EXHIBIT 10.9
LICENSE AND SERVICES AGREEMENT
BETWEEN
CITYSEARCH INCORPORATED
AND
1217554 ONTARIO INC.
MADE AS OF
FEBRUARY 17, 1997
--------------------
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
TABLE OF CONTENTS
ARTICLE ONE - INTERPRETATION
----------------------------
1.01 Definitions................................................... 2
1.02 Headings...................................................... 6
1.03 Extended Meanings............................................. 6
1.04 Accounting Principles......................................... 6
1.05 Currency...................................................... 6
1.06 Schedules..................................................... 7
ARTICLE TWO - LICENSE TO CITYSEARCH SYSTEMS
-------------------------------------------
2.01 License to CitySearch Systems................................. 7
2.02 License to CitySearch Documentation........................... 8
ARTICLE THREE - SERVICES
------------------------
3.01 Delivery of Materials......................................... 8
3.02 Training Service.............................................. 8
3.03 Consulting Service............................................ 8
3.04 Customization Service......................................... 8
3.05 Responsibilities of Licensee.................................. 9
ARTICLE FOUR - FEES AND EXPENSES
--------------------------------
4.01 License....................................................... 10
4.02 Initial Service Fee........................................... 10
4.03 Additional Service Fees....................................... 11
4.04 Invoicing..................................................... 11
4.05 Expenses...................................................... 11
4.06 Taxes......................................................... 11
4.07 Disputed Payments............................................. 12
ARTICLE FIVE - INTELLECTUAL PROPERTY RIGHTS
-------------------------------------------
5.01 Ownership of CitySearch Systems............................... 12
5.02 Ownership of Content.......................................... 12
5.03 Ownership of Work Product..................................... 13
5.04 Disclosure of Licensee Improvements........................... 14
5.05 Disclosure of Licensor Improvements........................... 14
5.06 Source Codes.................................................. 14
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ARTICLE SIX - TRADE-MARKS AND QUALITY STANDARDS
-----------------------------------------------
6.01 Grant of License to Trade-Marks.............................. 17
6.02 Ownership of Trade-Marks..................................... 17
6.03 Restrictions on Use of the Trade-Marks....................... 17
6.04 Quality Standards............................................ 17
ARTICLE SEVEN - PROPRIETARY RIGHTS
AND CONFIDENTIAL INFORMATION
----------------------------
7.01 Duty of Confidence........................................... 19
7.02 Protection of Proprietary Rights............................. 20
7.03 Inspection by Licensor....................................... 20
7.04 Third Party Information...................................... 21
7.05 Loss of Confidential Information............................. 21
7.06 Enforcement of Confidentiality Obligation.................... 21
ARTICLE EIGHT - INFRINGEMENT
----------------------------
8.01 Prosecution of Infringement Claims........................... 21
8.02 Licensor's Defence of Infringement Claims.................... 22
8.03 Licensee's Defence of Infringement Claims.................... 23
ARTICLE NINE - WARRANTIES AND DISCLAIMERS
-----------------------------------------
9.01 Warranty..................................................... 24
9.02 Electronic Access............................................ 25
9.03 Disclaimer of Warranty....................................... 25
9.04 Limit of Liability........................................... 25
9.05 Limitation Period............................................ 27
9.06 California Franchise Disclaimer.............................. 27
ARTICLE TEN - TERM AND TERMINATION
----------------------------------
10.01 Term........................................................ 27
10.02 Termination................................................. 27
10.03 Effect of Termination by Licensor........................... 28
10.04 Return of Intellectual Property............................. 28
10.05 Survival.................................................... 29
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10.06 Sale of Partnership Interest................................ 30
ARTICLE ELEVEN - GENERAL
------------------------
11.01 Further Assurances.......................................... 31
11.02 Public Announcements........................................ 31
11.03 Dispute Resolution.......................................... 32
11.04 Entire Agreement............................................ 32
11.05 Force Majeure............................................... 32
11.06 Amendment and Waiver........................................ 32
11.07 Assignment.................................................. 33
11.08 Notices..................................................... 33
11.09 Governing Law............................................... 34
LICENSE AND SERVICES AGREEMENT
------------------------------
THIS AGREEMENT made as of February 17, 1997;
B E T W E E N:
CITYSEARCH INCORPORATED, a corporation incorporated under
the laws of Delaware (hereinafter referred to as "Licensor")
OF THE FIRST PART.
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1217554 ONTARIO INC., a corporation incorporated under the
laws of Ontario (hereinafter referred to as "Licensee"),
OF THE SECOND PART.
WHEREAS Licensor is engaged in the business of providing CitySearch
Information Services (as defined below) in the United States and elsewhere;
AND WHEREAS Toronto Star CitySearch (the "Partnership") a general
partnership between Metroland Printing, Publishing & Distributing Ltd.
("Metroland"), a subsidiary of Torstar Corporation and Licensee has been formed
to carry on a CitySearch Information Service in the Exclusive Territory (as
defined below);
AND WHEREAS Licensee is a wholly-owned subsidiary of Licensor and has
requested Licensor to grant to it the License and to provide it with the
Services to enable the Partnership to establish and operate a CitySearch
Information Service in the Exclusive Territory;
AND WHEREAS Licensee intends to assign this Agreement to the
Partnership as part of its capital contribution towards the Partnership and
Licensor is prepared to agree to such assignment, upon and subject to the terms
and conditions of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
issuance to Licensor of fifty (50) common shares of Licensee and the premises
and the covenants and agreements herein contained, the parties hereto agree as
follows;
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ARTICLE ONE - INTERPRETATION
----------------------------
1.01 DEFINITIONS
-----------
In this Agreement
(a) "Access Event" has the meaning ascribed to it in Section 5.06(a).
(b) "Additional Service Fees" shall have the meaning ascribed to it
in Section 4.03.
(c) "Affiliate" means an affiliate of a party as determined by the
provisions of the Business Corporations Act (Ontario) as now
enacted or as the same may be from time to time amended, re-
enacted or replaced.
(d) "Agreement" means this agreement, the schedules hereto annexed
and all amendments made hereto by written agreement between the
parties hereto.
(e) "Business Day" means a day other than a Saturday, Sunday or
statutory holiday in Ontario or California.
(f) "CitySearch Business Systems" means the methods of operation
procedures and standards to implement, maintain, market and
advertise a CitySearch Information Service, described in Schedule
B and all Licensor Improvements thereto.
(g) "CitySearch Documentation" means documentation, however recorded,
which forms part of and which describes the CitySearch Business
Systems and CitySearch Technology Systems and which are provided
by Licensor to Licensee hereunder. For the avoidance of doubt
the term "CitySearch Documentation" does not include any of the
Licensed Programs.
(h) "CitySearch Information Service" means an online service of
providing Content related to restaurants, entertainment, retail
establishments, community events and other services pertaining
to a particular city or geographic region which uses the
CitySearch Systems.
(i) "CitySearch Systems" means the CitySearch Technology Systems.
CitySearch Business Systems, and related CitySearch
Documentation.
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(j) "CitySearch Technology Systems" means the proprietary software
and tools described in Schedule A and database structures text
and artwork formats, computer and human interfaces, databases
and other Intellectual Property related thereto and all Licensor
Improvements thereto.
(k) "Competing Business" has the meaning ascribed to it in the
Partnership Agreement.
(1) "Confidential Information" means the confidential, secret or
proprietary information of one party (the "Disclosing Party"),
including technical, financial, and business information and
software of the Disclosing Party which has been or may hereafter
be disclosed, directly or indirectly to the other party (the
"Recipient"), either orally, in writing or in any other material
form.
(m) "Consulting Service" means the consulting assistance described in
Section 3.03.
(n) "Content" with respect to a CitySearch Information Service
includes all information, databases, advertisements, text, sound,
photographic images, video and other content which is
displayed or accessible to a consumer using the service. For the
avoidance of doubt, the term "Content" does not include any
CitySearch System or any Improvement thereto.
(o) "Customization Service" means the service described in Section
3.04.
(p) "Direct Competitor" has the meaning ascribed to it in the
Partnership Agreement.
(q) "Designated Location" means the location(s) described in Schedule
C at which the CitySearch Systems must be used and includes such
replacement locations in the Exclusive Territory owned or
controlled by Licensee or any of its Affiliates which are
notified to Licensor in writing by Licensee.
(r) "Effective Date" means the date first set out above.
(s) "Escrow Agreement" means the agreement described in Section
5.06(a).
(t) "Event of Default" has the meaning ascribed to it in Section
10.02(a).
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(u) "Exclusive Territory" shall have the meaning ascribed to it in
the Partnership Agreement.
(v) "Improvements" means, in relation to any technology or
Intellectual Property, changes, modifications improvements,
enhancements, additions and adaptations to, and derivative
works based upon or derived from, the technology or intellectual
Property.
(w) "Initial Service Fee" shall have the meaning ascribed to it in
Section 4.02.
(x) "Intellectual Property" means all intellectual and industrial
property including without limitation all works in which
copyright subsists or may subsist (such as computer programs,
designs and documentation, data structures, audio-visual
displays, databases, and designs), methods, operational
procedures, specialized techniques, processes, formula, know-
how, trade secrets and confidential information, and discoveries
and inventions.
(y) "Intellectual Property Rights" includes all trade-▇▇▇▇ rights and
trademarks and trade names, patents, copyrights, industrial
design rights, design rights, integrated circuit topography
rights, rights in trade secrets, confidential information and
know-how, applications and registrations for the foregoing, and
other proprietary rights including privacy rights, moral rights,
publicity rights, neighbouring rights, and rights of a similar
nature.
(z) "Jointly Owned Work Products" means the Work Products described
in Section 5.03 (b).
(aa) "Launch" means the date when the Toronto CitySearch Information
Service will be accessible to the public and "Launched" shall
have a corresponding meaning.
(bb) "License" means the license rights conferred upon Licensee
pursuant to Article 2 and Sections 5.06(b) and 6.01.
(cc) "Licensed Programs" means the computer programs forming part of
the CitySearch Technology Systems described in Schedule A.
(dd) "Licensed Trade-Marks" means the words, symbols, icons, logos,
trade-marks and other indicia of origin described in Schedule D.
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(ee) "Licensee Improvements" means the Licensee Owned Work Products,
the Jointly Owned, Work Products to the extent created by
Licensee, and the Source Modifications.
(ff) "Licensee Owned Work Products" means the Work Products described
in Section 5.03(a).
(gg) "Licensor Improvements" means Improvements made by Licensor to
the CitySearch Systems which are owned or controlled by Licensor
and, which are made generally available by Licensor to its
Affiliates and other persons to whom it has granted licenses to
use the CitySearch Systems to carry on a CitySearch Information
Service during the term of this Agreement.
(hh) "Licensor Owned Work Products" means the Work Products described
in Section 5.03(e)
(ii) "Non-Competition Agreement" means an agreement as of even date
herewith between Metroland, Licensor, Licensee, and Torstar
Corporation.
(jj) "Partnership Agreement" means an agreement made as of even date
herewith between Licensee and Metroland.
(kk) "Partnership Interest" shall have the meaning ascribed thereto in
the Partnership Agreement,
(ll) "Quality Standards" has the meaning ascribed thereto in Section
6.04.
(mm) "Services" means Services which are provided by Licensor to
Licensee under this Agreement.
(nn) "Source Modifications" has the meaning ascribed thereto in
Section 5.06(b).
(oo) "Toronto Star CitySearch Information Service" means a CitySearch
Information Service which contains Content related solely to the
Exclusive Territory as set out in Section 2.01(c).
(pp) "Training Services" means the training services described in
Section 3.02.
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(qq) "Work Product" means Intellectual Property (other than trade-
marks) originated or developed by either party either alone or
with the assistance of the other party pursuant to this
Agreement.
1.02 HEADINGS
--------
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles and
Sections are to Articles and Sections of this Agreement.
1.03 EXTENDED MEANINGS
-----------------
In this Agreement words importing the singular number only shall
include the plural and vice versa, words importing any gender shall include all
genders and words importing persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations. The terms
"provision" and "provisions" refer to terms, conditions, provisions, covenants,
obligations, undertakings, warranties and representations in this Agreement. The
term "includes" or "including" or "such as" shall be construed as meaning
"includes without limitation", "including without limitation" and "such as
without limitation", as the case may be.
1.04 ACCOUNTING PRINCIPLES
---------------------
Wherever in this Agreement reference is made to a calculation to be
made in accordance with generally accepted accounting principles, such reference
shall be deemed to be to the generally accepted accounting principles from time
to time approved by the Canadian Institute of Chartered Accountants, or any
successor institute, applicable as at the date on which such calculation is made
or required to be made. Wherever in this Agreement reference is made to a
calculation to be made in accordance with United States generally accepted
accounting principles, such reference shall be deemed to be to the generally
accepted accounting principles from time to time approved by the American
Institute of Certified Public Accountants, or any successor institute,
applicable as at the date on which such calculation is made or is required to be
made.
1.05 CURRENCY
--------
All references to currency herein are to lawful money of Canada. Any
conversion of funds required to enable payments to be made or calculated in
Canadian dollars shall be converted at the spot buying rate for such funds
quoted by the Canadian Imperial
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Bank of Commerce at its office in Toronto at approximately noon on the
business day immediately preceding the due date of the payment or calculation,
as the case may be.
1.06 SCHEDULES
---------
The Schedules To This Agreement Are As Follows;
Schedule A - CitySearch Technology Systems
Schedule B - CitySearch Business Systems
Schedule C - Designated Locations
Schedule D - Licensed Trade-Marks
Schedule E - Cost Plus Fee Schedule
Schedule F - Assignment Agreement
ARTICLE TWO - LICENSE TO CITYSEARCH SYSTEMS
--------------------------------------------
2.01 LICENSE TO CITYSEARCH SYSTEMS
-----------------------------
(a) Subject to the provisions of this Agreement including the
provisions of Article 10, Licensor hereby grants to Licensee and Licensee hereby
accepts from Licensor a [*] license to use the CitySearch Systems in the
Exclusive Territory solely for the purpose of establishing and operating the
Toronto Star CitySearch Information Service. Notwithstanding the foregoing, the
Licensor reserves the right to, and to authorize other persons to, use the
CitySearch Systems at a site or sites in the Exclusive Territory for the purpose
of operating or establishing CitySearch Information Services for a territory
outside the Exclusive Territory.
(b) The Licensed Programs may be reproduced solely to (i) install
same on computers located at the Designated Location, (ii) for processing of
the machine instructions, statements or data therein, and (iii) as may be
necessary for archival and backup purposes in accordance with Licensee's Written
archival and backup policies.
(c) The CitySearch Systems may be used only as set out in this
Agreement and Licensee agrees not to make any copies or use thereof other than
as expressly permitted herein. Without limiting the generality of the
foregoing, Licensee agrees to use the CitySearch Systems only in the Exclusive
Territory, at the Designated Location, and for the purpose of providing a
CitySearch Information Service with Content related solely to the Exclusive
Territory. The parties agree that particular Content that relates primarily to
the Exclusive Territory but which also refers to a place or places outside of
the Exclusive Territory will be considered to be Content related solely to the
Exclusive Territory. Licensee agrees not to use the CitySearch Systems for the
purpose of providing any service other than the Toronto Star City Search
Information Service.
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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2.02 LICENSE TO CITYSEARCH DOCUMENTATION
-----------------------------------
CitySearch Documentation provided in machine readable form may be
printed and used solely for the purpose of establishing and operating the
Toronto Star CitySearch Information Service. No other reproduction or use of
the CitySearch Documentation is permitted.
ARTICLE THREE - SERVICES
------------------------
3.01 DELIVERY OF MATERIALS
---------------------
Licensor agrees to deliver to Licensee by no later than 120 days
following the Effective Date, a technology information package containing a
copy of the materials described in Schedules A and B made generally available by
Licensor to its Affliliates and other persons to, whom it has granted licenses
to use the CitySearch Systems to assist them in establishing and operating a
CitySearch Information Service. Except as agreed to pursuant to this Article 3,
Licensor shall not be required to create any computer programs, documentation or
other Intellectual Property for delivery to or use by Licensee.
3.02 TRAINING SERVICE
----------------
Upon the request of Licensee, Licensor agrees to permit employees of
Licensee to attend and participate in management workshops and planning
sessions, sales training sessions and other training sessions provided by
Licensor to its own staff in the course of carrying on its CitySearch
Information Service business (the "Training Services").
3.03 CONSULTING SERVICE
------------------
Licensor agrees to provide consulting assistance to Licensee to update
the financial model for the Toronto Star CitySearch Information Service.
Licensor also agrees to provide Licensee with other consulting services as
reasonably requested by Licensee (subject to availability of staff of Licensor)
related to the CitySearch Systems and the Toronto Star CitySearch Information
Service (all consulting assistance and service provided by CitySearch pursuant
to this Section 3.03 is referred to here as the "Consulting Service").
3.04 CUSTOMIZATION SERVICE
---------------------
(a) The parties acknowledge that there may be a need to customize
the CitySearch Technology Systems to adapt same for use in the Toronto Star
CitySearch Information Service such as, for example, customization of
interfaces, design tools, mapping of geographic data and of spellings, phrases
and colloquialisms to conform to norms in the Exclusive Territory. (Any such
customization service provided by Licensor is referred to here
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as the "Customization Service"). Licensee shall initiate a request for
Customization Service by submitting a request for Customization Service to
Licensor (the "Request"). Each Request shall contain a description of the
specific Customization Service and the CitySearch System Technology which is the
subject of the Request (the "Project").
(b) Licensor shall submit within a reasonable period of time a reply
to Licensee's Request (the "Work Plan"). Where applicable the Work Plan will
include the following: (i) a description of the Customization Service to be
performed and the CitySearch Technology Systems to be customized; (ii)
acceptance tests or means proposed for testing the Systems delivered at the
completion of the Project; (iii) an implementation schedule which shows the time
frames for all stages of the Project's development and completion; and where the
costs of the Project will not be paid for in accordance with the fees schedule
set out in Schedule E, the costs of the Project and a schedule of payments to be
made during or at the completion of the Project. For larger Projects, the Work
Plan may provide for a development program of several stages, such stages, for
example, being the production of specifications and completions of the
development of custom changes. If the Customization Service to be provided will
be paid for on a cost plus basis the Work Plan shall, unless otherwise agreed to
by the parties, contain an estimate of the time and cost for all phases as well
as an estimate of the time and cost for the first phase of the Project.
(c) Neither party shall be bound to proceed with any Project until
the parties have agreed in writing to the terms of the applicable Work Plan:
Licensor and Licensee shall negotiate in good faith the terms of each Work Plan.
At Licensor's discretion, Licensor may notify Licensee that it does not desire
to perform Customization Service requested by Licensee pursuant to Section
3.04(b). Upon receipt of such notice, or in the event the parties are unable to
agree on the terms of a Work Plan after negotiating same in good faith. Licensee
shall he entitled to obtain access to the Source Materials necessary to perform
the work which is the subject of the Request, subject to the provisions of
Section 5.06 and the Escrow Agreement.
(d) Licensee shall assist Licensor in the performance of the
Customization Service by making available all equipment, software, documentation
and data, information and personnel described in a Work Plan on a timely basis.
Licensee shall also ensure that those of its personnel who are assigned to
assist Licensor are familiar with Licensee's requirements and have the expertise
and capabilities necessary to permit Licensor to undertake and complete the
Services.
3.05 RESPONSIBILITIES OF LICENSEE
----------------------------
Licensee acknowledges that Licensor shall not be required to:
(i) use its site production management staff and resources to develop
or operate the Toronto Star CitySearch Information Service;
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(ii) provide any Training Service, Consulting Service or
Customization Service for any CitySearch Information Service
other than the Toronto Star CitySearch Information Service;
(iii) deploy any of its personnel or resources to provide any
services that could substantially change Licensor's own
priorities such as writing additional manuals or scheduling
additional training that ordinarily would not have been
provided by Licensor in the course of conducting its business
in the United States;
(iv) developing or providing any Content;
(v) providing any of Licensor's back office support systems such as
sales tracking, site creation tracking, billing and customer
services;
(vi) providing access to or use of any of Licensor's databases,
servers or other computer or communications hardware or
software, except as provided in Schedule A;
(vii) purchase, lease, license or otherwise provide any hardware or
software, other than as set forth in Schedule A; or
(viii) furnish or license to Licensee any third party software such as
Informix/Illustra, Etak, Perly, Photoshop, Microsoft Word, SQL
Server, Windows 95 and Windows NT, or networking software such
TCP/IP.
ARTICLE FOUR - FEES AND EXPENSES
--------------------------------
4.01 LICENSE
-------
The parties acknowledge that the License has a value of [*] and that
Licensee has issued to Licensor [*] of Licensee in consideration for the grant
of the License.
4.02 INITIAL SERVICE FEE
-------------------
Licensee shall pay to Licensor a [*] service fee (the "Initial Service
Fee") of [*] with respect to Services to be provided by Licensor under this
Agreement. The Initial Service Fee shall be paid on the Effective Date.
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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4.03 ADDITIONAL SERVICE FEES
-----------------------
Licensee shall pay to Licensor service fees with respect to
Customization Services, Training Services and Consulting Services. Except as
provided to the contrary in any Work Plan, the said services shall be paid for
on a cost plus basis in accordance with the cost plus schedule of Licensor set
out in Schedule E (the "Additional Service Fees"). In consideration of the
payment by Licensee to Licensor of the Initial Service Fee, Licensor hereby
waives its right to be paid [*] of Additional Service Fees.
4.04 INVOICING
---------
Except as otherwise set forth in a Work Plan, any Additional Service
Fees billed to Licensee will be invoiced regularly once a month in arrears and
will be due and payable within forty-five (45) days of receipt by Licensee. Any
sum due to Licensor that is not paid when due shall bear interest from the due
date thereof to the date of payment at the prime rate plus tWo percent (2%) per
annum, calculated and payable monthly. For the purpose of this section, the
term "prime rate means at any time the rate per annum, commonly known as the
prime rate, announced by the Canadian Imperial Bank of Commerce from time to
time, being its reference rate in effect for determining interest rates on
Canadian dollar commercial loans made at Toronto.
4.05 EXPENSES
--------
Licensee agrees to reimburse Licensor for all expenses incurred by it
in connection with travel (including airfare and hotel accommodation)
pertaining to providing Services to Licensee hereunder. The amount to which
Licensor shall be entitled to be reimbursed for travel shall not exceed amounts
which have been approved in advance by Licensee, or amounts generally approved
by Metroland for travel, from time to time, whichever is the greater. Licensee
also agrees to reimburse Licensor for any costs or expenses incurred by it in
connection to rent or lease dedicated communication lines between Licensor and
Licensee, and other out-of-pocket expenses such as expenses for discs, tapes,
and other magnetic media provided by Licensor to Licensee.
4.06 TAXES
-----
All payments to be made to Licensor under this Agreement are exclusive
of all taxes and Licensee shall pay any sales, use, goods and services, personal
property, consumption, value added, or other tax and any duties or tariffs that
now exist or which may arise in the future related to this Agreement or the
performance of the Services or otherwise, except for tax based on the income of
Licensor. Licensee shall be entitled to deduct withholding taxes which may be
imposed by any governmental authority in Canada with
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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respect to Services performed in Canada otherwise due to Licensor; provided,
however, that no such deduction shall be taken unless Licensee makes payment to
the government authority responsible for the collection of such taxes within 30
days of the month following the month in which the payments are made to Licensor
hereunder. Not less frequently than once each year during the term of this
Agreement and during the year immediately following the termination of this
Agreement, Licensee shall forward to Licensor a copy of any and all
correspondence filed with governmental authorities directly relating to the
reporting and/or payment of withholding taxes clue on account of payments made
to Licensor hereunder Licensee shall provide to Licensor such reasonable
assistance as Licensor may request in connection with any claim by Licensor for
a credit or refund of such withholding taxes.
4.07 DISPUTED PAYMENTS
-----------------
[*]
ARTICLE FIVE - INTELLECTUAL PROPERTY RIGHTS
-------------------------------------------
5.01 OWNERSHIP OF CITYSEARCH SYSTEMS
-------------------------------
Nothing herein shall transfer or convey or operate so as to grant to
Licensee any right, title or interest to all or any part of the CitySearch
Systems or any of the Licensed Trade-Marks.
5.02 OWNERSHIP OF CONTENT
--------------------
Nothing herein shall transfer or convey or operate so as to grant to
Licensor any right, title or interest to all or any part of the Content
developed by Licensee for use as part of the Toronto Star CitySearch Information
Service.
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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5.03 OWNERSHIP OF WORK PRODUCTS
--------------------------
Except as otherwise specifically provided in a Work Plan, ownership
of Work Products and the Intellectual Property Rights therein shall be as
follows;
(a) With respect to Work Products developed and prepared solely by
Licensee during the term of this Agreement and which are not Improvements to the
CitySearch Systems (the "Licensee Owned Work Products"), the Intellectual
Property Rights therein shall be and remain the exclusive property of Licensee.
Licensee shall disclose to Licensor the Licensee Owned Work Products and shall,
if requested to do so by Licensor, negotiate in good faith with Licensor a
license to use and to enable Affiliates and other licensees of Licensor to use
the Licensee Owned Work Products in consideration of the payment to Licensee of
a reasonable license fee.
(b) With respect to Work Products which are: (i) developed and
prepared solely by Licensee during the term of this Agreement or during any
period in which the License in respect of the CitySearch Systems conferred by
Article 2 shall survive termination of the Agreement, and which are Improvements
to the CitySearch Systems, or (ii) developed and prepared jointly by Licensor
and Licensee during the term or following the termination of this Agreement
including Work Products developed and prepared by Licensor or jointly by
Licensor and Licensee in the course of performing Customization Service (the
"Jointly Owned Work Products"), the Intellectual Property Rights therein shall
be jointly owned by Licensor and Licensee as tenants-in-common.
(c) Licensee agrees that during the term of this Agreement and
thereafter for as long as any copyright or other Intellectual Property Right
subsists in Canada or the United States in the Jointly Owned Work Products that
it will not itself, and it will not authorize or permit any other person to, use
the Jointly Owned Work Products to provide, operate, manage or carry on a
Competing Business to the business of Licensor. Further, Licensee agrees that it
will not make any grant including any grant of any interest or license in the
Jointly Owned Work Products to any person without obtaining the agreement of
such person that it will not itself and that it will not authorize or permit any
other person to use the Jointly Owned Work Products to provide, operate, manage
or carry on a Competing Business to the business of Licensor. The aforesaid
restrictions shall not operate, however, following the termination of this
Agreement so as to prevent Licensee from using the Jointly Owned Work Products
to carry on a CitySearch Information Service pertaining to any geographic region
in the Province of Ontario other than the Ottawa-Carleton region. Subject to the
foregoing and to Licensee's obligations under the Non-Competition Agreement.
Licensee shall have the right to, and to authorize others to, make changes,
modifications and enhancements (but not other adaptations or derivative works
which Licensee agrees not to make) to the Jointly Owned Work Products and to
reproduce and commercially exploit same without any obligation to obtain the
consent of or to account to Licensor with respect to the
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said activities. The parties agree that any changes, modifications or
enhancements made to the Jointly Owned Work Products by Licensee during the term
of this Agreement or during any period in which the License in respect of the
CitySearch Systems conferred by Article 2 shall survive a termination of the
Agreement, shall be considered to be Jointly Owned Work Products. Provided,
however, nothing in this Section 5.03 authorizes Licensee to use or reproduce
any CitySearch Systems or to commercially exploit or embed same in connection
with the commercial exploitation of the Jointly Owned Work Products. The parties
agree that Improvements made to the Jointly Owned Work Products by Licensor
shall be considered to be Licensor Owned Work Products.
(d) Subject to Licensor's obligations under the Non-Competition
Agreement, Licensor shall have the right to, and to authorize others to, make
Improvements to the Jointly Owned Work Products and to reproduce and
commercially exploit same without any obligation to obtain the consent of or to
account to Licensee with respect to the said activities.
(e) With respect to all Work Products developed and prepared solely
by Licensor during the term of this Agreement (the "Licensor Owned Work
Products"), the Intellectual Property Rights therein shall be and remain the
exclusive property of Licensor. Such Work Products shall be considered to be
CitySearch Systems for all purposes herein which Licensee shall have the right
to use pursuant to Article 2 during the term of this Agreement.
5.04 DISCLOSURE OF LICENSEE IMPROVEMENTS
-----------------------------------
Licensee will promptly inform Licensor of any and all Licensee
Improvements. Upon request, Licensee agrees to furnish Licensor with copies of
all Intellectual Property including source codes and technical documentation
related thereto, provided, however, that Licensee shall not be required to
deliver to Licensor the source codes to Licensee Owned Work Products unless
Licensee agrees to do so pursuant to an agreement reached by the parties
pursuant to Section 5.03(a).
5.05 DISCLOSURE OF LICENSOR IMPROVEMENTS
-----------------------------------
Licensor will promptly inform Licensee of Licensor Improvements. Upon
request, Licensor will furnish Licensee with copies of the Intellectual Property
related thereto.
5.06 SOURCE CODES
------------
(a) Except as may be otherwise provided in a Work Plan, Licensor
shall not be required to disclose to Licensee the source codes, models, or other
high level language versions of any computer programs forming part of the
CitySearch Systems. [*]
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-15-
[*]
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-16-
[*]
(e) Licensee acknowledges and agrees that Licensor will suffer
irreparable injury if Licensee breaches any of the provisions of this Section
5.06 and that the damages suffered by Licensor would be an inadequate remedy in
respect of such breach. Licensee hereby agrees in advance, that in the event of
such breach, that Licensor shall be entitled in addition to such other
remedies, damages and relief as may be available under applicable law.
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-17-
[*]
ARTICLE SIX - TRADE-MARKS AND QUALITY STANDARDS
-----------------------------------------------
6.01 GRANT OF lICENSE TO TRADE-MARKS
-------------------------------
(a) Licensor hereby grants to Licensee, and Licensee hereby accepts
from Licensor, a personal, non-exclusive, non-transferable license during the
term of this Agreement to use the Licensed Trade-Marks solely in conjunction
with the Toronto Star CitySearch Information Service.
(b) During the term of this Agreement, Licensor agrees not to use
the Licensed Trade-Marks in conjunction with a CitySearch Information Service
pertaining to the Exclusive Territory or to license any other person to do so,
without Licensee's prior written consent. However, nothing herein shall prevent
Licensor or persons authorized by Licensor from using the Licensed Trade-Marks
to market, advertise or promote the Toronto Star CitySearch Information Service
or to operate other CitySearch Information Services.
6.02 OWNERSHIP OF TRADE-MARKS
------------------------
Licensee acknowledges that all goodwill associated with Licensee's use
of the Licensed Trade-Marks will enure to the exclusive benefit of Licensor
Licensee agrees that it will not challenge the validity or ownership or
Licensor's right to use the Licensed Trade-Marks. Licensee also agrees that it
will not apply for registration of any of the Licensed Trade-Marks, or any
substantially similar ▇▇▇▇, in the Exclusive Territory or outside the Exclusive
Territory, either during or after the term of this Agreement.
6.03 RESTRICTIONS ON USE OF THE TRADE-MARKS
--------------------------------------
Licensee agrees to comply with all instructions and requirements
provided by Licensor in writing to Licensee with respect to the use of the
Licensed Trade-Marks from time to time. Licensee will not make any use of the
Licensed Trade-Marks including any use over any network until Licensor has
approved such use in writing. Licensee agrees not to use the Licensed Trade-
Marks, or any variation thereof, as a corporate name or trade name of Licensee
or any affiliate of Licensee, without Licensor's prior written consent.
6.04 QUALITY STANDARDS
-----------------
(a) Licensee acknowledges that high standards of quality are required
for the operation of the Toronto Star CitySearch Information Service to
maintain the good public image and reputation of the Licensed Trade-Marks and
the business of Licensor and Licensee
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-18-
agrees to maintain such standards. Without limiting the generality of the
foregoing, Licensee agrees:
(i) to comply with all policies, standards and specifications
established from time to time by Licensor and notified to
Licensee in writing for the establishment and operation of
a CitySearch Information Service including those related
to navigational layouts, hierarchical maps and the use of
trade-marks and logos;
(ii) to implement and enforce the policies and procedures
adopted by Torstar Corporation for the operation of its
electronic publishing business and those of its Affiliates
(or replacement policies and procedures agreed to in
writing by the parties) (the "Offensive Content
Standards"); to ensure that the Content which is displayed
or accessible to consumer(s) using the Toronto CitySearch
Information Service will not be obscene, indecent,
pornographic or offensive or be defamatory of any person,
or infringe upon or violate any Intellectual Property
Right of any person; and, to promptly delete from the
service any such Content or Content which contravenes the
Offensive Content Standards;
(iii) that the Toronto Star CitySearch Information Service will
be available to consumers 7 days a week, 24 hours a day,
subject only to scheduled maintenance and system failures
which could not have been reasonably avoided by Licensee;
(iv) to conduct the Toronto Star CitySearch Information Service
in a manner that will reflect favourably on the good name
and reputation of Licensor and its business of providing
CitySearch Information Services, and refrain from engaging
in any unfair, or deceptive trade practice, or unethical
business practice whatever, or practice that could
unfavourably reflect upon Licensor or the CitySearch
Information Services provided by Licensor; and
(v) to comply with all applicable laws, regulations, and
ordinances and obtain all necessary licenses, permits and
consents pertaining to or required for the establishment
and operation of the Toronto Star CitySearch Information
Service including consents from persons with any
Intellectual Property Right in any Content used or
displayed in the provision of the Toronto
-19-
Star Information Service (the requirements set out in this
Section 6.04(a) are referred to here as the "Quality
Standards").
(b) Prior to Launching the Toronto Star CitySearch Inforrmation
Service. Licensee shall demonstrate to the reasonable satisfaction of Licensor
that the service meets all of the Quality Standards.
(c) Licensor, either by itself or through third parties, shall have
the right to test the Toronto Star CitySearch Information Service provided from
time to time by Licensee. In connection with the foregoing, Licensee agrees to
provide Licensor with access to the Designated Locations from which the service
is provided, subject to the reasonable security and confidentiality requirements
of Licensee. In the event the Quality Standards are not complied with, Licensee,
if requested to do so in writing by Licensor, shall cease to use the Licensed
Trade-Marks until such time as Licensee can demonstrate to the reasonable
satisfaction of Licensor that the service meets or exceeds the Quality
Standards, if Licensor shall have given written notice to Licensee describing in
reasonable detail the failures of the Toronto Star CitySearch Service to meet
the Quality Standards and such breach shall not have been remedied by Licensee
within thirty (30) days after receipt of such written notice.
(d) Licensee assumes all responsibility and liability for loss or
damage caused by or attributable to the Toronto Star CitySearch Information
Service, however caused, Licensee agrees to indemnify and hold harmless
Licensor and its Affiliates and their officers, directors, employees and agents
from any and all claims, damages, liabilities and costs. including reasonable
legal fees and disbursements, which Licensor or any of the said persons shall
suffer or incur as a result of the failure of Licensee to meet the Quality
Standards or the operation of the Toronto Star CitySearch Information Service.
Notwithstanding the foregoing. Licensee shall not be responsible for, and shall
have no liability to indemnify Licensor hereunder for, any claim, damage,
liability or cost to the extent that it is caused by Licensor or the failure of
the CitySearch Systems to operate as described in Section 9.01.
ARTICLE SEVEN - PROPRIETARY RIGHTS
AND CONFIDENTIAL INFORMATION
----------------------------
7.01 DUTY OF CONFIDENCE
------------------
(A) Each of Licensee and Licensor acknowledges that Confidential
Information will be exchanged between them pursuant to this Agreement. Each of
Licensee and Licensor shall use no less than the same means it uses to protect
its similar confidential and proprietary information, but in any event not less
than commercially reasonable means, to prevent the disclosure and to protect the
confidentiality of the Confidential Information of the other. Each of Licensee
and Licensor agrees that, except as provided herein, it will not
-20-
use the Confidential Information of the other except for the purposes of this
Agreement and as authorized herein.
(b) Licensee shall not disclose, provide, or make the CitySearch
Systems or any part thereof available in any form or medium to any person except
to its employees, and to contractors and consultants of Licensee approved in
writing by Licensor with a need for access to enable Licensee to exercise its
license rights under this Agreement, All persons to whom access is given shall
execute a confidentiality agreement in a form to be approved by Licensor.
(c) Notwithstanding section 7.01(a), the Recipient of Confidential
Information may use or disclose the Confidential Information to the extent that
the Recipient can show that such Confidential Information is (i) already known
by the Recipient without an obligation of confidentiality (ii) publicly known
or becomes publicly known through no unauthorized act of the Recipient, (iii)
rightfully received from a third party, (iv) independently developed by the
Recipient without use of the information of the Disclosing Party (v) approved
by the Disclosing Party for disclosure, or (vi) required to be disclosed
pursuant to a requirement of a governmental agency or law so long as the
Recipient provides the other party with notice of such requirement prior to any
such disclosure and takes all reasonable steps available to maintain the
information in confidence.
7.02 PROTECTION OF PROPRIETARY RIGHTS
--------------------------------
(a) On all authorized copies of the CitySearch Systems and Source
Materials Licensee shall make and include all proprietary, copyright, patent,
trade-▇▇▇▇, design right and trade secret legends and alphanumeric codes, in the
same form and location as the legends appearing on the CitySearch Systems and
Source Materials. Further, Licensee shall not remove any proprietary, copyright,
patent, trade-▇▇▇▇, design right or trade secret legends from the CitySearch
Systems or Source Materials.
(b) Licensee agrees not to disassemble, decompile, translate or
convert into human readable form or into another computer language,
reconstruct or decrypt, or reverse engineer, all or any part of the CitySearch
Systems.
7.03 INSPECTION BY LICENSOR
----------------------
Licensee agrees to provide Licensor with reasonable access to the
Designated Locations where the CitySearch Systems and Source Materials are used
for the purpose of enabling Licensor to verify that the CitySearch Systems and
Source Materials are and have been Used in compliance with the provisions of
this Agreement. Licensor agrees to give Licensee reasonable notice of its
intention to make the aforesaid investigation.
-21-
7.04 THIRD PARTY INFORMATION
-----------------------
Neither Licensee nor Licensor shall disclose to the other any
proprietary, confidential, secret, or private information of any third person
which It is under a duty not to disclose.
7.05 LOSS OF CONFIDENTIAL INFORMATION
--------------------------------
In the event of any unauthorized disc disclosure or loss of, or
inability to account for, Confidential Information of the Disclosing Party, the
Recipient will notify the Disclosing Party immediately.
7.06 ENFORCEMENT OF CONFIDENTIALITY OBLIGATION
---------------------------------------------
Each of Licensee and Licensor acknowledges and agrees that irreparable
injury may result to the other if it breaches the provisions of this Article and
that damages may be an inadequate remedy in respect of such breach. Each of
Licensee and Licensor hereby agree in advance that, in the event of such breach,
the other of them shall be entitled, in addition to such other remedies, damages
and relief as ANY be available under applicable law, to the granting of
injunctive relief in such party's favour.
ARTICLE EIGHT - INFRINGEMENT
----------------------------
8.01 PROSECUTION OF INFRINGEMENT CLAIMS
----------------------------------
(a) The parties shall as soon as possible notify each other in writing
of any actual, alleged, or threatened infringements or other unauthorized uses
of the CitySearch Systems or the Licensed Trade-Marks in conjunction with a
CitySearch Information Service pertaining to the Exclusive Territory (the
foregoing are referred to here as "Infringements") of which they become aware.
Licensor may, but is not required to, take any and all actions, legal or
otherwise, which are necessary to terminate or prevent Infringements. Licensee
shall have the right to be kept informed of the status and progress of all
actions instituted by Licensor pursuant to this section 8.01(a). Licensee agrees
to comply with all reasonable requests for assistance from Licensor in
connection with Infringements. Licensor agrees to reimburse Licensee for its
costs of providing such assistance, provided that Licensee gives Licensor a
written estimate of the costs to he incurred and provided further that the costs
for which reimbursement are sought do not exceed the estimate. Licensor shall
bear all expenses of all actions which it initiates pursuant to this section
8.01(a).
-22-
(b) If Licensor does not institute an action within thirty (30) days
after receiving notice from Licensee of an Infringement and a request by
Licensee to commence an action to terminate the Infringement itself, then
Licensee may institute an action with respect thereto only upon receiving the
prior written consent of Licensor, which consent will not be unreasonably
refused. Licensee agrees that if any of the Licensed Trade-Marks are not owned
by Licensor that Licensor may not be able to consent to Licensee's instituting
any action with respect thereto. Licensee shall have no right hereunder to
commence any action with respect to any Infringements which do not pertain to
the use of the CitySearch Systems or the Licensed Trade-Marks, in connection
with a CitySearch Information System pertaining to the Exclusive Territory.
Licensor shall have the right to be kept informed of the status and progress of
all such actions instituted by Licensee pursuant to this section 8.01(b).
Licensee shall bear all the expenses of all actions which it initiates pursuant
to this Section 8.01(b) including without limitation all legal fees and
disbursements which Licensor may incur in connection with such actions
regardless of whether Licensor is a party to such action and Licensee shall
indemnify and hold Licensor harmless with respect to such costs. Licensor agrees
to comply with all reasonable requests for assistance from Licensee in
connection with actions instituted by Licensee under this Section. Licensee
agrees to reimburse Licensor for its costs of providing such assistance,
provided that Licensor gives Licensee a written estimate of the costs to be
incurred and provided further that the costs for which reimbursement are sought
do not exceed the estimate.
(c) In the event Licensee and Licensor jointly agree to institute an
action to terminate or prevent Infringements, Licensee and Licensor shall
jointly control any such proceedings and shall develop mutually satisfactory
procedures for prosecuting the said action.
(d) Unless otherwise provided for herein, any recoveries or settlement
fees received from suits or settlements involving an action initiated pursuant
to section 8.01(a) or (b) shall be paid to the party which initiated such suit
or action in accordance with Section 8.01(a) or (b), and shall be for such
party's own use and benefit. Any recoveries or settlement fees received from
suits or settlements involving an action initiated pursuant to section 8.01(c)
shall, unless otherwise agreed to by the parties in writing, be to the joint
benefit of Licensor and Licensee after payment of all expenses (including all
legal fees).
8.02 LICENSOR'S DEFENCE OF INFRINGEMENT CLAIMS
-----------------------------------------
(a) Licensor will defend or (at its option) settle, any claim or
action brought against Licensee to the extent that it is based on a claim that
the CitySearch Systems infringes any copyright, patent, trade secret, trademark
or contractual right enforceable in Canada or the United States of any third
person (a "Claim") and indemnify Licensee against damages and costs awarded
against Licensee by a court of competent jurisdiction by final order from which
the appeal is taken or the time for appealing has expired; provided that
Licensee notifies Licensor promptly in writing of same; and provided further
that Licensee permits Licensor thereof to defend, compromise or settle the
Claim, and at Licensor's expense provides all
-23-
available information assistance and authority to enable Licensor to do so.
Licensor shall be responsible for paying for any compromises or settlements with
respect to Claims, provided that Licensor shall not be liable to reimburse
Licensee for any compromise or settlement made by Licensee without Licensor's
prior written consent. Licensor shall not be liable to reimnburse License for
any legal fees or expenses incurred by Licensee in connection with any Claim.
Licensee shall have no authority to settle any Claim on behalf of Licensor.
(b) Should the CitySearch Systems or any part thereof become, or in
Licensor's sole opinion be likely to become, the subject of a claim of
infringement, misappropriation, or violation of any Intellectual Property Right
(an "Infringement Claim") Licensor shall (i) procure for Licensee, at no cost to
Licensee the right to continue to use the CitySearch System or component which
is the subject of the Infringement Claim, (ii) replace or modify the CitySearch
System (or the component thereof which is the subject of the Infringement Claim)
at no cost to Licensee with a functionally equivalent system or component, or
(iii) if none of the forgoing alternatives are reasonably practical in
Licensor's sole judgement, if requested to do so by Licensee remove the
component that is the subject of the Infringement Claim and refund all license
fees paid by Licensee related to such component.
(c) Licensor shall have no liability for any Claim to the extent that
it is based on (i) the use of other than the latest release and version of any
Intellectual Property provided to Licensee, (ii) the use or combination of the
CitySearch Systems with software, hardware or any other product not provided by
Licensor or recommended or approved in writing by Licensor, or (iii) any
Licensee Improvement to the CitySearch Systems or use of the CitySearch Systems
other than as authorized herein or as described or recommended by Licensor in
the CitySearch Documentation.
(d) Except as expressly provided herein, this Section 8.02 states the
entire liability of Licensor and Licensee's sole remedies with respect to any
Infringement Claim.
8.03 LICENSEE'S DEFENCE OF INFRINGEMENT CLAIMS
-----------------------------------------
(a) Licensee will defend or (at its option) settle, any claim or
action brought against Licensor to the extent that it is based upon a claim that
any Licensee Improvement or Content displayed or accessible to consumers using
the Toronto CitySearch Information Service infringes or violates an Intellectual
Property Right or contractual right enforceable in Canada or the United States
(a "Claim") of any third person and indemnifies Licensor against damages and
costs awarded against Licensor by a court of competent jurisdiction by final
order from which no appeal is taken or the time for appealing has expired,
provided that Licensor notifies Licensee promptly in writing of same; and
provided further that Licensor permits Licensee to defend, compromise or settle
the Claim and at Licensee's expense provides all available information,
assistance and authority to enable Licensee to do so. Licensee shall be
responsible for paying for any compromises or settlements with respect to
-24-
Claims, provided that Licensee shall not be liable to reimburse Licensor for any
compromise or settlement made by Licensor without Licensee's prior written
consent. Licensee shall also not be liable to reimburse Licensor for any legal
fees or expenses incurred by Licensor in connection with any Claims. Licensor
shall have no authority to settle any Claim on behalf of Licensee.
(b) Licensee shall have no liability for any Claim to the extent that
it is based on any Improvement made by Licensor to the Licensee Improvement or
Content or for the use thereof other than related to a CitySearch Information
Service.
(c) Except as otherwise provided herein, this Section 8.03 states the
entire liability of Licensee and Licensor's sole remedies with respect to any
Claim.
ARTICLE NINE - WARRANTIES AND DISCLAIMERS
-----------------------------------------
9.01 WARRANTY
--------
(a) During the term of this Agreement, Licensor will make commercially
reasonable efforts to correct or provide Licensee with a workaround for the
failure of the CitySearch Systems to conform in all material respects to the
description thereof in the CitySearch Documentation and provide Licensee with
replacement media in the event there are defects in materials or workmanship in
the media upon which the CitySearch Systems are provided. Licensor shall have no
obligations under this Section 9.01 with respect to any changes, modifications
or enhancements made by Licensee to the CitySearch Systems or to any part of the
CitySearch Systems affected by any such changes, modifications or enhancements,
except as may be specifically agreed to by Licensor and Licensee in a Work Plan
or other agreement of the parties in writing.
(b) Licensor Warrants to Licensee that all Services will be performed
with reasonable skill and care and by persons qualified to provide the Services.
Licensor also warrants that to its knowledge, the Licensed Programs do not
contain any viruses, locks or codes which are intended to interfere with their
use.
(c) In the event of Licensor's material failure to comply with its
obligations under Section 9.01(a) that results in the Toronto Star CitySearch
System being unavailable to the public after the Launch and Licensee having
given written notice of same to Licensor in sufficient detail to enable
Licensor to reproduce the problems experienced by Licensee. Licensor agrees that
if such problems are not substantially remedied (or a work-around provided to
Licensee therefor) within two (2) days following receipt of the notice, that
Licensor will, if requested to do so by Licensee and subject to Licensor's
security and confidentiality requirements, permit up to two (2) members of
Licensee's technical staff to
-25-
access the Source Materials pertaining to the problem at the business premises
of Licensor to assist Licensor in resolving the problem.
9.02 ELECTRONIC ACCESS
-----------------
Licensee agrees to provide Licensor with access to the computer upon which
the CitySearch Systems are installed, used, or accessed, to perform its
obligations hereunder, subject to compliance with Licensee's security and
confidentiality policies. Access to the said systems shall include access by
physical and direct remote electronic access means. To facilitate such access,
Licensee agrees to establish and maintain, at its own expense, during the term
of this Agreement all reasonable communication equipment and related software
and other items reasonably requested by Licensor to enable Licensor to access
and use the said systems. The remote electronic access shall be available at all
times (twenty-four (24) hours seven (7) days a week), except for scheduled
maintenance and downtimes due to failures of the systems. Licensee shall also
reimburse Licensor for its costs of establishing and maintaining electronic
links with Licensee including without limitation any equipment purchased by
Licensor specifically to provide Services to Licensee hereunder and, monthly
line charges.
9.03 DISCLAIMER OF WARRANTY
----------------------
(A) LICENSOR EXPRESSLY DISCLAIMS ALL REPRESENTATIONS, WARRANTIES AND
CONDITIONS EXPRESS OR IMPLIED NOT CONTAINED HEREIN, INCLUDING REPRESENTATIONS,
WARRANTIES AND CONDITIONS OF QUALITY, PERFORMANCE, MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, TITLE AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR
FROM A COURSE OF DEALING OR USE OF TRADE. LICENSOR DOES NOT REPRESENT OR WARRANT
THAT (I) THE OPERATION OF THE CITYSEARCH SYSTEMS WILL BE ERROR FREE OR
UNINTERRUPTED OR (II) ALL PROGRAMMING ERRORS CAN BE CORRECTED OR FOUND IN ORDER
TO BE CORRECTED.
(b) Licensee is responsible for taking precautionary measures to
prevent the loss or destruction of Content such as, for example, making regular
backups and verifying the results obtained from using the CitySearch Systems.
9.04 LIMIT OF LIABILITY
------------------
(a) For breach or default by Licensor of any of the provisions of this
Agreement, or in respect of any claim arising herefrom or related hereto,
Licensor's entire liability, regardless of the form of action, whether based on
contract or tort, including negligence, shall be [*]
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-26-
[*]
(B) IN NO EVENT WILL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL,
INDIRECT, OR CONSEQUENTIAL LOSS OR DAMAGE, LOST BUSINESS REVENUE, LOSS OF
PROFITS, LOSS OF DATA, FAILURE TO REALIZE EXPECTED PROFITS OR SAVINGS OR ANY
CLAIM AGAINST THE OTHER PARTY BY ANY OTHER PERSON (EVEN IF THE PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE). THE LIMITATION OF
LIABILITY IN THIS SECTION 9.04(B) SHALL NOT APPLY TO ANY CLAIM TO THE EXTENT
THAT THE CLAIM IS BASED UPON A BREACH OR DEFAULT BY LICENSEE OF ARTICLES 2, 5,
OR 6, OR SECTIONS 7.01, 7.02, OR 8.03. THE LIMITATION OF LIABILITY IN THIS
SECTION 9.04(B) SHALL NOT APPLY TO ANY CLAIM TO THE EXTENT THAT THE CLAIM IS
BASED UPON A BREACH OR DEFAULT BY LICENSOR OF SECTIONS 5.06(A) (LICENSOR'S
REFUSAL TO ESTABLISH AN ESCROW AGREEMENT WITH AN INDEPENDENT SOURCE CODE AGENT
AS REQUIRED IN SECTION 5.06(A)) 7.01 OR 8.02.
(C) LICENSOR SHALL BE LIABLE TO LICENSEE AS EXPRESSLY PROVIDED IN THIS
AGREEMENT BUT SHALL HAVE NO OTHER OBLIGATION, DUTY, OR LIABILITY WHATSOEVER IN
CONTRACT, TORT OR OTHERWISE TO LICENSEE INCLUDING ANY LIABILITY FOR NEGLIGENCE,
THE LIMITATIONS, EXCLUSIONS AND DISCLAIMERS IN THIS AGREEMENT SHALL APPLY
IRRESPECTIVE OF THE NATURE OF THE CAUSE OF ACTION, DEMAND, OR ACTION BY
LICENSEE, INCLUDING BUT NOT LIMITED TO BREACH OF CONTRACT, NEGLIGENCE, TORT,
OR ANY OTHER LEGAL THEORY AND SHALL SURVIVE A FUNDAMENTAL BREACH OR BREACHES
OR THE FAILURE OF THE ESSENTIAL PURPOSE OF THIS AGREEMENT OR OF ANY REMEDY
CONTAINED HEREIN.
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-27-
9.05 LIMITATION PERIOD
-----------------
Neither party may bring an action, regardless of form, arising out of or
related to this Agreement more than [*] after the cause of action has arisen or
the date of discovery of such cause, whichever is later.
9.06 CALIFORNIA FRANCHISE DISCLAIMER
-------------------------------
The parties agree that neither this Agreement nor the business
relationship established hereunder will be construed as granting a franchise.
The parties warrant to one another that they have consulted counsel in reviewing
and negotiating this Agreement and have concluded that no business plan or
franchise fees are conveyed or provided for in this Agreement or otherwise by
the relationship established hereby or by the relationship between the parties.
ARTICLE TEN - TERM AND TERMINATION
----------------------------------
10.01 TERM
----
The term of this Agreement shall commence on the Effective Date and
shall continue until [*]
10.02 TERMINATION
-----------
(a) This Agreement may be terminated (each ground for termination below
is referred to here as an "Event of Default"):
(i) at any time by mutual written consent of Licensee and
Licensor;
(ii) by notice from one party to the other in the event the other
party becomes insolvent, makes an assignment for the benefit
of its creditors, ceases operation, a receiver is appointed
for the other party or its property, or the other party
becomes subject to bankruptcy or receivership proceedings;
(iii) by a party immediately upon notice to the other party in the
event of any material breach or default by the other party of
any provision in this Agreement, if the party shall have
given written notice to the other party of such breach or
default and such breach or default shall not have been
remedied within thirty (30) days after receipt of such
written notice;
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-28-
(iv) by a party effective immediately upon notice to the other
party in the event of a material breach of the provisions
of Article 7 by the other party, if the party shall have
given written notice to the other party of such material
breach and such material breach shall not have been remedied
within ten (10) days after receipt of such written notice:
(v) by Licensor in the event Licensee or Torstar Corporation is
in breach of the Non-Competition Agreement and such breach
has not been remedied within thirty (30) days after receipt
of such written notice or by Licensee in the event Licensor
or 1217554 Ontario Inc. is in breach of the Non-competition
Agreement and such breach has not been remedied within
thirty (30) days after receipt of such written notice; or
(vi) by Licensor upon written notice to Licensee in the event
Licensee's use of CitySearch Systems or Source Materials or
any part thereof exceeds the License granted to Licensee or
is in contravention of any of the provisions of Article 2 or
Article 6 or Section 5.06, if such use or contravention has
not been remedied with twenty (20) days after receipt of
such written notice.
(b) The failure of any party to terminate this Agreement for any of
the reasons specified in Section 10.02, or in this Agreement, shall not in any
way be deemed a waiver of such party's rights in respect thereof or otherwise
limit its rights to enforce the obligations of the other party hereunder.
10.03 EFFECT OF TERMINATION BY LICENSOR
---------------------------------
Upon the termination of this Agreement by Licensor pursuant to Section
10.02 or by the parties pursuant to Section 10.02(i), the rights, powers,
privileges, and licenses including the License granted to Licensee shall
immediately terminate. Without limiting the generality of the foregoing, upon
any such termination, Licensee shall have no right to continue to use the
CitySearch Systems, to receive or use any Licensor Improvements, or to use
the Licensed Trade-marks.
10.04 RETURN OF INTELLECTUAL PROPERTY
-------------------------------
Subject to the provisions of Section 10.05(b), upon the termination of
this Agreement, Licensee shall cease all use of the CitySearch Systems
(including the Source Materials) and Licensee shall return to Licensor all of
Licensor's Confidential Information (including Source Materials) and
CitySearch Systems in its possession, power or control.
-29-
10.05 SURVIVAL
--------
(a) The termination of this Agreement by Licensor under Section 10.02
or by the parties pursuant to Section 10.02(i) shall not limit or otherwise
affect the respective rights and obligations of the parties under Articles 4, 7
and 9 and Sections 5.03, 6.02, 6.03, 6.04(d), 10.03, 10.04, 11.01, 11.03, 12.02,
or 12.03 or any other right or obligation of the parties hereunder accrued prior
to the date of the termination.
(b) The termination of this Agreement by Licensee under Section 10.02
shall not limit or otherwise affect the respective rights and obligations of the
parties under Articles 4, 7 and 9 and Sections 5.03, 5.04, 5.06, 6.02, 6.03,
6.04(d), 8.03, 11.01, 11.03, 12.02, or 12.03 or any other rights and obligations
of the parties hereunder accrued prior to the date of the termination. Further,
and notwithstanding any termination of this Agreement by Licensee pursuant
to Section 10.02 (the date of the occurrence of any such event is referred to
here as the "Licensee Termination Date"), the following shall occur:
(i) the License in respect of the CitySearch System conferred by
Article 2 shall continue with respect to the version and
release thereof delivered to Licensee as of the Licensee
Termination Date subject to the provisions and restrictions
set out in Article 2 related to the use of the CitySearch
Systems;
(ii) Licensee shall have no right to receive or use any Licensor
Improvements made after the Licensee Termination Date;
(iii) Licensee's License to use the Licensed Trade-Marks shall
terminate. Licensor's obligations under Section 6.01(b) shall
terminate, and Licensee shall make no further use of any of
the Licensed Trade-Marks other than for the minimum period,
not to exceed thirty (30) days, which is necessary for
Licensee to remove all reference to the Licensed Trade-Marks
from the Toronto Star CitySearch Information Service (provided
that the Quality Standards shall be met during this period);
(iv) Licensee's License to use the CitySearch Systems conferred by
Section 2.01 shall become non-exclusive and Licensor, subject
to the restrictions contained in the Non-Competition
Agreement, shall be entitled to, and may authorize third
persons to, use the CitySearch Systems in the Exclusive
Territory or outside thereof for the purpose of establishing
and operating a CitySearch Information Service;
-30-
(v) Licensor shall have no further obligations to Licensee
hereunder to provide any Services, or to provide Licensee
with the warranty support described in Section 9.01;
(vi) Licensee shall not have any right to take or continue any
action against any person for the infringement of any
Intellectual Property Right in connection with the use of
the CitySearch Systems or the Licensed Trade-Marks; and
(vii) Licensor shall be entitled to terminate any of the rights of
Licensee which pursuant to this Section 10.05(b) shall have
expressly survived a termination of this Agreement by
Licensee pursuant to Section 10.02(a), upon the occurrence of
an Event of Default which would have entitled Licensor to
terminate this Agreement pursuant to Section 10.02(a) and the
provisions of Section 10.05(a) shall apply mutatis mutandis
upon the termination of the said rights.
10.06 SALE OF PARTNERSHIP INTEREST
----------------------------
Upon the sale by Licensor of its Partnership Interest pursuant to
Section 8.02 or Section 8.03 of the Partnership Agreement, or upon the
dissolution of the Partnership pursuant to Section 8.03(7) of the Partnership
Agreement by reason of an event of default by CitySearch U.S.A. as described in
Section 8.03(1) of the Partnership Agreement (the date of the occurrence of any
such event is referred to here as the "Sale Date"), the following shall occur:
(i) the License in respect of the CitySearch System conferred by
Article 2 shall continue with respect to the version and
release thereof delivered to Licensee as of the Sale Date,
subject to the provisions and restrictions set out in
Article 2 related to the use of the CitySearch Systems;
(ii) Subject to Sub-section (v) below, Licensee shall have no
right to receive or to use any Licensor Improvements made
after the Sale Date;
(iii) Licensee's License to use the Licensed Trade-Marks shall
terminate. Licensor's obligations under Section 6.01(b) shall
terminate, and Licensee shall make no further use of any of
the Licensed Trade-Marks, other than for the minimum
period, not to exceed thirty (30) days, which is necessary
for Licensee to remove all reference to the Licensed
Trade-Marks from the
-31-
Toronto Star CitySearch Information Service (provided that
the Quality Standards shall be met during this period);
(iv) Licensee's License to use the CitySearch Systems conferred by
Article 2 shall become non-exclusive and Licensor, subject to
the restrictions contained in the Non-Competition Agreement,
shall be entitled to, and may authorize third persons to, use
the CitySearch Systems in the Exclusive Territory or outside
thereof for the purpose of establishing and operating a
CitySearch Information Service;
(v) Licensor shall have no further obligations to Licensee
hereunder to provide any Services, or to provide Licensee with
the warranty support described in Section 9.01; however, upon
being requested to do so by Licensee, Licensor agrees to
negotiate with Licensee in good faith a renewal of the said
obligations and a license to use Licensor Improvements
developed after the Sale Date upon terms to be mutually agreed
upon by the parties including terms pertaining to the payment
of reasonable license fees for the use of Licensor Improvements
and for the provision of Services, provided that Licensor shall
have no obligation to enter into any such agreement in the
event Licensor has ceased to or has plans to cease to operate
CitySearch Information Services; and
(vi) the provisions of Sections 3.01-3.04, 6.01, 6.04(a), 8.01
(other than Licensee's obligations to assist Licensor), 9.01
and 9.02 shall cease to apply.
ARTICLE ELEVEN - GENERAL
------------------------
11.01 FURTHER ASSURANCES
------------------
Each party shall from time to time execute and deliver all such
further documents and instruments and do all acts and things as the other party
may reasonably require (at the requesting party's expense) to effectively carry
out or better evidence or perfect the full intent and meaning of this Agreement.
11.02 PUBLIC ANNOUNCEMENTS
--------------------
Subject to applicable law or stock exchange regulation, no public
announcement or press release concerning this Agreement shall be made by any
party without the prior
-32-
consent and joint approval of the other party. If a party wishes to issue a
press release it shall provide a draft thereof to the other party at least
three days prior to its intended release and shall consider the reasonable
comments of the other party with respect to the press release. Any failure to
provide comment within a period of thirty (30) days with respect to a draft
press release shall be deemed to constitute consent to the release thereof.
11.03 DISPUTE RESOLUTION
------------------
Any dispute, disagreement, controversy, question or claim arising out
of or relating to this Agreement shall be settled in accordance with the
provisions of Section 11.03 (Dispute Resolution) of the Partnership Agreement.
11.04 ENTIRE AGREEMENT
----------------
This Agreement together with the Partnership Agreement, the Non-
Competition Agreement and the Assignment Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and cancels and supersedes any prior understandings and agreements between the
parties hereto with respect thereto. There are no representations, warranties,
terms, conditions, undertakings or collateral agreements, express, implied or
statutory, between the parties other than as expressly set forth in this
Agreement.
11.05 FORCE MAJEURE
-------------
If the performance of this Agreement, or any obligation thereunder
except the making of payments hereunder is prevented, restricted, or interfered
with by reason of; fire, flood, earthquake, explosion or other casualty or
accident or act of God; strikes or labour disputes; inability to procure or
obtain delivery of parts, supplies, power, equipment or software from suppliers,
war or other violence; any law, order, regulation, ordinance, demand or
requirement of any governmental authority; or any other act or condition
whatsoever beyond the reasonable control of the affected party, the party so
affected, upon giving prompt notice to the other party, shall be excused from
such performance to the extent of such prevention, restriction or interference;
provided, however, that the party so affected shall take all commercially
reasonable steps to avoid or remove such cause of non-performance and shall
resume performance hereunder with dispatch whenever such causes are removed.
11.06 AMENDMENT AND WAIVER
--------------------
No modification of or amendment to this Agreement shall be valid or
binding unless set forth in writing and duly executed by the parties hereto and
no waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided, shall be limited to the
specific breach waived.
-33-
11.O7 ASSIGNMENT
----------
[*] This Agreement shall enure to the benefit of and be binding upon the
successors and permitted assigns of the parties. Either party may also assign
this Agreement with the prior written consent of the other party.
11.08 NOTICES
-------
Any demand, notice or other communication to be given in connection
with this Agreement shall be given in writing and shall be given by personal
delivery or by transmittal by electronic means of communication addressed to
the recipient as follows:
To Licensee:
c/o Torstar Corporation
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
----------
with a copy to:
Toronto Star Newspapers Limited
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice-President, Strategic Planning
----------
To Licensor:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-34-
U.S.A.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
---------
or to such other address, electronic communication number or individual as may
be designated by notice given by any party to the other. Any communication
shall be conclusively deemed to have been given on the day or actual delivery
thereof if such day is a Business Day and the communication is delivered or
transmitted during the normal business hours of the recipient and on the
Business Day during which normal business hours next occur if given after such
hours on any day.
11.09 GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
IN WITNESS WHEREOF the parties have executed this Agreement.
CITYSEARCH INCORPORATED
Per: [SIGNATURE ILLEGIBLE]
-------------------------------
1217554 ONTARIO INC.
Per: [SIGNATURE ILLEGIBLE]
-------------------------------
SCHEDULE A
CITYSEARCH TECHNOLOGY SYSTEMS
CITYSEARCH TECHNOLOGY SYSTEMS
-----------------------------
The CitySearch Technology Systems are composed of four systems:
the CitySearch client
CityServer
the CitySearch Staging Server
CityWorks
These systems form a CitySearch technology infrastructure which supports
content management and on-line delivery mechanisms. Licensee will have access
to hardware configuration documentation and initial setup support for all
CitySearch Technology Systems. Licensee will be responsible for acquiring,
configuring all third party hardware and software components required by the
CitySearch Systems before the actual delivery and setup of the CitySearch
Systems begins.
Licensee understands that the CitySearch Systems are not "shrink wrapped" and
will require significant setup time and tailoring for Exclusive Territory.
Customization Service activities are likely to include but not be limited to:
. Canadian editorial content such as record categorization model and
associated keywords/synonyms.
. Canadian interface " look and feel".
. Acquisition and incorporation of telephone directory listings data for
the Exclusive Territory.
. Acquisition and incorporation of mapping data and associated rendering,
server and geocoding software related to the Exclusive Territory.
The actual components and configuration of the CitySearch Systems will change
over time in response to market conditions, externally available hardware and
software, and internally generated improvements. The CitySearch Systems
delivered to Licensee initially will be based upon those used in the San
Francisco deployment.
The following is a summary of the CitySearch Technology Systems components to be
delivered to Licensee:
CitySearch Client
-----------------
-2-
CitySearch Interface: This is the interface the user sees and includes icons,
--------------------
buttons, the CitySearch map and other graphic design elements. This is the
interface through which the user initiates tasks to be performed by the
CityServer.
The CitySearch Client application is capable of initiating keyword, spatial and
temporal search on the CitySearch database resident on the CityServer. This
proprietary search interface is included as part of the CitySearch interface.
CityServer
----------
Proprietary Server Components: CityServer consists of a collection of custom
-----------------------------
server software modules which provide the core functionality for the on-line
delivery of the CitySearch application. The proprietary components manage
communications between the CitySearch client application, the Informix/Illustra
database and the CitySearch Staging server.
Customized front end to the Informix/Illustra database: CitySearch has chosen
to use Informix/Illustra, an object relational database which provides features
including text, web, 2D and geo-spacial DataBlades (an Illustra technical term)
as well as proprietary temporal search components developed by CitySearch.
Subject to the provisions of Article 10, any Licensor Improvements to the
proprietary software developed by CitySearch designed to be used with
Informix/Illustra will be delivered to Licensee. The Informix/Illustra database
licenses must be sublicensed from Licensor in consideration of the payment by
Licensee to Licensor of the license fee payable to third parties plus expenses
of Licensor in entering into the sublicense agreement.
CitySearch Staging Server.
-------------------------
Proprietary Server Software: The CitySearch Staging Server is a collection of
---------------------------
proprietary software modules which provide server support for the development
and maintenance of the CitySearch service for one or more markets. The
CitySearch Staging Server manages communications between the CityServer, the
Informix/Illustra database and components of the City works system.
Customization of the Informix/Illustra database: CitySearch has chosen to build
-----------------------------------------------
the CitySearch Staging Server around Informix/Illustra, an object relational
database. The Informix/Illustra database licenses must he acquired pursuant to
a sublicense from Licensor in consideration of the payment by Licensee to
Licensor of the license fee payable to third parties plus expenses of Licensor
in entering into the sublicense agreement.
-3-
Subject to the provisions of Article 12 of the Agreement, any Licensor's
Improvements to the proprietary software developed by CitySearch designed to be
used with Informix/Illustra will be delivered to Licensee.
City works:
-----------
Content Creation and Maintenance: The City works system includes tools and
--------------------------------
support software needed to create and maintain the content of the CitySearch
system. Most of the tools run under Windows 95 or Windows NT on PC platforms.
The proprietary tools InfoWorks and SiteWorks operate in conjunction with third
party software (Photoshop and Word, for example). The PC platforms, TCP/IP
networking components, operating systems, and required third party software need
to be obtained and configured by Licensee before City works can be put in place.
Other tools such as EditWorks are used in conjunction with a local database
in order to generate and maintain editorial content. The local database requires
the Windows NT Server operating system and SQL Server.
SCHEDULE B
CITYSEARCH BUSINESS SYSTEMS
CITYSEARCH BUSINESS SYSTEMS
---------------------------
CitySearch has developed a scalable business model to enable rapid adoption of
the service. Licensee will have full access to the CitySearch consumer and
vendor roll-out plan aimed at building a durable franchise. Specifically, the
business systems made available to Licensee will include the following
components (much of which is embedded in staff member's experience base).
Community selection approach: CitySearch has developed a statistically weighted
----------------------------
model of the US which "weights" nearly one hundred cities (through CitySearch
developed value criterion) as to their potential for the CitySearch service The
methodology and weighting used in this model will, in most cases also apply in
the Exclusive Territory.
Market segmentation/prioritization approach: This approach helps determine which
-------------------------------------------
suburbs and shopping areas to cover within a target market, and in what order.
Categorization of community information: This involves market prioritization for
---------------------------------------
certain high leverage categories such as entertainment, education, government,
health/human services, sports/recreation, arts and culture. The CitySearch
philosophy involves providing comprehensive coverage of both community and
business information in a dense local area, and attempts to insures that the
information is meaningful and easy to use for the end user.
City organization approach: CitySearch will provide its approach to how to work
--------------------------
with various organizations within a community. CitySearch will advise as to how
Licensee first establishes sponsorships from the important merchant associations
and government groups.
Statistics/surveys and accompanying methodology: Statistical data has been
-----------------------------------------------
accumulated and continues to be accumulated on existing CitySearch markets. In
addition, CitySearch has conducted numerous focus groups and consumer surveys
around information content, user interfaces, search functionality, and other
essential subjects. This documentation will be provided to Licensee.
Sales force training, techniques and approaches: CitySearch has organized a
-----------------------------------------------
fluid sales team structure to maximize speed of entry and capture. This
commissioned, flexible sales force is supported by a custom designed training
program and a demo-assisted sales process. CitySearch will provide education as
to its methods of operating the sales force training through secondments of the
Exclusive Territory staff to the US, supplemented by appropriate telephone/e-
mail interaction.
SCHEDULE C
DESIGNATED LOCATIONS
▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
SCHEDULE D
LICENSED TRADE-MARKS
The Licensed Trade-Marks are as follows:
The following CitySearch Logo:
[LOGO APPEARS HERE]
In the event Licensor becomes the owner of or acquires license rights to use the
trade-marks "CitySearch" in Canada, the said trade-▇▇▇▇, upon notice from
Licensor to Licensee shall be deemed to be included in this Schedule D.
SCHEDULE E
COST PLUS FEE SCHEDULE
Calculation Methodology:
-----------------------
Source
------
Employee Salary actual, at time of billing
Overhead actual, at time of billing (based on generally
applied CitySearch formulae)
Benefits 30% of salary
Equipment Costs actual, at time of billing (based on generally
applied CitySearch formulae)
Total Costs sum of above
Administrative Fee 2.5% of Total Costs
-------------------
Total cost + fee Total Costs + Administrative fee
EXAMPLES OF CALCULATION AT 11/30/96, FOR ILLUSTRATIVE PURPOSES ONLY
-2-
===================================================================================================================================
EXAMPLE - FOR ILLUSTRATIVE PURPOSES ONLY FOR WORK PERFORMED IN THE USA *
----------------------------------------------------------------------------------------------------------------------------------
TECHNICAL RANGE PER YEAR RANGE PER hour ***
----------------------------------------------------------------------------------------------------------------------------------
ITEM LOW/BASE HIGH Low/Base High
----------------------------------------------------------------------------------------------------------------------------------
Employee Salary **
----------------------------------------------------------------------------------------------------------------------------------
Technical $ 96,000 $ 144,000 $ 46 $ 69
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Overhead 22266 22266 11 11
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Benefits 30% 28800 43200 14 21
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Equipment 25938 25938 12 12
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Total Cost $173,004 $ 235,404 $ 83 $113
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Administrative Fee 30% 51901 70621 25 34
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Total Cost + Fee $224,906 $ 306,026 $108 $147
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
EXAMPLE - FOR ILLUSTRATIVE PURPOSES ONLY
-----------------------------------------------------------------------------------------------------------------------------------
Design Range per year Range per hour
-----------------------------------------------------------------------------------------------------------------------------------
Item LOW/BASE HIGH LOW/BASE High
-----------------------------------------------------------------------------------------------------------------------------------
Employee Salary * *
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Design $ 54,000 $ 90,000 $ 26 $ 43
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Overhead 22266 22266 11 11
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Benefits 30% 16200 21000 8 13
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Equipment 12872 12872 6 6
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Total Cost $105,338 $152,138 $ 51 $ 73
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Administrative Fee 30% 31601 45641 14 22
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Total Cost + Fee $136,939 $197,779 $ 66 $ 95
-----------------------------------------------------------------------------------------------------------------------------------
* All amounts in U S dollars.
** Salaries may vary from time to time.
*** The range/per hour may vary from time to time based upon changes in
salaries paid to employees.
SCHEDULE F
ASSIGNMENT AGREEMENT
LICENSE AND SERVICES AGREEMENT AMENDING AGREEMENT
-------------------------------------------------
THIS AGREEMENT made as of December 31, 1997;
BETWEEN :
CITYSEARCH, INC., a corporation incorporated under the laws of Delaware
(hereinafter referred to as the "Licensor")
OF THE FIRST PART,
-and-
CITYSEARCH CANADA INC., a corporation incorporated under the laws of
Ontario (hereinafter referred to as the "Licensee")
OF THE SECOND PART.
WHEREAS the Licensor and the Licensee entered into a license and services
agreement made as of February 17, 1997 (the "License Agreement ") with respect
to the use by Licensee of the CitySearch Systems in the Exclusive Territory for
the purpose of establishing and operating the Toronto Star CitySearch
Information Service;
AND WHEREAS the Licensor and Licensee desire to amend the terms of the
License Agreement;
NOW THEREFORE this agreement witnesses that, for good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
each of the parties), the parties covenant and agree as follows:
1. The License Agreement is amended by deleting in its entirety the fourth
recital on page 1.
2. The License Agreement is amended by deleting in its entirety Section 4.01,
3. The License Agreement is amended by adding the following as a new section
4.08;
"4.08 Annual Royalty Fee
------------------
Licensee shall pay to Licensor an annual royalty fee in an amount and on
terms to be agreed upon by Licensee and Licensor by January 31, 1998."
-2-
4. The License Agreement is amended by deleting the second sentence of section
11.07 and substituting the following therefor:
"Licensee may grant a sublicense of its rights hereunder to the
Partnership, either with or without the royalty obligation provided for in
Section 4.08."
5. This agreement amends the License Agreement. This agreement and the License
Agreement shall be read, interpreted, construed and have effect as, and
shall constitute, one agreement with the same effect as if the amendments
made by this agreement had been contained in the License Agreement as of
the date of this agreement. All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in
the License Agreement.
6. This agreement and the amendments to the License Agreement contained herein
shall be effective as of and from the date of this agreement. The License
Agreement, as amended by this agreement, is hereby confirmed by Licensor
and Licensee.
7. This agreement shall enure to the benefit of and be binding upon each of
the Licensor and Licensee and their respective successors and permitted
assigns.
8. This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
9. This agreement may be executed in counterparts. Each executed counterpart
shall be deemed to be an original and all counterparts taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF the parties have executed this agreement as of the date
first referred to above.
CITYSEARCH, INC.
Per: [SIGNATURE ILLEGIBLE]
-----------------------------
CITYSEARCH CANADA INC.
Per: [SIGNATURE ILLEGIBLE]
-----------------------------