CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THE
FOLLOWING EXHIBIT MARKED WITH AN *
EXHIBIT 10.15
ANCHOR BRAND
CONTENT PROVIDER AGREEMENT
BETWEEN
AT&T CORP.
AND
IVI PUBLISHING, INC.
TABLE OF CONTENTS
RECITALS......................................................................1
A. Certain Definitions.....................................................1
B. License to Exploit the Content..........................................6
C. Production and Delivery of Content......................................8
D. AT&T Service Functions..................................................9
E. Advertising...........................................................10
F. Electronic Commerce on the Network.....................................10
G. Third Party Content....................................................11
H. Revenue Sharing and Payment...........................................11
I. Anchor Brand Content Provider..........................................14
J. Anchor Brand Council...................................................15
K. Marketing..............................................................16
L. Non-Solicitation.......................................................18
M. Subscriber Information.................................................18
N. CD-ROMs, Books, and Derivative Products................................19
O. Provider's Web Site....................................................20
P. Option to Purchase Provider Shares....................................20
Q. Provider Content Plan.................................................24
R. Term...................................................................24
STANDARD TERMS...............................................................26
1. Content Standards......................................................26
2. Software License, Training.............................................26
3. Ownership..............................................................29
4. Provider Trademark Graphics............................................29
5. Payments...............................................................29
6. Representations and Warranties by Provider.............................31
7. Representations and Warranties by AT&T.................................33
8. Exclusions and Limitations.............................................34
9. Indemnification; Insurance.............................................35
10. Confidentiality; Press Releases.......................................38
11. Suspension Due to Force Majeure.......................................39
12. Protection of Copyrights and Trademarks...............................39
13. Termination...........................................................39
14. No Obligation to Exploit..............................................41
15. General Provisions....................................................42
EXHIBITS
Exhibit 1 - AT&T Advertising Standards
Exhibit 2 - Content Editorial Standards
Exhibit 3 - Content Technical Standards
Exhibit 4 - Delivery Schedule
Exhibit 5 - List of Titles
Exhibit 6 - Provider Trademarks
Exhibit 7 - Provider Responsibilities
Exhibit 8 - Customer Care Guidelines
Exhibit 9 - Subscription Agreement
Exhibit 10 - Registration Rights Agreement
Exhibit 11 - Provider's Advertising Standards
Exhibit 12 - Exclusivity Exceptions
Exhibit 13 - Distribution Agreement
ANCHOR BRAND
CONTENT PROVIDER AGREEMENT
This Anchor Brand Content Provider Agreement including the Standard
Terms and Exhibits 1 through 13 attached hereto and made a part hereof
(collectively, this "Agreement") dated as of October 30, 1995, is by and between
AT&T Corp. ("AT&T"), a corporation organized under the laws of the State of New
York with offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇; and
IVI Publishing, Inc. ("Provider"), a corporation organized under the laws of the
State of Minnesota, with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
RECITALS
AT&T desires to introduce a portfolio of on-line computer services to
its customers which will include a Health and Wellness service or service
segment ("Health and Wellness Service") and to exploit as part of its Health and
Wellness Service certain Content owned or licensed by Provider; and Provider
desires to make such Content available to AT&T pursuant to the terms of this
Agreement.
For good and valuable consideration, receipt of which is hereby
acknowledged, AT&T and Provider hereby agree as follows:
A. Certain Definitions
As used herein, the following terms shall have the meaning herein
ascribed:
(a) "Adjusted Transaction Revenues": Gross revenues from Provider
Transactions after deducting (i) applicable taxes, other than
taxes on net income, (ii) refunds actually paid by Provider,
and (iii) shipping and handling charges.
(b) "Advertising Fees": All revenues received for advertising,
less advertising agency commissions and reasonable credits
allowed in accordance with customs of trade in the advertising
business, provided that if the advertiser pays for such
advertising with products or services, the fair market value
of such products or services, as determined by AT&T in its
reasonable discretion, shall be included within the definition
of "Advertising Fees".
(c) "Anchor Brand Content Provider": A content provider on the
AT&T Service designated as such by AT&T in accordance with
Section I.
(d) "Anchor Brand Council": The organization described in Section
J hereof.
(e) "AT&T Advertising Standards": The advertising standards set
forth on Exhibit 1, attached hereto, as modified by AT&T from
time to time, in its reasonable discretion.
(f) "AT&T Affiliate": Any parent, subsidiary or affiliate of AT&T
or a United States entity in which AT&T owns directly or
indirectly at least fifty percent (50%) of the equity thereof
or a foreign entity in which AT&T owns directly or indirectly
at least twenty percent (20%) of the equity thereof.
(g) "AT&T Service": Any on-line service or other interactive
service offered to the general public (regardless of the
distribution medium or mechanism utilized, but excluding CD
ROMs and other interactive products) which is owned or
operated by AT&T, an AT&T Affiliate or a foreign third party
pursuant to a license from AT&T or an AT&T Affiliate,
including without limitation, the AT&T on-line service planned
for introduction in 1996. If the operations of any AT&T
Service are merged, combined, or joined, in whole or in part,
with the operations of any other on-line service or services,
the term AT&T Service shall be deemed to embrace such merged,
combined, or joined services, subject to Section 15(b) of the
Standard Terms.
(h) "AT&T Software": The software described in Section 2(a) of the
Standard Terms.
(i) "Beta Phase Milestone". The milestone so described in the
Delivery Schedule.
(j) "Click": An action by a Subscriber on a computer or other
communication device causing access to and display of a page
of content from an AT&T Service or any segment or sub-segment
from an AT&T Service.
(k) "Content": The health and wellness information made available
by Provider for use in the AT&T Service as provided herein,
including without limitation the publications and titles
listed on Exhibit 5, attached hereto, and any chat, chat
forums and hosted bulletin boards offered by Provider and also
including without limitation, all updates, upgrades,
modifications, and other versions of any of the above.
(l) "Content Editorial Standards": The content editorial standards
set forth on Exhibit 2, attached hereto, as modified by AT&T
from time to time, in its reasonable discretion.
(m) "Content Technical Standards": The technical standards set
forth on Exhibit 3, attached hereto, as modified by AT&T, from
time to time, in its reasonable discretion.
(n) "Customer Care Guidelines": The Customer Care Guidelines set
forth on Exhibit 8, attached hereto, as modified by AT&T from
time to time, in its reasonable discretion.
(o) "Delivery Notice": A notice from AT&T to the Provider that
Provider has failed in a material respect to deliver
substantially all of the Content scheduled to be delivered on
either the Beta Phase Milestone or the General Availability
Milestone.
(p) "Delivery Schedule": The schedule for delivery of Content by
Provider attached hereto as Exhibit 4.
(q) "Derivative Products and Services": Products and services, in
any media which substantially consist of elements of Content
created exclusively for and exhibited on the AT&T Service
(including any fictional characters developed as part of the
Content appearing on the AT&T Service and any unique
formatting or packaging of the Content) and any products or
services which are updates, enhancement, revisions, sequels,
prequels, continuations, or modifications thereof.
(r) "Download": The transfer of displayed or transmitted Content
onto a storage medium.
(s) "Electronic Commerce Operations". In connection with the sale
of products and/or services pursuant to this Agreement,
electronic shopping capabilities, order processing, credit
card processing (including verification), order fulfillment
(including locating, shipping & handling and invoicing of
products or services), processing of returns, collection of
revenues from product and/or service sales and payment thereof
to Provider, inventory management and customer service with
respect to the above.
(t) "Exclusivity Period": The period defined in Section B(c) of
this Agreement.
(u) "Event of Force Majeure": Any event as defined in Section II
of the Standard Terms.
(v) "Foreign Revenues": Any revenues collected by AT&T or an AT&T
Affiliate that are derived from the AT&T Service outside the
United States. Foreign Revenues shall be net of any
commissions, agency fees, distribution fees or other similar
fees paid to foreign distributors or agents other than an AT&T
Affiliate.
(w) "General Availability Milestone". The milestone so described
in the Delivery Schedule.
(x) "Health and Wellness Segment" or "Health and Wellness
Service": The service or segment of the AT&T Service dedicated
to the community of interest associated with health and
wellness.
(y) "Net Provider Revenues": Provider Revenues after deducting
revenues from the sale of products, but including revenues (i)
from the Downloading of Content pursuant to Subsection H(e)(i)
and (ii) from the sale of CD-ROM titles through various AT&T
distribution channels and marketing programs as described in
Section N of this Agreement.
(z) "Net User Revenues": The user fees/charges, collected by AT&T,
associated with utilizing the Service, segment, or sub-segment
as the case may be, (including such Net User Revenues which
are Foreign Revenues, but excluding network and access fees
and any other charges associated with transport to the
service) after deducting any applicable agency commissions,
finder fees or bounties associated with bringing Subscribers
to the AT&T Service, credit card charges and taxes (other than
taxes on net income). If the user pays for such use with
products or services , the fair market value of such products
or services, as determined by AT&T in its reasonable
discretion, shall be included within the definition of "Net
User Revenues".
(aa) "Person": Any corporation, p artnership or other business unit
or entity recognized under law, or a natural person.
(bb) "Premium Content": Shall mean any Content for which
Subscribers will be charged a fee over and above the fee for
use of the basic AT&T Service.
(cc) "Provider Advertising Standards": The Advertising Standards
set forth on Exhibit 11, attached hereto as modified by
Provider, from time to time, in its reasonable discretion.
(dd) "Provider Brands": Mayo Foundation For Medical Education and
Research, Massachusetts Medical Society, and any other entity
licensing rights to Content to Provider.
(ee) "Provider Revenues": All revenues collected by Provider in
connection with this Agreement, regardless of its form or
nature (and without any deductions or subtractions, except
taxes (other than taxes on net income); refunds actually paid,
and shipping and handling charges), including without
limitation, Provider Revenues from the purchase or sale of
CD-ROM titles through various AT&T distribution channels and
marketing programs as described in Section N of this Agreement
and any such Provider Revenues which are Foreign Revenues.
(ff) "Provider Trademarks": The trademarks set forth on Exhibit 6
attached hereto, as modified by Provider from time to time
solely to the extent reasonably required to reflect Provider's
acquisition of additional rights or Provider's loss or
modification of rights to use trademarks associated with the
Content.
(gg) "Provider Transaction": The sale of merchandise or services by
Provider, its representatives, agents or distributors in
direct response to an offering made by Provider on the AT&T
Service, provided that, with respect to the sale of Derivative
Products or Services, any such sale shall be a Provider
Transaction regardless of how or by whom such merchandise or
services are sold or whether or not such sale is in direct
response to an offering made by Provider on the AT&T Service.
(hh) "Revenue Targets": The following annual minimum targets for
Net Provider Revenues, each of which shall be individually
referred to herein as a Revenue Target, beginning with the
year 1997:(i) Four Million Dollars ($4,000,000) for 1997, (ii)
Four Million Dollars ($4,000,000) for 1998, and (iii) Five
Million Dollars ($5,000,000) for 1999, which amounts shall be
cumulative (i.e., the cumulative target for 1997 and 1998
combined is Eight Million Dollars ($8,000,000); the cumulative
target for 1997, 1998 and 1999 combined is Thirteen Million
Dollars). For example if Net Provider Revenues in 1997 are Six
Million Dollars ($6,000,000), the Revenue Target for 1998
would be achieved with 1998 Net Provider Revenues of Two
Million Dollars ($2,000,000). To the extent AT&T pays any
money to Provider pursuant to Subsection B(c)(i) (e.g.,
Revenue Target shortfall payments) such payment shall not be
subject to refund by Provider or offset against any amounts
owed to Provider by AT&T or any AT&T Affiliate.
(ii) "Sponsor": The host, promoter or sponsor of a bulletin board,
forum, chat session, special event or other similar activity.
(jj) "Sponsorship": The hosting, promotion or sponsoring of a
bulletin board, chat forum, special event or other similar
activity.
(kk) "Sponsorship Revenues": Fees paid by a Sponsor, after
deduction of applicable agency commissions and charges as are
reasonable and customary, in connection with chat, a chat
forum, bulletin board or special event for which such Sponsor
receives some promotional or other consideration. If the
Sponsor pays for such Sponsorship with products or services,
the fair market value of such products or services, as
determined by AT&T in its reasonable discretion, shall be
included within the definition of "Sponsorship Revenues".
(ll) "Subscriber": Any Person with authorized access to the Health
and Wellness Service or any other AT&T Service.
B. License to Exploit the Content.
(a) License Grant. Subject to the terms of this Agreement, Provider
hereby grants to AT&T a worldwide license to use, review, copy, display and
perform (privately and publicly), publish, transmit, distribute, sublicense and
exploit the Content in whole or in part, separately or together with the
Provider Trademarks, on or in connection with the promotion or marketing of an
AT&T Service in any medium, now known or hereafter devised, including, without
limitation, in connection with any demonstration, promotion, advertisement or
publicity of an AT&T Service. Without limitation of the foregoing, the rights
granted to AT&T include the following: (i) the right to enter the Content and
Provider Trademarks into AT&T's files, storage space and databases; (ii) the
right to store, process, retrieve and transmit and to authorize others to store,
process, retrieve and transmit the Content and Provider Trademarks on or in
connection with an AT&T Service in any manner or media, now known or hereafter
discovered or devised; (iii) the right to reasonably juxtapose and combine the
Content with materials owned and/or controlled by AT&T, and/or by third parties
for the purpose of promoting and advertising the AT&T Service; and (iv) the
right to offer to Subscribers the option of printing and Downloading for
personal use all or any portion of the Content and the Provider Trademarks to
the Subscriber's computer hard drive or onto a separate disk.
(b) Exclusivity. Except as set forth on Exhibit 12, the license granted
to AT&T herein shall be exclusive. Provider warrants and represents that except
as set forth on Exhibit 12; (i) the Content has not previously been used,
displayed, performed, published, transmitted, distributed, advertised,
demonstrated, promoted or otherwise exploited, directly or indirectly, by or to
the public, in connection with any on-line computer service or any other form of
interactive on-line service ; and (ii) during the Exclusivity Period, the
Content will not be used, displayed, performed, published, transmitted,
distributed, advertised, demonstrated, promoted or otherwise exploited in any
manner, directly or indirectly, by or to the public, in connection with any
on-line computer service or any other form of interactive service except as
specifically authorized by Section O(b), below. AT&T and Provider acknowledge
and agree that breach of this Section by Provider shall entitle AT&T to
injunctive relief for breach thereof.
(c) Exclusivity Period. The Exclusivity Period shall commence on the
date of this Agreement and continue throughout the term hereof
*
(d) Guaranteed Minimum Revenue. As consideration for the exclusive
rights granted to AT&T pursuant to Section B(b), AT&T agrees to guarantee
minimum aggregate 1995 and 1996 Provider Revenues of Two Million Dollars
($2,000,000), payable as an advance against such 1995 and 1996 Provider Revenues
(excluding advertising and sponsorship revenues allocated exclusively to
Provider, pursuant to Section H(d)(i)), payable as follows:
(i) One Million Dollars within thirty (30) days of the date of
this Agreement; and
(ii) One Million Dollars within ten (10) days of January 1, 1996.
AT&T shall make the payments recited in this Subsection B(d) regardless of
whether or not AT&T offers the AT&T Service or the Health and Wellness Service.
C. Production and Delivery of Content.
Provider shall furnish the Content to AT&T in accordance with the
Delivery Schedule. Thereafter, during the Term of this Agreement: (i) Provider
shall create, update and maintain the Content (and without limitation, perform
in all material respects the obligations specified on Exhibit 7 in connection
therewith); and (ii) provide the Content for publication and distribution on the
AT&T Service. If within thirty (30) days after receipt by Provider of a Delivery
Notice from AT&T, Provider fails in any material respect to deliver
substantially all of the Content referenced in such Notice, Provider shall, upon
written demand by AT&T, pay AT&T the sum of * in liquidated damages,
which shall not be a penalty, for each full month in which such Content is not
delivered up to a maximum aggregate amount of * .
In addition, if Provider does not deliver to AT&T any Content whatsoever prior
to January 1, 1997 (assuming delivery of such Content is required pursuant to
the Delivery Schedule), Provider shall, upon written demand by AT&T, pay AT&T an
additional sum of * in liquidated damages, which shall not be a
penalty. The foregoing notwithstanding, Provider shall not be required to pay
any liquidated damages pursuant to this Section C to the extent Provider's
failure to deliver Content results from any action or omission by AT&T or any
AT&T Affiliate.
D. AT&T Service Functions
Subject to Section 14 of the Standard Terms, AT&T shall:
(a) Use reasonable efforts to establish, maintain and operate the
Health and Wellness Service and AT&T Service at its expense pursuant to the
terms of this Agreement;
(b) Host content on servers and provide specifications, and support for
providers to transport their content to the AT&T Service; including the
maintenance of file or storage space reasonably sufficient to store current
Content made available by Provider for a reasonable time consistent with
commercially prudent operation of the AT&T Service, provided AT&T shall not be
obligated to archive Content that has been updated, replaced or becomes
obsolete;
(c) Provide such development and authoring tools and such other AT&T
Software (including any updates, upgrades and enhancements of such) as AT&T
determines in its sole discretion to make generally available to Anchor Brand
Content Providers (subject to Section 2(b) of the Standard Terms) for the
purpose of allowing Provider to design, develop, launch, test and implement its
Content on the AT&T Service;
(d) Provide such training as AT&T determines in its sole discretion to
make generally available to Anchor Brand Content Providers , subject to Section
2(d) of the Standard Terms, on terms that are at least as favorable as the terms
generally available to other Anchor Brand Content Providers;
(e) Provide network access to the AT&T Service via AT&T WorldNet
Service or such other Internet access service as may be offered by AT&T, as well
as general access to users from other Internet access providers;
(f) Provide various operational features for a competitive on-line
service which may include Information access, on-line communications and
applications, file copy services, electronic shopping capabilities, E-Mail, chat
forums, bulletin boards, and Internet standard security for transactions and
user data input, all subject to AT&T's right to determine, in its sole
discretion, the features that will be available with the AT&T Service and the
date of availability;
(g) Provide customer care, including the following functions:
(i) Delineate and promulgate all Customer Care
Guidelines,
(ii) Develop and maintain the Subscriber registration
process,
(iii) Develop and perform all general billing functions,
including collection of usage data, generation of
billing statements and management of billing
inquiries,
(iv) Provide support for customer questions, including
managing customer inquiries relating to content and
referring inquiries to content providers when
appropriate,
(v) Monitor and maintain system performance, and
(vi) Develop and perform quality control functions; and
(h) *
E. Advertising.
AT&T shall have the right to enter into agreements with advertising
sales agencies which grant them the right to sell advertising on the AT&T
Service, including advertising for inclusion in any page or screen which
includes the Content. AT&T or any such advertising sales agency engaged by AT&T
shall be entitled to obtain advertisements for inclusion on any screen which
contains Provider's Content, provided such advertisements: (i) shall comply with
the AT&T Advertising Standards and Provider Advertising Standards; (ii) shall
not be juxtaposed with or appear to be part of the Content; and (iii) shall make
no statement to the effect or which implies that Provider, any Provider Brand or
any owner or creator of the Content certifies, endorses or guarantees the AT&T
Service, any segment thereof, any other provider of content or service or any
other service or product.
*
F. Electronic Commerce on the Network
Subject to Section D of this Agreement and Section 14 of the Standard
Terms, Provider may offer products and/or services for sale on the AT&T Service,
provided that: (i) the Provider complies in all material respects with the
Customer Care Guidelines, and (ii) such offers are approved in advance by AT&T,
which approval shall not be unreasonably withheld. In the event an offer is not
rejected by AT&T within ten (10) business days after it is presented to AT&T by
Provider for approval it will be deemed approved. In addition once an offer is
approved, such approval shall apply to subsequent offers of product(s) and
service(s) that are substantially similar. AT&T shall have responsibility for
providing Electronic Commerce Operations with respect to the sale of any
products or services pursuant to this Section F (consistent with technical
capabilities of an Internet based on-line service) at a standard consistent with
AT&T's customer care practices.
G. Third Party Content
*
H. Revenue Sharing and Payment.
(a) *
(b) Chat, Chat Forums and Hosted Bulletin Boards. AT&T shall receive
100% of the Net User Revenues derived from chat, chat forums and hosted bulletin
boards which are not sponsored by Provider, Provider Brands or third party
Sponsors provided by Provider. If and when chat, chat forums and hosted bulletin
boards become available as part of the Health and Wellness Service, Provider,
Provider Brands and third party Sponsors provided by Provider will be permitted
to host chat forums and bulletin boards pursuant to the practices, procedures
and guidelines reasonably established by AT&T. AT&T will receive * and the
Provider shall receive * of the Net User Revenues (after the deduction of any
applicable agency commissions and transport/access charges) derived from chat
forums and bulletin boards hosted by Provider, Provider Brands or third-party
Sponsors provided by Provider.
(c) Content Downloading. AT&T shall receive * and the Provider shall
receive * of all revenues derived from charges to Subscribers for the
Downloading of Content (other than (i) the Content Downloading charges
established by Provider, and (ii) Adjusted Transaction Revenues in connection
with Provider Transactions).
(d) Sponsorship Revenues and Advertising Fees.
(i) Prior to 1997 or until Six Months after the general
availability of the Health and Wellness Service to Subscribers
(whichever is later): Provider shall receive * of the Advertising
Fees and Sponsorship Revenues derived from advertising and Sponsorship
located on the screens and pages furnished by Provider.
(ii) Beginning January 1, 1997 or after the expiration of Six
Months after the general availability of the Health and Wellness
Service to Subscribers (whichever is later): AT&T shall receive * of
the Advertising Fees and Sponsorship Revenues generated from the Health
and Wellness Service or other AT&T Service which are derived from
advertising and Sponsorship not located on the screens and pages
furnished by Provider. AT&T shall receive * and Provider shall
receive * of Advertising Fees and Sponsorship Revenues derived from
advertising and Sponsorship located on the screens and pages furnished
by Provider.
(e) Electronic Commerce Fees. AT&T shall receive (i) * of the
Adjusted Transaction Revenues derived from Provider Transactions
transacted by electronic delivery (that is, by Downloading) from the
Health and Wellness Service or other AT&T Service (provided that in the
event the Downloading does not reflect a legitimate electronic
transaction but merely reflects the Downloading of Content in order to
circumvent Content user fees, such revenues shall be allocated pursuant
to Section H(a) or H(c) as appropriate); (ii) * of Adjusted Transaction
Revenues derived from Provider Transactions where the Provider
Transaction is in direct response to the offer on the AT&T Service,
(e.g., mail, telephone, fax, electronic mail or any other means of
direct response), but the transaction is not completed by electronic
delivery from the AT&T Service, provided that AT&T shall also receive
100% of any shipping and handling charges reasonably established by
AT&T for such transaction (provided that AT&T provides * of the
Electronic Commerce Operations); (iii) * of Adjusted Transaction
Revenues from the sale of any Derivative Product or Service in direct
response to an offer on the AT&T Service (provided that AT&T provides *
of the Electronic Commerce Operations), and (iv) * of Adjusted
Transaction Revenues from the sale of any Derivative Product or
Service, regardless of where or how sold, other than by direct
response. In the event that AT&T does not provide * of the Electronic
Commerce Operations, the parties will negotiate in good faith a
reasonable downward adjustment to the amounts specified in items (ii)
and (iii) above, based upon the cost of the operations not being
performed by AT&T.
(f) Other Revenues. AT&T shall receive * and Provider shall
receive * of any other revenues, net of applicable agency
commissions, charges, fees and taxes (other than taxes on net income),
derived from exploitation of the Content on the AT&T Service which are
not described elsewhere in Section H, excluding: (i) the payments made
pursuant to Section B(d), (ii) the Revenue Target shortfall payments
made pursuant to Subsection B(c)(i), and (iii) revenues from the sale
of products or services by Provider that are not covered by Section
H(e).
(g) Beta Testing. Notwithstanding any provision in this
Section H, AT&T reserves the right not to charge any fees to
Subscribers during any reasonable period of beta testing, as determined
by AT&T in its reasonable discretion.
I. Anchor Brand Content Provider
*
J. Anchor Brand Council
*
K. Marketing.
(a) Upon request by AT&T, Provider shall promptly furnish to
AT&T, such camera-ready graphics, artwork and/or other materials now in
existence or which come into existence during the Term, as Provider
determines to furnish in its reasonable discretion, for the advertising
and promotion of the Content, and its availability on the AT&T Service,
to be used by AT&T and by third parties authorized by AT&T, solely for
the purpose of advertising and/or promoting the AT&T Service; provided,
however, that no change or modification can be made to such materials
without Provider's prior approval, which approval shall not
unreasonably be withheld, and further provided, that in the event such
a request for approval is not rejected within ten (10) business days
after submission to Provider, it will be deemed approved.
AT&T shall promptly furnish to Provider such camera ready graphics,
artwork and/or other materials now in existence or which come into
existence which pertain (i) generically to the AT&T Service or to the
Health and Wellness Service or (ii) to another segment of the AT&T
Services if it has relevance to the Health and Wellness Service, and
which it provides to other Content Providers for the purpose of
advertising and promoting the Health and Wellness Service and/or the
AT&T Service, to be used by Provider solely for the purpose of
advertising and/or promoting the AT&T Service, the Health and Wellness
Service or the content available on the AT&T Service. No change or
modification can be made to such materials without AT&T's prior
approval, which approval shall not be unreasonably withheld, provided
that, in the event such a request for approval is not rejected within
ten (10) business days after submission to AT&T, it will be deemed
approved.
(b) Provided that the Health and Wellness Service is made
generally available to Subscribers by AT&T, Provider shall actively
promote and market the Content and its availability on the AT&T
Service, as soon as reasonably practicable and after reasonable
collaboration with AT&T. Provider shall secure and pay for, at its sole
cost and expense, advertising, in any media, of the Content and its
availability on the AT&T Service and shall mention the Health and
Wellness Service or the AT&T Service in all such advertising, and in
all media packaging of Derivative Products. Provider may determine in
its discretion the amount of advertising and the allocation of
advertising among different media. Upon AT&T's request, Provider shall
furnish AT&T with a description of its advertising program no more
often than once every six months during the Term. The content of all
such advertising shall be subject to the prior written approval of
AT&T, which shall not be unreasonably withheld. No advertising or any
promotion shall make any use of AT&T's name or logo, or the name or
logo of the AT&T Service or any segment thereof, or any other property
of AT&T, without AT&T's prior written approval, provided, however, that
approval to use the name of the AT&T Service and/or the Health and
Wellness Service shall not be unreasonably withheld. If AT&T does not
reject any advertising or promotional content or materials within ten
(10) business days after it has been submitted to AT&T by Provider for
approval, such advertising or promotional content or materials shall be
deemed approved.
If AT&T shall approve any advertising or promotion or the use of the
name or logo of the AT&T Service or any segment thereof, Provider shall
not be required to secure additional approval from AT&T in connection
with future advertising, promotion and use that is substantially
similar to that which has been approved, provided that Provider shall
use reasonable efforts to furnish AT&T with copies of all such
advertising prior to their appearance in any media or through any
retail or other public presentation.
(c) *
(d) AT&T will consult with Provider concerning co-marketing
opportunities for the Health and Wellness Service and Provider's
Content as well as the organization, direction and other aspects of the
AT&T Service. In addition, subject to Section K(e) below, AT&T will
include references to Provider and Provider Trademarks in advertising
that includes the names of other Anchor Content Providers of the Health
and Wellness Service.
(e) If AT&T, in its discretion, elects to create and use
marketing materials which mention the Content and/or the Provider
Trademarks (other than any marketing materials in which the Provider
Trademarks appear in whole or in part in a list of content providers on
the AT&T Service), AT&T shall furnish Provider an opportunity to review
and approve such materials prior to their initial publication or
distribution, which approval shall not be unreasonably withheld. If
such materials have been approved by Provider, AT&T shall have the
right to create, publish and distribute, without additional approval,
subsequent marketing materials which mention Provider, the Content
and/or the Provider Trademarks in a substantially similar manner,
provided that AT&T shall use reasonable efforts to furnish Provider
with copies of all such marketing materials prior to their appearance
in any media or through any retail or other public presentation. If
Provider does not reject marketing materials within ten (10) business
days after it has been submitted to Provider by AT&T for approval, it
shall be deemed approved.
(f) The Provider hereby agrees to use reasonable commercial
efforts to cause the Provider Brands to provide advertising and
promotional support for the Health and Wellness Service and the Content
(g) Provider and AT&T will consult with each other concerning
co-marketing activities with the Provider Brands.
L. Non-Solicitation
AT&T agrees that, during the Exclusivity Period, it shall not directly
or indirectly solicit or enter into any negotiations or agreements with the
Provider Brands concerning the possibility of such Provider Brands providing
content for the AT&T Service other than through Provider. Provider agrees that
during the Exclusivity Period, it shall not directly or indirectly (i) provide
any health and wellness content for use on an on-line service, or (ii) solicit
or enter into any negotiations or agreement with any on-line service provider
concerning the possibility of providing health and wellness related content for
such service (excluding a Private Label Service as defined in Exhibit 12).
M. Subscriber Information
At Provider's request, AT&T will provide Provider, without charge, with
information ("General Profile Information"), as determined by AT&T in its
reasonable discretion, that describes the habits, usage patterns and/or
demographics of Subscribers as a group, subgroup or a class of Subscribers.
Information identifying the name or address (electronic or physical) of a
Subscriber ("Individual Subscriber Information") will be provided to Provider,
without charge, to the extent readily available, solely in connection with
Provider Transactions and solely for Provider's internal use in connection with
product or service registration, accounting, research and marketing. At AT&T's
discretion, Individual Subscriber Information may be provided to Provider,
without charge, solely for the purpose of enabling Provider to design, implement
or create a marketing program whereby Provider makes a special offer or
communication relative to its products and/or services to a targeted group of
Subscribers, provided the provisions of Section K are met and subject to each
individual Subscriber's right to elect not to receive any such offers or
communications.
Individual Subscriber Information related to Provider Transactions which is
collected by AT&T shall be Confidential Information as defined in, and pursuant
to the provisions of Section 10 of the Standard Terms. In addition, AT&T will
not disclose any General Profile Information or Individual Subscriber
Information which is derogatory to or critical of Provider or any officer,
director, agent or employee of Provider.
General Profile Information shall not be used by Provider except in connection
with providing Content for the AT&T Service or in connection with products for
which AT&T derives revenues pursuant to Section H, except that Provider may
disclose such Information, pursuant to appropriate nondisclosure agreements, to
potential advertisers, Provider Brands, and Sponsors for the purpose of
soliciting advertising, additional Content and Sponsorship for the AT&T Service.
All other information provided by AT&T to Provider pursuant to this Section M
shall be solely for the use of Provider pursuant to the terms of this Section M
and shall not be disclosed by Provider to any person or entity which could
reasonably be construed as being a competitor of the AT&T Service or other AT&T
telecommunications services.
N. CD-ROMs, Books, and Derivative Products
(a) Provider agrees to make available to AT&T all Health and
Wellness titles it produces in CD-ROM format, book format or other
published format. AT&T will use the CD ROMs (and may use the books and
other publications) as part of its marketing program to promote the
Health and Wellness Service; provided that AT&T shall have no
obligation to include in its marketing programs any such CD-ROM
products which contain a browser other than or in addition to the
Internet Browser Software (as defined in Section 2(c)) licensed to
Provider pursuant to this Agreement.
(b) The price for CD ROMs, books and Derivative Products used
for promotional purposes will be *
(c) The price for CD ROMs, books and Derivative Products used
with AT&T's marketing programs and retail channels, (e.g., phone
centers, retail outlets, etc.) will be *
(d) AT&T may elect in its sole discretion to use the CD ROMs,
books and Derivative Products in any of its marketing programs
including, without limitation:
(i) Distribution through its phone center stores and
retail outlets; and/or
(ii) Distribution in connection with any direct
marketing promotion by AT&T.
O. Provider's Web Site
(a) Provider shall be permitted to create health and wellness
programming and publish such programming (including Content) on its own
web site prior to the launch of the Health and Wellness Service,
provided that:
(i) all Content on Provider's web site is transferred
immediately and exclusively to the AT&T Service to be
available by the General Availability Milestone for the Health
and Wellness Service; and
(ii) Provider's web site is co-branded in a manner
reasonably agreed upon by Provider and AT&T.
(b) After the launch of the Health and Wellness Service,
Provider will have the right to create and/or maintain its own web site
for any corporate purpose which is not competitive with the Health and
Wellness Service, except Provider may provide technical support for the
Content and promote and advertise the Content and the Health and
Wellness Service on its web site.
P. Option to Purchase Provider Shares
(a) The Provider hereby grants to AT&T the right to purchase
common stock of the Provider pursuant to the following terms:
(i) During the period commencing on the date of
execution of this Agreement and continuing until March 31,
1996, AT&T shall have the right (the "First Option"), upon
written notice to the Provider given during such period of
time, to purchase on the First Option Date (as defined below),
for the price of Ten Dollars ($10.00) per share, that number
of shares of common stock of the Provider par value $.01 per
share (the "Common Stock") which shall equal up to 10% of the
issued and outstanding Common Stock of the Provider after
taking into account the exercise of this First Option. The
First Option Date shall mean the 10th day after the notice
pursuant to this Section P(a)(i) is deemed to be given.
(ii) During the period commencing on April 1, 1996
and continuing until March 31, 1997, AT&T shall have the right
(the "Second Option"), upon written notice to Provider given
during such period of time to make an additional purchase on
the Second Option Date (as defined below), for the price of
Fourteen Dollars ($14.00) per share, that number of shares of
Common Stock which together with Common Stock purchased on the
First Option Date, regardless if held at that time, shall
equal up to 20% of the authorized, issued and outstanding
Common Stock, after taking into account the exercise of this
Second Option. The Second Option Date shall mean the 10th day
after the notice pursuant to this Section P(a)(ii) is deemed
to be given.
Notwithstanding anything to the contrary in this Section P(a),
the First Option and the Second Option shall expire
automatically upon the termination of the Exclusivity Period,
for any reason, pursuant to the terms of this Agreement unless
the notice given by Provider pursuant to Section B(c) of this
Agreement expressly provides that such Options will remain in
full force and effect.
(b) The exercise of the options set forth in Sections P(a)(i)
and P(a)(ii) shall be effected pursuant to subscription agreements, the
form of which is attached hereto as Exhibit 9. In the event that AT&T
exercises either or both of its options pursuant to Sections P(a)(i)
and P(a)(ii), and acquires and maintains a minimum of seven and
one-half percent (7.5%) of the outstanding Common Stock on a fully
diluted basis, then, during the Exclusivity Period only, Provider will
use all reasonable efforts to support and recommend the election of one
AT&T nominee to Provider's Board of Directors, including placing AT&T's
nominee on the management's recommended list of nominees for Provider's
Board of Directors in Provider's proxy statement . From the date of
execution of this Agreement until the expiration of the options granted
in Sections P(a)(i) and P(a)(ii) above, AT&T shall be permitted to
conduct such due diligence investigations of the Provider and any of
its subsidiaries as shall be reasonable for a company such as Provider.
(c) If AT&T exercises either the First Option or Second
Option, in whole or in part, it shall be accorded certain registration
rights pursuant to the Registration Rights Agreement attached hereto as
Exhibit 10.
(d) If Provider plans to register any of its Common Stock
pursuant to the Securities Act of 1933, as amended, or any similar or
successor statute, at any time while AT&T has outstanding and
unexercised options to purchase Provider's Common Stock pursuant to
Section P, Provider agrees to give AT&T written notice of its planned
registration at least thirty (30) days prior to the effective date of
such registration. AT&T acknowledges and agrees that neither (i) the
failure by Provider to deliver to AT&T the notice described in this
Section P(d) nor (ii) the failure by Provider (for any reason
whatsoever) to file a registration statement in connection with, or
otherwise follow through on any aspect of such planned registration
(including, without limitation, registering any shares thereunder),
shall, in either case, give rise to or result in any default by
Provider under this Agreement or give rise to or result in any
liability on the part of Provider to AT&T or any AT&T Affiliate;
provided that, if Provider shall not register its shares after having
notified AT&T of a plan to do so pursuant to this Subsection P(d), AT&T
shall have the right to cancel any exercise of its options pursuant to
Subsection P(a) made after receipt of such notification by Provider.
AT&T hereby acknowledges and is aware that it may receive certain
material non-public information concerning Provider pursuant to this
Subsection P(d) and that it will advise any of its officers, directors,
employees, agents and representatives receiving any such information
through AT&T that the United States securities laws prohibit any person
who has received from an issuer material, non-public information
concerning the matters which are the subject of this Agreement from
purchasing or selling securities of such issuer or from communicating
such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell
such securities.
(e) The purchase price of the shares of Common Stock for which
an option may be exercised under this Section P, shall be subject to
adjustment from time to time as set forth below.
If at any time the Provider shall:
(i) subdivide its outstanding shares of Common Stock
into a larger number of shares of such Common Stock; or
(ii) combine its outstanding shares of Common Stock
into a smaller number of shares of such common stock;
the option price to purchase shares of Common Stock shall be
adjusted proportionately so that the total purchase price for
all shares being purchased will equal the total purchase price
that would have applied to acquire the same percentage of
Provider's outstanding shares of Common Stock immediately
prior to the event. The adjustments required by this Section
P(e) shall be made whenever and as often as any specified
event requiring such an adjustment shall occur. For the
purpose of any such adjustment, any specified event shall be
deemed to have occurred at the close of business on the date
of its occurrence.
In case the Provider shall reorganize its capital, reclassify
its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving
corporation or where there is any change whatsoever in, or
distribution with respect to, the outstanding Common Stock of
the Provider), or sell, transfer or otherwise dispose of all
or substantially all of its property, assets or business to
another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or
disposition of assets, (i) shares of Common Stock of the
successor or acquiring corporation or of the Provider (if it
is the surviving corporation) or (ii) any cash, shares of
stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or
acquiring corporation ("Other Property") are to be received by
or distributed to the holders of common stock of the Provider
who are holders immediately prior to such transaction (a
"Restructuring Event"), then Provider shall notify AT&T at
least thirty (30) days prior to such Restructuring Event and
either (i) AT&T shall exercise its Options pursuant to this
Section P prior to the occurrence of any such Restructuring
Event, or (ii) such Options shall expire at the end of such
thirty (30) day notice period.
(f) The rights granted to AT&T pursuant to this Section P are
not assignable or transferable (directly or indirectly) by AT&T, other
than to a United States entity which is an AT&T Affiliate.
Q. Provider Content Plan.
On or before September 30, of each year, Provider in consultation with
AT&T, shall provide AT&T with a detailed content plan (the "Content Plan") for
the following year with sufficient detail to assist AT&T in determining how to
augment the other areas of the Health and Wellness Service. Provider's Content
Plan shall be developed by Provider in consultation with AT&T and will provide
reasonable detail of the types and areas of Content, associated timeframes for
availability, types of (and to the extent known, specific) forums and speakers;
and premium Content. Provider shall periodically review and update the Content
Plan as appropriate to reflect the most comprehensive, accurate, and timely data
available, and shall promptly provide AT&T with any updates to its Content Plan.
R. Term.
The initial term of this Agreement (the "Initial Term") shall commence
on the date of this Agreement and shall continue for a period of four (4) years.
After the Initial Term, this Agreement shall continue in effect for an
additional term (the "Additional Term") of indefinite duration until terminated
by either party upon at least one (1) year's prior written notice to the other
party which notice may be given at any time following the third anniversary of
this Agreement (the Initial Term and Additional Term together constituting the
"Term" of this Agreement).
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date set forth above.
AT&T CORP. IVI PUBLISHING, INC.
By: By:
Title: Title:
Date: Date:
STANDARD TERMS
1. Content Standards.
(a) Content Standards. AT&T hereby delegates to Provider sole control
of the Content; and Provider shall manage, renew, create, delete, edit and
otherwise control the editorial content of the Content, all subject to this
Subsection (a). Provider agrees that the Content will comply in all material
respects with the Content Editorial Standards. AT&T generally will not review
the Content prior to uploading the Content onto the AT&T Service, except: (i)
AT&T personnel may review the Content at the time of creation of a prototype
design for display of the Content on the Service; and (ii) prior to the
initiation of service, AT&T personnel may review the initial Content to ensure
that the Content complies with the Content Editorial Standards.
(b) Removal of Content. Without limitation of the foregoing, AT&T shall
have the right to remove from the AT&T Service at any time, without prior notice
to Provider, any portion of the Content that in AT&T's sole opinion does not
comply in all material respects with the Content Editorial Standards or which in
AT&T's sole judgment is otherwise objectionable. AT&T shall use reasonable
efforts to notify Provider promptly following any removal of any Content from
the AT&T Service which shall include an explanation of the reason for any such
removal.
(c) Viruses. In the event that any virus or destructive feature is
found in or furnished with any Content, Provider will use its reasonable best
efforts, upon learning that such situation exists, to immediately eliminate the
virus or destructive feature. Provider shall notify AT&T as to the existence of
any such virus or destructive feature immediately upon discovery thereof, and
AT&T shall have the right (at the Provider's expense to the extent reasonably
incurred ) to take any steps it deems necessary to eliminate the virus or
destructive feature. Notwithstanding any provision of this Subsection (c),
Provider shall not have any responsibility with respect to any virus which
originates from software furnished to Provider by or on behalf of AT&T other
than to notify AT&T of the existence of any such virus upon the discovery
thereof.
2. Software License, Training.
(a) The AT&T Software. AT&T is the developer, owner or licensee of
software development tools and/or utilities which allow for the creation,
delivery, editing, manipulation and configuration of the Content as it will
appear on the AT&T Service including, without limitation, all applications
programming interfaces, scripting language in which AT&T has intellectual
property rights, all code written in any such scripting language (regardless of
format, including source, object or executable) and other interfaces related
thereto (collectively the "AT&T Software").
(b) AT&T Software License. If AT&T requires Provider to use proprietary
AT&T Software that is necessary to enable Provider to perform its duties
hereunder and to monitor the AT&T Service , AT&T shall provide such proprietary
AT&T Software to Provider free of charge for the limited purposes specified
below in this Subsection 2(b). If AT&T requires Provider to use non-proprietary
AT&T Software that is necessary to enable Provider to perform its duties
hereunder and to monitor the AT&T Service, AT&T shall use its reasonable efforts
to cause the licensor of such non-proprietary AT&T Software to grant to Provider
a license to such Software, for the limited purposes specified below in this
Subsection 2(b), on terms which shall be as favorable to Provider as the terms
generally available to the other Anchor Brand Content Providers. AT&T in its
sole discretion may also elect to make other AT&T Software available to Provider
for the limited purposes specified below in this Subsection 2 (b). To the extent
AT&T makes AT&T Software available to Provider, AT&T hereby grants Provider a
nonexclusive, royalty free limited license to use such AT&T Software solely to
(i) develop a design for the Content on the AT&T Service (the "Content Design")
and (ii) create, deliver, edit, manipulate, configure and test the Content for
use on the AT&T Service. The Content Design will include introductory screens
and organization of the Content. AT&T shall have the right to approve the
Content Design prior to publication of the Content on the AT&T Service, which
approval shall not be unreasonably withheld. A Content Design will be deemed
approved if it is not rejected by AT&T within ten (10) days after it is
submitted to AT&T for approval. The foregoing license shall terminate upon
termination of this Agreement for any reason.
(c) Internet Browser Software. AT&T shall grant to Provider a
non-exclusive license to include AT&T's Internet browser software (the "Internet
Browser Software") in products produced and/or marketed by the Provider if and
only to the extent AT&T is permitted to grant such a license pursuant to the
terms of the license agreement between AT&T and the licensor of such Internet
Browser Software. During the Exclusivity Period, such a license shall be on a
royalty free basis, provided , that if AT&T is required to pay a royalty to any
unrelated third party for making or distributing copies of the Internet Browser
Software (a "Copy Royalty"), Provider shall pay to AT&T an amount no greater
than such Copy Royalty for the products containing copies thereof. AT&T's
license from Netscape Communications Corporation with respect to the version
which it is custom designing for AT&T currently does not contain a Copy Royalty
charge. During the Exclusivity Period, if AT&T creates and/or owns its own
Internet Browser Software it shall license such Software to Provider on a
royalty free basis. Provider shall execute a Distribution Agreement, a form of
which is attached hereto as Exhibit 13, prior to receiving the license for the
Internet Browser Software from AT&T. THE INTERNET BROWSER SOFTWARE SHALL BE
PROVIDED BY AT&T AS IS WITHOUT ANY REPRESENTATIONS OR WARRANTIES OR INDEMNITIES
EXPRESSED OR IMPLIED INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND/OR USAGE OF TRADE, COURSE OF DEALING OR
COURSE OF PERFORMANCE.
(d) Training. If AT&T provides Provider with proprietary AT&T Software
pursuant to the first sentence of Section 2(b) above, AT&T shall provide
training with respect to such proprietary AT&T Software, to Provider personnel,
free of charge, to the extent reasonably required as determined by AT&T in its
reasonable discretion. In order to facilitate Provider's creation of the
Content, AT&T, in its sole discretion, may elect to provide such further
training to Provider personnel, in such manner and to such extent as AT&T deems
appropriate. Such training may be conducted at no cost or at a charge to
Provider, as determined by AT&T in its sole discretion. However, for all
training provided by AT&T hereunder, Provider shall have sole responsibility for
all travel, food and lodging expenses incurred by Provider personnel
participating in the training.
(e) Restrictions on Use. Provider shall not copy, decompile or reverse
compile, reverse engineer or reverse assemble the AT&T Software or the Internet
Browser Software without the express written consent of AT&T. Except as provided
by this Subsection, Provider shall not permit any third party access to the AT&T
Software. Provider shall not assign, transfer, sell, license, sublicense, or
grant any rights to or interests in the AT&T Software or the Internet Browser
Software to any other person or entity except with respect to a license to use
the AT&T Software and Internet Browser Software as permitted by Sections 2(b)
and 2(c) in connection with the sale of products or services . Access to the
AT&T Software shall be restricted to employees and independent contractors of
Provider under an obligation of confidentiality, who have a need to know in
connection with the exercise of Provider's rights and the performance of
Provider's obligations under this Agreement. Provider shall hold the AT&T
Software in strict confidence in accordance with Section 10 below, using no less
than reasonable care to protect AT&T's rights therein. Provider shall not, at
any time, use or exploit or authorize any third party to use or exploit, any
Content which embodies AT&T Software or which was created or developed using
AT&T Software, except for use on the AT&T Service as herein provided except with
respect to a license to use the AT&T Software and Internet Browser Software as
permitted by Sections 2(b) and 2(c) in connection with the sale of products or
services by Provider.
(f) No Access. Except as may be required in order for Provider to
perform its obligations hereunder, Provider shall have no access to the
operating system software for the elements of the AT&T Service delivery system,
including without limitation the server or server complex, consisting of
hardware and operating system software used to store and deliver media elements
for the AT&T Service and, all enhancements, modifications, additions, revisions
and updates thereto.
(g) Return of AT&T Software. Upon termination of this Agreement and/or
the license granted in this Section 2, Provider shall promptly return to AT&T
all copies of the AT&T Software, together with any notes, abstracts, summaries
or other documentation relating thereto. Any computer entries, database entries
or other recordations or manifestations of the AT&T Software which are not
capable of being returned to AT&T shall promptly be destroyed, and Provider
shall certify to AT&T that it has retained no copies of the AT&T Software or
other materials relating thereto. Notwithstanding anything in this Subsection
2(g) Provider shall not be required to destroy any of its products manufactured
prior to the termination of this Agreement which contain the Internet Browser
Software or AT&T Software.
3. Ownership.
(a) Ownership of Provider Property. Except for the rights granted to
AT&T hereunder, as between AT&T and Provider, Provider shall retain all right,
title and interest in and to the Content and the Provider Trademarks including,
without limitation, all associated rights under the laws of copyright, but
specifically excluding any portion of the AT&T Software which may be included in
the Content (together with any notes, abstracts, summaries and marketing,
advertising or promotional materials with respect thereto delivered to AT&T,
collectively, the "Provider Property"). AT&T agrees not to challenge the
validity of Provider's ownership of the Provider Property. AT&T shall not alter
or delete any copyright notices or trademarks included in the Content or in any
other materials provided by Provider to AT&T hereunder. Upon termination of this
Agreement, AT&T shall promptly return to Provider the Provider Property. Any
computer entries, data base entries or other recordations or manifestations of
the Provider Property shall promptly be destroyed and AT&T shall certify to
Provider that it has retained no copies of the Provider Property.
(b) Ownership of the AT&T Software. Except for the rights licensed to
Provider pursuant to Subsection 2(b)of the Standard Terms, as between Provider
and AT&T, AT&T shall own all right, title and interest in and to the AT&T
Software including, without limitation, all associated rights under the laws of
copyright, trademarks and patents. Provider shall not challenge AT&T's ownership
of the AT&T Software. Provider shall not alter or delete any copyright notices
or trademarks included in the AT&T Software or the documentation for the AT&T
Software provided by AT&T.
4. Provider Trademark Graphics.
Upon AT&T's reasonable request, Provider shall promptly furnish to AT&T
camera-ready black and white and full color representations of any and all logos
which incorporate the Provider Trademarks, for AT&T's use consistent with the
terms hereof.
5. Payments.
(a) Calculation of Payments. AT&T shall pay to Provider such amounts
computed and determined in accordance with the terms of the Agreement, and
Provider shall pay to AT&T such amounts computed and determined in accordance
with the terms of the Agreement.
(b) Accounting.
(i) AT&T shall compute the amounts payable to Provider for
each calendar month in which the Content is available to Subscribers on
the AT&T Service (an "Accounting Period") within forty-five (45) days
following the end of such month and shall furnish Provider with an
accounting statement with respect thereto. In the event AT&T generally
adopts an Accounting Period for the AT&T Service which is different
than monthly, AT&T shall have the right to account to Provider on such
other basis, provided that actual or estimated payments are made on a
monthly basis. Payments, if due, shall be paid together with the
rendering of the accounting statement. If AT&T makes any overpayment to
Provider, Provider will reimburse AT&T for it; AT&T shall also have the
right to deduct such overpayment from any payments due or becoming due
to Provider.
(ii) Provider shall compute the amounts payable to AT&T for
each Accounting Period within forty-five (45) days following the end of
such Accounting Period and shall furnish AT&T with an accounting
statement with respect thereto. Payments, if due, shall be paid
together with the rendering of the accounting statement. If Provider
makes any overpayment to AT&T, AT&T will reimburse Provider for it;
Provider shall also have the right to deduct such overpayment from any
payments due or becoming due to AT&T.
(iii) All payments hereunder shall be payable in U.S. Dollars.
Foreign Revenues paid in foreign currency shall be converted to U.S.
Dollars as of the last business day of the Accounting Period prior to
allocation between AT&T and Provider at the rate published in the Wall
Street Journal's New York City edition dated on such date or, if not so
published, at a mutually agreed upon rate.
(c) Inspection of Books and Records by Provider. Not more frequently
than once during each calendar year, upon reasonable advance notice and during
normal business hours, Provider shall have the right to appoint, at Provider's
sole cost, an independent certified public accountant reasonably acceptable to
AT&T to inspect AT&T's books and records, at the place where AT&T keeps such
books and records, for the sole purpose of verifying the accuracy of AT&T's
calculation of the payments due hereunder. Provider may make such an examination
for a particular statement only once upon reasonable advance written notice, and
only within one (1) year after the date that statement was rendered to Provider.
Provider will not be entitled to examine any records that do not relate
specifically to the payments due hereunder and in no event shall Provider have
the right to inspect statements or information pertaining to other AT&T Service
content providers other than records which relate to the computation or
determination of the payments due Provider hereunder. Absent claims of fraud,
any statement rendered to Provider by AT&T hereunder shall be deemed binding and
conclusive and Provider shall be forever barred from raising any claim in
connection therewith if AT&T does not receive specific written objection with
respect thereto within eighteen (18) months from the date such statement was
rendered to Provider, or if no arbitration is commenced within the six (6) month
period following the date of such timely written objection.
(d) Inspection of Books and Records by AT&T. Not more frequently than
once during each calendar year, upon reasonable advance notice and during normal
business hours, AT&T shall have the right to appoint, at AT&T's sole cost, an
independent certified public accountant reasonably acceptable to Provider to
inspect Provider's books and records, at the place where Provider keeps such
books and records, for the sole purpose of verifying the accuracy of Provider's
calculation of the payments due hereunder. AT&T may make such an examination for
a particular statement only once upon reasonable advance written notice, and
only within one (1) year after the date that statement was rendered to AT&T.
AT&T will not be entitled to examine any records that do not relate specifically
to the payments due hereunder or to the calculation of Provider Revenues. Absent
claims of fraud, any statement rendered to AT&T by Provider hereunder shall be
deemed binding and conclusive and AT&T shall be forever barred from raising any
claim in connection therewith if Provider does not receive specific written
objection with respect thereto within eighteen (18) months from the date such
statement was rendered to AT&T or if no arbitration is commenced within the six
(6) month period following the date of such timely written objection.
6. Representations and Warranties by Provider.
To induce AT&T to enter into this Agreement, Provider warrants and represents to
AT&T that:
(a) Corporate Status. Provider is a corporation in good standing and
formed under the laws of the state identified in the first introductory
paragraph of this Agreement, and Provider has the full right, power and
authority to enter into this Agreement and to grant the rights herein granted.
(b) No Conflicting Obligations. The performance by Provider pursuant to
this Agreement and/or the rights herein granted to AT&T will not conflict with
or result in a breach or violation of any of the terms or provisions, or
constitute a default under any organizational instruments of Provider, or any
agreement to which Provider is a party or to which it is bound.
(c) Compliance with Laws and Regulations. *
(d) Content Editorial Standards. *
(e) No Infringement. *
(f) Viruses. *
(g) Copyright Protection. *
(h) Safety. *
(i) Rejection of Mayo Materials. Provider shall not refuse or be deemed
to have refused for on-line publication (other than for a valid business reason
as determined by the senior management of Provider in good faith, provided that,
any additional payment or other consideration to be received by Provider for
such refusal shall not constitute a valid business reason for purposes of this
Subsection) any offer from the Mayo Foundation for Medical Education and
Research ("Mayo") of materials or title ideas for electronic publication
pursuant to the terms set forth in Section 2.1 of the 1994 License, Development
and Marketing Agreement between Mayo and Provider dated September 27, 1994 (the
"1994 Mayo Agreement").
(j) Mayo Platform Selection. Provider shall include in any business
plan for any of the titles governed by the Electronic Publishing License,
Development and Marketing Agreement, dated as of April 28, 1993 between Mayo and
Provider (the "1993 Mayo Agreement") the selection of on-line publishing as a
platform for publication of such title.
(k) No Assignment of AHN Agreement. Without the express written consent
of AT&T, which shall not be unreasonably withheld, Provider shall not consent to
any assignment of the rights and/or obligations of America's Health Network
("AHN") pursuant to the Agreement between America's Health Network, Inc. and IVI
Publishing, Inc. dated May 25, 1995 (the "AHN Agreement"), except with respect
to a good faith assignment to an affiliate of AHN in connection with a
reorganization or restructuring of the business of AHN.
(l) Breach of Provider License Agreements. Provider shall not knowingly
commit a material breach of the 1994 Mayo Agreement or the 1993 Mayo Agreement,
nor will it knowingly take any other action which would reasonably be expected
to give rise to an early termination of any of such Agreements pursuant to the
terms thereof.
7. Representations and Warranties by AT&T.
To induce Provider to enter into this Agreement, AT&T represents and
warrants to Provider that:
(a) Corporate Status. AT&T is a corporation in good standing and formed
under the laws of the State of New York, and AT&T has the full right, power and
authority to enter into this Agreement and to grant the rights herein granted.
(b) No Conflicting Obligations. The performance by AT&T pursuant to
this Agreement and/or the rights herein granted to Provider will not conflict
with or result in a breach or violation of any of the terms or provisions, or
constitute a default under any organizational instruments of AT&T or any AT&T
Affiliate or any agreement to which AT&T or any AT&T Affiliate is a party or to
which it is bound.
(c) Right to License. *
(d) Compliance with Laws and Regulations. *
8. Exclusions and Limitations.
(a) AT&T Exclusion of Warranties. *
(b) Provider Exclusion Of Warranties. *
(c) Limitation of Liability. *
(d) Disclaimers. AT&T shall provide in its agreement with Subscribers a
disclaimer of warranties, representations and liabilities of AT&T and Provider
which shall be subject to the approval of Provider, not to be unreasonably
withheld. Provider may provide on its Content screens and pages a disclaimer of
warranties, representation and liabilities of Provider and AT&T which shall be
subject to the approval of AT&T, not to be unreasonably withheld.
9. Indemnification; Insurance.
(a) Provider Indemnity. *
(b) AT&T Indemnity. *
(c) Claims. The obligations and liabilities of the indemnifying persons
hereunder with respect to claims resulting from the assertion of liability by
third parties shall be subject to the following terms and conditions:
(i) The indemnified person ("Deliverer") shall give prompt
written notice ("Claim Notice") to the indemnifying person
("Recipient") of any assertion of liability by a third party which
might give rise to a claim by the Deliverer against the Recipient based
on the indemnity agreements contained in this Section 9, stating the
nature and basis of said assertion and the amount thereof, to the
extent known.
(ii) If the Recipient does not notify the Deliverer within
thirty (30) days after delivery of the Claims Notice of the Recipient's
disagreement regarding said claim and/or the amount of the indemnity,
Recipient shall pay to Deliverer the amount of such claim within
forty-five (45) days after the Claims Notice if the amount of such
claim is known, and otherwise within ten (10) days after the amount of
such claim becomes known.
(iii) If the Recipient notifies the Deliverer within ten (10)
days after delivery of the Claims Notice of Recipient's disagreement
regarding said claim and/or the amount of the indemnity, Recipient and
Deliverer shall have thirty (30) days after delivery of such
notification by Recipient to reach an agreement regarding said claim
and/or the indemnity amount. If Recipient and Deliverer cannot so agree
within such thirty (30) day period, Deliverer and Recipient shall
submit such dispute to arbitration pursuant to Section 15(c), hereof.
(iv) In the event any action, suit or proceeding is brought
against the Deliverer, with respect to which the Recipient may have
liability under the indemnity agreements contained in this Section 9,
the Recipient shall have the right, upon the written agreement of the
Recipient that it is obligated to indemnify under the indemnity
agreements contained in this Section 9, to assume the defense thereof
(including all proceedings on appeal or for review which counsel for
the defendant shall deem appropriate). The Deliverer shall have the
right to employ their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Deliverer
unless (x) the employment of such counsel shall have been authorized by
the Recipient in connection with the defense of such action, suit or
proceeding, (y) the Recipient shall not have agreed, promptly after the
Claims Notice, that they are obligated to indemnify under the indemnity
agreements contained in this Section 9 or (z) such Deliverer shall have
reasonably concluded that (a) such action, suit or proceeding involves
to a significant extent matters beyond the scope of the indemnity
agreements contained in this Section 9, or (b) there may be defenses
available to it (or them) which are different from, additional to or in
conflict with those available to the Recipient, in any of which event
the Recipient shall not have the right to direct the defense of such
action, suit or proceeding on behalf of the Deliverer and that portion
of such fees and expenses reasonably related to matters covered by the
indemnity agreements contained in this Section 9 shall be borne by the
Recipient; provided, however, that in the case of clause (b) above, the
fees of such counsel shall be paid by the Recipient only to the extent
they relate to such different or additional defenses. The Deliverer
shall be kept fully informed of such action, suit or proceeding at all
stages thereof whether or not they are so represented. The Recipient
shall make available to the Deliverer and their attorneys and
accountants all books and records of the Recipient relating to such
proceedings or litigation and the parties hereto agree to render to
each other such assistance as they may reasonably require of each other
in order to ensure the proper and adequate defense of any such action,
suit or proceeding. If the Recipient elects not to assume the defense
of such claim, the Deliverer shall be entitled to assume such defense
and the Recipient shall reimburse the Deliverer for all reasonable
costs in connection therewith.
(d) Approval Over Settlement. Neither party shall have the right to
settle any claim, action or proceeding for which it seeks indemnification
hereunder without the consent of the other party (which consent shall not be
unreasonably withheld); provided however that a party shall not have the right
of consent over such settlement unless it has fulfilled its indemnity
obligations under this Section 9.
(e) Insurance. Provider has obtained and shall maintain during the Term
hereof, errors and omissions insurance with respect to its business activities
and responsibilities hereunder with a reputable insurer reasonably acceptable to
AT&T, naming AT&T as an additional named insured. Such errors and omissions
insurance shall have total limits of not less than *
* and shall have a deductible of not more than *
Dollars * . Such policy shall provide that such insurance shall be
primary, and that no insurance that may be maintained by AT&T shall be deemed
contributory in any way. Such policy shall be non-cancelable except after thirty
(30) days prior written notice to AT&T. Provider shall furnish AT&T with a copy
of such policy within thirty (30) days after execution of this Agreement and, to
the extent such insurance must be renewed, shall furnish AT&T with proof of
renewal annually thereafter, at least thirty (30) days prior to the termination
date of coverage in the absence of renewal. Failure of Provider to obtain and
maintain such insurance coverage shall be a material breach of this Agreement.
10. Confidentiality; Press Releases.
(a) Non-Disclosure Agreement. The parties agree and acknowledge that,
as a result of negotiating and entering into this Agreement, each party will
have access to certain of the other party's Confidential Information (as defined
below). Each party also understands and agrees that misuse and/or disclosure of
that information could adversely affect the other party's business. Accordingly,
the parties agree that, during the Term of this Agreement and thereafter,
neither party shall use or disclose to anyone any of the other party's
Confidential Information. Notwithstanding the foregoing, it shall not be a
breach of this Agreement for either party to disclose Confidential Information
of the other party if compelled to do so under law, in a judicial or other
governmental investigation or proceeding, provided the other party has been
given prior notice and the disclosing party has sought all available safeguards
(including, without limitation, good faith efforts to obtain a protective order
satisfactory to the other party) against widespread dissemination prior to such
disclosure.
(b) Confidential Information Defined. As used in this Agreement, the
term "Confidential Information" refers to: (i) the terms and conditions of this
Agreement; (ii) the computer software or other proprietary computer system
components used by AT&T in connection with the AT&T Service; (iii) each party's
trade secrets, business plans, strategies, methods and/or practices; and (iv)
other information relating to either party that is not generally known to the
public, including information about either party's personnel, products
(including the AT&T Service), customers, marketing strategies, services or
future business plans. Notwithstanding the foregoing, the term Confidential
Information specifically excludes (i) information that is now in the public
domain or subsequently enters the public domain by publication or otherwise
through no action or fault of the other party; (ii) information that is known to
a party without restriction, prior to receipt from the other party under this
Agreement, from its own independent sources as evidenced by such party's written
records, and which was not acquired, directly or indirectly, from the other
party; (iii) information that either party receives from any third party having
a legal right to disclose such information, and not under any obligation to keep
such information confidential; and (iv) information independently developed by
either party's employees or agents provided that either party can show that
those same employees or agents had no access to the Confidential Information
received hereunder.
(c) Press Releases. AT&T and Provider shall jointly prepare press
releases concerning the existence of this Agreement and the terms hereof.
Otherwise, no public statements inconsistent with previously authorized and
released press releases concerning the existence or terms of this Agreement
shall be made or released to any medium except with the prior approval of AT&T
and Provider or as required by law.
11. Suspension Due to Force Majeure.
Neither party shall be liable to the other for any breach of or failure
to comply with the terms of this Agreement, owing to an "Event of Force
Majeure". An "Event of Force Majeure" shall be deemed to occur at any time
either party is unable to perform its material obligations hereunder because of
circumstances beyond its control, including without limitation, acts of God,
fires, floods, wars, civil disturbances, sabotage, accidents, labor disputes,
governmental actions, unavailability of transportation and/or unavailability of
or delays in transmission beyond the reasonable control of the parties to this
Agreement. Each party shall give prompt notice to the other party of any
discovery of an Event of Force Majeure.
12. Protection of Copyrights and Trademarks.
(a) Each party will use the appropriate trademark, product descriptor
and trademark symbol (either "(TM)" or "(R)"), and clearly indicate ownership of
the AT&T trademarks and Provider Trademarks whenever first mentioned in any
Content, advertisement, brochure or other material in connection with this
Agreement. Neither party will use any name or trademark that infringes the other
party's trademarks, trade names and/or product names. The Content shall contain
a copyright notice that shall be consistent with the provisions of Sections
401(b) and (c) of the Copyright Law of the United States.
(b) The parties shall promptly notify each other of all infringements
or violations by third parties of any of the parties' respective rights in and
to any of the Content, AT&T Software or trademarks associated with the Content
or AT&T Service which come to a party's attention. The parties shall consult
with respect to how to respond to each infringement or violation relating
thereto.
(c) The parties will coordinate any efforts to prosecute any
infringement or violation of the Content and the Provider Trademarks consistent
with Provider's obligations under other agreements with Provider Affiliates
13. Termination.
Notwithstanding the expiration or termination of this Agreement for any
reason, the parties' obligations set forth in Sections 3, 5, 6, 7, 8, 9, 10, and
15 hereof will survive such expiration or termination and remain in full force
and effect. This Agreement may be terminated as follows:
(a) By Notice. By AT&T or Provider, after the expiration of the Initial
Term, by giving written notice in accordance with Section R of the Agreement.
(b) Adversary Claim. By AT&T (i) in the event of any claim, suit or
other legal or administrative action against AT&T by any third party arising out
of AT&T's use of the Content consistent with the terms of this Agreement, which
claim, suit or other action is not dismissed within *
days of service of process upon AT&T; or (ii) upon * prior
written notice in the event of service upon AT&T of any writ or order enjoining
or prohibiting AT&T's continued use of a substantial portion of the Content
consistent with the terms of this Agreement in the event that such writ or order
is not dismissed within * days after service upon AT&T, or (iii)
immediately upon service upon AT&T of any writ or order enjoining or prohibiting
AT&T from providing the AT&T Service or Health and Wellness Service.
(c) Bankruptcy; Insolvency. Immediately by either party if the other
party shall: (i) admit in writing an inability to pay its debts as they come due
or fail to pay its debts as they become due, or (ii) commence a case under any
chapter of Title 11 of the United States Bankruptcy Code ("Bankruptcy Code"); or
(iii) have commenced against it an involuntary case under the Bankruptcy Code,
which case is not dismissed within sixty (60) days from the date of
commencement; or (iv) consent to or suffer the appointment of a custodian,
receiver, or trustee for all or a major part of its property; or (v) make an
assignment for the benefit of its creditors or consent to the entry of a court
order under any law ordering the winding up or liquidation of its affairs, or
suffer the entry of such an order, such termination shall not relieve the party
in proceedings from liability for the performance of its obligations arising
prior to such termination and shall be in addition to all other rights and
remedies the terminating party may have available to it under this Agreement or
at law or in equity.
(d) Non-Exploitation on AT&T Service By Provider. By Provider, by
giving no less than * prior written notice (the "Notice Period")
to AT&T in the event of any of the following:
(i) the Health and Wellness Service is not established and
generally available to Subscribers on or before * and
thereafter;
(ii) a substantial portion of the Content is not generally
available to Subscribers on the AT&T Service on or before *
and thereafter, provided such Content is delivered to AT&T by
Provider in accordance with the requirements of the Agreement, and
provided further that the Agreement may not be terminated if, within
the Notice Period, AT&T makes a substantial portion of the Content
available on the AT&T Service and such Content remains generally
available on a consistent basis for a minimum period of * ;
(iii) Electronic Commerce Operations are not generally
available to Provider and Subscribers on the Health and Wellness
Service by * and thereafter (other than for the conduct of
system maintenance and operational repairs for reasonable periods);
(iv) chat, chat forum and bulletin board capabilities are not
generally available on or through the Health and Wellness Service by
March 31, 1997 and thereafter (other than for the conduct of system
maintenance and operational repairs for reasonable periods);
(v) after * , a substantial portion of the
Content is not generally available to Subscribers on the AT&T Service
for more than * , or for a total of more
than * during any * period, unless the
unavailability of such Content on the AT&T Service is the result of (1)
a good, valid and verifiable technical reason; (2) a reasonable concern
on the part of counsel to AT&T that such Content infringes upon rights
of a third party; (3) a reasonable concern that the availability of
such Content on the AT&T Service could violate some applicable domestic
or foreign law which violation could, in the reasonable opinion of
AT&T's counsel, have a material adverse effect on the Health and
Wellness Service, the AT&T Service or AT&T; (4) the Content not
complying in all material respects with the Content Editorial
Standards; (5) an Event of Force Majeure; or (6) such Content not being
delivered to AT&T in material compliance with the requirements of the
Agreement.
(e) Material Breach: By AT&T or Provider if the other party is in
material breach of its material obligations under this Agreement and such
material breach is not cured within (i) * days with respect to
non-payment of monies and (ii) * days for non-monetary breaches
following receipt of written notice of such material breach provided, however,
that neither party shall be permitted to terminate this Agreement due to a
failure of the other party to make any payment due hereunder, if such payment or
the amount thereof is disputed in good faith by the other party, until any such
dispute is resolved in accordance with this Agreement.
(f) Written Consent. By mutual written consent of AT&T and Provider.
14. No Obligation to Exploit.
Although it is AT&T's current intention to establish and operate the
Health and Wellness Service, nothing herein shall be construed as requiring AT&T
to use or exploit the Content on the Health and Wellness Service or on any other
AT&T Service in whole or in part at any time during the Term hereof or to
establish or continue to operate the Health and Wellness Service or any other
AT&T Service in any manner. Without limitation of the foregoing, AT&T reserves
the right, subject to Section L of this Agreement, to exploit content which is
the same or similar to the Content on the same, different and/or competing
networks or services without payment to Provider. The sole remedy of Provider in
the event AT&T does not use or exploit the Content shall be to terminate this
Agreement in accordance with Section 13 or to terminate the Exclusivity Period
in accordance with Section B(c) and, in either case, collect all sums which are
then or become due and payable to Provider, pursuant to terms of this Agreement.
15. General Provisions.
(a) Relationship of the Parties. Provider and AT&T are independent
contractors under this Agreement, and nothing herein shall be construed to
create a partnership, joint venture or agency relationship between Provider and
AT&T. Neither Provider nor AT&T has any authority to enter into agreements of
any kind on behalf of the other party.
(b) Assignment; Binding Effect. Provider may not assign this Agreement
or any of its rights or delegate any of its duties under this Agreement without
the prior written consent of AT&T. AT&T may, assign, sublicense, or otherwise
transfer the rights licensed to AT&T under this Agreement (i) to any AT&T
Affiliate which operates an AT&T Service and (ii) to any third party which owns
and/or operates an AT&T Service outside the United States provided, however,
that (x) AT&T provides prompt notice of such assignment to Provider, and (y)
AT&T shall remain jointly and severally liable with the transferee for the
performance of all such duties hereunder. Any purported assignment which is
inconsistent with the foregoing shall be null and void.
(c) Jurisdiction. This Agreement, its interpretation, performance or
any breach thereof, shall be construed in accordance with, and all questions
with respect thereto shall be determined by, the laws of the State of New York
applicable to contracts entered into and wholly to be performed within said
state. Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration in New York, New York in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Such Arbitration shall not be
permitted to determine ownership of or rights in the Provider Trademarks,
trademarks of AT&T and/or the AT&T Software.
(d) Waiver. No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provision hereof, and no waiver shall be effective unless made
in writing and signed by an authorized representative of the waiving party.
(e) Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunications, and shall be deemed to
have been duly given: (i) if mailed by certified mail, postage prepaid, on the
date three (3) days from the date of mailing, (ii) if delivered by overnight
courier, when received by the addressee, or (iii) if sent by confirmed
telecommunication, one business day following receipt by the addressee at the
addresses set forth below, or such other address as either party may specify in
writing:
If to AT&T:
AT&T Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
AT&T Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, General Attorney
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
If to Provider:
IVI Publishing, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President - On-Line Services and
Technology Group
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
IVI Publishing, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇.
Two ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Pucker
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
(f) Severability. In the event any provision of this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
the remaining provisions shall remain in full force and effect.
(g) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
(h) Construction. In resolving any dispute or construing any provision
hereunder, there shall be no presumptions made or inferences drawn (i) because
the attorneys for one of the parties drafted the Agreement; (ii) because of the
drafting history of the Agreement; or (iii) because of the inclusion of a
provision not contained in a prior draft, or the deletion of a provision
contained in a prior draft.
(i) Section Headings. Section headings are for convenience only and are
not a part of this Agreement and should not limit or otherwise effect the
interpretation of any term or provision hereof.
(j) Entire Agreement. This Agreement (including all Exhibits attached
hereto which are incorporated herein by this reference) contains the entire
understanding of the parties hereto with respect to the transactions and matters
contemplated hereby, supersedes all previous agreements between AT&T and
Provider concerning the subject matter, and cannot be amended except by a
writing signed by both parties. No party hereto has relied on any statement,
representation or promise of any other party or of any officer, agent, employee
or attorney for the other party in executing this Agreement except as expressly
stated herein.
(k) No Third Party Beneficiaries. The provisions of this Agreement
shall be solely for the benefit of, and may be enforced solely by, the parties
hereto and their respective permissible successors and assigns.
Exhibit 1
Page 1 of 1
Exhibit 1
AT&T Advertising Standards
The initial version of the AT&T Advertising Standards shall be formulated by
AT&T with the concurrence of Provider, which concurrence shall not be
unreasonably withheld.
Exhibit 2
Page 1 of 1
Exhibit 2
Content Editorial Standards
AT&T shall promptly notify Provider of any changes to the Content
Editorial Standards.
1. Provider may not upload any information which is libelous, defamatory
or which discloses private or personal matters concerning any person
including home phone numbers and addresses, credit card information,
and/or member account information such as member passwords).
2. Provider may not upload any messages, data, images or programs which
are obscene or pornographic.
3. Provider may not upload any messages, data, images or programs that
would violate the property rights of others, including unauthorized
copyrighted text, images or programs, trade secrets or other
confidential proprietary information, or trademarks or service marks
used in an infringing fashion.
4. Provider may not use the facilities and capabilities of AT&T to conduct
any activity or solicit the performance of any illegal activity or
other activity which infringes the rights of AT&T subscribers,
merchants or other publishers or content providers to the AT&T Service.
5. Provider may not upload as Content any messages (i) for which Provider
has been paid a sum by a third party in order to present such message;
(ii) the primary substance of which constitutes an offer to sell any
product or service to Subscribers; nor which in any other way disguises
advertising as Content. All such messages shall be clearly identified
as Advertising.
6. When publishing or otherwise interacting in any area of the AT&T
Service, Provider will conform its behavior on-line to those behavior
standards required of Subscribers or Systems Operators of the AT&T
Service, as the case may be.
7. Provider may not upload any information, messages, data, images or
programs that are discriminatory or otherwise offensive as determined
by AT&T in its reasonable discretion.
8. In the event that Provider unknowingly violates the Content Editorial
Standards, AT&T's sole remedy, other than as provided in Section 9 of
this Agreement, shall be to remove the violative Content from the AT&T
Service in accordance with Section 1(b) of this Agreement. This
Paragraph 8 shall not be modified by AT&T without the consent of the
Provider which consent shall not be unreasonably withheld.
Exhibit 3
Content Technical Standards
AT&T shall promptly notify Provider of any changes to the Content
Technical Standards.
Delivery of Content
Content shall be transmitted to the AT&T Editing Server via FTP. The
transmission should be done using the existing telephone network technology. The
Content transmitted should be compressed, encrypted, and signed with a hash
algorithm supplied by AT&T. The encryption algorithm and the private key will be
provided by AT&T. Once reviewed in the Editing Server, Provider will sign the
authorization to migrate the Content to the Production Servers. The
authorization will indicate the date/time for the Content to be automatically
loaded into production or will indicate that a future authorization is required.
Content Format
Content shall adhere to accepted Internet standards as defined by the Internet
Engineering Task Force and any AT&T extensions. The current base standard is
Netscape version 1.2.
Content will be sent in a file which will begin with (i) a header that defines
the data to follow, (ii) the name of Provider, (iii) the length of the content,
and (iv) other header details provided by AT&T. The specific format of the
header will be supplied by AT&T. Such file shall be divided into three sections
as follows:
Content Promotion - This section of the file will contain information used to
promote the Content on AT&T navigation screens. Included will be a graphic icon,
a single line title, a mullet-line description and recommended Content segments
to be promoted in.
Data - This section of the file will contain the actual Content pages or screens
in various standard Internet multimedia formats.
Versioning and Instructions - This part of the file will contain the version
number of the Content, data collection requirements, billing requirements,
display start and end dates and the linkages to be cross-checked.
Exhibit 4
Page 1 of 1
Exhibit 4
Delivery Schedule
The following working schedules may be delayed by AT&T as it determines in its
reasonable discretion. AT&T will promptly notify Provider of any delays to the
schedule.
Development Phase - 11/15/95
Provider shall deliver pages of Content which are representative of the Content
it plans to deliver pursuant to this Agreement in a sufficient quantity for AT&T
to use in configuring the servers and organizing the Content by 11/15/95.
Beta Phase- 2/1/96
Provider shall deliver the pages of Content expected to be available on the AT&T
Service at the launch thereof 15 days prior to the Beta test (the "Beta Phase
Milestone") currently scheduled to commence on 2/1/96. The pages delivered shall
be of sufficient quantity and variety to be suitable for the Beta phase of the
Service.
General Availability - 7/1/96
Provider shall deliver any revisions and/or additions to the Content pages
delivered for the Beta Phase which revisions and/or additions are expected to be
included in the Content available on the AT&T Service at the launch thereof at
least 30 days prior to general availability (the "General Availability
Milestone") currently scheduled to commence on 7/1/96.
Updates - ongoing
Updated Content shall be sent live within 48 hours of submission excluding
weekends and holidays. Provider should review and provide final approval of
Content updates in the Editing Server 24 hours prior to general availability
excluding weekends and holidays.
Exhibit 5
List of Titles
1. Mayo Clinic Health Letters
2. Mayo Clinic Tip of the Day
3. Health News
Exhibit 6
Page 1 of 1
Exhibit 6
Provider Trademarks
1. IVI Publishing (with and without design/logo).
2. See Mayo trademarks listed on Annex 1 attached to this Exhibit 6.
3. See Massachusetts Medical Society trademarks listed on Annex 2 attached
to this Exhibit 6.
NOTE: The trademarks listed above (other than Provider-owned
trademarks) are licensed to Provider by the trademark owner pursuant to the
terms of one or more license agreements (the "Underlying Licenses"). The license
granted by Provider to AT&T under the Agreement is subject to the terms and
conditions of the Underlying Licenses. AT&T acknowledges that it has received
copies of and has fully reviewed the Underlying Licenses and agrees not to
knowingly take any actions which would reasonably be expected to cause Provider
to default under with the terms of such Underlying Licenses.
Exhibit 7
Page 1 of 2
Exhibit 7
Provider Responsibilities
Content
Use reasonable efforts to deliver Content having, at a minimum, the
following characteristics: (i) excellent quality in all material
respects consistent with the standards and practices of AT&T, Provider
and, the Provider Brands; (ii) sufficient quantity to stimulate
consistent Subscriber interest and to avoid the presence of "stale"
Content on the AT&T Service, within the context of publishing medical
information; and (iii) format and presentation which takes advantage of
features and characteristics of an interactive on-line service.
Aggregate and index Content in coordination with the
categories/classification plan developed by AT&T.
Consult with AT&T through the Anchor Brand Council and otherwise in
order to, among other things: (i) identify opportunities for
development of the AT&T Service and (ii) identify ways to enhance
Subscribers' general experience on the AT&T.
Operations
Perform all operations in material compliance with the Content
Technical Standards, including data format, transmission requirements,
delivery intervals, and method of acceptance, trouble reporting and
issuance.
Comply with the AT&T guidelines for all file transfers and protocols.
Attend any courses that are reasonably required pursuant to the terms
and conditions of this Agreement.
Sponsorships
If and when bulletin board and chat forum capabilities become available
in connection with the Health and Wellness Service, use reasonable
efforts to obtain Sponsorships from reputable firms including firms
whose names will enhance the credibility of the AT&T Service when
associated with presenting a given bulletin board, chat forum or other
special event.
If and when bulletin board and chat forum capabilities become available
in connection with the Health and Wellness Service, use reasonable
efforts to actively solicit Sponsors to promote sessions on the Health
and Wellness Service.
Transactions
Actively seek out products and services for electronic commerce of
excellent quality consistent with the standards and practices of AT&T,
Provider and the Provider Brands.
Actively develop programs that are of high interest as premium services
within the Health and Wellness Service.
Exhibit 8
Page 1 of 3
Exhibit 8
Customer Care Guidelines
AT&T shall promptly notify Provider of any changes to the Customer Care
Guidelines.
General
All customer contacts within the domain of AT&T will be handled by AT&T, and
immediately referred to AT&T by Provider if misdirected to Provider by the
customer. Likewise, all contacts within the domain of Provider will be handled
by Provider, and immediately referred to Provider by AT&T, if misdirected to
AT&T. In general, contacts relating to technical support, network access,
network usage, billing and general navigation on the AT&T Service shall be
handled by AT&T. Contacts relating to Content, products or services offered by
Provider or the Major Brands, or the use of the application within the Content
domain, shall be handled by Provider.
Both Provider and AT&T will jointly develop a Joint Service Plan (JSP) which
will define the operational and systems interfaces, process flows, methods and
procedures, and Quality of Service (QOS) objectives required to support
customers for the products and services offered by Provider on the AT&T Service.
The JSP will be completed and agreed upon between both parties 120 days prior to
the planned commencement of any operational test periods (Operational Readiness
Test, Beta Test etc.) The basic underlying principles which will drive the
development of the JSP are as follows:
We will make the potentially fragmented nature of customer care delivery
appear to be seamless to the customer.
We will make the complex nature of customer questions, issues and/or
problems appear to be simple to the customer.
We will work to minimize costs and maximize Quality of Service to our
customers.
The JSP will include, but not be limited to, the following areas, and will
attempt to incorporate the objectives or requirements as specified:
Customer Care Access
Provider will accept customer inquiries through an inbound 800 number,
electronic mail, and the US Postal Service. The 800 number will be staffed
between the hours of 8:00am and 5:00pm CST, Monday through Friday. These hours
of operation will be modified to meet the QOS objectives as specified in the
JSP, and customer call patterns. Electronic mail inquiries will be responded to
via electronic mail, unless the specific situation warrants otherwise.
Electronic mail inquiries will be responded to within 24 hours of receipt.
Outside of the normal hours of operation for the 800 number, Provider will
provide customers with the choice of leaving a voice mail message, at the VRU
prompt, for follow up during normal hours of operation.
Responsiveness
During normal hours of operation, Provider will respond to customer requests for
support via the 800 number according to the QOS objectives as specified below,
for customer questions or problems with the use of the application, or the
Content. outside of the normal hours of operation, Provider will respond to
customer requests for support within 2 hours of the commencement of the next
period of normal hours of operation, for both 800 voice calls and voice mail
messages.
Quality of Service Objectives
Provider will meet the following Quality of Service Objectives:
Inbound Calls and Voice Mail Messages -
Inbound voice call abandonment rate of less than 2%
90% of all inbound voice calls answered within 20 seconds, 100%
answered within 60 seconds.
90% of all voice mail messages responded to within two hours of the
commencement of the next scheduled period of normal operations, 100%
responded to within 4 hours.
95% of inbound voice calls rated as good or excellent based upon call
monitoring.
Repeat calls limited to less than 2% of total inbound voice calls
outbound voice calls -
90% of all outbound voice calls will be attempted within 10 minutes of
the scheduled commitment time, 100% within 20 minutes.
100% of all outbound voice calls will result in a completion.
Completion will be defined as 2 attempts within a period of normal
hours of operation. In the event that voice contact is not made after 2
attempts, Provider shall attempt further contact via fax or electronic
mail, customer addresses being available.
Unless otherwise agreed upon with the customer, outbound call attempts
will be limited to normal hours of operation as specified above.
Customer Call Transfers
All transfers of calling customers, from the AT&T and Provider call response
centers, will be "warm", conference call transfers. Every attempt will be made
to transfer the caller to the other party (during the normal hours of
operation), after an exchange of information from one customer service
representative to the other regarding the nature of the customers call, the work
effort already undertaken, and the results of that work effort. Every attempt
will be made to avoid duplicate work efforts, and redundant communication with
the customer.
Problem Identification, Escalation and Closure
An electronic record shall be retained for all customer contacts. The
information contained in the record will include, but not be limited to the
following:
Customer Identification
Customer Address(es)
Date and time of the contact
Nature of the problem
Resolution attempted
Resolution
Resolution date/time
Customer response commitment (if not closed at the time of contact)
Customer response
If the resolution of the problem or question belongs in the other party's
domain, the information collected in the electronic call record shall be
communicated electronically to the other party in the form of a Trouble Ticket
(TT). All work effort attempted and completed, and documented in the electronic
call record completed as the result of the received trouble ticket, will be
communicated back to the originating party in the form of a completed trouble
ticket, or revised trouble ticket if the trouble ticket has not yet been
completed. Status of all open trouble tickets will be communicated according to
the escalation time frames as agreed upon by both parties in the JSP. Completion
of all trouble tickets shall be communicated back to the originating party
within 15 minutes of completion. Provider and AT&T will maintain a current list
of contact staff, and managers, associated with the initial transfer and each
escalation of unresolved customer problems as outlined in the JSP.
Problems escalated to each party from the other, and callers transferred to each
party from the other, will be responded to by the receiving party, unless
otherwise agreed upon, and responded to within the QOS objectives as specified
in the JSP.
Operations Status Reviews and Reports
AT&T and Provider will, on a regular basis, provide status reports relative to
Customer Care performance against the QOS objectives. In addition, information
will be shared between the parties relative to unsolicited customer feedback on
products, services, and support. Also, information will be shared relative to
observations or captured data concerning the efficiency of Customer Care, in
order for both parties to engage in constant improvement processes. On a
quarterly basis, a face to face joint status and operations review meeting will
be held to review the above.
EXHIBIT 9
IVI PUBLISHING, INC.
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT AND THE ACCOMPANYING MATERIALS, IF ANY DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY A SECURITY
IN ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE
SUCH AN OFFER OR SOLICITATION.
IN MAKING AN INVESTMENT DECISION INVESTOR MUST RELY ON ITS OWN
EXAMINATION OF IVI PUBLISHING, INC. ("THE COMPANY"), ITS MANAGEMENT AND THE
TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS THEREOF. THE SHARES OF
COMMON STOCK (THE "SHARES") WHICH ARE THE SUBJECT OF THIS SUBSCRIPTION AGREEMENT
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF AN INVESTMENT IN SUCH SHARES, NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS AGREEMENT AND THE ACCOMPANYING MATERIALS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE INFORMATION CONTAINED
HEREIN IS LESS DETAILED AND COMPLETE THAN AN INVESTOR WOULD RECEIVE IF THE WERE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT")
OR IF AN ALTERNATIVE EXEMPTION FROM SUCH REGISTRATION WERE RELIED UPON.
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, NOR HAVE
THE SHARES BEEN REGISTERED UNDER THE SECURITIES LAWS OF ANY STATE. THE SALE OF
THE SHARES IS BEING MADE BY THE COMPANY IN RELIANCE ON APPLICABLE IONS UNDER THE
SECURITIES ACT AND/OR THE RULES PROMULGATED THEREUNDER. AS A CONDITION TO ANY
SALE, THE COMPANY WILL BE RELYING ON CERTAIN REPRESENTATIONS AND WARRANTIES FROM
THE UNDERSIGNED AS SET FORTH IN THIS AGREEMENT TO THE EFFECT, AMONG OTHER
THINGS, THAT THE UNDERSIGNED IS ACQUIRING ITS SHARES SOLELY FOR ITS OWN ACCOUNT
AND NOT WITH A VIEW TOWARD DISTRIBUTION OR FRACTIONALIZATION.
THE INVESTOR SHOULD NOT CONSTRUE THE CONTENTS OF THIS SUBSCRIPTION
AGREEMENT OR ANY CO CATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY OR ITS
OFFICERS, DIRECTORS, COUNSEL OR AGENTS AS LEGAL, TAX OR BUSINESS ADVICE AND
SHOULD CONSULT ITS OWN LEGAL COUNSEL, ACCOUNTANTS AND OTHER PROFESSIONAL
ADVISORS AS TO LEGAL, TAX, ACCOUNTING AND RELATED MATTERS CONCERNING ITS
INVESTMENT.
INVESTMENT IN THE SHARES IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN AFFORD TO LOSE THEIR
ENTIRE INVESTMENT. INVESTORS WILL BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
SUBSCRIPTION AGREEMENT (this "Subscription Agreement") dated as of
_____________ 199__ between IVI PUBLISHING, INC., a Minnesota corporation (the
"Company"), and the party set forth on the signature page hereto (the
"Investor").
W I T N E S S E T H:
WHEREAS, the Investor desires to subscribe for and purchase from the
company, and the Company desires to issue and to sell to the Investor, the
number of shares of common stock, $.01 par value, (the "Common Stock") of the
Company set forth under the Investor's name on the signature page hereof, upon
the terms and conditions hereinafter set forth. The shares of Common Stock are
sometimes referred to herein as the "Shares".
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby acknowledge, agree and understand the
following:
l. Subscription. The Investor hereby subscribes for the Shares set
forth on the signature page of this Subscription Agreement for the sum set forth
as the "Total Purchase Price" on the signature page hereof (the "Purchase
Price"). The Company's acceptance of the Investor's subscription shall be deemed
acknowledgment of its receipt of such funds.
2. The Closing. The closing of the purchase and sale of the Shares (the
"Closing") shall take place at the offices of the Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., Minneapolis time, on ________
__ 199,, or at such other place or time as shall be agreed upon by the parties
hereto. The date of the Closing is referred to herein as the "Closing Date".
3. Representations and Warranties of the Company. The Company
represents and warrants to the Investor as follows:
(a) Organization.. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota.
(b) Power and Authority. The Company has the requisite corporate power
and authority and full legal right to enter into this Subscription Agreement, to
perform, observe and comply with all of its agreements and obligations hereunder
and to issue the Shares to the Investor.
(c) Due Authorization; Valid Issuance. The execution and delivery by
the Company of this Subscription Agreement the performance by it of all of its
agreements and obligations under this Subscription Agreement and the issuance of
the Shares, have been duly authorized by all necessary corporate action on the
part of the Company. All of the Shares subscribed for hereunder will, at the
time of issuance, have been duly authorized and issued and upon receipt by the
Company of the Purchase Price will be fully paid and non-assessable.
(d) Enforceability. Assuming the due execution and delivery of this
Subscription Agreement by the Investor, this Subscription Agreement is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be subject Co (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(e) Due and Valid Execution. This Subscription Agreement has been duly
and validly executed and delivered by the Company.
(f) Governmental Consents. No consent, approval, order or authorization
of, or 'registration, qualification, designation, declaration or filing with,
any governmental authority is required on the part of the Company in connection
with the offer and 'sale of the Shares under this Subscription Agreement. The
offer and sale of the shares hereunder complies in all material respects with
applicable federal and state securities laws.
(g) Absence of Changes. Since the date of the most recent report of the
Company filed on Form 10-__ pursuant to the Securities Exchange Act of 1934, as
amended, there has been no material adverse change in the condition (financial
or otherwise) or results of operations of the Company, other than changes
occurring in the ordinary course of business, which changes have not in the
aggregate had a material adverse effect on the business, properties or condition
(financial or otherwise) of the Company.
4. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company as follows:
(a) Investment Intention. The Investor is acquiring the Shares for
investment solely for its own account and not with a view to, or for resale in
connection with, the distribution or other disposition thereof. The Investor
agrees ad acknowledges that all dispositions of the Shares will comply with the
applicable provisions of state ad federal securities laws. The Investor further
acknowledges transfer of the Shares will be severely restricted. The Investor
acknowledges that the Company will not consent to a transfer of the Shares
unless the transferee meets the financial and other suitability standards
required of an initial subscriber or unless such conditions are waived by the
Company in its sole discretion. The Company may, in its sole and absolute
discretion, require the Investor to deliver an opinion of counsel (from a law
firm and in form and substance reasonably satisfactory) to the Company to the
effect that any such transfer is exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws. The Investor further acknowledges that the Company is
under no obligation to register under the Securities Act the Shares on behalf of
the Investor (except pursuant to that certain Registration Rights Agreement,
dated as of ________, 199 (the "Registration Rights Agreement") between the
Company and the Investor) to assist the Investor in complying with any exemption
from registration or to consent to the transfer of the Shares.
(b) Shares Unregistered. The Investor acknowledges and represents that
it has been advised by the Company that:
(i) the Offer and sale of the Shares have not been registered
under the Securities Act, or any state securities laws;
(ii) the Shares must be held indefinitely and the Investor
must continue to bear the economic risk of the investment in the Shares
unless the offer and sale of such ShareS is subsequently registered
under the Securities Act and all applicable state securities laws or an
exemption from such registration is available;
(iii) Rule 144 promulgated under the Securities Act may not be
presently available with respect to the sale of any securities of the
Company, and (other than in accordance with the Registration Rights
Agreement) the Company has made no covenant to make such Rule
available;
(iv) when and if the Shares may be disposed of without
registration under the Securities Act in reliance on Rule 144, such
disposition may be made only in limited amounts in accordance with the
terms and conditions of such Rule;
(v) a restrictive legend in the following form shall be placed
on the certificates representing the Shares;
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS SUCH OFFER, SALE,
TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION
OR IS OTHERWISE IN COMPLIANCE WITH SUCH ACT.
A STATEMENT SUMMARIZING THE VOTING POWERS, DESIGNATIONS,
PREFERENCES, LIMITATIONS, RESTRICTIONS AND RELATIVE RIGHTS OF
THE VARIOUS CLASSES OF STOCK OR SERIES THEREOF MAY BE OBTAINED
BY THE STOCKHOLDERS OF THE COMPANY, WITHOUT CHARGE, FROM THE
PRINCIPAL OFFICES OF THE COMPANY."
(vi) a notation shall be made in the appropriate records of
the Company indicating that the Shares are subject to restrictions on
transfer and appropriate stop transfer instructions will be issued with
respect to the Shares.
(c) Additional Investment Representations.
(i) The Investor has carefully reviewed, is familiar with and
understands each of the Articles of Incorporation and Bylaws of the
Company and the other documents, records and information, if any,
requested by the Investor or otherwise supplied by the Company;
(ii) All documents, records and information pertaining to an
investment in the Company which have been requested by the Investor
have been made available or delivered to the Investor;
(iii) No oral or written statement, printed material or
inducement given or made by the Company or any affiliate of the Company
is contrary to the information contained herein, and the Investor
acknowledges and agrees that in making its decision to purchase the
Shares it has relied solely on its own information, the information
provided to the Investor by the Company pursuant to this Subscription
Agreement, and the other documents, records and information requested
by the Investor and independent investigations made by the Investor
and, to the extent believed by the Investor to be appropriate, the
Investor's representatives, including the Investor's own professional,
financial, tax and other advisors;
(iv) The Investor acknowledges that the Company, in reliance
upon certain federal and state securities law exemptions, has provided
the Investor with less or different information than the Investor would
have received if an information memorandum complying with Rule
502(b)(2) of Regulation D promulgated pursuant to the Securities Act
had been prepared and made available to the Investor or if the Shares
had been registered pursuant to the Securities Act. The foregoing
notwithstanding, the information provided to the Investor is sufficient
to allow the Investor to make a knowledgeable and informed decision
regarding its investment in the Shares;
(v) The Investor qualifies as an "accredited investor" as such
term is defined in Rule 501 promulgated under the Securities Act, and
the information set forth on the signature page hereto is true and
correct in all material respects;
(vi) The Investor is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization;
(vii) The Investor has the requisite corporate power and
authority and full legal right to enter into this Subscription
Agreement and to perform, observe and comply with all of its agreements
and obligations hereunder;
(viii) The execution and delivery of this Subscription
Agreement and the performance by the Investor of all of its agreements
and obligations under this Subscription Agreement have been duly
authorized by all necessary corporate action on the part of the
Investor;
(ix) The Investor is authorized and otherwise duly qualified
to purchase and hold the Shares, and the Investor has not been formed
for the specific purpose of purchasing the Shares unless (in the case
of a partnership or corporation) all of its equity owners qualify as
accredited individual investors under Rule 501 of Regulation D
promulgated under the Securities Act;
(x) Assuming the due execution and delivery of this
Subscription Agreement by the Company, this Subscription Agreement is a
valid and binding obligation of the Investor, enforceable against the
Investor in accordance with its terms, except as such enforcement may
be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors
rights generally and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law); and
(xi) Horn of the following has ever been represented,
guaranteed or warranted to the Investor by or on behalf of the Company:
(A) that the Company will be profitable or that the
Investor will realize profits or losses, as a result of its
investment in the Shares; or
(B) that the past performance or experience on the
part of any officer, director, stockholder, employee, agent or
affiliate thereof, or any employee, agent or affiliate of the
Company will in any way indicate the predict-able results of
ownership of capital stock of the Company or of the overall
venture.
5. Indemnification.
(a) Indemnification of the Company and the Company Affiliates. From and
after the date hereof, the Investor shall indemnify and hold harmless the
Company, its directors, officers, employees, agents, representatives and
stockholders (each & 'Company Indemnified Party") from and against any loss,
damage or expense9 including, without limitation, reasonable attorneys' and
consultants' fees, disbursements and expenses9 suffered by the Company or any
Company Indemnified Party arising or resulting from any inaccuracy in or breach
of any of the representations and warranties made by Investor herein.
(b) Indemnification of the Investor. From and after the date hereof,
the Company shall indemnify and hold harmless the Investor, its directors,
officers, employees, agents, representatives, stockholders and partners (each an
'Investor Indemnified Party"), as applicable, from and against any loss, damage
or expense, including, without limitation, reasonable attorneys' and
consultants' fees, suffered by the Investor or any Investor Indemnified Party
arising or resulting from any inaccuracy in or breach of any of the
representations. warranties, covenants or agreements made by the Company herein.
(c) Procedure for Claims. Within ten days after obtaining written
notice of any claim or demand which has given rise to, or could reasonably give
rise to' a claim for indemnification hereunder, the parry seeking
indemnification shall give written notice of such claim ('Notice of claim') to
the other parry. Failure to give such notice by the parry seeking
indemnification within said ten day period shall not relieve the indemnifying
party of its obligations hereunder, unless and only to the extent the failure to
so notify the identifying party actually results in damage or prejudice to such
indemnifying party. Notice of Claim shall set forth a brief description of the
facts giving rise to such claim and the amount (or a reasonable estimate) of the
loss, damage or expense suffered, or which may be suffered, by the party seeking
indemnification.
Upon receiving the Notice of Claim, the indemnifying party shall
resist, settle or otherwise dispose of such claim in such manner as it shall
deem appropriate, including the employment of counsel, and shall be responsible
for the payment of all expenses, including the reasonable fees and expenses of
such counsel provided that the indemnifying party shall not settle such claim
without the consent of the indemnified party which will not be unreasonably
withheld. The indemnified party shall have the right to employ separate counsel
in any such action and to participate in or assume the defense thereof, but the
fees and expenses of such counsel shall be at the indemnified party's expense
unless (i) the employment has been specifically authorized by the indemnifying
party in writing, (ii) the indemnifying party has failed to assume the defense
and employ counsel in a timely manner or (iii) the named parties to any action
(including any impleaded parties) include both Investor and the Company, and the
indemnified party has been advised by such counsel that representation of the
Company and the Investor by the same counsel would be inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them (in which case, if the indemnified party
notifies the indemnifying party in writing that the indemnified party elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall have neither the right nor the obligation to assume the
defense of such action on behalf of the indemnified party).
(d) Third Party Beneficiaries. Nothing contained in this Section 5
shall confer any rights upon, or inure to the benefit of, any third party other
than those parties specified in Sections 5(a) and 5(b) above, it being
understood that such parties, to the extent not actually parties hereto, shall
be third party beneficiaries.
6. Condition to the Company's Obligations. The obligation of the
Company to consummate the transactions contemplated hereby is expressly
conditioned upon:
(a) the execution and delivery by the Investor of this Subscription
Agreement;
(b) payment by the Investor to the Company of the Purchase Price either
(i) by certified or cashier's check made payable to the order of "IVI
Publishing, Inc." or (ii) by electronic wire transfer to an account designated
in writing to the Investor prior to the Closing.
7. Conditions to Investor's Obligations. The obligation of the Investor
to consummate the transactions contemplated hereby is expressly conditioned
upon:
(a) the execution and delivery of by the Company of this Subscription
Agreement; and
(b) the delivery to the Investor of certificates evidencing the Shares
issued in the name of the Investor.
8. Miscellaneous.
(a) Notices. Any and all notices or other communications provided for
herein shall be in writing and shall be considered duly given upon the earliest
to occur of (i) personal delivery, (ii) two days after being delivered to a
reputable overnight mail delivery courier or service, (iii) five days after
being mailed by certified or registered mail, return receipt requested, postage
prepaid or (iv) the delivering party's receipt of a written confirmation of a
facsimile transmission. All notices shall be addressed to the Company at its
principal office and to the Investor at its address last appearing on the stock
records of the Company. Any party hereto may change its address by giving notice
to the other party hereto as provided herein.
(b) Effect and Interpretation. Notwithstanding the place where this
Subscription Agreement may be executed by any of the parties hereto, the parties
expressly agree that all terms and provisions hereof shall be construed in
accordance with and governed by the laws of the State of Minnesota without
regard to the conflicts of laws provisions thereof.
(c) Entire Agreement. This Subscription Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof any may be amended only by a writing executed by all parties. This
Subscription Agreement and the information contained herein expressly supersede
all understandings and agreements of the parties, whether written or oral,
between the parties with respect to the subject matter hereof.
(d) Successors. This Subscription Agreement and all the terms and
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto, and their respective heirs, legal representatives, permitted
successors and permitted assigns.
(e) Pronouns and Headings. As used herein, all pronouns shall include
the masculine, feminine, neuter, singular and plural wherever the context and
facts require such construction. The descriptive headings in the sections of
this Subscription Agreement are inserted for convenience of reference only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
(f) Severability. If any provision of this Subscription Agreement is
held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such provision shall be severed and enforced to the extent
possible or modified in such a way as to make it enforceable, and the
invalidity, illegality or unenforceability thereof shall not affect the
validity, legality or enforceability of the remaining provisions of this
Subscription Agreement.
(g) Counterparts. This Subscription Agreement may be executed
simultaneously in one or more counterparts each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(h) No Assignment. This Subscription Agreement and the rights and
obligations of the parties hereunder may not be assigned or delegated without
the prior written consent of the non-assigning or non-delegating party.
(i) Jurisdiction; Service of Process; Waiver of Jury Trial. The parties
hereby submit to the exclusive jurisdiction of the federal and state courts in
Minneapolis, Minnesota for all purposes of or in connection with this
Subscription Agreement. The parties hereby consent to process being served in
any suit, action or proceeding of the nature referred to above (A) by the
mailing of a copy thereof by registered or certified mail, postage prepaid,
return receipt requested,, to its address shown below its signature hereto or
(B)by serving a copy thereof upon any party s authorized agent for service of
process (to the extent permitted by applicable law, regardless whether the
appointment of such agent for service of process for any reason shall prove to
be ineffective or such agent for service of process shall accept or acknowledge
such service); provided that, to the extent lawful and practicable, written
notice of said service upon said agent shall be mailed by registered or
certified mail, postage prepaid, return receipt requested, to either party at
its address shown below its signature hereto. The parties agree that such
service, to the fullest extent permitted by law, (1) shall be deemed in every
respect effective service of process upon it in any such suit, action or,
proceeding and (2) shall be taken and held to be valid personal service upon and
personal delivery to it. Nothing herein shall affect either party's right to
serve process in any other manner permitted by law.
THE PARTES HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THE THIS SUBSCRIPTION AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR
RELATED TO THE TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first above written.
THE COMPANY:
IVI PUBLISHING, INC., a Minnesota corporation
By:
Its:
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
FOR CORPORATE AND PARTNERSHIP INVESTORS
Note: This page must be executed by an officer (in the case of a corporation) or
other authorized agent (in the case of a partnership) authorized to bind the
corporation or partnership.
The undersigned hereby subscribes for the following shares of Common Stock:
Number of shares of Common Stock:
Purchase Price:
Name of Investor:
AT&T CORP.
By:
Its:
Taxpayer Identification No.:
Address of Principal Place of Business:
Date:
--------------------------------------------------------------
Below this line to be completed by the Company Only
SUBSCRIPTION FOR THE ABOVE DESCRIBED SHARES ACCEPTED AS OF
_____________, 199__
IVI PUBLISHING, INC.,
a Minnesota corporation
By:
Title:
STATE OF )
)
COUNTY OF )
I, __________________________ a Notary Public in and for said County,
in the State aforesaid, do hereby certify that the person whose name is
subscribed to above, known to me to be the _________________ of _______________,
appeared before me this day in person, and acknowledged and swore that he signed
and delivered the said instruments on behalf of said entity for the uses and
purposes therein set forth, and that the statements contained therein are true.
Give under my hand and notarial seal as of the ___ day of
_____________, 199__.
My Commission expires:
-----------------------
Notary Public
EXHIBIT 10
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the "Agreement"), dated as of [____],
1995 by and between IVI Publishing, Inc., a Minnesota corporation (the
"Company"), and the Persons named in Schedule I hereto who execute counterparts
of this Agreement.
R E C I T A L S:
A. This Agreement is made pursuant to the Anchor Brand Content Provider
Agreement, dated as of the date hereof (the "Content Agreement") between the
Company and AT&T Corp. ("AT&T"), which (among other things) provides that the
Company grant to AT&T options (the "Options") to purchase in the aggregate up to
20% of the Company's common stock, $.01 par value (the "Common Stock"), at the
exercise prices provided in the Content Agreement.
B. The Content Agreement provides that the Common Stock acquired by
AT&T pursuant to the exercise of the Options, if any, will be entitled to
certain so-called "piggyback" registration rights, as more fully described
herein.
C. In order to induce AT&T to enter into and perform its obligations
under the Content Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Common Stock" has the meaning set forth in the Recitals.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar or successor federal statute and the rules and regulations of the
SEC promulgated thereunder, all as the same shall be in effect at the time.
"Holder" means any Person named in Schedule l hereto who executes a
counterpart of this Agreement and any Person who becomes a Holder after the date
of this Agreement pursuant to Paragraph 11(a).
"Indemnified Party" has the meaning set forth in Paragraph 6(c).
"Indemnifying Party" has the meaning set forth in Paragraph 6(c).
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof, or any other entity of any kind.
"Registered Securities" means Registrable Securities which have been
registered under the Securities Act pursuant to a registration statement filed
with and declared effective by the SEC.
"Registrable Securities" means (i) the Shares; (ii) the shares of
Common Stock issued or issuable as dividends on, or other distributions with
respect to, the Shares; and (iii) any other security issued or issuable in
exchange for, or in replacement of, any of the Shares, in -each case until any
such security ceases to be a Registrable Security in accordance with Paragraph 2
hereof.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Paragraph 3 of this Agreement, including
without limitation all registration and filing fees, including fees with respect
to filings required to be made with any stock exchange or the NASD, fees and
expenses of compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), messenger, telephone and delivery
expenses, and the fees and expenses of counsel for the underwriter, costs of
printing prospectuses, and fees and disbursements of counsel for the Company and
of all independent certified public accountants of the Company (including the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance).
"Registration Statement" means any registration statement of the
Company which includes any of the Registrable Securities pursuant to the
provisions of this Agreement, including the prospectus included or deemed
included in the Registration Statement and all amendments and supplements to the
Registration Statement or the prospectus, including post-effective amendments,
and all exhibits to, and all materials incorporated by reference in, the
Registration Statement.
"SEC" means the United States Securities and Exchange Commission or any
similar agency then having the authority to enforce the Exchange Act or the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar or successor statute, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means all fees and expenses of counsel to the
Holder(s), all discounts, commissions or other reasonable customary fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Registrable Securities.
"Selling Holders" has the meaning set forth in Paragraph 4(b).
"Shares" means the shares of Common Stock of the Company owned by the
Holders which were originally purchased by AT&T through the exercise of the
Options.
"Stockholder" means any holder of equity securities issued by the
Company.
2. Securities Subject to this Agreement. The securities entitled to the
benefits of this Agreement are the Registrable Securities, but such benefits
shall continue with respect to each such security only so long as such security
continues to be a Registrable Security. A security ceases to be a Registrable
Security when (i) a Registration Statement covering the sale of such Registrable
Security has been declared effective under the Securities Act and the
Registrable Security has been sold in accordance with the Registration
Statement; (ii) it is distributed to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act; (iii) a new
certificate representing such security has been delivered (to the original
Holder or any subsequent transferee) by the Company free from any restrictive
legend and without issuance of stop transfer or other instructions to the
Company's transfer agent and the Holder of such security has been advised by
counsel acceptable to it that subsequent disposition of such security will not
require registration or qualification under the Securities Act or any state
"blue sky" or similar law then in effect; or (iv) the security has ceased to be
outstanding.
3. Registration under the Securities Act: Piggy-Back Registration.
(a) Piggy-Back Registration. If (but without any obligation to do so)
at any time during the period beginning April 1, 1996 and ending March 31, 2000
the Company proposes to register for itself or any of its stockholders (other
than (1) the Holders or (2) in connection with any demand registration requested
pursuant to the Registration Rights Agreement, dated October 14, 1993 between
the Company and Invemed Associates, Inc.) any of its capital stock under the
Securities Act in connection with the public offering of such securities on a
form and in a manner that would permit registration of Registrable Securities
for sale to the public under the Securities Act, then:
(i) the Company in each case will notify in writing each
Holder of its intention to effect such a registration at least 30 days
prior to the proposed filing of a Registration Statement in connection
therewith;
(ii) the Company will offer each Holder the opportunity to
include in such registration all or such lesser amount of Registrable
Securities as each Holder may request. Upon the request of one or more
Holders which in the aggregate own at least a majority of the
outstanding Registrable Securities, given in writing within 20 days
after receipt of the notice described under clause (i) above, the
Company will use its reasonable best efforts as soon as practicable
thereafter to cause any of the Registrable Securities specified by such
Holder to be included in the Registration Statement; and
(iii) if the registration of which the Company gives written
notice under clause (i) above involves an underwriting, the Company
shall use its reasonable best efforts to cause the managing
underwriter(s) of the proposed underwritten offering to permit Holders
to include their Registrable Securities in the underwriting on the same
terms and conditions as similar terms of the Company included therein.
(b) Limitations on Company's Obligations to Effect Additional
Piggy-Back Registration. Notwithstanding the provisions of Paragraph 3(a) above:
(i) the Company shall not be obligated to include Registrable
Securities in more than two Registration Statements pursuant to
Paragraph 3(a) in which Registrable Securities are included (excluding
registrations in which the number of Registrable Securities requested
to be included is reduced as a result of the operation of Paragraph
3(b)(ii) below, but only to the extent of such deductions) and
thereafter, the Company shall have no obligation to include any
Registrable Securities in any registration pursuant to this Paragraph
3;
(ii) if and to the extent that the managing underwriter(s)
advise the Company in writing that inclusion of the number of
Registrable Securities held by Holders requesting inclusion in the
Registration Statement would materially interfere with the
underwriter's ability to effectuate the registration and sale of
securities proposed to be offered and sold pursuant to the Registration
Statement, the managing underwriter(s) shall select the permissible
quantity of Registrable Securities to be sold by the Holders (which may
be none) by reducing the total number of securities to be sold by the
holders of securities other than Registrable Securities and the Holders
(but not the number of securities to be sold by the Company) on a pro
rata basis. For purposes of apportionment pursuant to this Paragraph
3(b), for any selling Holder that is a partnership or a corporation,
the affiliates of such partnership or corporation shall collectively,
with such Holder be deemed to be one "selling Holder," and any pro rata
reduction with respect to such "selling Holder" shall be based upon the
aggregate amount of shares carrying registration rights owned by
entities and individuals included in such "selling Holder;"
(iii) if, at any time after giving such written notice of its
intention to register any of its securities and prior to the effective
date of the applicable Registration Statement filed in connection with
such registration, the Company shall determine for any reason not to
register such securities, the Company may, at its election, give
written notice of such determination to each holder of Registrable
Securities and thereupon shall be relieved of its obligation to
register any Registrable Securities in connection with such
registration; and
(iv) the Company shall not be obligated to effect any
registration of Registrable Securities under Paragraph 3(a) in
connection with mergers, acquisitions, exchange offers, dividend
reinvestment plans or stock option plans or other employee benefit
plans; provided, that the securities to be included in such
registration are limited to shares to be issued in such transaction
and/or pursuant to such benefit plans.
(c) Underwritten Offer. If the registration of which the Company gives
written notice under Paragraph 3(a)(i) above involves an underwriting, the
Company shall so advise in such written notice. In such event the right of any
Holder to registration pursuant to Paragraph 3(a) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in such underwriting. All Holders proposing to distribute
their Registrable Securities through such underwriting shall (together with the
Company and the other holders distributing their Registrable Securities through
such underwriting) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Company.
If any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw from the underwriting by prompt written notice to the Company
and the underwriter.
4. Registration Obligations of the Company. In connection with the
filing of a Registration Statement Pursuant to Paragraph 3, the Company shall:
(a) Use its reasonable best efforts to cause such Registration
Statement to remain in effect until the earlier of (i) the completion of the
distribution of the Registrable Securities included in the Registration
Statement, and (ii) two years after the date on which the Registration Statement
is declared effective.
(b) Notify the Holders whose Registrable Securities are included in
such Registration Statement (the "Selling Holders") as to the filing of the
Registration Statement and of all amendments or supplements promptly after the
filing of any thereof;
(c) Notify the Selling Holders, promptly after the Company shall
receive notice thereof, of the time when such Registration Statement became
effective or when any amendment or supplement to any prospectus forming a part
of said Registration Statement has been filed;
(d) Notify the Selling Holders promptly of any request by the SEC for
the amending or supplementing of such Registration Statement or prospectus or
for additional information;
(e) During the period in which the Company is obligated to use its
reasonable best efforts to keep a Registration Statement effective pursuant to
this Paragraph 4, prepare and promptly file with the SEC and promptly notify the
Selling Holders of the filing of any amendments or supplements to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the Securities Act, any
event with respect to the Company shall have occurred as a result of which any
such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading; and, in addition, during such
period. prepare id file with the SEC, promptly upon the Selling Holders' written
request, any amendments or supplements to such Registration Statement or
prospectus which may be reasonably necessary or advisable in connection with the
distribution of the Registrable Securities;
(f) Prepare, promptly upon request of the Selling Holders or any
underwriters for the Selling Holders made during the period in which the Company
is obligated to use its reasonable best efforts to keep a Registration Statement
effective, such amendment or amendments to such Registration Statement and such
prospectus or prospectuses as may be reasonably necessary to permit compliance
with the requirements of Section 10(a)(3) of the Securities Act;
(g) Rise the Selling Holders promptly after the Company shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC
suspending the effectiveness of any such Registration Statement or amendment
thereto or of the initiation or threatening of any proceeding for that purpose,
and promptly use its reasonable best efforts to prevent the issue of any stop
order or obtain its withdrawal promptly if such stop order should be issued;
(h) Use its reasonable best efforts to qualify as soon as reasonably
practicable the Registrable Securities for sale under the securities or blue sky
laws of such states and jurisdictions within the United States as shall be
reasonably requested by the Selling Holders; provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do
business, to become subject to taxation or to file a consent to service of
process generally in any of the aforesaid states or jurisdictions;
(i) Furnish the Selling Holders, as soon as available, copies of any
Registration Statement and each preliminary or Final prospectus, or supplement
or amendment required to be prepared pursuant hereto, all in such reasonable
quantities as the Selling Holders may from time to time reasonably request;
(j) Furnish each Selling Holder such signed counterparts of opinions of
counsel and accountants' "comfort" letters as it reasonably may request with
respect to the registration of its Registrable Securities, the Registration
Statement covering such Registrable Securities and the financial statements
included therein; and
(k) Apply for listing and use its reasonable best efforts to list the
Registrable Securities, if any, being registered on any national securities
exchange on which a class of the Company's equity securities is listed or, if
the Company does not have a class of equity securities listed on a national
securities exchange, apply for qualification and use its reasonable best efforts
to qualify the Registrable Securities, if any, being registered for inclusion on
the automated quotation system of the NASD.
5. Expenses. The Company will pay all Registration Expenses in
connection with registrations of Registrable Securities effected pursuant to
Paragraph 3. All Selling Expenses in connection with any registration effected
pursuant to this Agreement shall be borne by the Company and the holders of the
Registrable Securities so registered, pro rata on the basis of the number of
Shares included in the registration for the account of the Company and the
number of Registrable Securities so registered by each such holder.
6. Indemnification.
(a) To the extent permitted by applicable law, the Company will
indemnify each Holder of the Registrable Securities requesting or joining in a
registration, each Person who controls such Holder within the meaning of Section
15 of the Securities Act, and each underwriter of the securities so registered
and each Person who controls such underwriter, id their respective officers,
directors, partners, agents, employees and successors, against all costs,
expenses, demands, claims, losses, damages, liabilities, fines id penalties (or
actions in respect thereof), to which such holder or such other Person may
become subject under the Securities Act, the Exchange Act or under any other
statute or at common law or otherwise, insofar as such claims, losses, damages,
liabilities, fines and penalties arise out of or are based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
Registration Statement or prospectus, or arise out of or are based upon any
omission (or alleged omission) to state therein a fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law (other
than with respect to violations or alleged violations caused by the Person
seeking indemnification under this Paragraph 6(a)) and will reimburse each such
Holder, each Person who controls such Holder within the meaning of Section 15 of
the Securities Act and each such underwriter, and their respective officers,
directors, partners, agents, employees and successors for any legal and any
other expenses reasonably incurred in connection with investigating or defending
any such demand, claim, loss, damage, liability or action promptly after
submission of supporting materials with respect to such expenses; provided,
however, that the Company shall not be required to indemnify any Holder or
underwriter or Person which controls any Holder or underwriter for any cost,
expense, demand, claim, loss, damage, liability, fine or penalty which arises
out of or is based upon any written information provided by such Person
expressly for inclusion in the Registration Statement.
(b) To the extent permitted by applicable law, each Holder requesting
or joining in a registration will indemnify the Company, each of its officers,
directors, successors and controlling persons, and each underwriter, if any, of
the Company's securities covered by a registration statement, each Person who
controls the Company or such underwriter within the meaning of Section 15 of the
Exchange Act, and any other Holder selling securities in such registration
statement or any of its directors, officers, partners, agents or employees or
any other person who controls, within the meaning of Section 15 of the Exchange
Act, such Holder against all costs, expenses, demands, claims, losses, damages,
liabilities, fines and penalties (or actions in respect thereof to which such
indemnified party may become subject under the Securities Act, the Exchange Act
or under any other statute or at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon an untrue
statement (or alleged untrue statement) of a material fact contained in any
Registration Statement or prospectus, or arise out of or are based upon the
omission (or alleged omission) to state therein a fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) was made in any Registration
Statement or prospectus in reliance upon and in conformity with written
information furnished to the Company by such Holder requesting or joining in a
registration expressly for use in the preparation thereof.
(c) Each party entitled to indemnification under this Paragraph 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has received written notice of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided (i) the Indemnifying Party shall
acknowledge in writing to the Indemnified Party prior to engaging in such
defense its obligation to indemnify the Indemnified Party and (ii) such counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld or delayed). The Indemnified Party may participate in
such defense at its own expense; provided, however, that the Indemnifying Party
shall bear the expense of such defense of the Indemnified Party if (i) the
Indemnifying Party has agreed in writing to pay such expenses, (ii) the
Indemnifying Party shall have failed to assume the defense of such claim or
employ counsel reasonably satisfactory to the Indemnified Party, (iii) in the
reasonable judgment of the Indemnified Party, based upon the written advice of
such Indemnified Party's counsel, representation of both parties by the same
counsel would be inappropriate due to actual or potential conflicts of interest
or (iv) such claim could involve the imposition of criminal sanctions against
the Indemnified Party, in which case the Indemnified Party shall assume the
defense of any such criminal claim. In the event that the Indemnifying Party
properly does not assume such defense, the Indemnifying Party shall not be
subject to any liability for any settlement made without its prior written
consent, which consent shall not be unreasonably withheld or delayed. The
failure of any Indemnified Party to give notice as provided herein shall relieve
the Indemnifying Party of its obligations under this Section 6 only to the
extent that such failure to give notice shall materially adversely prejudice the
Indemnifying Party in the defense of any such claim or any such litigation. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the prior written consent of each Indemnified Party (which consent
shall not be unreasonably withheld), consent to entry of any judgment or enter
into any settlement of any such claim.
7. Contribution.
(a) If the indemnification provided for in Paragraph 6 from the
Indemnifying Party is unavailable to or unenforceable by the Indemnified Party
in respect to any losses, claims, damages, liabilities or expenses referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Paragraph 6, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(b) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Paragraph 7 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(c) If indemnification is available under Paragraph 6, the Indemnifying
Parties shall indemnify each Indemnified Party to the full extent provided in
Paragraph 6 without regard to the relative fault of the Indemnifying Party or
Indemnified Party or any other equitable consideration provided for in this
Paragraph 7.
8. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holder of Registrable Securities. To
the extent consistent with applicable law, each Holder of Registrable Securities
whose Registrable Securities are included in a Registration Statement filed
pursuant to Paragraph 3 hereof agrees not to effect any public sale or
distribution of the issue being registered or any similar security of the
Company, including a sale pursuant to Rule 144 under the Securities Act, during
the 7-day period prior to, and during the 90-day (or such longer period as the
managing underwriter with respect to the application Registration Statement
shall deem appropriate) period beginning on, the effective date of such
Registration Statement, to the extent such sales may prevent the Company from
being in compliance with the Exchange Act; provided, however, that no such
restriction shall apply to sales of Registrable Securities made pursuant to that
Registration Statement, which may be, made at any time following the effective
date of that Registration Statement.
(b) Restrictions on Public Sale by the Company and Others. The Company
shall not effect any public or nonpublic sale or distribution of any securities
similar to those being registered, or any securities convertible into or
exchangeable or exercisable for any such securities or similar securities,
during the 7-day period prior to, and during the 90-day period beginning on, the
effective date of any Registration Statement in which holders of Registrable
Securities are participating or the commencement of a public distribution of
Registrable Securities pursuant to any such Registration Statement (except (i)
as part of such registration or pursuant to registrations on ▇▇▇ ▇▇▇▇▇ ▇-▇ or
S-8 or any similar or successor form, or on any form filed in connection with an
exchange offer or an offering of securities solely to the existing stockholders
or employees of the Company or (ii) for sales or other issuances of securities
pursuant to outstanding options, warrants, rights or similar obligations).
9. Rule 144 and Stock Exchange Listings.
To the extent that the Company is subject to the filing and reporting
requirements of the Securities Act and the Exchange Act, and so long as there
are Registrable Securities outstanding:
(a) The Company will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, and will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Holder of Registrable Securities, the Company
will deliver to such Holder a written statement as to whether it has complied
with such information and requirements.
(b) The Company will use its reasonable best efforts to avoid taking
any action which would cause the Common Stock to cease to be eligible for
inclusion on either of the NASD Automated Quotation System or for listing on any
securities exchange on which it may become listed.
10. Obligations of Holder.
(a) Each Holder of Registrable Securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
(b) Each Holder of the Registrable Securities agrees by acquisition of
such Registered Securities that upon receipt of any notice from the Company
pursuant to Paragraph 4(g), such Holder will forthwith discontinue such Holder's
disposition of Registered Securities pursuant to the Registration Statement
relating to such Registered Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Paragraph 4(g) and if
so directed by the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the prospectus relating to such Registered Securities at the time
of receipt of such notice.
11. Miscellaneous.
(a) Transfer of Certain Rights. The rights granted to the Holders under
this Agreement may be transferred only to a transferee who delivers to the
Company, within a reasonable time after such transfer, a written instrument by
which such transferee agrees to be bound by the applicable terms of this
Agreement. Notwithstanding the foregoing, nothing herein shall prohibit: (i) any
Holder from transferring any of its rights under this Agreement to any
wholly-owned subsidiary of such Holder or to any entity which merges or
consolidates with or acquires all or substantially all of the equity securities
or assets of such Holder, (ii) any Holder which is a partnership from
transferring any of its rights under this Agreement to a partner of such
partnership where such partner receives Registrable Securities in a distribution
from such partnership, (iii) any Holder who is an individual from transferring
any of its rights under this Agreement to such Holder's spouse or to other
relatives, or to a trust for the benefit of the Holder, or his or her spouse or
other relatives; or (iv) any trustee of a trust which holds Registerable
Securities from distributing such Registrable Securities to the beneficiaries of
such trusts; provided that any such transferee under subparagraphs (i), (ii),
(iii) or (iv) above will hold the Registrable Securities subject to the terms
and conditions of this Agreement. Upon any transfer of the rights of a Holder
permitted by and completed in compliance with the terms of this Agreement, the
transferee shall become a "Holder" for purposes of this Agreement and the
Company shall add the name and address of the transferee to Schedule I (and, to
the extent the transferor no longer holds Registrable Securities, shall delete
the name and address of the transferor).
(b) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written consent of the
Company and Holders of at least a majority of the Registrable Securities
affected by such amendment, modification, supplementation, waiver or consent.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter which relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and which does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by the
Holders of a majority of the Registrable Securities being sold by such Holders,
provided thai the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(d) Notices. Any and all notices or other communications provided for
herein shall be in writing and shall be considered duly given upon the earliest
to occur of (i) personal delivery, (ii) two days after being delivered to a
reputable overnight mail delivery courier or service, (iii) five days after
being mailed by certified or registered mail, return receipt requested, postage
prepaid or (iv) the delivering party's receipt of a written confirmation of a
facsimile transmission. All notices shall be addressed to the Company at its
principal office and to the Holder at its address last appearing on the stock
records of the Company. Any party hereto may change its address by giving notice
to the other party hereto as provided herein.
(e) Governing Law. This Agreement shall be governed by ad construed in
accordance with the laws of the State of Minnesota without regard to the
conflict of laws provisions thereof.
(f) Counterparts. This Agreement may be executed in any number of
counterparts ad by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only ad shall not limit or otherwise affect the meaning hereof.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement (and all exhibits and/or schedules
attached hereto) is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the securities
now or hereafter owned by the Holders.
(j) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof or thereof is validly
asserted as a defense, the successful party shall be entitled to recover, and
the court shall award, reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
(k) Jurisdiction; Service of Process; Waiver of Jury Trial. The parties
hereby submit to the exclusive jurisdiction of the federal and state courts in
Minneapolis, Minnesota for all purposes of or in connection with this
Registration Rights Agreement. The parties hereby consent to process being
served in any suit, action or proceeding of the nature referred to above (i) by
the mailing of a copy thereof by registered or certified mail, postage prepaid,
return receipt requested, to its address shown below its signature hereto or
(ii) by serving a copy thereof upon any party's authorized agent for service of
process (to the extent permitted by applicable law, regardless whether the
appointment of such agent for service of process for any reason shall prove to
be ineffective or such agent for service of process shall accept or acknowledge
such service); provided that, to the extent lawful and practicable, written
notice of said service upon said agent shall be mailed by registered or
certified mail, postage prepaid, return receipt requested, to either party at
its address shown below its signature hereto. The parties agree that such
service, to the fullest extent permitted by law, (1) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (2) shall be taken and held to be valid personal service upon and
personal delivery to it. Nothing herein shall affect either party's right to
serve process in any other manner permitted by law.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
THE COMPANY:
IVI PUBLISHING, INC., a Minnesota corporation
By:
Title:
THE HOLDER(S):
AT&T CORP., a New York corporation
By:
Title:
Address:
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit 11
Page 1 of 1
Exhibit 11
Provider's Advertising Standards
The initial version of the Provider's Advertising Guidelines shall be formulated
by Provider with the concurrence of AT&T which concurrence shall not be
unreasonably withheld.
Exhibit 12
Page 1 of 2
EXHIBIT 12
Exceptions to Exclusivity
The following items are exceptions to (i) the exclusive rights granted
by Provider to AT&T under the Agreement, and (ii) Provider's non-solicitation
obligations pursuant to Section L:
1. The rights reserved to Mayo Foundation for Medical Education and
Research ("Mayo Foundation") pursuant to the Electronic Publishing License,
Development and Marketing Agreement, dated as of April 28, 1993, between Mayo
Foundation and Provider, a copy of which has previously been delivered to AT&T.
2. The rights reserved to Mayo Foundation pursuant to the 1994 License,
Development and Marketing Agreement between Mayo Foundation and Provider, a copy
of which has previously been delivered to AT&T.
3. Provider's rights with respect to Provider Trademarks licensed to
Provider by Provider Brands are non-exclusive.
4. The agreements of Provider and America's Health Network, Inc.
(together with its successors and assigns, ("AHN") pursuant to the Agreement
between AHN and Provider, dated May 25, 1995, a copy of which has previously
been delivered to AT&T.
5. All non-consumer on-line and/or interactive products and services
regardless of the medium or mechanism utilized, whether known or hereafter known
or hereafter devised, developed, designed, established, distributed, produced,
sold or marketed by Provider alone or together with any person or entity which
are offered to focused communities of special interest subscribers/customers
(i.e., not offered to the general public) and which shall not compete to any
material respect with Health and Wellness Service (a "Private Label Service"),
including, without limitation:
(a) on-line and/or interactive content to be used by members
of a managed care organization, clinics and employers; and
(b) on-line and/or interactive work-for-hire projects
undertaken for clients of Provider which work-for-hire will not be made
available by Provider or on Provider's behalf to the general public.
6. On-line and/or interactive networked kiosks (or similar delivery
systems) that feature portions or segments of Content which may only be
available (i) to employees in private work places free of charge or (ii) to the
general public free of charge, provided that such kiosks shall not compete to
any material respect with the Health and Wellness Service.
7. Provider's CD-ROM and other interactive products.
Exhibit 13
Distribution Agreement
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