EXHIBIT 10.16
07/02/99
FINAL Rev. 8
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STRATEGIC BUSINESS AGREEMENT
BY AND BETWEEN
COMPAQ COMPUTER CORPORATION
AND
CMGI, INC.
This Strategic Business Agreement (the "Agreement") is entered into as of
this 29th day of June, 1999 by and between Compaq Computer Corporation, a
Delaware corporation (hereinafter referred to as "Compaq," as such term is
defined below), and CMGI, Inc., a Delaware corporation (hereinafter referred to
as "CMGI," as such term is defined below).
WHEREAS, Compaq is the largest global supplier of computer systems and a
market leader in delivering Internet-enabled personal computers to consumers;
WHEREAS, CMGI is a recognized leader in the Internet economy with a
portfolio of synergistic Internet enterprises focused on providing solutions
and creating compelling Internet user experiences;
WHEREAS, Compaq and CMGI desire to work together to define mutually
beneficial vehicles for the strategic bundling, distribution, and promotion of
CMGI products and services on Compaq's products.
NOW THEREFORE, in consideration of the premises, the mutual agreements and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1.0 DEFINITIONS
The following definitions shall apply throughout this Agreement:
1.1 "Affiliate" shall mean, with respect to any specified Person, any
other Person that directly or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common
Control with, such specified Person.
1.2 "Aggregate User Data" shall mean (i) general User transactional or
behavioral tracking data that is not Registration Data (including
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without limitation clickstreams, purchasing patterns, connect time
and number of visits); (ii) anonymous User data, which may include
individual User information without personal identification; and
(iii) any data consisting of any combination of Registration Data,
anonymous User data, and/or general User transactional or behavioral
data that does not contain or constitute Registration Data. All such
data in all instances shall be aggregated over all relevant Users
redirected from Products or Compaq Sites.
1.3 "Agreement" shall have the meaning set forth in the preamble.
1.4 "Appliance" shall mean any consumer-oriented device designed or
intended for execution of a specific application or related set of
applications.
1.5 "Closing Date" shall be the date on which the transactions
contemplated by the Purchase and Contribution Agreement between the
parties dated of even date herewith have been satisfied or waived.
1.6 "CMGI" shall mean CMGI, Inc. and its Affiliates.
1.7 "CMGI Site" shall mean any Site owned by CMGI or any CMGI Affiliate.
1.8 "Compaq" shall mean Compaq Computer Corporation and its Affiliates.
1.9 "Compaq's Area of Business" shall mean all business segments in
which Compaq sells goods or services during the applicable period.
1.10 "Compaq Labs" shall mean the Compaq research and development
facilities in the Research and Advanced Development Group currently
known as the Systems Research Center Lab, Cambridge Research Lab,
Western Research Lab and the Network Systems Lab.
1.11 "Compaq Site" shall mean any Site owned by Compaq or any Compaq
Affiliate, excluding any CMGI Site.
1.12 "Control" or "Controlled" shall mean that a corporation or entity
owns or directly or indirectly controls more than fifty percent
(50%) of the voting stock or other ownership interest of another
corporation or entity.
1.13 "including" shall mean including without limitation.
1.14 "Instant Internet Keyboard Button" shall mean a single button,
accessible by means of
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a keyboard or other input device as agreed between the parties, that
enables the functionality to access and direct an end-user to a
designated URL and/or a designated URLs redirector.
1.15 "Internet Browser" shall mean programs that allow for browsing the
Internet including but not limited to Microsoft Internet Explorer(R)
and Netscape Navigator(R). "Internet Browser" shall not include
browsers that are embedded or included with proprietary networks
such as AOL, Compuserve or Prodigy.
1.16 "Link" shall mean a URL (or an icon, logo, highlighted or colored
text, figure or image representing a URL) on which a user may point
and click, or otherwise send a command, to hyperlink to another Site
or page.
1.17 "Marks" shall mean trademarks, service marks, Internet domain names,
trade names, logos and designs, together with applications and
registrations of the foregoing.
1.18 "Marketing Addendum" shall mean a statement of the marketing
strategies of both parties, including joint marketing and promotion
plans, which shall be agreed to and implemented by the Executive
Coordinators prior to each Compaq product sales cycle, in accordance
with the schedules determined by the Executive Coordinators.
Marketing Addenda shall, at a minimum, contain reference to the
number and configuration of any Instant Internet Keyboard Buttons on
Products intended for sale in the next product cycle, including
where appropriate reference to the intended Links to CMGI Sites.
1.19 "Person" shall mean any individual, bank, partnership, firm,
corporation, limited liability company, association, trust, or any
other entity or organization.
1.20 "Product" shall mean Presario-branded (including successor brands or
sub-brands) consumer desktop and portable personal computers.
"Product" as used herein shall not include commercial or enterprise
computing devices, networking equipment, or consumer Appliances,
unless otherwise specified.
1.21 "Proprietary Online Service Provider" shall mean any provider of
Internet access or other network bandwidth to end-user customers for
whom the definition, allocation, distribution or programming of the
Instant Internet Keyboard Buttons or other Internet addressing
functionality is a defined requirement of distribution or resale of
its service.
1.22 "Redirect Script" shall mean a set of instructions that accepts
Internet traffic and redirects the traffic to another location.
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1.23 "Registration Data" shall mean any data collected by a party,
through registration or by any other means, that contains
information that could be used to determine the identity of a User.
1.24 "Search Engine" shall mean a general electronic information location
tool that (i) is accessible through the World Wide Web; (ii) accepts
a query in the form of words; and (iii) responds to the query by
indexing World Wide Web pages and using such index to present URL
addresses of World Wide Web pages that are relevant to the asserted
query.
1.25 "Site" shall mean a page or group of pages on the World Wide Web or
any successor online network organized under a single domain name.
1.26 "Term" shall have the meaning set forth in Section 6.1.
1.27 "User" shall mean any person who navigates to a Site.
2.0 COMPAQ OBLIGATIONS
2.1 Internet Traffic
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2.1.1 Obligations of Compaq. During the Term, Compaq shall
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preprogram each Product prior to sale so that activation of
any Instant Internet Keyboard Button automatically loads only
the Compaq Redirect Script URLs. For Products with seven (7)
or more Instant Internet Keyboard Buttons, Compaq shall
program Compaq Redirect Script URLs to immediately direct
traffic from four (4) Instant Internet Keyboard Buttons to
the applicable CMGI Site as directed by CMGI, provided that
such CMGI Sites shall be subject to Compaq's review and
approval for suitability and appropriateness for Compaq
customers, which approval shall not be unreasonably denied.
The process for such approval shall be defined in the
Marketing Addenda. In the event that a Product is equipped
with fewer than seven (7) Instant Internet Keyboard Buttons,
the number of Redirect Script URLs directed to CMGI Sites may
be fewer than four (4), but in any event shall comprise not
less than fifty percent (50%) of the total number of Instant
Internet Keyboard Buttons. Users shall be able to reconfigure
the Instant Internet Keyboard Buttons. For any Product for
which an Instant
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Internet Keyboard Button is programmed or redirected to a
default portal start page, the "Home" Link of the Internet
Browser shall also be linked or redirected to the same
default portal start page.
2.1.2 Additional Obligations. It is Compaq's intention to redirect
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Internet traffic to appropriate CMGI Sites from all Compaq
products that are equipped with Instant Internet Keyboard
Buttons (including commercial PC products and Appliances) to
the same extent as described in Section 2.1.1, subject to
availability and suitability of appropriate CMGI Sites for
the specific customer segment targeted. Subject to the
applicable obligations and exclusions set forth in this
Article 2, for Compaq-only branded Appliances, Compaq shall
program Instant Internet Keyboard Buttons, if any, in the
same manner and quantity as set forth in Section 2.1.1, to
the extent that CMGI Sites are applicable and competitive in
price and performance.
2.1.3 Excluded Products. The products subject to the provisions of
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Sections 2.1.1 and 2.1.2 shall not include (i) products that
cannot be configured pursuant to this Article because of
local law restrictions, (ii) products intended for sale in
geographic regions in which CMGI does not have a local Site
that is translated, localized, relevant and fully operational
in the specific international market, (iii) products designed
or manufactured specifically for a sponsor or affinity
program that requires the programming of a proprietary
default start page, or (iv) products for which Compaq's
customers have requested that pre-programmed Internet
functionality not be included. The parties shall work
together to coordinate international expansion and roll-out
plans, including identification of specific local
requirements and time frames for implementation.
2.1.4 Exclusions. Compaq's obligations pursuant to this Section 2:
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(i) are subject to contractual obligations with third parties
existing as of the date of execution of this Agreement, and
(ii) shall not apply to products or services provided by or
for a Proprietary Online Service Provider. Compaq shall
provide CMGI with a list of all such contractual obligations
within 30 days of the execution of this Agreement, and Compaq
shall use its best efforts to minimize the adverse impact of
such contractual obligations upon Compaq's obligations
hereunder. If Compaq engages in a distribution agreement with
any Proprietary Online Service provider, Compaq shall as part
of the process use its best efforts to explore opportunities
with CMGI and the Proprietary Online Service Provider to
engage CMGI as a preferred provider of portal solutions or
other content.
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In addition, Compaq's obligations pursuant to this Section 2
shall terminate, at Compaq's election, if after January 1,
2000, the Primary CMGI Portal Site fails to be one of the
twelve (12) most trafficked web sites for four (4)
consecutive months as measured in terms of unique visitors by
Media Metrix, or such other comparable industry metric as may
be agreed between the parties. The Primary CMGI Portal Site
shall mean, for purposes of this Agreement, the AltaVista,
▇▇▇▇▇▇▇▇.▇▇▇, and Zip2 Sites (and any future Sites owned by
AltaVista or any subsidiary owned or Controlled by AltaVista)
considered in the aggregate. Within twenty-four (24) months
of the Closing Date, CMGI intends that AltaVista will be
among the top three (3) portal Sites as measured by Media
Metrix.
2.2 Sale of Compaq Equipment. Subject to CMGI entering into Compaq's
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standard reseller agreement, during the Term, Compaq shall make
available to CMGI Compaq hardware and equipment for resale through
any CMGI Site at terms no less favorable than Compaq's then-current
most favored Internet Reseller pricing.
2.3 Premier Internet Technology Supplier. Compaq hereby designates CMGI
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as a "Premier Internet Technology Supplier." It is Compaq's
intention to promote, demonstrate, and display CMGI's companies and
Sites on Compaq Sites and/or Compaq products, as further defined by
mutual agreement of the parties.
2.4 Designation of Internet Search Service. Subject to contractual
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obligations existing as of the date of execution of this Agreement,
Compaq shall, and shall cause its Affiliates to, designate the Alta
Vista Search Engine as the only Search Engine offered by, linked to,
or promoted by each Compaq Site, provided that AltaVista maintains a
competitive Search Engine service, as determined by mutually agreed
upon industry competitiveness standards. Compaq shall provide CMGI
with a list of all such contractual obligations within 30 days of
the execution of this Agreement, and Compaq shall use its best
efforts to minimize the adverse impact of such contractual
obligations upon Compaq's obligations hereunder. Compaq shall state
on each Compaq Site that searches are "Powered By AltaVista." For
all products that contain Instant Internet Keyboard Buttons or other
features (including the Internet Browser, subject to authorization
from the Internet Browser licensor) that are specifically labeled or
otherwise identifiable as dedicated to a Search Engine, Compaq shall
not redirect users to any other Search Engine.
2.5 Distribution of Dial-Up Internet Access. Compaq shall designate
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NaviNet as a provider of dial-up Internet access, subject to
negotiation of acceptable terms and conditions including pricing and
technical feasibility, including but not limited to
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availability and performance, scope of coverage, broadband
upgradability support, and infrastructure support (e.g., billing
services, service and support, and e-mail support).
2.6 Product Qualification, Optimization, and Licensing. It is Compaq's
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intent to distribute certain CMGI products (e.g., the "iCaster"
player client software) on Compaq platforms, subject to Compaq's
then-current testing, qualification and acceptance criteria and
product marketing requirements and further subject to negotiation of
acceptable terms and conditions including license rights, pricing,
compatibility, co-branding and customizations. Such distribution may
include the display and/or promotion of the CMGI products as an icon
on the desktop.
2.7 Distribution Through Compaq Site Links. It is Compaq's intent to
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promote certain CMGI Sites through Links on Compaq Sites, subject to
Compaq's qualification and acceptance criteria and product marking
requirements, and further subject to negotiation of acceptable terms
and conditions including license rights, pricing, and compatibility.
3.0 CMGI OBLIGATIONS
3.1 Revenue Share
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3.1.1 During the Term, CMGI shall pay to Compaq a fee based on the
number of redirect messages directed to CMGI Sites from Compaq, either directly
or through Compaq's Redirect Script Server (the "Redirect Fee"). The amount of
the Redirect Fee due to Compaq shall be as follows:
Time Period $ per redirect
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Closing Date - 5/30/00 .01875
6/1/00 - 5/30/01 .02000
6/1/01 - 5/30/02 .0225
3.1.2 Payment of the Redirect Fee shall be due to Compaq on a
monthly basis, no later than the last day of each month for
the previous month's traffic. CMGI shall provide to Compaq,
with each payment, a full report of User traffic in a level
of detail adequate to support the accuracy of the monthly
payment.
3.1.3 No later than March 31, 2001, the parties shall agree to an
appropriate revenue target for the time period June 1, 2001
through March 31, 2002. CMGI shall have the option to extend
the Agreement for one additional year
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based on the same Redirect Fee schedule listed in Section
3.1.1 in effect as of the previous year if the agreed upon
revenue target is met or exceeded, and if the Primary CMGI
Portal Site is among the top five (5) trafficked Sites, as
determined by MediaMetrix. If the revenue target is not met,
CMGI may, at its option, pay to Compaq an "option fee,"
calculated as the difference between the revenue target and
the actual revenue for the period. Upon payment of the option
fee, CMGI may extend the Agreement for one additional year on
the same terms as if the revenue target was achieved. Each
subsequent year, prior to March 31, the parties shall agree
to an appropriate revenue and traffic target for
qualification for an additional one-year renewal option.
3.1.4 Compaq shall have the right to inspect and audit, upon five
(5) days notice, during normal business hours and not more
than four times per year, all of CMGI's records and books of
account insofar as they relate to Redirect Fee, provided that
any such audit and inspection shall be conducted by an
independent third-party accounting firm on Compaq's behalf.
The costs of said inspection and audit shall be borne solely
by Compaq unless accounting errors amounting to five percent
(5%) or more of the applicable total are found to Compaq's
disadvantage, in which case CMGI shall promptly pay the
entire cost of said inspection and audit. CMGI shall at all
times maintain such books and records, or true duplicates
thereof, at its primary or registered offices.
3.2 The Sites to which Compaq redirects CMGI traffic shall be co-branded
and customized in accordance with marketing plans to be determined
by the parties. CMGI will not display any advertisement or include
any other promotional element of any party (other than Compaq) in
Compaq's Area of Business on any pages or CMGI products that are
linked directly to or redirected directly from Compaq Sites or
Products.
3.3 CMGI shall provide web-site and software application development,
design and customization services to Compaq on terms no less
favorable than such services are provided to CMGI's most favored
customers.
3.4 CMGI shall, through its AdSmart subsidiary, monetize Compaq's
advertising inventories at most favored commission rates.
3.5 CMGI shall designate Compaq as a "Premier IT Partner." Compaq is
hereby designated as a preferred provider of information technology
products, services, and solutions. It is CMGI'S intent to utilize,
demonstrate, and promote Compaq's
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products and services to the extent that such products and services
meet CMGI's technical requirements and competitive price/performance
specifications, subject to negotiation of acceptable terms and
conditions including license rights, pricing, and availability, and
further subject to existing contractual commitments. Each year
during the Term, CMGI shall purchase goods and services from Compaq
constituting no less than thirty-three percent (33%) of CMGI's total
annual IT spending for product categories in which Compaq provides
products. CMGI shall provide reports to Compaq on an annual basis
sufficient to permit Compaq to confirm CMGI's compliance with this
Section.
3.6 During the Term, the AltaVista Search Engine (or its successor)
shall be run exclusively on a Compaq hardware platform, subject to
ability of the hardware to meet competitive price/performance
specifications.
3.7 CMGI agrees to work with Compaq to develop a portal Site optimized
for broadband Internet access, with the goal that CMGI shall launch
the new Site during the fourth quarter of 1999.
4.0 MUTUAL OBLIGATIONS
4.1 Most Favored Customer. Compaq and CMGI each agree that for all
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products and services provided by one party to the other under this
Agreement, such products and/or services, including without
limitation the services for which CMGI pays Redirect Fees to Compaq
under Section 3.1, shall be provided on terms, including pricing, no
less favorable than the terms afforded to the respective supplier's
most favored customer under similar conditions, including but not
limited to purchasing patterns and volumes, type of product, service
and support or maintenance considerations, and warranty terms.
4.2 Relationship Management.
4.2.1 Executive Coordinator. Compaq and CMGI shall each designate a
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corporate officer who is at least a Vice President as an
Executive Coordinator who shall be responsible for all
overall matters pertaining to this Agreement. The initial
Executive Coordinator for CMGI shall be ▇▇▇▇▇ ▇▇▇▇▇▇▇▇. The
initial Executive Coordinator for Compaq shall be ▇▇▇▇▇▇
▇▇▇▇. The responsibilities of the Executive Coordinators are
as follows:
4.2.1.1 Administer and coordinate the overall aspects of
this Agreement and the strategic relationship
between the parties;
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4.2.1.2 Arrange meetings, visits and consultations between
the parties concerning matters related to this
Agreement, including but not limited to all
required quarterly and/or annual business reviews;
and
4.2.1.3 Review and approve plans for marketing programs to
be administered under the Joint Marketing Fund.
All expenditures from the Joint Marketing Fund
must be approved by both Executive Coordinators.
4.2.1 Quarterly Business Reviews. Both parties agree to meet at
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least once every calendar quarter to review the basic
business terms and the business and marketing plans for the
next quarter. Topics to be addressed in each Quarterly
Business Review shall include, but shall not be limited to
the following: Strategic Plans/New Products and Services,
Advertising and Promotion Opportunities, Use of Joint
Marketing Funds, Performance Measurement of Existing Joint
Programs, Contract or Relationship Issues, including
negotiation and performance of Marketing Addenda.
4.2.2 Changes in Coordinators. Either party may replace any of the
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people referenced in this Section by delivering written
notice of the change to the other party. The notice must be
signed by either the Executive Coordinator of the party
making the change, or by an authorized signatory of that
party. The notice shall set forth the name, business address
and telephone number of the replacement.
4.2.3 Program Management. Each party shall make available
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sufficient facilities, resources and access to permit the
establishment of an on-site dedicated program management
office, as mutually agreed by the Executive Coordinators.
4.3 Joint Marketing Efforts. The parties shall identify and implement
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strategies for jointly identifying market opportunities and jointly
marketing the products and services offered by both Compaq and CMGI.
Joint marketing opportunities shall be identified in Quarterly
Business Reviews, or more often as required. Joint marketing efforts
may be funded through the Compaq/CMGI Joint Marketing Fund, in
accordance with the terms of this Agreement and such policies or
procedures as may be developed by mutual agreement of the Executive
Coordinators. The parties shall explore opportunities for co-
branding products and services, where appropriate.
4.4 Joint Marketing Fund. Compaq and CMGI agree to fund a Joint
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Marketing Fund for use in market research, advertising, marketing,
and promoting Compaq and CMGI
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products and services, including promotion of this strategic
relationship. Each party commits to spend fifty million dollars
($50,000,000) over the first six (6) quarters of the Term of this
Agreement on activities funded by the Joint Marketing Fund. The
scope of funded activities, and the extent to which each activity
shall contribute toward a party's funding obligations, shall be
determined by the Executive Coordinators at each Quarterly Business
Review.
The parties agree to contribute a minimum of ten million dollars
($10,000,000) to the Joint Marketing Fund, following the initial six
(6) quarter period. The percentage contribution by each party to
this secondary stage of the Joint Marketing Fund will be determined
based on the relative revenue share to Compaq from Redirect Scripts
directed to CMGI Sites as a percentage of the total CMGI gross
advertising revenue generated from such Redirect Scripts. In no
event will Compaq's contribution to the Joint Marketing Fund be less
than fifty percent (50%).
4.5 Joint Promotions. Compaq and CMGI each agree to promote the
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respective services and products of the other. For example, each
party shall use the products and services of the other, where
appropriate, when demonstrating, displaying, or advertising its own
products. Where appropriate, Compaq shall be referred to as a
"Preferred Platform" for operation of CMGI products or services.
4.6 Future Investment Opportunities
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4.6.1 Subject to approval by the Engage Board of Directors, Engage
shall seek to reserve for offer to Compaq, in its initial
public offering, a number of shares equal to 2% of the
outstanding shares of Engage common stock at the initial
public offering price. If Engage determines, in its sole
discretion, that such offer might interfere with or delay
such offering, it may reduce or eliminate the shares reserved
for offer to Compaq. In addition, to the extent that the SEC
requires any legal opinion or imposes any restrictions on
Compaq as a condition to the registration of such shares to
be offered to Compaq, Compaq shall agree to such restrictions
and/or provide such legal opinion as a condition to CMGI's
obligations hereunder.
4.6.2 In the event that CMGI seeks external equity investment for
its NaviNet subsidiary prior to the initial public offering
of shares of NaviNet, and upon completion of a substantive
strategic business relationship as contemplated in Section
2.5, Compaq shall have the right, in its sole discretion, in
the first such external investment opportunity for such
Subsidiary to invest an amount up to 4.9% of the then-current
pre-
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investment valuation of NaviNet.
4.6.3 In the event that any CMGI majority-owned subsidiary seeks to
raise external equity investments prior to its initial public
offering of shares or acquisition by a third party, Compaq
may make an investment in such subsidiary (subject to the
approval of the Board of Directors of such subsidiary)
provided that the parties mutually agree on a substantive
strategic business relationship agreement in connection with
such investment for the benefit of such subsidiary.
4.6.4 If, during the Term, CMGI forms an entity for the purpose of
pursuing a free or ad-subsidized ISP service, Compaq may
invest in such company prior to an initial public offering of
shares (subject to the approval of the Board of Directors of
such subsidiary) provided that the parties mutually agree on
a substantive strategic business relationship agreement in
connection with such investment for the benefit of such
subsidiary.
4.6.5 If, during the Term, CMGI forms a new investment fund similar
to its "@Venture" holdings, Compaq may invest in such venture
to the same extent and on terms at least as favorable as any
other investor in the same fund, subject to the mutual
agreement of the parties.
4.7 User Data. Each party shall provide to the other any Aggregate
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User Data that it collects from Users who are directed to CMGI Sites
from Compaq Sites or Products. All Aggregate User Data shall be made
available without the imposition of additional fees or obligations.
Subject to mutual agreement of the parties, the parties further intend
to share Registration Data to the extent such information is collected
from or related to the CMGI Sites directed from Compaq Sites or
Products, provided that sharing of Registration Data shall be limited
by and subject to the respective company privacy policies.
4.8 Compaq Labs.
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4.8.1 Ongoing Meetings. Compaq and CMGI may meet on a mutually
----------------
agreeable ongoing basis to discuss topics of common interest
(e.g., research ideas, projects, and search-related
requirements for services and technology). Although the parties
may discuss various cooperative arrangements, potential new
research projects, search technologies and/or other matters,
neither party shall be obligated to the other unless such
obligation is in writing and executed by both parties. It is
anticipated that such meetings shall be pursuant to an
appropriate non-disclosure agreement to protect the
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confidential nature of the information disclosed by either
party. It is understood that these ongoing meetings are
entirely voluntary and that neither party is required to
disclose any specific information to the other.
4.8.2 New Search Technology. From time to time Compaq may disclose
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to CMGI new search technology which might be of interest to
AltaVista or CMGI for incorporation on the AltaVista Site. CMGI
shall promptly make its interest known. CMGI shall have an
option period of thirty (30) days, from the date of disclosure,
to acquire a non-exclusive license to use such search
technology on the AltaVista Site for a one-time payment which
will be identified by Compaq. Compaq and CMGI each agree to use
reasonable best efforts to enter into a mutually acceptable
license agreement within such thirty (30) day period. If CMGI
wants to obtain rights beyond a non-exclusive license to use
the identified search technology, the parties will use
reasonable best efforts to complete a mutually acceptable
license agreement within sixty (60) days. Unless extended by
mutual agreement in writing, after the option period lapses
Compaq can offer such search technology to any third parties
under any terms and conditions. In no event shall this
Agreement be interpreted as requiring Compaq to provide any
research and development services for CMGI, unless set forth in
a separate agreement.
4.8.3 Technology Transfers and Engineering Services. In addition to
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the option to acquire license rights to new search technology,
CMGI may request a technology transfer, which might require
engineering services beyond the transfer of existing results
from a research project. These additional tasks may include
programming, contracting, testing, installation help and
documentation. CMGI and Compaq will negotiate a mutually
acceptable agreement for such engineering services, which will
reimburse Compaq in full for the costs of such engineering
services.
4.8.4 Credits and Acknowledgements. If a Compaq Lab is the source
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for a particular technology, at Compaq's request, CMGI shall
cite or acknowledge the contribution of the Compaq Labs by a
suitable phrase such as "Photofinder technology from Compaq's
Cambridge Research Lab."
5. TRADEMARKS
5.1 Use of CMGI Marks. CMGI hereby grants to Compaq a non-exclusive,
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royalty-free license, in jurisdictions in which CMGI has such
rights, to use, reproduce, distribute and display the Marks owned by
CMGI in connection with its
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performance of the terms of this Agreement.
5.2 Use of Compaq Marks. Compaq and its Affiliates hereby grant to CMGI
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a non-exclusive, royalty-free license, in jurisdictions in which
Compaq has such rights, to use the Marks owned by Compaq in
connection with its performance of the terms of this Agreement.
5.3 Quality Control. Each party shall have the right to exercise quality
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control over the use of its Marks and the products and services with
which the Marks are used by the other party to the degree necessary,
in the sole opinion of the owner of such Marks, to maintain the
validity and enforceability of such Marks and to protect the rights
in such Marks and the goodwill associated therewith. Each party
shall, in their use of the other's Marks adhere to a level of
quality, at least as high as that used by such party in connection
with its use of its own Marks. In the event that the owner of a ▇▇▇▇
finds that use of the ▇▇▇▇ by the other party in the reasonable
opinion of owner of such ▇▇▇▇ materially threatens the goodwill of
the ▇▇▇▇ or the rights in the ▇▇▇▇, the licensee of such ▇▇▇▇ shall,
upon notice from such owner, immediately, and no later than ten (10)
days after receipt of such owner's notice, take all measures
reasonably necessary to correct the deviations or misrepresentations
in, or misuse of, the respective items.
5.4 Trademark Usage. Each party shall use the other's Marks in
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accordance with sound trademark and trade name usage principles and
in compliance with all applicable laws and regulations of the United
States, including without limitation all laws and regulations
relating to the maintenance of the validity and enforceability of
such Marks and shall not use the Marks in any manner which might
tarnish, disparage, or reflect adversely on the Marks or the owners
of such Marks. Each party shall use, in connection with the other's
Marks, all legends, notices and markings as required by law. Neither
party may materially alter the appearance of another's Marks in any
advertising, marketing, distribution, or sales materials, or any
other publicly distributed materials.
6.0 TERM AND TERMINATION
6.1 Term. This Agreement will become effective as of the Closing Date
----
and shall, unless sooner terminated as provided below or as
otherwise agreed, remain effective until May 30, 2002.
6.2 Termination by Mutual Consent. This Agreement may be terminated by
-----------------------------
mutual written consent.
14
6.3 Termination for Insolvency. Notwithstanding the foregoing, this
--------------------------
Agreement may be terminated by either party immediately upon notice
if the other party: (i) becomes insolvent; (ii) files a petition in
bankruptcy; or (iii) makes an assignment for the benefit of its
creditors.
7.0 REPRESENTATIONS AND WARRANTIES
7.1 Compaq Warranties. Compaq hereby represent and warrant to CMGI as of
-----------------
the date hereof that:
7.1.1 Compaq is a corporation duly organized and validly existing
under the laws of the state of its incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, permits, consents and approvals required to
carry on its business as now conducted;
7.1.2 The execution, delivery and performance by Compaq of this
Agreement are within the corporate powers of Compaq and has
been duly authorized by all necessary corporate action on the
part of Compaq. This Agreement constitutes a valid and
binding agreement of Compaq enforceable against Compaq in
accordance with its terms;
7.1.3 The execution, delivery and performance by Compaq of this
Agreement requires no action by or in respect of, or filing
with, any governmental body, agency or official; and
7.1.4 The execution, delivery and performance by Compaq of this
Agreement do not and will not (i) violate the organizational
documents of Compaq, (ii) violate any applicable law,
judgment, injunction, order or decree, or (iii) require any
notice or consent or other action by any person or entity
under, constitute a default under, or give rise to any right
of termination, cancellation or acceleration of any right or
obligation of Compaq or to a loss of any benefit to which
Compaq is entitled under, any agreement or other instrument
binding upon Compaq or any license, franchise, permit or
other similar authorization held by Compaq.
7.2 CMGI Warranties. CMGI hereby represents and warrants to Compaq as of
---------------
the date hereof that:
7.2.1 CMGI is a corporation duly organized and validly existing
under the laws of the state of its incorporation and has all
corporate powers and all material governmental licenses,
authorizations, permits, consents and approvals
15
required to carry on its business as now conducted;
7.2.2 The execution, delivery and performance by CMGI, Inc.
(excluding its Affiliates) of this Agreement are within the
corporate powers of CMGI, Inc. (excluding its Affiliates) and
have been duly authorized by all necessary corporate action
on the part of CMGI, Inc. (excluding its Affiliates). This
Agreement constitutes a valid and binding agreement of CMGI,
Inc. (excluding its Affiliates) enforceable against CMGI,
Inc. (excluding its Affiliates) in accordance with its terms;
7.2.3 CMGI, Inc. shall cause its Affiliates to adhere to the terms
of this Agreement;
7.2.4 The execution, delivery and performance by CMGI of this
Agreement require no action by or in respect of, or filing
with, any governmental body, agency or official; and
7.2.5 The execution, delivery and performance by CMGI of this
Agreement do not and will not (i) violate the organizational
documents of CMGI, (ii) violate any applicable law, judgment,
injunction, order or decree, or (iii) require any notice or
consent or other action by any person under, constitute a
default under, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of
CMGI or to a loss of any benefit to which CMGI is entitled
under, any agreement or other instrument binding upon CMGI or
any license, franchise, permit or other similar authorization
held by CMGI.
8.0 LIMITATIONS OF LIABILITY
8.1 Limitation of Liability. except for indemnification obligations, if
-----------------------
any, of a party pursuant to Article 10 , no party shall be liable to
another party or any other person or entity for special, incidental,
consequential, or indirect damages (including loss of good will or
business profits), or exemplary or punitive damages. No officer,
director, manager, member, or employee of any party shall have any
personal liability under this Agreement and the other parties hereby
hold such persons harmless for any liability hereunder.
8.2 Limitation of Warranties. Except as expressly set forth in this
------------------------
Agreement, each party expressly disclaims all warranties, express or
implied, including warranties of merchantability and fitness for a
specific purpose. Except as expressly set forth in
16
this Agreement, no party endorses, warrants, or guarantees any
product or service provided hereunder.
9.0 INDEMNIFICATION
9.1 Indemnification by CMGI. Except as provided in this Article, CMGI
-----------------------
will indemnify and hold Compaq and its Affiliates, officers,
directors and employees harmless from and against any and all
damages resulting from or arising out of (a) the CMGI Sites or any
other activities of CMGI, including infringement of any intellectual
property rights of any third person; (b) any misrepresentation or
breach of representation or warranty of CMGI contained herein; or
(c) any breach of any covenant or agreement to be performed by CMGI
hereunder. Notwithstanding anything to the contrary in this Section,
CMGI shall not have any obligation to indemnify Compaq for any
damages for which Compaq is obligated to indemnify CMGI under the
Assignment Agreement dated of even date herewith.
9.2 Indemnification by Compaq. Compaq will indemnify and hold CMGI and
-------------------------
its Affiliates, officers, directors and employees harmless from and
against any and all damages resulting from or arising out of (a) the
Compaq Sites or any other activities of Compaq, including
infringement of any intellectual property rights of any third
person; (b) any misrepresentation or breach of representation or
warranty of Compaq contained herein; or (c) any breach of any
covenant or agreement to be performed by Compaq or its respective
Affiliates hereunder.
9.3 Notice of Indemnification. A party seeking indemnification pursuant
-------------------------
to this Article (an Indemnified Party) from or against the assertion
of any claim by a third person (a Third Person Assertion) will give
prompt notice to the party from whom indemnification is sought (the
Indemnifying Party); provided that failure to give prompt notice
--------
will not relieve the Indemnifying Party of any liability hereunder
(except to the extent the Indemnifying Party has suffered actual
material prejudice by such failure).
9.4 Assumption of Defense. Within five (5) business days of receipt of
---------------------
notice from the Indemnified Party pursuant to this Section, the
Indemnifying Party will have the right, exercisable by written
notice to the Indemnified Party, to assume the defense of a Third
Person Assertion. If the Indemnifying Party assumes such defense,
the Indemnifying Party may select counsel, which counsel will be
reasonably acceptable to the Indemnified Party.
9.5 Appointment of Counsel. After notice from the Indemnifying Party to
----------------------
the Indemnified
17
Party of its election to assume the defense of such Third Party
Assertion, the Indemnifying Party shall not be liable to the
Indemnified Party under this Article for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with
the defense thereof other than reasonable costs of investigation,
provided, that if there may be reasonable legal defenses available
--------
to it that are different from or in addition to those available to
the Indemnifying Party the reasonable fees, disbursements and other
charges of counsel for the Indemnified Party will be at the expense
of the Indemnifying Party or parties. It is understood that the
Indemnifying Party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees, disbursements and other charges of
more than one separate firm of attorneys (in addition to any local
counsel) at any one time for all such Indemnified Party or parties.
9.6 Failure to Defend. If the Indemnifying Party (a) does not assume the
-----------------
defense of any Third Person Assertion in accordance with this
Article; or (b) having so assumed such defense, unreasonably fails
to defend against such Third Person Assertion, then, upon five (5)
days written notice to the Indemnifying Party, the Indemnified Party
may assume the defense of such Third Person Assertion. In such
event, the Indemnified Party will be entitled under this Article as
part of its damages to indemnification for the costs of such
defense.
9.7 Settlement. The party controlling the defense of a Third Person
----------
Assertion will have the right to consent to the entry of judgment
with respect to, or otherwise settle, such Third Person Assertion
with the prior written consent of the other party, which consent
will not be unreasonably withheld; provided that such other party
-------------
may withhold its consent if any such judgment or settlement imposes
a monetary obligation on such other party that is not covered by the
indemnification, imposes any material non-monetary obligation, or
does not include an unconditional release of such other party and
its Affiliates from all claims of the Third Person Assertion.
9.8 Participation. The Indemnifying Party and the Indemnified Party will
-------------
cooperate, and cause their Affiliates to cooperate, in the defense
or prosecution of any Third Person Assertion. The Indemnifying Party
or the Indemnified Party, as the case may be, will have the right to
participate, at its own expense, in the defense or settlement of any
Third Person Assertion.
10.0 CONFIDENTIAL INFORMATION.
10.1 Definition of Confidential Information. Confidential Information
--------------------------------------
shall mean any
18
information (whether or not in writing) relating to
or disclosed in the course of the performance of this Agreement,
which is marked as "confidential" or which is not generally known to
the public or in the trade and is or should be reasonably understood
to be confidential or proprietary to the disclosing party, including
without limitation (i) marketing and sales information and (ii)
other documentation and any analyses, compilations, studies or other
documents incorporating or developed from Confidential Information.
Confidential Information shall not include information (a) already
known to the receiving party lawfully and not in violation of any
agreement or understanding (whether or not in writing) relating to
the confidentiality thereof, (b) disclosed in published materials,
(c) obtained from any third party lawfully and not in violation of
any agreement or understanding (whether or not in writing) relating
to the confidentiality thereof, or (d) independently developed by
the receiving party without the use or inclusion of any Confidential
Information. The receiving party shall not be in breach of its
obligations with respect to Confidential Information hereunder in
the event the disclosure of any Confidential Information is required
by law, provided that prior to any such disclosure by a receiving
--------
party, the disclosing party is given ample notice to enable it to
move for a protective order.
10.2 Confidential Information. Each party hereto acknowledges that all
------------------------
title and interest, including all patents, copyrights, trade secrets
and other intellectual property rights, in the disclosing party's
(the "Disclosing Party") Confidential Information is the exclusive
property of the Disclosing Party. Each party further acknowledges
that the Disclosing Party's Confidential Information is proprietary
and a trade secret of the Disclosing Party. Each party agrees
neither to do nor to permit any act which may in any way jeopardize
or be detrimental to the validity of the Disclosing Party's patent,
copyright, trade secret or other rights in the Confidential
Information.
10.3 Confidentiality. Each party shall use its best efforts to maintain
---------------
the confidentiality of any Confidential Information it receives,
including taking such steps as such party takes to maintain the
confidentiality of its own Confidential Information.
10.4 Return of Confidential Information. Upon the termination or
----------------------------------
expiration of this Agreement for any reason, each party shall at the
direction of the discloser of such Confidential Information (the
"Disclosing Party") either return all Confidential Information in
its possession or destroy such Confidential Information and certify
in writing to the Disclosing Party that it has done so.
10.5 Remedies for Breach of Confidentiality. It is understood and agreed
--------------------------------------
by both parties
19
that in the event of a breach of this Article, damages may not be an
adequate remedy and either party shall be entitled to injunctive
relief to restrain any such breach, threatened or actual.
10.6 Survival. Each party's respective obligations hereunder to protect
--------
Confidential Information shall survive any termination or expiration
of this Agreement or any license granted hereunder for any reason.
11.0 MISCELLANEOUS
11.1 Governing Law. Any question as to the validity, construction,
-------------
performance or effect of this Agreement and the transactions to
which it relates shall be construed in accordance with and subject
to the substantive laws (as opposed to the conflicts of law
provisions) of the State of Delaware and, where applicable, the laws
of the United States.
11.2 Further Assurances. Subject to the terms and conditions herein
------------------
provided, each of the parties hereto agrees to use their respective
reasonable best efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement. If
at any time after the Closing Date any further action is necessary
or desirable to carry out the purposes of this Agreement, the
parties hereto shall take or cause to be taken all such necessary
action, including, without limitation, the execution and delivery of
such further instruments and documents as may be reasonably
requested by the other party for such purposes or otherwise to
consummate and make effective the transactions contemplated hereby.
11.3 Entire Agreement. This Agreement contains the entire understanding
----------------
between CMGI and Compaq with respect to its subject matter and the
transactions contemplated hereby, supercedes all previous or
contemporaneous oral or written agreements, negotiations,
representations or understandings between them with respect thereto,
and shall not be modified except by a writing of subsequent date
hereto signed by all parties hereto. Neither the course of conduct
between the parties nor trade usage shall act to modify or alter the
provisions of this Agreement.
11.4 No Waiver. No waiver by any party of a breach of any provision of
---------
this Agreement shall operate as or be deemed to be a waiver of any
other preceding, or subsequent breach of that provision or of any
breach of any other provision of this Agreement. The failure of a
party to insist upon strict adherence to any
20
term of this Agreement on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement. Any waiver must be in a writing of subsequent date hereto
executed by the waiving party.
11.5 Partial Invalidity. If any portion of the Agreement, or the
------------------
application thereof in any circumstances, shall be held to be
illegal, invalid or unenforceable in any respect by a final or
unappealable order, decree or judgment of any court, this Agreement
shall be constructed as if such invalid, illegal or unenforceable
provision had never been contained herein within the jurisdiction of
such court and the Agreement shall otherwise remain in full force
and effect in such jurisdiction and in its entirety in other
jurisdictions. Additionally, in lieu of each such illegal, invalid
or unenforceable provision, there shall, within the jurisdiction of
such court finding such illegality, invalidity or unenforceability,
be added automatically as part of this Agreement a provision as
similar to such former provision as shall be legal, valid and
enforceable.
11.6 Section Headings. Section headings used herein are for informational
----------------
purposes only and shall not define nor limit the provisions of this
Agreement.
11.7 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of CMGI, Inc. and its successors and assignees
and Compaq and its successors and assignees permitted hereunder;
provided, however, that neither party hereto may assign,
subcontract, transfer or otherwise delegate its rights or
obligations hereunder, in whole or in part, by operation of law or
otherwise, without the prior written consent of the other party,
which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, either Compaq or CMGI, Inc. may assign its rights or
obligations hereunder in connection with the sale of all or
substantially all of the assets of its business related to this
Agreement, whether by asset purchase, merger or otherwise, unless
the intended assignee is a competitor of the non-assigning party. In
the event of a change of Control of the CMGI entity that holds the
assets of the Alta Vista Search Engine Site, the provisions
contained in Section 2.4 hereof shall immediately terminate at
Compaq's election.
11.8 Independent Contractors. Each party agrees it is and will be an
-----------------------
independent contractor as to the other party and not an agent,
employee, partner or joint venturer of or with the other party.
Without limiting the foregoing, no party nor any officer or employee
of such will have any right to bind any other party, to make any
representations or warranties on behalf of any other party, to
accept service of process, to receive notice, or to perform any act
or thing
21
on behalf of any other party other than as expressly authorized by
such other party in its sole discretion.
11.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each such counterpart shall be an original instrument,
and all such counterparts shall together constitute the same
agreement. Execution may be effectuated by delivery of facsimiles of
signature pages (and the parties shall follow such delivery by
prompt delivery or originals of such pages).
11.10 Press Releases/Statements. Except as may be required by law or by
-------------------------
the rules of any national securities exchange, no party hereto shall
issue a press release or other similar public announcement making
reference to any other party, such other party's products, or the
services provided hereunder, unless such party has received the
approval of the other party with respect to the proposed text of
such press release or announcement, which approval shall not be
unreasonably withheld or delayed. No party shall make or publish any
statement which is, or may be reasonably considered to be,
disparaging of any other party or its Affiliates, directors,
employees, products or services.
11.11 Remedies Cumulative. No remedy conferred upon any of the parties by
-------------------
this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in
addition to any other remedy given hereunder or now or hereafter
existing at law or in equity.
11.12 Export Control. Each party acknowledges that data and materials if
--------------
any, supplied by one party to the other may be subject to export
controls under United States law and the applicable export controls
in other territories. Accordingly, neither party shall export or re-
export any technical data supplied by the other party, directly or
through third parties, to any source for use in any country or
countries in contravention of any export laws, regulations or
decrees of the United States Government or any agency thereof. Each
party shall be solely responsible for identifying and complying with
all laws of any jurisdiction outside the United States regarding use
of technical data and materials supplied by the other party. Each
party agrees to obtain all licenses, permits or approvals required
by any government at that party's sole cost. Each party's
obligations under this Section shall survive the expiration or
termination of this Agreement for any reason whatsoever.
11.13 Force Majeure. Except for the failure to make payments when due,
-------------
neither party shall be liable to the other by reason of any failure
of or delay in performance of its obligations under this Agreement
to the extent such failure or delay is due to circumstances beyond
its reasonable control, including, without
22
limitation, acts of God, acts of the other party, acts of a public
enemy, fires, floods, wars, civil disturbances, sabotage, accidents,
insurrections, blockades, embargoes, storms, other acts of nature,
explosions, damage to its plants, labor disputes (whether or not the
employees' demands are reasonable and within the party's power to
satisfy), or acts of any governmental body (whether civil or
military, foreign or domestic) collectively referred to herein as
"Force Majeure", nor shall any such failure or delay give the other
party the right to terminate this Agreement. Each party shall use
its best efforts to minimize the duration and consequences of any
failure of or delay in performance resulting from a Force Majeure
event.
11.14 Non-solicitation. Compaq agrees that, during the Term, it will not,
-----------------
without CMGI's written consent, solicit for employment any employee
of CMGI until at least six (6) months after any such employee ceases
to be employed by CMGI. CMGI agrees that, during the Term, it will
not, without Compaq's written consent, solicit for employment any
employee of Compaq until at least six (6) months after any such
employee ceases to be employed by Compaq.
11.15 No Third-Party Beneficiaries. This Agreement is for the sole benefit
----------------------------
of the parties hereto, their Affiliates, and their permitted
successors and assigns. Nothing herein, express or implied, is
intended to or shall confer upon any person or entity, other than
the parties hereto, their Affiliates and their permitted successors
and assigns, any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
23
IN WITNESS WHEREOF, the parties hereto have executed and delivered
Strategic Business Agreement as of the day and year first above written.
CMGI, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Chairman of the Board, President and Chief
-------------------------------------------
Executive Officer
-------------------------------------------
COMPAQ COMPUTER CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
Title: Vice President
-------------------------------------------
24