,
or other software routine designed to disable a computer program
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automatically with the passage of time or under the control of
any Person other than AOL. To the best of IMGIS' knowledge, the
Technology does not, and any Improvements provided by IMGIS shall
not, contain any virus, Trojan horse, worm or other software
routine designed to permit unauthorized access or to disable,
erase, modify, deactivate or otherwise harm software, hardware or
data; and IMGIS covenants that, prior to or at the time of the
delivery of any Technology (including any Improvement), IMGIS
shall test the Technology using a current version of a reputable
"antivirus" program and remove any such unauthorized codes; and
(f) YEAR 2000 COMPLIANCE. All Software and other operational items
included in the Technology shall: (i) properly execute with all
date data, whether from years in the same century or different
centuries, including by yielding correct results in arithmetic
operations, comparisons and sorting of date fields and in leap
year calculations; and (ii) not abnormally cease to execute or
return an error message due to date-related processing.
10.3 NO OTHER WARRANTIES. THE EXPRESS WARRANTIES IN THIS AGREEMENT SHALL BE
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 11
INDEMNIFICATION
11.1 INDEMNITY. AOL shall not be liable to IMGIS, any of its Affiliates or
any other Person for, and IMGIS shall indemnify and hold harmless AOL and all
AOL Affiliates, and their respective directors, officers, employees and agents
(collectively, the "AOL Indemnitees"), from and against any Losses incurred
arising out of or resulting from: (a) any infringement of any patent, copyright,
trade secret or other proprietary right by the Technology or any Work Product,
except to the extent that such infringement arises solely from any Improvement
developed by AOL, or by IMGIS to AOL's specifications if IMGIS could not
reasonably have conformed to such specifications while avoiding the
infringement; or (b) the presence of IMGIS' employees or agents on the premises
of AOL or an AOL Affiliate (except those Losses that result solely from the
gross negligence or willful misconduct of AOL or an AOL Affiliate), including,
but not limited to, Losses resulting from injuries to IMGIS' Personnel and
Losses resulting from injuries caused by IMGIS' Personnel.
11.2 PROCEDURE. Any AOL Indemnitee shall notify IMGIS promptly in writing
of an indemnifiable claim or cause of action under Section 11.1 above upon
receiving notice or being informed of the existence thereof; provided, however,
that failure to notify IMGIS of an indemnifiable claim or cause of action shall
not relieve IMGIS of its
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obligation to provide indemnification hereunder, except to the extent that such
failure prejudices IMGIS' ability to defend or settle such claim or cause of
action. IMGIS shall assume, at its cost and expense, the sole defense of such
claim or cause of action through counsel selected by IMGIS and reasonably
acceptable to AOL, except that in the case of a conflict of interest between
IMGIS and AOL, IMGIS shall, at IMGIS' cost and expense, provide separate counsel
for AOL selected by AOL. IMGIS shall maintain control of such defense, including
any decision as to settlement; provided that, in the event that IMGIS does not
maintain control of such defense on a timely basis, then, without prejudice to
any other rights and remedies available to AOL under this Agreement, AOL may
take over such defense with counsel of its choosing, at IMGIS' cost and expense.
AOL may, at its option and expense, participate in IMGIS' defense, and if AOL so
participates, the Parties shall cooperate with one another in such defense.
IMGIS shall bear the total costs of any court award or any settlement of such
claim or cause of action approved by IMGIS and all other costs, fees and
expenses related to the resolution thereof (including reasonable attorneys'
fees, except for attorneys' fees for which AOL is responsible in the event that
AOL participates in IMGIS' defense of such claim or cause of action).
11.3 ABATEMENT OF INFRINGEMENT. If IMGIS reasonably believes it necessary
to do so to minimize its liability under Section 11.1 above, IMGIS may, at its
expense, procure the right for AOL to continue using the Technology or any Work
Product, replace the Technology or any Work Product with a functionally
equivalent noninfringing item, or modify the Technology or any Work Product so
that it is functionally equivalent but noninfringing.
ARTICLE 12
LIMITATION ON LIABILITY
EXCEPT FOR A CLAIM OF INDEMNIFICATION PURSUANT TO ARTICLE 11 OR A BREACH OF
ANY OF THE WARRANTIES SET FORTH IN SECTION 10.2 ABOVE, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER PARTY HEREUNDER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR
CONSEQUENTIAL DAMAGES.
ARTICLE 13
CONFIDENTIALITY
13.1 CONFIDENTIALITY OBLIGATION. Each of AOL and IMGIS (the "Receiving
Party") shall keep, and shall cause their Affiliates to keep, strictly
confidential any information disclosed by the other Party (the "Disclosing
Party") or otherwise made available to the Receiving Party concerning the
Technology or either Party's performance of this Agreement or otherwise
concerning the business, operations, trade secrets or other proprietary
information of the Disclosing Party (whether in written media or otherwise)
("Confidential Information"), using the same degree of care that it uses to
protect its own
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confidential or proprietary information of a like nature but in no event less
than a reasonable degree of care. "Confidential Information" shall not include
information: (a) which is or becomes generally available to the public other
than as a result of disclosure thereof by the Receiving Party; (b) which is
lawfully received by the Receiving Party on a nonconfidential basis from a Third
Party that is not itself under any obligation of confidentiality or
nondisclosure to the Disclosing Party or any other Person with respect to such
information; (c) which is independently developed by the Receiving Party; or (d)
which was in the Receiving Party's possession prior to receipt from the
Disclosing Party. Each Party shall treat any Technology or Work Product owned by
or assigned to the other Party as Confidential Information of such Party.
13.2 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Receiving Party shall
use Confidential Information solely for the purposes of this Agreement and shall
not disclose or disseminate any Confidential Information to any Person at any
time, except for disclosure to its Affiliates and to those of its own and its
Affiliates' directors, officers, employees, accountants, attorneys, advisers and
agents whose duties reasonably require them to have access to such Confidential
Information, provided that such directors, officers, employees, accountants,
attorneys, advisers and agents are bound to maintain the confidentiality of such
Confidential Information to the same extent as if they were Parties hereto.
13.3 EXCEPTION. The foregoing confidentiality and nondisclosure obligations
shall not apply to Confidential Information: (a) incidentally retained in the
memory of Persons to whom the Receiving Party is permitted to disclose
Confidential Information, other than as the result of an intentional effort to
commit Confidential Information to memory to circumvent the provisions of this
Article 13; or (b) which is required to be publicly disclosed by law or by
regulation; provided, however, that, in such event, the Receiving Party provides
the Disclosing Party with prompt advance notice of such disclosure so that the
Disclosing Party has the opportunity if it so desires to seek a protective order
or other appropriate remedy.
13.4 SURVIVAL. The confidentiality and nondisclosure obligations of this
Article 13 shall remain in effect for three years following the date hereof or
two years following the termination of this Agreement, whichever is greater,
except with respect to source code and related source code documentation, for
which the obligations of this Article 13 shall survive for so long as the source
code and documentation remain Confidential Information.
13.5 SOURCE CODE PROTECTION. The Receiving Party shall protect Confidential
Information consisting of source code and related source code documentation from
unauthorized use and disclosure to the same extent that it protects its own
source code (but no less than to a reasonable degree).
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13.6 OTHER BUSINESS ACTIVITIES.
(a) The Disclosing Party agrees that the Receiving Party may currently
or in the future acquire information, either independently developed or legally
received from Third Parties, which may be similar to the Confidential
Information. Nothing in this Agreement shall be construed as a representation
that the Receiving Party does not or shall not have such independently developed
or legally received information.
(b) Nothing in this Agreement shall be construed as a representation
or agreement to restrict reassignment of the Receiving Party's employees, or in
any manner to affect or limit either Party's present or future business
activities of any nature, including business activities which could be
competitive with the Disclosing Party.
(c) Nothing in this Agreement shall be construed as a representation
or agreement that the Receiving Party shall not develop or have developed for it
products, concepts, systems or techniques contemplated by or embodied in the
Confidential Information, provided that the Receiving Party does not violate any
of its obligations under this Agreement in connection with such development.
ARTICLE 14
TERM AND TERMINATION
14.1 TERM. This Agreement shall commence as of the date hereof and, unless
terminated in accordance with the provisions of Section 14.2 below, this
Agreement shall remain in full force and effect without expiration.
14.2 TERMINATION.
14.2.1 TERMINATION RIGHTS OF AOL. AOL shall have the right to
terminate this Agreement in the event of the breach by IMGIS of, or the failure
of IMGIS to perform, any of its material obligations hereunder and the failure
to remedy such breach or nonperformance within 60 days following the receipt of
written notice of such breach or nonperformance from AOL. Such termination shall
be immediately effective upon the receipt by IMGIS of written notice of
termination from AOL.
14.2.2 TERMINATION RIGHTS OF IMGIS. IMGIS shall have the right to
terminate this Agreement in the event of:
(a) The breach by AOL of, or the failure of AOL to perform, any
of its material obligations under this Agreement (except for
its obligations under Articles 3, 4, 5 and 6 above) and the
failure to remedy such breach or nonperformance within 60
days following the receipt of written notice of such breach
or nonperformance from IMGIS;
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(b) The breach by any wholly-owned subsidiary of AOL that is a
sublicensee of AOL's licenses hereunder and that is a
recipient of source code for the Software of, or the failure
of such subsidiary to perform, any of its material
obligations under its sublicense with AOL, the failure to
remedy such breach or nonperformance within 60 days
following the receipt of written notice of such breach or
nonperformance from AOL, and the failure of AOL to terminate
its sublicense with such subsidiary with 60 days of such
failure; or
(c) A "Data Agreement Material Breach" by AOL. For purposes of
this Agreement, a "Data Agreement Material Breach" means the
breach by AOL of, or the failure of AOL to perform, any of
its material obligations under the Demographic Data
Agreement, the failure of AOL to remedy such breach or
nonperformance within 60 days following the receipt of
written notice of such breach or nonperformance from IMGIS,
and, in the event that such breach or nonperformance is
disputed by the Parties, the final determination of such
breach or nonperformance by a court of competent
jurisdiction from which no further appeal may be taken.
Such termination shall be immediately effective upon the receipt by AOL of
written notice of termination from IMGIS.
14.2.3 IMGIS RIGHT TO DISCONTINUE SERVICES. IMGIS shall have the right
to discontinue the provision of Services pursuant to Sections 3.2, 4.1, 5.1 and
6.1 above for which it is entitled to reimbursement or other payment from AOL,
but shall not have the right to terminate this Agreement or the licenses granted
pursuant to Section 2.1 above, in the event of the material breach by AOL of its
obligation hereunder to reimburse or pay IMGIS for any Services and the failure
to remedy such breach within 60 days following the receipt of written notice of
such breach from IMGIS. Such discontinuation of Services shall be immediately
effective upon the receipt by AOL of written notice of discontinuation from
IMGIS.
14.3 EFFECT OF TERMINATION. Notwithstanding anything herein to the
contrary, in the event of the termination of this Agreement other than upon the
breach by AOL of any of its material obligations under Article 2 or Article 13
and the failure to remedy such breach within the time period set forth in
Section 14.2.2 above, AOL and all AOL Affiliates which are sublicensees of AOL's
license hereunder shall have the right, for a period of one year following
termination, to continue to exercise all license rights granted to them under
Section 2.1 above on all the same terms in effect pursuant to this Agreement
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immediately prior to termination and to retain any Confidential Information
necessary or useful for the exercise of such rights. Notwithstanding anything
herein to the contrary, IMGIS shall in no event be entitled to enjoin or seek to
enjoin any exercise by AOL or any such AOL Affiliate of the rights set forth in
this Section 14.3, and IMGIS hereby expressly waives any right to injunctive or
other equitable relief, whether based on statute, common law or otherwise,
arising out of any alleged default by AOL or any AOL Affiliate that would
adversely affect the exercise by AOL or any AOL Affiliate of its rights under
this Section 14.3.
14.4 RETURN OF CONFIDENTIAL INFORMATION. Within 30 calendar days
following the termination of this Agreement other than termination where Section
14.3 above would be applicable, each Party shall either deliver to the other
Party, or destroy, all copies of any Confidential Information of the other Party
embodied in a tangible medium that is in such Party's possession or under its
control, and shall furnish to the other Party an affidavit signed by an officer
of such Party certifying that, to the best of its knowledge, such delivery or
destruction has been fully effected.
14.5 SURVIVAL. All rights granted to and obligations undertaken by the
Parties hereunder shall terminate immediately upon the termination of this
Agreement, except for the rights and obligations provided for in Sections 14.3
and 14.4 above as well as the following rights and obligations, which shall
survive according to their terms:
(a) The obligation of the payor Party to pay any and all
payments accrued hereunder;
(b) The license to IMGIS granted in Section 5.4;
(c) The right of each Party to inspect the books and records of
the other Party to the extent provided in Section 9.5;
(d) The indemnification obligations of Article 11 and the
limitation on liability of Article 12;
(e) The confidentiality and nondisclosure obligations of Article
13; and
(f) The provisions of Sections 15.1, 15.7, 15.8, 15.10, 15.19
and 15.20 below.
In addition, termination of this Agreement shall not affect the remedies of the
Parties otherwise available at law or in equity in relation to any rights
accrued under this Agreement prior to termination.
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ARTICLE 15
MISCELLANEOUS
15.1 ELECTRONIC REPOSSESSION. In no event shall IMGIS electronically
repossess, de-install, deactivate or disable any Technology in the absence of a
final, unappealable judgment of a court of competent jurisdiction that the
license rights granted under Section 2.1 above have been validly terminated.
15.2 PERIODIC DISCUSSIONS. Commencing within 30 days following the
execution of this Agreement and on a quarterly basis thereafter, AOL shall
engage in discussions with IMGIS concerning AOL's deployment of the Technology
and shall endeavor to provide IMGIS with non-binding, 180 day forecasts of the
Services that AOL intends to request from IMGIS hereunder. Within 45 days after
the Deployment Date, the Parties shall execute a more detailed development,
support and maintenance agreement with respect to IMGIS' obligations to provide
development, support and maintenance for the Technology, including, without
limitation, IMGIS' obligations for the delivery of Improvements and other
Technology, IMGIS' obligations to provide Development Services and Technical
Services, and IMGIS' obligations to cure any nonperformance or other failure
with respect to the Technology.
15.3 MUTUAL NON-SOLICITATION. For a period of one year following the date
hereof, without the prior written approval of the other Party, neither Party or
any of its Affiliates shall actively solicit for hire any Personnel of the other
Party with responsibility for the development or maintenance of the Technology
or Work Products or for the provision of interactive advertisement serving,
trafficking, targeting or related services, excluding independent contractors
that do not spend the majority of their time providing services to such Party.
The foregoing mutual non-solicitation covenant shall terminate at any time in
the event of the acquisition by a Third Party of more than fifty percent (50%)
of the voting power of IMGIS, the acquisition by a Third Party of all or
substantially all of the assets of IMGIS, or the consummation of a merger,
consolidation or similar corporate transaction of IMGIS with or into a Third
Party where the voting securities of IMGIS outstanding immediately prior to
consummation of such transaction are converted into cash or securities
possessing less than fifty percent (50%) of the voting power of the surviving
entity. The obligations of the Parties under this Section 15.3 shall not survive
the termination of this Agreement.
15.4 FAILURE TO ASSERT RIGHTS IN BANKRUPTCY. AOL's failure to assert its
rights to retain its benefits under this Agreement in accordance with 11 U.S.C.
Section 365(n)(1)(B) shall not be construed as a termination of this Agreement
by AOL under 11 U.S.C. Section 365(n)(1)(A).
15.5 FURTHER ASSURANCES. Upon the request of either Party, the other Party
shall sign and deliver any assignments or other necessary documents and
otherwise assist the requesting Party to obtain, maintain, perfect or enforce
any of the requesting Party's rights hereunder.
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15.6 RELATIONSHIP OF THE PARTIES. Nothing in this Agreement is intended or
will be deemed to constitute a partnership, agency or joint venture relationship
between the Parties hereto.
15.7 APPLICABLE LAW. This Agreement shall be governed by the laws of the
Commonwealth of Virginia applicable to contracts made and to be performed
entirely within such jurisdiction and without giving effect to the choice or
conflict of laws rules or principles of the Commonwealth of Virginia or of any
other jurisdiction.
15.8 CONSENT TO JURISDICTION. Each of the Parties irrevocably submits to
the exclusive jurisdiction of the courts of the Commonwealth of Virginia and of
any United States federal court sitting in the Commonwealth of Virginia in any
action or proceeding arising out of or relating to this Agreement, and
irrevocably agrees that all claims in respect of such action or proceeding shall
be heard and determined in any such Virginia or United States federal court.
Each Party further agrees that service of any process, summons, notice or
document by registered mail to the address of such Party set forth in Section
15.10 below shall be effective service of process for any action or proceeding
brought against such Party in any such court. Each Party hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action or
proceeding arising out of or relating to this Agreement in any such court and
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action or proceeding brought in any such court
has been brought in any inconvenient forum. Each Party further agrees that a
final, nonappealable judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdictions by suit on the
judgment or in any other manner provided by law.
15.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and may be executed by facsimile. All counterparts shall
collectively constitute one and the same Agreement.
15.10 NOTICES. In any case where any notice or other communication is
required or permitted to be given hereunder, such notice or communication shall
be in writing and deemed to have been duly given and delivered (a) if delivered
in person, on the date of such delivery, (b) if sent by confirmed facsimile
transmission (with answer back received), on the date of such facsimile
transmission, or (c) if sent by overnight express or registered or certified
mail (with return receipt requested), on the date of receipt of such mail, and
shall be sent to the following address (or such other address as either Party
may designate from time to time in writing):
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If to AOL:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000
Telephone: (000) 000 0000
Telefax: (000) 000 0000
Attention: Senior Vice President, Business Affairs
Copy to:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000
Telephone: (000) 000 0000
Telefax: (000) 000 0000
Attention: General Counsel
If to IMGIS:
Imgis, Inc.
00000 X. XxXxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
Copy to :
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
15.11 FORCE MAJEURE. If any circumstance beyond the reasonable control of
either Party occurs which delays or renders impossible the performance of that
Party's obligations under this Agreement on the dates herein provided, such
obligation shall be postponed for such time as such performance necessarily has
had to be suspended or delayed on account thereof, provided such Party shall
notify the other Party in writing as soon as practicable, but in no event more
than ten days after the occurrence of such force majeure. In such event, the
Parties shall meet promptly to determine an equitable solution to the effects of
any such event, provided that such Party who fails because of force majeure to
perform its
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obligations hereunder shall upon the cessation of the force majeure take all
reasonable steps within its power to resume with the least possible delay
compliance with its obligations. Events of force majeure shall include, without
limitation, war, revolution, invasion, insurrection, riots, mob violence,
sabotage or other civil disorders, acts of God, limitations imposed by exchange
control regulations or foreign investment regulations or similar regulations,
laws, regulations or rules of any government or governmental agency, and any
inordinate and unanticipated delays in the regulatory review or governmental
approval process that are within the control of such government or governmental
agency. In no event shall the failure or nonperformance of the Technology as
described in Section 4.3 above constitute an event of force majeure.
15.12 BINDING EFFECT; ASSIGNMENT. This Agreement may not be assigned, in
whole or in part, by either Party without the prior written consent of the other
Party, except that: (a) AOL may assign any of its rights or obligations
hereunder to a wholly-owned subsidiary of AOL without IMGIS' consent; and (b)
the rights and obligations of either Party under this Agreement may be assigned
without the other Party's consent to a Third Party acquiring all or
substantially all of the assets of the assigning Party or to the surviving
entity upon the consummation of any merger, consolidation or similar corporate
transaction of the assigning Party with or into a Third Party. Any attempted
assignment by either Party without the consent of the other Party in any
circumstances other than those described in the immediately preceding sentence
shall be null and void. This Agreement shall inure to the benefit of and be
binding upon each of the Parties hereto and their respective successors and
permitted assigns.
15.13 ENTIRE AGREEMENT. The terms and conditions herein contained
constitute the entire agreement between the Parties relating to the subject
matter of this Agreement and shall supersede all previous communications between
the Parties with respect to the subject matter of this Agreement, except for the
Letter Agreement between the Parties dated as of April 14, 1998 and the
Confidential Non-Disclosure Agreement between the Parties dated as of April 15,
1998, each of which shall survive according to their terms. Neither Party has
entered into this Agreement in reliance upon any representation, warranty,
covenant or undertaking of the other Party that is not set out or referred to in
this Agreement.
15.14 RECITALS. The recitals set forth at the start of this Agreement and
the terms and conditions incorporated in such recitals shall be deemed integral
parts of this Agreement, and all references in this Agreement to this Agreement
shall encompass such recitals and the terms and conditions incorporated in such
recitals.
15.15 AMENDMENT. This Agreement may be varied, amended or extended only by
the written agreement of the Parties through their duly authorized officers or
representatives, specifically referring to this Agreement.
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15.16 SEVERABILITY. In the event that any provision of this Agreement is
held to be illegal, invalid or unenforceable in a final, unappealable order or
judgment (each such provision, an "invalid provision"), then such provision
shall be severed from this Agreement and shall be inoperative, and the Parties
promptly shall negotiate in good faith a lawful, valid and enforceable provision
that is as similar to the invalid provision as may be possible, while the
remaining provisions of this Agreement shall remain binding on the Parties
hereto.
15.17 HEADINGS. The descriptive headings of the several articles and
sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
15.18 NO WAIVER OF RIGHTS. No failure or delay on the part of either
Party in the exercise of any power or right hereunder shall operate as a waiver
thereof. No single or partial exercise of any right or power hereunder shall
operate as a waiver of such right or of any other right or power. The waiver by
either Party of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any other or subsequent breach hereunder.
15.19 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. All rights and
remedies granted to either Party under this Agreement are cumulative and in
addition to, and not in lieu of, any other rights or remedies otherwise
available to such Party at law or in equity. The Parties agree that any breach
by either Party of, or failure of either Party to perform, any obligation under
this Agreement shall constitute immediate and irreparable damage to the other
Party which cannot be fully and adequately compensated in money damages and
that, in the event of such breach or failure, the other Party shall be entitled
to injunctive relief and specific performance in addition to any other remedies
to which it may be entitled at law or in equity.
15.20 CONFIDENTIALITY OF AGREEMENT. Each Party shall maintain the
confidentiality of this Agreement and all provisions of this Agreement and,
without the prior consent of the other Party, neither Party shall make any press
release or other public announcement of or otherwise disclose this Agreement or
any of its provisions to any Third Party (a) other than to its Affiliates and to
its own and its Affiliates' directors, officers, employees, attorneys and
accountants, and to the lead underwriter engaged by IMGIS in connection with any
offering of securities of IMGIS, whose duties reasonably require familiarity
with this Agreement, provided that such Persons (including any such lead
underwriter) are bound to maintain the confidentiality of this Agreement, and
(b) except for such disclosure as may be required by applicable law or
regulation, in which case the disclosing Party shall provide the other Party
with prompt advance notice of such disclosure so that the other Party has the
opportunity if it so desires to seek a protective order or other appropriate
remedy; provided that, in connection with any offering of securities of IMGIS,
IMGIS shall provide in advance to AOL for review the form and content of any
disclosure of this Agreement or any of its provisions that may be required by
applicable law or regulation and, to the extent consistent with its disclosure
obligations under applicable law, include
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such modifications to such disclosure as may be reasonably requested by AOL
(except that IMGIS may file this Agreement as an exhibit to its registration
statement if it would constitute a "material agreement" under applicable law or
regulation and IMGIS shall use its reasonable best efforts to obtain
confidential treatment of the portions of this Agreement that meet the SEC
qualifications for confidential treatment if so requested by AOL). The
confidentiality obligations of this Section 15.20 would apply, inter alia, to
any disclosure by IMGIS of this Agreement or of any provisions of this Agreement
to any customer or potential customer of IMGIS and any such disclosure would
constitute a breach of this Section 15.20. The Parties agree that any breach of
the provisions of this Section 15.20 by either Party, including, without
limitation, by any directors, officers or employees of such Party, would
constitute a breach by such Party of a material obligation hereunder for which
the other Party shall have the right, notwithstanding the provisions of Section
14.2 above, to immediately terminate this Agreement without allowance of any
period to remedy such breach, such termination to be immediately effective upon
the receipt by the breaching Party of written notice of termination from the
nonbreaching Party.
15.21 USAGE. Wherever any provision of this Agreement uses the term
"including" (or "includes"), such term shall be deemed to mean "including
without limitation" and "including but not limited to" (or "includes without
limitation" and "includes but is not limited to") regardless of whether the
words "without limitation" or "but not limited to" actually follow the term
"including" (or "includes").
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to executed by their duly authorized officers as of the date first above
written.
AMERICA ONLINE, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
Senior Vice President, Business Affairs
IMGIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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