CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
EXHIBIT 10.27
LICENSE AGREEMENT
By and Between
NETSCAPE COMMUNICATIONS CORPORATION
and
IMGIS, INC.
Dated as of February 1, 1999
CONFIDENTIAL
LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") is entered into as of
February 1, 1999 (the "Effective Date") by and between Netscape
Communications Corporation, a Delaware corporation having its principal
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("NETSCAPE"), and IMGIS, INC., a California corporation doing business as
"AdForce" and having its principal office at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("ADFORCE").
WITNESSETH:
WHEREAS, the parties hereto wish to provide the terms and conditions
under which ADFORCE will supply NETSCAPE Ad Serving Services (as defined
below) for the term provided herein; and
WHEREAS, NETSCAPE desires to obtain, and ADFORCE is willing to grant
to NETSCAPE at the times and on the specific conditions stated herein, a
worldwide, perpetual and nonexclusive license to use, and to serve interactive
advertisements using, ADFORCE's ad serving, trafficking, targeting and related
technology on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants and undertakings contained herein and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
In addition to other terms defined elsewhere herein, the following
terms will have the following meanings when used herein (any term defined in
the singular will have the same meaning when used in the plural and vice
versa, unless stated otherwise):
1.1 "AD SERVING SERVICES" has the meaning set forth in Section 6.1
below.
1.2 "AFFILIATE" of any specified Person means any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the specified Person.
1.3 "BANNER EXCHANGE" means the NETSCAPE advertising program which
offers companies the opportunity to promote their site, which site may or may
not have a NETSCAPE domain name, by contributing impressions into a banner
exchange network
CONFIDENTIAL
that would in turn give such site the right to impressions on other sites
within that banner exchange network. Typically, such sites receive one
impression on the banner exchange network for every two they give, with the
balance available for the banner exchange network to sell to advertisers. The
program is targeted at small sites with low-value inventory which are not
candidates for the AdForce Service and, therefore, noncompetitive with
ADFORCE. Examples of banner exchange networks include LinkExchange, SmartAge
and Hyperbanner.
1.4 "NETSCAPE AFFILIATE" means any Affiliate of NETSCAPE, where the
term "control" for purposes of Section 1.2 means the direct or indirect
ownership or control by NETSCAPE of twenty-five percent (25%) or more of the
stock or other equity interests of such Person entitled to vote for the
election of members of the Board of Directors or similar governing body of
such Person; provided, however, that such Person shall cease to be a NETSCAPE
Affiliate if and when such equity interest becomes less than twenty-five
percent (25%) for any reason other than as a result of dilution, and
provided, further, that if such equity interest becomes less than twenty-five
percent (25%) as a result of dilution, such Person shall cease to be a
NETSCAPE Affiliate if and when such percentage equity interest is further
reduced for any reason other than as a result of dilution.
1.5 "COVERED NETSCAPE PARTNER SITE PAGES" means the interactive site
pages of a NETSCAPE Partner provided that: (a) such site pages are marketed
or promoted, and intended to be accessible, to Netcenter visitors only,
meaning links to such Site Pages are available only through Netcenter and not
from the Partner site; and (b) NETSCAPE or a NETSCAPE Affiliate has the right
to serve and to sell the advertising inventory for such site.
1.6 "NETSCAPE NETCENTER" means the United States, English language
NETSCAPE brand online website and information service, including future
modifications to, implementations of and successors of such service.
1.7 "NETSCAPE NETWORK" means: (a) NETSCAPE Netcenter, (b) any other
domestic U.S. online product or service owned or operated by NETSCAPE,
excluding mere links to Third Party products or services that are accessible
through distribution channels other than NETSCAPE Netcenter and excluding any
products consisting of the Technology, or any repackaged or reengineered
version of the Technology, that are distributed commercially to Third Parties
other than NETSCAPE Affiliates; and (c) any other product or service
distributed under the brand name of NETSCAPE other than under a mere
trademark license of such brand name, provided that NETSCAPE contributes
substantially to the creation or development of such product or service; (d)
Banner Exchange NETSCAPE Partner site; and (e) Covered NETSCAPE Partner Site
Pages.
1.8 "NETSCAPE PARTNER" means any Person with which NETSCAPE or a
NETSCAPE Affiliate has a joint venture, partnership or other contractual
relationship for
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the purposes of commerce, advertising, online access, or the provision by such
Person of content or information for the NETSCAPE Network.
1.9 "DATA AGREEMENT MATERIAL BREACH" has the meaning set forth in
Section 14.2.2 below.
1.10 "DEMOGRAPHIC DATA" has the meaning set forth in the Demographic
Data Agreement.
1.11 "DEMOGRAPHIC DATA AGREEMENT" means the Demographic Data
Agreement between NETSCAPE and ADFORCE, should the parties elect to proceed
with such and agreement.
1.12 "DEPLOYMENT DATE" has the meaning set forth in Section 3.2 below.
1.13 "DEVELOPMENT SERVICES" has the meaning set forth in Section 5.1
below.
1.14 "FULLY BURDENED COSTS" of ADFORCE Personnel in the provision of
Services hereunder means, for each ADFORCE Personnel providing any Services
to NETSCAPE, an amount equal to the sum of the following:
(a) (i) If such Personnel is an employee of ADFORCE, the wages
and benefits payable by ADFORCE to such employee multiplied
by the percentage of time spent by such employee in the
provision of such Services to NETSCAPE relative to the
total amount of time spent by such employee in his or her
employment with ADFORCE, as measured on a daily basis and
charged on an hourly basis, which amount shall in no event
exceed $100 per hour, or
(ii) if such Personnel is an independent contractor of
ADFORCE, the fees (excluding out-of-pocket expenses paid to
such contractor) payable to such contractor by ADFORCE
multiplied by the percentage of time spent by such
contractor in the provision of such Services to NETSCAPE
relative to the total amount of time spent by such contractor
in the provision of services to ADFORCE, as measured on a
daily basis and charged on an hourly basis, which amount
shall in no event exceed $100 per hour; plus
(b) ADFORCE's direct out-of-pocket costs in the provision by
such Personnel of such Services to NETSCAPE but only to the
extent that NETSCAPE is not otherwise obligated hereunder to
provide reimbursement to ADFORCE for such direct costs; plus
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(c) An amount (representing a reasonable allocation of overhead
expenses) equal to ten percent (10%) of the direct out-of-pocket
costs provided for in subpart (b) above.
Out-of-pocket costs and expenses, for purposes of this definition, means
travel, lodging and other non-compensatory costs or expenses. The $100 per
hour maximum amount referred to in subparts (a)(i) and (a)(ii) above shall be
adjusted by mutual agreement of the Parties three (3) years following the
Effective Date hereof to reflect any applicable increase or decrease in the
cost of living.
1.15 "ADFORCE SYSTEM" means any software owned and/or used by, and/or
licensed to, ADFORCE that enables operators of interactive sites and
interactive advertisers to schedule, monitor, serve, traffic and/or target
interactive advertising, including the system used by ADFORCE to provide
services under the AdForce service ▇▇▇▇ and any related or successor system.
1.16 "IMPLEMENTATION DATE" means the date as of which NETSCAPE first
provides Demographic Data (as defined in the Demographic Data Agreement) to
ADFORCE.
1.17 "IMPROVEMENT" means any modification, customization, upgrade,
update, enhancement, patch, "bug" fix or other improvement to the Technology.
1.18 "LOSSES" means losses, liabilities, suits, claims, costs, expenses
(including reasonable attorneys' fees), penalties, fines, judgments and/or
damages (including personal injury or property damages, but excluding
indirect, incidental, special or consequential damages suffered by the
indemnified Party).
1.19 "MATERIALLY LIMIT OR PROHIBIT" shall have the meaning to be set
forth in the Demographic Data Agreement. In addition, for purposes of this
Agreement, NETSCAPE shall be deemed to "Materially Limit or Prohibit" the use
by ADFORCE of Demographic Data: (a) six months following the expiration of
the term (including any renewal term) of the Demographic Data Agreement; or
(b) six months following the termination of the Demographic Data Agreement
(other than as a result of breach or nonperformance by NETSCAPE) provided
that, if the event giving rise to such termination is disputed by the
Parties, there has been a final determination of such termination event by a
court of competent jurisdiction (excluding any determination in connection
with the granting of equitable relief).
1.20 "PARTY" means NETSCAPE or ADFORCE, and "PARTIES" means NETSCAPE and
ADFORCE.
1.21 "PERMITTED PURPOSES" means to serve, traffic and/or target
advertisements or other information or materials, and to perform such other
functions as the Technology
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(including any Improvements) is capable of, for NETSCAPE's own internal
purposes or for or on behalf of any of the NETSCAPE Network.
1.22 "PERSON" means a natural person, a corporation, a partnership, a
trust, a joint venture, any governmental authority, or any other entity or
organization.
1.23 "PERSONNEL" means employees and/or independent contractors.
1.24 "SERVICES" means any services provided by ADFORCE pursuant to this
Agreement, including Ad Serving Services, Development Services and
Technical Support Services.
1.25 "SOFTWARE" means software included in the Technology.
1.26 "TECHNICAL SUPPORT SERVICES" has the meaning set forth in Section
4.1 below.
1.27 "TECHNOLOGY" means all software (in both source code and object
code form), inventions, discoveries, designs, tools, know-how and other
technology, including any Improvements thereto, now or hereafter developed,
owned and/or used by, and/or licensed to, ADFORCE or any of its Affiliates
relating to the serving, trafficking and/or targeting of advertisements or
other information or materials (including all software, inventions,
discoveries, designs, tools, know-how and other technology comprising or used
in connection with the AdForce System and all Third Party software and other
Third Party technology integrated in or necessary for the successful
operation of such technology (except for commercially available Third Party
software that has not been modified to meet ADFORCE's needs, where ADFORCE
does not have the right to provide such software to NETSCAPE)), and all
documentation for such technology. Without limiting the generality of the
foregoing, in no event shall "Technology" include (a) demographic data owned
by or licensed to ADFORCE from any Third Parties or (b) Third Party software
that is not integrated in or necessary for the successful operation of such
technology which is developed by ADFORCE as a "work made for hire" for a
Third Party that is not an Affiliate of ADFORCE. For purposes of the
foregoing definition, an "Affiliate" of ADFORCE means any Affiliate of
ADFORCE where the term "control" means the direct or indirect ownership or
control by ADFORCE of twenty-five percent (25%) or more of the stock or other
equity interests of such Person entitled to vote for the election of members
of the Board of Directors or similar governing body of such Person.
1.28 "THIRD PARTY" means any Person that is not a Party to this
Agreement.
1.29 "WORK PRODUCTS" means any Improvements, designs, drawings,
specifications, documentation, computer software, reports, training
materials, inventions, discoveries and other items made by or on behalf of
ADFORCE in connection with the provision of Development Services.
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ARTICLE 2
GRANT OF LICENSE
2.1 LICENSE GRANT.
(a) Subject to the terms and conditions hereof, and effective upon
completion by NETSCAPE of its pending merger (the "AOL Merger") with a
wholly-owned subsidiary of America Online, Inc., ADFORCE grants to NETSCAPE
a perpetual, worldwide, nonexclusive, nontransferable (except as set forth in
Section 15.12 below), royalty-free license under all of ADFORCE's patent,
copyright, trade secret and other proprietary rights to use, reproduce,
adapt, transmit, perform, display and otherwise practice the Technology or
any part thereof, other than commercially available Third Party software that
ADFORCE has the right to provide to NETSCAPE only upon payment of a fee to
the Third Party, solely for the Permitted Purposes. If for any reason the AOL
Merger is affirmatively canceled or does not otherwise occur within six (6)
months from the date hereof, then the license grants set forth herein and the
provisions set forth in Articles 3 and 4.1 and 4.2 below shall be null and
void, and NETSCAPE shall have no license rights whatsoever to the Technology.
In such event, within sixty (60) days from the earlier of (i) the date the
AOL Merger is affirmatively canceled or (ii) August 1, 1999, NETSCAPE and
ADFORCE will enter into a source code escrow agreement in form and substance
mutually acceptable to the parties. Under such agreement, ADFORCE will
deposit the source and object code for the Technology into an escrow with a
third party escrow company acceptable to the Parties. Such source code escrow
agreement will provide for the release of the source and object code to
NETSCAPE if ADFORCE ceases to do business, undergoes a bankruptcy or
insolvency proceeding, makes an assignment for the benefit of creditors or
experiences similar occurrences. In the event of a critical failure as
described in Section 4.3 below, such source code escrow agreement will
provide for the temporary release of the source and object code to NETSCAPE
for the duration of such critical failure. If ADFORCE breaches this
Agreement, the source code escrow agreement will provide for the release of
the source and object code to NETSCAPE, which NETSCAPE will then be able to
use for a period of one year from the date of such breach, after which period
NETSCAPE shall have no further rights of use. For purposes of this section
only, in order to be in breach of the Performance Metrics of Exhibit A,
ADFORCE must be in breach of at least 2 of the 4 Performance Metrics
described in Exhibit A, including at least one of either Exhibit A, Section
7(A) or 7(B).
(b) Subject to subsection 2.1(a) above, if any Technology consists
of commercially available Third Party software that ADFORCE has the right to
provide to NETSCAPE only upon payment of a fee to the Third Party, NETSCAPE
may, by written notice to ADFORCE and payment of such fee, require ADFORCE to
grant to NETSCAPE a perpetual, worldwide, nonexclusive, nontransferable
(except as set forth in Section 15.12 below), royalty-free (except for such
fee) license under all applicable patent, copyright, trade secret and other
proprietary rights to use, reproduce, adapt, transmit perform, display and
otherwise practice such Technology or any part thereof solely for the
Permitted Purposes (but only to the extent of ADFORCE's rights in such
Technology).
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(c) The Parties agree that neither the licenses to be granted in
this Section 2.1 nor any other provisions of this Agreement impose or shall
be construed to impose any obligation upon NETSCAPE to use or otherwise
practice the Technology. ADFORCE agrees that it shall not bring any action in
law or equity, or any other judicial or nonjudicial proceeding, against
NETSCAPE asserting that the use by NETSCAPE of any patent rights claiming the
Technology that are now or hereafter owned by or licensed to ADFORCE or any
other Technology infringes or otherwise violates any patent, copyright, trade
secret or other proprietary rights of ADFORCE.
2.2 EXERCISE OF RIGHTS. Following effectiveness of the licenses to be
granted herein pursuant to Section 2.1(a) above, NETSCAPE may exercise its
rights in and to the Technology at any location, on any hardware, and with
respect to all, none or any portion or combination of the Technology.
Notwithstanding the foregoing, any proposed exercise by NETSCAPE of such
rights shall be subject to the provisions of Section 15.2 below. Except as
set forth in Section 6.1 below, nothing in this Agreement shall obligate
NETSCAPE to use the Technology or to use a designated server or site in
connection with such Technology.
2.3 USE OF PERSONNEL. NETSCAPE may exercise its rights hereunder through
Personnel who are obligated by written agreement to maintain the Technology
in confidence and restrict their use of the Technology pursuant to terms
comparable to those set forth in Article 13.
ARTICLE 3
DELIVERY
3.1 INITIAL DELIVERY. Provided the license becomes effective per
Section 2.1(a) above, within forty-five (45) days after the effective date of
the AOL Merger, ADFORCE shall deliver to NETSCAPE: (a) one machine-readable
copy of the object code for the Software; (b) one copy of available technical
and user documentation for the Technology in printed and machine-readable
format as available; and (c) one machine-readable copy of the source code for
the Software. Such delivery shall be transmitted electronically or by any
other means agreed upon by ADFORCE and NETSCAPE.
3.2 DELIVERY OF IMPROVEMENTS AND OTHER TECHNOLOGY.
(a) Provided the license becomes effective per Section 2.1(a)
above, ADFORCE shall use commercially reasonable efforts regularly to develop
Improvements to adapt the Technology to changes in related technologies and
in market and user requirements and to remain competitive with alternative
technologies for the serving, trafficking and/or targeting of advertisements
or other information or materials.
(b) Provided the license becomes effective per Section 2.1(a)
above, at such times as reasonably requested by NETSCAPE, ADFORCE shall
provide NETSCAPE with any Improvements made by or on behalf of ADFORCE and
any other Technology
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CONFIDENTIAL
requested by NETSCAPE that is existing and not then in the possession of
NETSCAPE. In addition, provided the license becomes effective per Section
2.1(a) above and commencing no later than forty-five (45) days after such
time that NETSCAPE determines to deploy the Technology in whole or in part
(the "Deployment Date"), ADFORCE shall provide to NETSCAPE on a quarterly
basis the then current version of the source code for the Software and shall
provide to NETSCAPE any and all Improvements, including upgrades, updates,
enhancements, patches and "bug" fixes, prior to or concurrently with their
installation or release, by any means requested by NETSCAPE (including
electronically), along with the applicable documentation related to such
Improvement.
(c) Provided the license becomes effective per Section 2.1(a)
above, ADFORCE shall provide all Improvements and other Technology, other
than Improvements provided in the provision of Development Services, to
NETSCAPE without any additional charge or fee. Notwithstanding the foregoing,
(i) if the license becomes effective under Section 2.1(a) above, but the
Parties have not executed a Demographic Data Agreement, or (ii) if the
license becomes effective under Section 2.1(a) above and the Parties have
executed a Demographic Data Agreement but NETSCAPE ceases to be in compliance
with all of its material obligations under the Demographic Data Agreement or
Materially Limits or Prohibits the use by ADFORCE of Demographic Data, and
NETSCAPE desires to continue receiving Improvements from ADFORCE, then
NETSCAPE shall pay to ADFORCE on an annual basis a reasonable update fee to
be agreed upon by the Parties for all Improvements developed for so long as
NETSCAPE is not in compliance with all of its material obligations under the
Demographic Data Agreement or Materially Limits or Prohibits the use by
ADFORCE of Demographic Data; provided that such fee shall not exceed (i)
ADFORCE's customary update fees for such Improvements in arm's length
transactions with its licensees, if ADFORCE then licenses the Technology to
Third Parties, or (ii) update fees charged by other licensors of comparable
systems for serving, trafficking and/or targeting of advertisements or other
information or materials, but not less than ADFORCE's cost of providing such
Improvements, if ADFORCE does not then license the Technology to Third
Parties.
(d) Provided the license becomes effective per Section 2.1(a) above,
at NETSCAPE's request, ADFORCE shall identify to NETSCAPE, and provide
NETSCAPE reasonable information and assistance in furtherance of NETSCAPE's
efforts to acquire, at NETSCAPE's own expense, commercially available Third
Party software licensed to ADFORCE for use in connection with the Technology
and not sublicensed to NETSCAPE under Section 2.1(a) or (b) above.
ARTICLE 4
TECHNICAL SUPPORT SERVICES
4.1 SCOPE OF SERVICES.
(a) Provided the license becomes effective per Section 2.1(a)
above, during the term of this Agreement ADFORCE shall provide to NETSCAPE, at
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NETSCAPE's written request, reasonable technical training, support,
documentation and assistance relating to the interactive content (including
interactive advertisement) serving, trafficking, targeting and related
functions of the Technology (collectively, "Technical Support Services").
The Technical Support Services shall, at a minimum, enable NETSCAPE, without
the aid of ADFORCE or any other Person, to develop, enhance and maintain the
Technology (including the source code for the Software) for use by NETSCAPE
to the same extent as ADFORCE.
(b) Commencing no later than forty-five (45) days after the
Deployment Date, the Technical Support Services, if required hereunder, shall
include, without limitation: (i) the regular provision by ADFORCE of
qualified Personnel able to resolve problems in the operation of the
Technology on-site at NETSCAPE's data centers in Silicon Valley; and (ii) the
provision by ADFORCE of telephone access twenty-four (24) hours a day, seven
(7) days a week, to qualified Personnel able to resolve problems in the
operation of the Technology, via a designated telephone support number.
4.2 FEES FOR TECHNICAL SERVICES SUPPORT.
(a) Subject to subsection 4.2(b) below, provided that at the time
any Technical Support Services are requested by NETSCAPE or are to be
performed by ADFORCE hereunder, NETSCAPE is in compliance with all of its
material obligations under a validly executed Demographic Data Agreement and
does not Materially Limit or Prohibit the use by ADFORCE of Demographic Data,
ADFORCE shall provide the Technical Support Services requested by NETSCAPE
for no additional consideration other than reimbursement of the Fully
Burdened Costs of the provision by ADFORCE Personnel of such Technical
Support Services.
(b) If, at any time prior to July 15, 1999 any Technical Support
Services are requested to be performed by ADFORCE hereunder and (i) the
parties have not executed a Demographic Data Agreement, or (ii) the
Implementation Date has not yet occurred under a validly executed Demographic
Data Agreement, then NETSCAPE shall pay to ADFORCE the Fully Burdened Costs
of the provision by ADFORCE Personnel of such Technical Support Services plus
[*] ([*]%) of such costs. If, at any time on or after July 15, 1999 any
Technical Support Services are required to be performed by ADFORCE hereunder
and (i) the parties have not executed a Demographic Data Agreement, or (ii)
the Implementation Date has not yet occurred under a validly executed
Demographic Data Agreement, then NETSCAPE shall pay to ADFORCE the Fully
Burdened Costs of the provision by ADFORCE Personnel of such Technical
Support Services plus [*] percent ([*]%) of such costs.
(c) If, following the occurrence of the Implementation Date under
a validly executed Demographic Data Agreement, at the time any Technical
Support Services are requested to be performed by ADFORCE hereunder, NETSCAPE
is not in compliance with all of its material obligations under the
Demographic Data Agreement or Materially Limits or Prohibits the use by
ADFORCE of Demographic Data, then
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
NETSCAPE shall pay to ADFORCE the Fully Burdened Costs of the provision by
ADFORCE Personnel of such Technical Support Services plus [*] percent ([*]%)
of such costs.
4.3 WARRANTY. If the Technology or Services as described in Exhibit A
fail to conform to or perform in accordance with the technical or user
documentation provided by ADFORCE (other than as a result of operator error,
accident, or misuse or alteration of the Technology by a Person not under
ADFORCE's direction or control), or in the event of a breach of the
warranties set forth in Section 10.2(e) or 10.2(f) below, then ADFORCE, at
its expense and without any payment by NETSCAPE for Technical Support or
other Services, shall use commercially reasonable efforts to cure such
failure or breach as soon as practicable, but in any event:
(a) For a "critical" failure or breach, such as the Technology, or
other software, hardware or other technology with which the
Technology is interfacing or integrating, ceasing to execute a
function that NETSCAPE reasonably deems critical to its
business, ADFORCE shall provide at least a temporary
workaround or fix within two (2) hours of receiving notice of
such failure or breach and shall cure such failure or breach
within three (3) business days of receiving notice of such
failure or breach; and
(b) For any other failure or breach that is not a "critical"
problem, ADFORCE shall provide at least a temporary workaround
or fix within three (3) business days of receiving notice of
such failure or breach and shall cure such failure or breach
within fifteen (15) days after receiving notice of such
failure or breach.
Without limiting the generality of the foregoing, ADFORCE agrees, by way of
example, that it shall not be unreasonable for NETSCAPE to deem a failure or
breach "critical to its business" as provided in subpart (a) above if such
failure or breach results or would result in the breach or nonperformance by
NETSCAPE of any obligation to any advertiser on the NETSCAPE Network.
ARTICLE 5
DEVELOPMENT SERVICES
5.1 SCOPE OF SERVICES. At NETSCAPE's written request, ADFORCE
shall undertake the reasonable development of Improvements as necessary to
customize the interactive content (including interactive advertisement)
serving, trafficking, targeting and related functions of the Technology to
meet NETSCAPE's needs (collectively, "Development Services"). Notwithstanding
the foregoing, NETSCAPE shall have no obligation to request or to use
Development Services of ADFORCE and may undertake
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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similar work itself or through independent contractors other than ADFORCE,
subject to the provisions of Section 2.3 above.
5.2 FEES FOR DEVELOPMENT SERVICES.
(a) Provided that, at the time any Development Services are
requested to be performed by ADFORCE hereunder, NETSCAPE is in compliance
with all of its material obligations under a validly executed Demographic
Data Agreement and does not Materially Limit or Prohibit the use by ADFORCE
of Demographic Data, ADFORCE shall provide the Development Services requested
by NETSCAPE for no additional consideration other than reimbursement of the
Fully Burdened Costs of the provision by ADFORCE Personnel of such
Development Services.
(b) If, at any time prior to July 15, 1999 any Development
Services are requested to be performed by ADFORCE hereunder and (i) the
parties have not executed a Demographic Data Agreement, or (ii) the
Implementation Date has not yet occurred under a validly executed Demographic
Data Agreement, then NETSCAPE shall pay to ADFORCE the Fully Burdened Costs
of the provision by ADFORCE Personnel of such Development Services plus [*]
percent ([*]%) of such costs. If, at any time on or after July 15, 1999 any
Development Services are required to be performed by ADFORCE hereunder and
(i) the parties have not executed a Demographic Data Agreement, or (ii) the
Implementation Date has not yet occurred under a validly executed Demographic
Data Agreement, then NETSCAPE shall pay to ADFORCE the Fully Burdened Costs
of the provision by ADFORCE Personnel of such Development Services plus [*]
percent ([*]%) of such costs.
(c) If, following the occurrence of the Implementation Date
under a validly executed Demographic Data Agreement, at the time any
Development Services ARE requested to be performed by ADFORCE, NETSCAPE is
not in compliance with all of its material obligations under the Demographic
Data Agreement or Materially Limits or Prohibits the use by ADFORCE of
Demographic Data, then NETSCAPE shall pay to ADFORCE the Fully Burdened Costs
of the provision by ADFORCE Personnel of such Development Services plus [*]
percent ([*]%) of such costs.
5.3 ORIGINAL WORK. Any Work Products either shall be the original
work of ADFORCE and its Personnel or shall be items licensed by Third Parties
that ADFORCE has the right to provide to NETSCAPE and that ADFORCE identifies
as such to NETSCAPE in writing. ADFORCE shall not disclose to NETSCAPE, or
induce NETSCAPE to use, the trade secrets or other confidential information
of any Third Parties, except to the extent that the Technology includes
Software licensed from Third Parties which ADFORCE has the right to provide
to NETSCAPE.
5.4 WORK FOR HIRE.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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(a) The Parties intend that each Work Product that is a work of
authorship shall be deemed a "work made for hire" within the meaning of the
copyright laws of the United States and any similar laws of other
jurisdictions. To the extent, if any, that ADFORCE or its Personnel have
rights in any Work Product notwithstanding the foregoing, including because a
Work Product does not qualify as a "work made for hire," ADFORCE hereby
irrevocably assigns to NETSCAPE, and agrees that NETSCAPE shall be the sole
and exclusive owner of, all right, title and interest in and to the Work
Product, including all patent, copyright, trade secret and other proprietary
rights therein that may be secured in any place under laws now or hereafter
in effect.
(b) To extent that ADFORCE provides Development Services in support
of any modification of the Technology, NETSCAPE hereby grants to ADFORCE a
perpetual, worldwide, nonexclusive, nontransferable license to use,
reproduce, adapt, transmit, perform and display such modification in
connection with the provision of such Development Services and for no other
purpose without NETSCAPE's prior written approval. In the event that ADFORCE
desires to integrate such modification in the Technology and obtains
NETSCAPE's approval thereto, then ADFORCE shall reimburse NETSCAPE for any
payment made by NETSCAPE for such Development Services, or waive such payment
by NETSCAPE, in consideration for the grant of such license to ADFORCE.
ADFORCE may exercise its rights under the foregoing license through Personnel
who are obligated by written agreement to maintain such modification in
confidence and restrict their use of such modification pursuant to terms
comparable to those set forth in Article 13.
(c) ADFORCE shall have valid and enforceable written agreements
with all of its Personnel providing Development Services hereunder containing
confidentiality and nondisclosure obligations comparable in scope to those
set forth in Article 13 and giving ADFORCE all rights and authority necessary
to effectuate the provisions of this Section 5.4. ADFORCE shall provide
copies of these agreements to NETSCAPE upon NETSCAPE's request.
(d) To the extent that ADFORCE delivers to NETSCAPE any
Improvements, designs, drawings, specifications, documentation, computer
software, reports, training materials, inventions, discoveries and other
items that are not Work Products, such items shall be deemed included in the
Technology and licensed pursuant to Section 2.1 above.
5.5 CHANGE MANAGEMENT PROCESS. Notwithstanding the foregoing
provisions of this Article 5, if NETSCAPE implements a version of the
Technology containing any modification to the source code for the Software
that adds a substantially new feature or function to the version of the
Technology used by ADFORCE (in contrast to merely correcting what are
colloquially known as "bugs" in such Software or making any other minor
modification to an existing feature or function) then: (a) ADFORCE shall not
be obligated to provide Development Services or Technical Support Services
for such Improvement; and (b) in the event that NETSCAPE does not request, or
ADFORCE does
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not agree to provide, such Services, the Parties shall work together to
devise a change management process to facilitate the technical support and
maintenance of NETSCAPE's version of the Technology containing such
Improvement.
ARTICLE 6
AD SERVING SERVICES
6.1 SCOPE OF SERVICES. From the Effective Date through November 22,
1999 (the "initial Ad Serving Services Term"), ADFORCE shall provide to
NETSCAPE interactive advertisement serving, trafficking, targeting and
related services (collectively, "Ad Serving Services") for NETSCAPE
Netcenter, and such other parts of the NETSCAPE Network as NETSCAPE shall
reasonably request. The terms for such Ad Serving Services shall be as attached
hereto in Exhibits A and B and as set forth below.
6.2 FEES FOR AD SERVING SERVICES.
(a) Provided that, at the time any Ad Serving Services are to be
performed by ADFORCE, NETSCAPE is in compliance with all of its material
obligations under a validly executed Demographic Data Agreement and does not
Materially Limit or Prohibit the use by ADFORCE of Demographic Data, ADFORCE
shall provide the Ad Serving Services requested by NETSCAPE for no additional
consideration other than reimbursement of the Fully Burdened Costs of the
provision by ADFORCE Personnel of such Ad Serving Services; provided,
however, that in the event that ADFORCE agrees to provide any Ad Serving
Services to any Third Party that is similarly situated to NETSCAPE at a rate
that is more favorable to such Third Party than the consideration payable
by NETSCAPE under this subpart (a), then ADFORCE shall provide the Ad Serving
Services requested by NETSCAPE at such Third Party's rate.
(b) If, at any time prior to July 15, 1999 any Ad Serving Services
are required to be performed by ADFORCE hereunder and (i) the parties have
not executed a Demographic Data Agreement, or (ii) the Implementation Date
has not yet occurred under a validly executed Demographic Data Agreement,
then NETSCAPE shall pay to ADFORCE the Fully Burdened Costs of the provision
by ADFORCE Personnel of such Ad Serving Services plus [*] percent ([*]%) of
such costs. If, at any time on or after July 15, 1999 any Ad Serving Services
are required to be performed by ADFORCE hereunder and (i) the parties have
not executed a Demographic Data Agreement, or (ii) the Implementation Date
has not yet occurred under a validly executed Demographic Data Agreement,
then NETSCAPE shall pay to ADFORCE the Fully Burdened Costs of the provision
by ADFORCE Personnel of such Ad Serving Services plus [*] percent ([*]%) of
such costs.
(c) If, following the occurrence of the Implementation Date under
a validly executed Demographic Data Agreement, at the time any Ad Serving
Services are to be performed by ADFORCE, NETSCAPE is not in compliance with
all of its material
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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obligations under the Demographic Data Agreement or Materially Limits or
Prohibits the use by ADFORCE of Demographic Data, then NETSCAPE shall pay to
ADFORCE the Fully Burdened Costs of the provision by ADFORCE Personnel of such
Ad Serving Services plus [*] percent ([*]%) of such costs.
6.3 REIMBURSEMENT FOR AD SERVING SERVICES. In addition to the fees for Ad
Serving Services provided for in Section 6.2 above, NETSCAPE shall reimburse the
following costs incurred by ADFORCE in the provision of Ad Serving Services
requested by NETSCAPE for the purposes set forth in Section 6.1 above, and, at
NETSCAPE'S option, NETSCAPE shall provide financing for such costs on mutually
agreeable terms, but in any event on terms no less favorable than such terms are
commercially available to entities similarly situated.
(a) Reimbursement for ADFORCE's incremental costs for any
modification of the AdForce System required to meet NETSCAPE's
needs for the provision of Ad Serving Services (other than
capitalized costs, which if financed at the time such costs are
incurred, shall be reimbursed at the time such costs are
amortized), excluding any modifications required to scale the
Software or other Technology to meet NETSCAPE's needs;
(b) Reimbursement for ADFORCE'S incremental costs for any additional
equipment that ADFORCE must purchase or lease solely to meet
NETSCAPE's needs for the provision of Ad Serving Services for so
long as necessary to meet NETSCAPE's needs; and
(c) Reimbursement for any additional incremental bandwith costs
incurred by ADFORCE solely in connection with the provision of Ad
Serving Services to NETSCAPE.
6.4 APPLICATION OF FEE METHODOLOGY. Attached hereto as Exhibit B is the
Parties' agreed upon pricing for the Ad Serving Services for the Initial Ad
Services Term per the provisions of Sections 6.2 and 6.3 above.
ARTICLE 7
NETSCAPE MARKETING EFFORTS
7.1 NETSCAPE MARKETING EFFORTS. NETSCAPE shall use commercially
reasonable efforts to encourage NETSCAPE Partners (but NETSCAPE shall not be
obligated to actively solicit NETSCAPE Partners) to use the AdForce System for
the serving and management of Internet advertisements, subject to agreement
between ADFORCE and such NETSCAPE Partners on the terms and conditions of such
use.
7.2 COMMISSIONS. If, as a result of marketing efforts by NETSCAPE, a
NETSCAPE Partner or any other Person enters into an agreement with ADFORCE to
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
utilize the AdForce System, then, provided that, as of the time that ADFORCE
enters into such agreement with such NETSCAPE Partner or other Person, the
Parties have executed a Demographic Data Agreement, NETSCAPE is in compliance
with all of its material obligations thereunder and does not Materially Limit or
Prohibit the use by ADFORCE of Demographic Data, ADFORCE shall pay to NETSCAPE
on a quarterly basis the following commissions on the gross amount of the
consideration charged by ADFORCE to such NETSCAPE Partner or other Person for
use of the ADFORCE AdForce System:
(a) For the first year of such agreement, the greater of 4% and the
highest percentage commission granted by ADFORCE at such time to
any employee or agent of ADFORCE or to any Third Party for
similar marketing or sales efforts; and
(b) For each succeeding year of such agreement, the greater of 2% and
the highest percentage commission granted by ADFORCE at such
time to any employee or agent of ADFORCE or to any Third Party
for similar marketing or sales efforts.
7.3 COMMISSION SHARING. Notwithstanding the provisions of Section 7.2
above, if NETSCAPE and any employee or agent of ADFORCE or any other Third Party
claims commissions with respect to the same Person (and such Person has not
entered into an agreement with ADFORCE solely as a result of NETSCAPE marketing
efforts), ADFORCE shall not be required to pay total commissions to NETSCAPE and
such Third Party in excess of the amount specified in Section 7.2 and ADFORCE
may apportion the applicable commission specified in Section 7.2 between
NETSCAPE and the Third Party in such manner as ADFORCE determines in good faith
to be equitable.
ARTICLE 8
INTENTIONALLY OMITTED
ARTICLE 9
PAYMENT PROVISIONS
9.1 PAYMENT PROCEDURES.
(a) Unless otherwise agreed to in writing by the Parties, all
payments due by NETSCAPE for the provision of Services by ADFORCE hereunder
shall be due and payable thirty (30) days after the receipt by NETSCAPE of a
proper invoice therefor from ADFORCE, which invoice shall include such detail
and supporting documentation as NETSCAPE may reasonably request. Notwithstanding
the foregoing, NETSCAPE agrees to pay to ADFORCE the amount set forth in Exhibit
B within [*] ([*]) days from the
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
Effective Date, which represents a prepayment of the estimated fees for Ad
Serving Services for the Initial Ad Serving Services Term ("Prepayment").
The Prepayment shall be credited against the Ad Serving Service fees accruing
under this Agreement during the Initial Term, which ADFORCE shall calculate
monthly in accordance with Exhibits B and C and submit to NETSCAPE for its
review and approval. For each $[*] of fees due up to the Prepayment, $[*]
shall be credited against the Prepayment. Upon exhaustion of the Prepayment,
ADFORCE shall invoice NETSCAPE monthly in arrears for the Ad Serving Services
provided to NETSCAPE based on the rates for such Services as set forth in
Exhibit B.
Each month and coincident with the impression forecast NETSCAPE will provide per
Exhibit A, Section 1(C), the Parties will review the estimates that form the
basis of the prepayment described in Exhibit B and discuss any adjustments to
the forecast, principally the impression forecast and the headcount forecast.
Unless the parties mutually agree otherwise, if the changes to the forecasts in
Exhibit C are estimated to have a sum total impact greater than [*]% on the fees
(as measured against the prior adjustment to fees), the Parties will make a
mutually agreed to adjustment in the fees going forward.
On or before August 1, 1999, the Parties will evaluate if there is a significant
change in the payment forecast for the remainder of the term. If there is a
significant decline in the forecast (greater than [*]%), ADFORCE will make an
adjusting refund at that time, including interest on the amount of the refund
equal to the lower of (i) the prime rate on August 1, 1999 or (ii) the maximum
amount permitted by law.
If Netscape opts to deploy ADFORCE's Banner Exchange technology to provide a
Banner Exchange to NETSCAPE Banner Exchange Partner sites outside of NETSCAPE
Netcenter or NETSCAPE Affiliates, NETSCAPE may do so solely on a "barter" basis
as described in the Banner Exchange definition above. For ads served by
NETSCAPE to such external sites, NETSCAPE will make additional payments to
ADFORCE based on a CPM rate equal to 50% of NETSCAPE's imputed CPM at the end of
the Initial Term or a $0.04 CPM, whichever is higher, provided that the rate
shall never exceed the lowest CPM rate ADFORCE is offering other banner exchange
customers. NETSCAPE shall make these payments for as long as it requests the
delivery of improvements to ADFORCE's Banner Exchange technology or a minimum of
two years after NETSCAPE first deploys ADFORCE's Banner Exchange technology,
whichever is greater.
(b) Unless otherwise agreed to in writing by the Parties: (i) all
payments due by ADFORCE under Article 7 in connection with ADFORCE's entrance
into an agreement for use of the AdForce System with an NETSCAPE Partner or
other Person as a result of NETSCAPE marketing efforts shall be paid to
NETSCAPE within [*] ([*]) days after the end of the calendar quarter during
which such agreement is entered into and within [*] ([*]) days after the end
of each succeeding calendar quarter thereafter.
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
(c) All payments due to the payee Party hereunder shall be paid to
the payee Party in U.S. Dollars by wire transfer, or by such other method
mutually agreed upon by the Parties, in each case at the expense of the payor
Party, for value no later than the due date thereof (with 24 hours advance
notice of each wire transfer) to such bank account or accounts as the payee
Party shall designate in writing within a reasonable period of time prior to
such due date.
9.2 LATE PAYMENT. Without limiting the payee Party's rights to pursue any
other remedies at law or in equity, if the payor Party fails to pay any payment
required under this Agreement thirty days after written notice of past due
amount, then the payor Party shall pay annually compounded interest on such
amount at an annual rate equal to the lower of (a) the highest rate permitted by
applicable law and (b) the lowest prime rate as published by The Wall Street
Journal on or nearest to such due date plus three percent (3%), which interest
shall accrue from the date the payment not timely made became due until the date
such payment is paid in full.
9.3 APPLICATION OF PAYMENTS. Any payments received by the payee Party
shall be applied first to the satisfaction of the oldest of any unpaid, accrued
interest charges and, following payment of all such interest charges, to the
satisfaction of the oldest of any unpaid fees or other amounts due hereunder.
9.4 TAXES.
(a) All payments required to be made by the payor Party under this
Agreement shall be made free and clear of, and without deduction for, any and
all taxes that are levied on the transfer of such payments to the payee Party.
If any withholding or deductions are required by applicable law, payments shall
be made such that, after such withholding or deductions, the net amount that the
payee Party received is equal to the amount due hereunder. The payor Party
shall file any information or tax returns with respect to such taxes, and the
payor Party shall indemnify the payee Party from any interest or other payments,
fines or penalties relating to or resulting from any failure, delay or error of
the payor Party in doing so.
(b) ADFORCE shall be responsible for the payment of any and all
transfer, sales, use or similar taxes that are levied on or in connection with
the transfer of the Technology to NETSCAPE, including any Improvements.
9.5 BOOKS AND RECORDS. ADFORCE shall keep full, true and accurate books
of account containing all particulars and reasonable supporting documentation,
in connection with the provision of Services hereunder and the determination of
any amounts payable to NETSCAPE under Article 7. All such books of account and
reasonable supporting documentation shall be located at the principal place of
business of ADFORCE and shall be open for inspection by NETSCAPE or any
independent certified public accountant retained by NETSCAPE, at a time mutually
acceptable to the Parties during normal business hours but no more frequently
than once each calendar year for three years
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following the end of the calendar year to which they pertain (and access shall
not be denied thereafter if reasonably available). If such records are
insufficient or any such inspection discloses a discrepancy in favor of NETSCAPE
of five percent (5%) or more of the amounts actually due for any period, then,
in addition to any other rights and remedies available to NETSCAPE under this
Agreement, ADFORCE shall pay or refund to NETSCAPE the amount of such
discrepancy as well as the reasonable cost of such inspection promptly following
ADFORCE's receipt from NETSCAPE of the ▇▇▇▇ or invoice for such inspection.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party represents and
warrants to the other Party that:
(a) Such Party has the full corporate right, power and authority to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby;
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
such Party;
(c) This Agreement has been duly executed and delivered by an
authorized officer of such Party, and is a legal, valid and
binding obligation of such Party enforceable against it in
accordance with its terms, except as enforcement may be limited
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity)
and the effect of applicable bankruptcy, insolvency, moratorium
and other similar laws of general application relating to or
affecting creditors' rights generally, including, without
limitation, the effect of statutory or other laws regarding
fraudulent conveyances and preferential transfers;
(d) Such Party's execution, delivery and performance of this
Agreement shall not constitute a breach or default under any
contract or agreement to which such Party is a party or by which
it is bound or otherwise violate the rights of any Third Party;
and
(e) No consent, approval or authorization of or from any governmental
entity or any other Person not a Party to this Agreement, whether
prescribed by law, regulation, contract or agreement, is required
for such Party's execution, delivery and performance of this
Agreement or consummation of the transactions contemplated
hereby.
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10.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF ADFORCE. ADFORCE
further represents and warrants to NETSCAPE that:
(a) WORKMANLIKE SERVICES. The Services shall be provided in a
workmanlike manner, in accordance with the standards of care
and diligence and the level of skill, knowledge and judgment
normally practiced by nationally-recognized information
technology services firms in performing services of a similar
nature;
(b) NONINFRINGEMENT. The Technology does not, and any
Improvements provided by ADFORCE, any Work Products and
NETSCAPE's use of the Technology and Work Products as
authorized herein shall not, infringe any copyright, trade
secret or other proprietary rights (except patent rights) of
any Third Party or otherwise conflict with the rights of any
Third Party, and, to the best of ADFORCES's knowledge, the
Technology does not, and any Improvements provided by
ADFORCE, any Work Products and NETSCAPE's use of the
Technology and Work Products shall not, infringe any patent
of any Third Party;
(c) NO LITIGATION. There is no action, suit, proceeding or
arbitration pending, and, to the best of ADFORCE's knowledge,
there is no action, suit, proceeding, arbitration or claim
threatened, concerning the Technology;
(d) NO LIENS OR ENCUMBRANCES. The Technology is free from any
security interests and other liens and encumbrances of Third
Parties arising from the actions or inaction of ADFORCE;
(e) NO UNAUTHORIZED CODE. The Technology does not, and any
Improvements provided by ADFORCE shall not, contain any back
door, time bomb, drop dead device, protect codes, data
destruct keys, or other software routine designed to disable
a computer program automatically with the passage of time or
under the control of any Person other than NETSCAPE. To the
best of ADFORCE's knowledge, the Technology does not, and any
Improvements provided by ADFORCE shall not, contain any
virus, Trojan horse, worm or other software routine designed
to permit unauthorized access or to disable, erase, modify,
deactivate or otherwise harm software, hardware or data; and
ADFORCE covenants that, prior to or at the time of the
delivery of any Technology (including any Improvement),
ADFORCE shall test the Technology using a current version of
a reputable "antivirus" program and remove any such
unauthorized codes; and
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(f) YEAR 2000 COMPLIANCE. All Software and other operational
items included in the Technology shall: (i) properly execute
with all date data, whether from years in the same century or
different centuries, including by yielding correct results
in arithmetic operations, comparisons and sorting of date
fields and in leap year calculations; and (ii) not abnormally
cease to execute or return an error message due to
date-related processing.
10.3 NO OTHER WARRANTIES. THE EXPRESS WARRANTIES IN THIS AGREEMENT
SHALL BE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 11
INDEMNIFICATION
11.1 INDEMNITY. NETSCAPE shall not be liable to ADFORCE, any of its
Affiliates or any other Person for, and ADFORCE shall indemnify and hold
harmless NETSCAPE and all NETSCAPE Affiliates, and their respective
directors, officers, employees and agents (collectively, the "NETSCAPE
Indemnitees"), from and against any Losses incurred arising out of or
resulting from: (a) any infringement of any patent, copyright, trade secret
or other proprietary right by the Technology or any Work Product, except to
the extent that such infringement arises solely from any Improvement
developed by NETSCAPE, or by ADFORCE to NETSCAPE's specifications if ADFORCE
could not reasonably have conformed to such specifications while avoiding the
infringement; or (b) the presence of ADFORCE's employees or agents on the
premises of NETSCAPE or an NETSCAPE Affiliate (except those Losses that
result solely from the gross negligence or willful misconduct of NETSCAPE or
a NETSCAPE Affiliate), including, but not limited to, Losses resulting from
injuries to ADFORCE's Personnel and Losses resulting from injuries caused by
ADFORCE's Personnel.
11.2 PROCEDURE. Any NETSCAPE Indemnitee shall notify ADFORCE promptly
in writing of an indemnifiable claim or cause of action under Section 11.1
above upon receiving notice or being informed of the existence thereof;
provided, however, that failure to notify ADFORCE of an indemnifiable claim
or cause of action shall not relieve ADFORCE of its obligation to provide
indemnification hereunder, except to the extent that such failure prejudices
ADFORCE's ability to defend or settle such claim or cause of action. ADFORCE
shall assume, at its cost and expense, the sole defense of such claim or cause
of action through counsel selected by ADFORCE and reasonably acceptable to
NETSCAPE, except that in the case of a conflict of interest between ADFORCE
and NETSCAPE, ADFORCE shall, at ADFORCE's cost and expense, provide separate
counsel for NETSCAPE selected by NETSCAPE. ADFORCE shall maintain control of
such defense, including any decision as to settlement; provided that, in the
event that
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ADFORCE does not maintain control of such defense on a timely basis, then,
without prejudice to any other rights and remedies available to NETSCAPE
under this Agreement, NETSCAPE may take over such defense with counsel of its
choosing, at ADFORCE's cost and expense. NETSCAPE may, at its option and
expense, participate in ADFORCE's defense, and if NETSCAPE so participates,
the Parties shall cooperate with one another in such defense. ADFORCE shall
bear the total costs of any court award or any settlement of such claim or
cause of action approved by ADFORCE and all other costs, fees and expenses
related to the resolution thereof (including reasonable attorneys' fees,
except for attorneys' fees for which NETSCAPE is responsible in the event
that NETSCAPE participates in ADFORCE's defense of such claim or cause of
action).
11.3 ABATEMENT OF INFRINGEMENT. If ADFORCE reasonably believes it
necessary to do so to minimize its liability under Section 11.1 above,
ADFORCE may, at its expense, procure the right for NETSCAPE to continue using
the Technology or any Work Product, replace the Technology or any Work
Product with a functionally equivalent noninfringing item, or modify the
Technology or any Work Product so that it is functionally equivalent but
noninfringing.
ARTICLE 12
LIMITATION ON LIABILITY
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY HEREUNDER FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES.
ARTICLE 13
CONFIDENTIALITY
13.1 CONFIDENTIALITY OBLIGATION. Each of NETSCAPE and ADFORCE (the
"Receiving Party") shall keep, and shall cause their Affiliates to keep,
strictly confidential any information disclosed by the other Party (the
"Disclosing Party") or otherwise made available to the Receiving Party
concerning the Technology or either Party's performance of this Agreement or
otherwise concerning the business, operations, trade secrets or other
proprietary information of the Disclosing Party (whether in written media or
otherwise) ("Confidential Information"), using the same degree of care that
it uses to protect its own confidential or proprietary information of a like
nature but in no event less than a reasonable degree of care. "Confidential
Information" shall not include information: (a) which is or becomes generally
available to the public other than as a result of disclosure thereof by the
Receiving Party; (b) which is lawfully received by the Receiving Party on
a nonconfidential basis from a Third Party that is not itself under any
obligation of confidentiality or nondisclosure to the Disclosing Party or any
other Person with respect to such information; (c) which is independently
developed by the Receiving Party; or (d) which was in the Receiving Party's
possession prior to receipt from the Disclosing Party. Each Party shall
treat any Technology or Work Product owned by or assigned to the other Party
as Confidential Information of such Party.
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13.2 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Receiving Party
shall use Confidential Information solely for the purposes of this Agreement
and shall not disclose or disseminate any Confidential Information to any
Person at any time, except for disclosure to its Affiliates and to those of
its own and its Affiliates' directors, officers, employees, accountants,
attorneys, advisers and agents whose duties reasonably require them to have
access to such Confidential Information, provided that such directors,
officers, employees, accountants, attorneys, advisers and agents are bound
to maintain the confidentiality of such Confidential Information to the same
extent as if they were Parties hereto.
13.3 EXCEPTION. The foregoing confidentiality and nondisclosure
obligations shall not apply to Confidential Information: (a) incidentally
retained in the memory of Persons to whom the Receiving Party is permitted
to disclose Confidential Information, other than as the result of an
intentional effort to commit Confidential Information to memory to circumvent
the provisions of this Article 13; or (b) which is required to be publicly
disclosed by law or by regulation; provided, however, that, in such event,
the Receiving Party provides the Disclosing Party with prompt advance notice
of such disclosure so that the Disclosing Party has the opportunity if it so
desires to seek a protective order or other appropriate remedy.
13.4 SURVIVAL. The confidentiality and nondisclosure obligations of
this Article 13 shall remain in effect for three years following the date
hereof or two years following the termination of this Agreement, whichever is
greater, except with respect to source code and related source code
documentation, for which the obligations of this Article 13 shall survive for
so long as the source code and documentation remain Confidential Information.
13.5 SOURCE CODE PROTECTION. The Receiving Party shall protect
Confidential Information consisting of source code and related source code
documentation from unauthorized use and disclosure to the same extent that it
protects its own source code (but no less than to a reasonable degree).
13.6 OTHER BUSINESS ACTIVITIES.
(a) The Disclosing Party agrees that the Receiving Party may
currently or in the future acquire information, either independently
developed or legally received from Third Parties, which may be similar to the
Confidential Information. Nothing in this Agreement shall be construed as a
representation that the Receiving Party does not or shall not have such
independently developed or legally received information.
(b) Nothing in this Agreement shall be construed as a
representation or agreement to restrict reassignment of the Receiving Party's
employees, or in any manner to affect or limit either Party's present or
future business activities of any nature, including business activities which
could be competitive with the Disclosing Party.
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(c) Nothing in this Agreement shall be construed as a
representation or agreement that the Receiving Party shall not develop or have
developed for it products, concepts, systems or techniques contemplated by or
embodied in the Confidential Information, provided that the Receiving Party
does not violate any of its obligations under this Agreement in connection
with such development.
ARTICLE 14
TERM AND TERMINATION
14.1 TERM.
14.1.1 TECHNOLOGY LICENSE TERM. Provided the license grant to
NETSCAPE pursuant to Section 2.1(a) becomes effective, this Agreement with
respect to such Technology license grant and related provisions herein shall
commence as of the Effective Date and, unless terminated in accordance with
the provisions of Section 14.2 below, shall remain in full force and effect
without expiration.
14.1.2 TECHNOLOGY LICENSE GRANTED BY DEFAULT TERM. If the license
grant to NETSCAPE does not become effective pursuant to Section 2.1(a) but
Netscape obtains access to ADFORCE's source and object code as a result of
ADFORCE's default hereunder as described in such Section 2.1 (a), then this
Agreement with respect to such license grant and related provisions herein
shall commence as of the Effective Date and remain in full force and effect
through the date NETSCAPE's one-year right to use said source and object code
expires.
14.1.3 AD SERVING SERVICES TERM. The term of this Agreement with
respect to the Ad Serving Services and related provisions herein shall
commence as of the Effective Date and remain in full force and effect through
November 22, 1999. If both Parties assent in writing prior to the expiration
of this Agreement, this Agreement with respect to such Ad Serving Services
will renew on the same terms and conditions for an additional one year period.
14.2 TERMINATION.
14.2.1 TERMINATION RIGHTS OF NETSCAPE. NETSCAPE shall have the
right to terminate this Agreement in the event of the breach by ADFORCE of,
or the failure of ADFORCE to perform, any of its material obligations
hereunder and the failure to remedy such breach or nonperformance with sixty
(60) days following the receipt of written notice of such breach or
nonperformance from NETSCAPE. Such termination shall be immediately effective
upon the receipt by ADFORCE of written notice of termination from NETSCAPE.
On expiration or termination of this Agreement for any reason, the parties
agree to work in good faith to ensure a smooth transition of the Service and
Technology (if applicable) to NETSCAPE within 60 days of such termination or
expiration date.
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14.2.2 TERMINATION RIGHTS OF ADFORCE. ADFORCE shall have the right
to terminate this Agreement in the event of:
(a) The breach by NETSCAPE of, or the failure of NETSCAPE
to perform, any of its material obligations under
this Agreement (except for its obligations under
Articles 3, 4, 5 and 6 above) and the failure to
remedy such breach or nonperformance within sixty
(60) days following the receipt of written notice of
such breach or nonperformance from ADFORCE; or
(b) A "Data Agreement Material Breach" by NETSCAPE. For
purposes of this Agreement, a "Data Agreement Material
Breach" means the breach by NETSCAPE of, or the
failure of NETSCAPE to perform, any of its material
obligations under the Demographic Data Agreement, the
failure of NETSCAPE to remedy such breach or
nonperformance within sixty (60) days following the
receipt of written notice of such breach or
nonperformance from ADFORCE, and, in the event that
such breach or nonperformance is disputed by the
Parties, the final determination of such breach or
nonperformance by a court of competent jurisdiction
from which no further appeal may be taken.
Such termination shall be immediately effective upon the receipt by NETSCAPE
of written notice of termination from ADFORCE.
14.2.3 ADFORCE RIGHT TO DISCONTINUE SERVICES. ADFORCE shall have
the right to discontinue the provision of Services pursuant to Sections 3.2,
4.1, 5.1 and 6.1 above for which it is entitled to reimbursement or other
payment from NETSCAPE, but shall not have the right to terminate this
Agreement or the licenses granted pursuant to Section 2.1(a) above, if
effective, in the event of the material breach by NETSCAPE of its obligation
hereunder to reimburse or pay ADFORCE for any Services and the failure to
remedy such breach within sixty (60) days following the receipt of written
notice of such breach from ADFORCE. Such discontinuation of Services shall be
immediately effective upon the receipt by NETSCAPE of written notice of
discontinuation from ADFORCE. On expiration or termination of this Agreement
for any reason, the parties agree to work in good faith to ensure a smooth
transition of the Service and Technology (if applicable) to NETSCAPE within
60 days of such termination or expiration date.
14.3 EFFECT OF TERMINATION. Provided the license grant to NETSCAPE
under Section 2.1(a) becomes effective, and notwithstanding anything herein
to the contrary, in the event of the termination of this Agreement other than
upon the breach by NETSCAPE of any of its material obligations under Article
2 or Article 13 and the failure to remedy
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such breach within the time period set forth in Section 14.2.2 above,
NETSCAPE shall have the right, for a period of one year following
termination, to continue to exercise all license rights granted to it under
Section 2.1 above on all the same terms in effect pursuant to this Agreement
immediately prior to termination and to retain any Confidential Information
necessary or useful for the exercise of such rights. Notwithstanding anything
herein to the contrary, ADFORCE shall in no event be entitled to enjoin or
seek to enjoin any exercise by NETSCAPE of the rights set forth in this
Section 14.3, and ADFORCE hereby expressly waives any right to injunctive or
other equitable relief, whether based on statute, common law or otherwise,
arising out of any alleged default by NETSCAPE that would adversely affect
the exercise by NETSCAPE of its rights under this Section 14.3.
14.4 RETURN OF CONFIDENTIAL INFORMATION. Within thirty (30)
calendar days following the termination of this Agreement other than
termination where Section 14.3 above would be applicable, each Party shall
either deliver to the other Party, or destroy, all copies of any Confidential
Information of the other Party embodied in a tangible medium that is in such
Party's possession or under its control, and shall furnish to the other Party
an affidavit signed by an officer of such Party certifying that, to the best
of its knowledge, such delivery or destruction has been fully effected.
14.5 SURVIVAL. All rights granted to and obligations undertaken by
the Parties hereunder shall terminate immediately upon the termination of
this Agreement, except for the rights and obligations provided for in
Sections 14.3 and 14.4 above as well as the following rights and obligations,
which shall survive according to their terms:
(a) The obligation of the payor Party to pay any and all
payments accrued hereunder;
(b) The license to ADFORCE granted in Section 5.4;
(c) The right of NETSCAPE to inspect the books and records
of ADFORCE to the extent provided in Section 9.5;
(d) The indemnification obligations of Article 11 and the
limitation on liability of Article 12;
(e) The confidentiality and nondisclosure obligations of
Article 13; and
(f) The provisions of Sections 15.1, 15.7, 15.8, 15.10,
15.19, and 15.20 below.
In addition, termination of this Agreement shall not affect the remedies of
the Parties otherwise available at law or in equity in relation to any rights
accrued under this Agreement prior to termination.
ARTICLE 15
MISCELLANEOUS
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15.1 ELECTRONIC REPOSSESSION. In no event shall ADFORCE
electronically repossess, de-install, deactivate or disable any Technology in
the absence of a final, unappealable judgment of a court of competent
jurisdiction that the license rights granted under Section 2.1 above have
been validly terminated.
15.2 PERIODIC DISCUSSIONS. Commencing within thirty (30) days
following the execution of this Agreement and on a quarterly basis
thereafter, NETSCAPE shall engage in discussions with ADFORCE concerning
NETSCAPE's deployment of the Technology and shall endeavor to provide ADFORCE
with non-binding, 180 day forecasts of the Services that NETSCAPE intends to
request from ADFORCE hereunder. Within forty-five (45) days after the
Deployment Date, the Parties shall execute a more detailed development,
support and maintenance agreement with respect to ADFORCE's obligations to
provide development, support and maintenance for the Technology, including,
without limitation, ADFORCE's obligations for the delivery of Improvements
and other Technology, ADFORCE's obligations to provide Development Services
and Technical Services, and ADFORCE's obligations to cure any nonperformance
or other failure with respect to the Technology.
15.3 MUTUAL NON-SOLICITATION. For a period of one year following
the date hereof, without the prior written approval of the other Party,
neither Party or any of its Affiliates shall actively solicit for hire any
Personnel of the other Party with responsibility for the development or
maintenance of the Technology or Work Products or for the provision of
interactive advertisement serving, trafficking, targeting or related
services, excluding independent contractors that do not spend the majority of
their time providing services to such Party. The foregoing mutual
non-solicitation covenant shall terminate at any time in the event of the
acquisition by a Third Party of more than fifty percent (50%) of the voting
power of ADFORCE, the acquisition by a Third Party of all or substantially all
of the assets of ADFORCE, or the consummation of a merger, consolidation or
similar corporate transaction of ADFORCE with or into a Third Party where the
voting securities of ADFORCE outstanding immediately prior to consummation of
such transaction are converted into cash or securities possessing less than
fifty percent (50%) of the voting power of the surviving entity. The
obligations of the Parties under this Section 15.3 shall not survive the
termination of this Agreement.
15.4 FAILURE TO ASSERT RIGHTS IN BANKRUPTCY. NETSCAPE's failure to
assert its rights to retain its benefits under this Agreement in accordance
with 11 U.S.C. Section 365(n)(1)(B) shall not be construed as a termination
of this Agreement by NETSCAPE under 11 U.S.C. Section 365(n)(1)(A).
15.5 FURTHER ASSURANCES. Upon the request of either Party, the
other Party shall sign and deliver any assignments or other necessary
documents and otherwise assist the requesting Party to obtain, maintain,
perfect or enforce any of the requesting Party's rights hereunder.
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15.6 RELATIONSHIP OF THE PARTIES. Nothing in this Agreement is
intended or will be deemed to constitute a partnership, agency or joint
venture relationship between the Parties hereto.
15.7 APPLICABLE LAW. This Agreement shall be governed by the laws
of the State of California applicable to contracts made and to be performed
entirely within such jurisdiction and without giving effect to the choice
or conflict of laws rules or principles of the State of California or of any
other jurisdiction.
15.8 CONSENT TO JURISDICTION. Each of the Parties irrevocably
submits to the exclusive jurisdiction of the courts of the State of California
and of any United States federal court sitting in the State of California in
any action or proceeding arising out of or relating to this Agreement, and
irrevocably agrees that all claims in respect of such action or proceeding
shall be heard and determined in any such California or United States federal
court. Each Party further agrees that service of any process, summons, notice
or document by registered mail to the address of such Party set forth in
Section 15.10 below shall be effective service of process for any action or
proceeding brought against such Party in any such court. Each Party hereby
irrevocably and unconditionally waives any objection to the laying of venue
of any action or proceeding arising out of or relating to this Agreement in
any such court and further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in any inconvenient forum. Each
Party further agrees that a final, nonappealable judgment in any such action
or proceeding shall be conclusive and may be enforced in any other
jurisdictions by suit on the judgment or in any other manner provided by law.
15.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and may be executed by facsimile. All counterparts shall
collectively constitute one and the same Agreement.
15.10 NOTICES. In any case where any notice or other communication
is required or permitted to be given hereunder, such notice or communication
shall be in writing and deemed to have been duly given and delivered (a) if
delivered in person, on the date of such delivery, (b) if sent by confirmed
facsimile transmission (with answer back received), on the date of such
facsimile transmission, or (c) if sent by overnight express or registered or
certified mail (with return receipt requested), on the date of receipt of
such mail, and shall be sent to the following address (or such other address
as either Party may designate from time to time in writing):
If to NETSCAPE:
Netscape Communications Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
27
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telefax: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Executive Vice President
Copy to:
Netscape Communications Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telefax: (▇▇▇)▇▇▇-▇▇▇▇
Attention: General Counsel
If to ADFORCE:
ADFORCE, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telefax: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
cc: General Counsel
Copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telefax: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
15.11 FORCE MAJEURE. If any circumstance beyond the reasonable
control of either Party occurs which delays or renders impossible the
performance of that Party's obligations under this Agreement on the dates
herein provided, such obligation shall be postponed for such time as such
performance necessarily has had to be suspended or delayed on account
thereof, provided such Party shall notify the other Party in writing as soon
as practicable, but in no event more than ten days after the occurrence of
such force majeure. In such event, the Parties shall meet promptly to
determine an equitable solution to the effects of any such event, provided
that such Party who fails because of force majeure to perform its obligations
hereunder shall upon the cessation of the force majeure take all reasonable
steps within its power to resume with the least possible delay compliance
with its obligations. Events of force majeure shall include, without
limitation, war, revolution, invasion, insurrection, riots, mob violence,
sabotage or other civil disorders, acts of God,
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CONFIDENTIAL
limitations imposed by exchange control regulations or foreign investment
regulations or similar regulations, laws, regulations or rules of any
government or governmental agency, and any inordinate and unanticipated
delays in the regulatory review or governmental approval process that are
within the control of such government or governmental agency. In no event
shall the failure or nonperformance of the Technology as described in Section
4.3 above constitute an event of force majeure.
15.12 BINDING EFFECT; ASSIGNMENT. This Agreement may not be
assigned, in whole or in part, by either Party without the prior written
consent of the other Party, except that: (a) NETSCAPE may assign any of its
rights or obligations hereunder to America Online, Inc. or a wholly-owned
subsidiary of NETSCAPE without ADFORCES's consent; and (b) the rights and
obligations of either Party under this Agreement may be assigned without the
other Party's consent to a Third Party acquiring all or substantially all of
the assets of the assigning Party or to the surviving entity upon the
consummation of any merger, consolidation or similar corporate transaction of
the assigning Party with or into a Third Party. Any attempted assignment by
either Party without the consent of the other Party in any circumstances
other than those described in the immediately preceding sentence shall be
null and void. This Agreement shall inure to the benefit of and be binding
upon each of the Parties hereto and their respective successors and permitted
assigns.
15.13 ENTIRE AGREEMENT. The terms and conditions herein contained
constitute the entire agreement between the Parties relating to the subject
matter of this Agreement and shall supersede all previous communications
between the Parties with respect to the subject matter of this Agreement,
except for the Confidential Non-Disclosure Agreement between the Parties
dated as of January 1, 1999, and attached hereto as Exhibit D, each of which
shall survive according to their terms. Neither Party has entered into this
Agreement in reliance upon any representation, warranty, covenant or
undertaking of the other Party that is not set out or referred to in this
Agreement.
15.14 RECITALS. The recitals set forth at the start of this
Agreement and the terms and conditions incorporated in such recitals shall be
deemed integral parts of this Agreement, and all references in this Agreement
to this Agreement shall encompass such recitals and the terms and conditions
incorporated in such recitals.
15.15 AMENDMENT. This Agreement may be varied, amended or extended
only by the written agreement of the Parties through their duly authorized
officers or representatives, specifically referring to this Agreement.
15.16 SEVERABILITY. In the event that any provision of this
Agreement is held to be illegal, invalid or unenforceable in a final,
unappealable order or judgment (each such provision, an "invalid
provision"), then such provision shall be severed from this Agreement and
shall be inoperative, and the Parties promptly shall negotiate in good faith
a lawful, valid and enforceable provision that is as similar to the invalid
provision as may
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be possible, while the remaining provisions of this Agreement shall remain
binding on the Parties hereto.
15.17 HEADINGS. The descriptive headings of the several articles
and sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
15.18 NO WAIVER OF RIGHTS. No failure or delay on the part of
either Party in the exercise of any power or right hereunder shall operate as
a waiver thereof. No single or partial exercise of any right or power
hereunder shall operate as a waiver of such right or of any other right or
power. The waiver by either Party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach hereunder.
15.19 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. All rights and
remedies granted to either Party under this Agreement are cumulative and in
addition to, and not in lieu of, any other rights or remedies otherwise
available to such Party at law or in equity. The Parties agree that any
breach by either Party of, or failure of either Party to perform, any
obligation under this Agreement shall constitute immediate and irreparable
damage to the other Party which cannot be fully and adequately compensated in
money damages and that, in the event of such breach or failure, the other
Party shall be entitled to injunctive relief and specific performance in
addition to any other remedies to which it may be entitled at law or in
equity.
15.20 CONFIDENTIALITY OF AGREEMENT. Each Party shall maintain the
confidentiality of this Agreement and all provisions of this Agreement and,
without the prior consent of the other Party, neither Party shall make any
press release or other public announcement of or otherwise disclose this
Agreement or any of its provisions to any Third Party (a) other than to its
Affiliates and to its own and its Affiliates' directors, officers, employees,
attorneys and accountants, and to the lead underwriter engaged by ADFORCE in
connection with any offering of securities of ADFORCE, whose duties
reasonably require familiarity with this Agreement, provided that such
Persons (including any such lead underwriter) are bound to maintain the
confidentiality of this Agreement, and (b) except for such disclosure as may
be required by applicable law or regulation, in which case the disclosing
Party shall provide the other Party with prompt advance notice of such
disclosure so that the other Party has the opportunity if it so desires to
seek a protective order or other appropriate remedy; provided that, in
connection with any offering of securities of ADFORCE, ADFORCE shall provide
in advance to NETSCAPE for review the form and content of any disclosure of
this Agreement or any of its provisions that may be required by applicable
law or regulation and, to the extent consistent with its disclosure
obligations under applicable law, include such modifications to such
disclosure as may be reasonably requested by NETSCAPE (except that ADFORCE
may file this Agreement as an exhibit to its registration statement if it
would constitute a "material agreement" under applicable law or regulation
and ADFORCE shall use its reasonable best efforts to obtain confidential
treatment of the portions of this Agreement that meet the SEC qualifications
30
CONFIDENTIAL
for confidential treatment if so requested by NETSCAPE). The confidentiality
obligations of this Section 15.20 would apply, inter alia, to any disclosure
by ADFORCE of this Agreement or of any provisions of this Agreement to any
customer or potential customer of ADFORCE and any such disclosure would
constitute a breach of this Section 15.20. The Parties agree that any breach
of the provisions of this Section 15.20 by either Party, including, without
limitation, by any directors, officers or employees of such Party, would
constitute a breach by such Party of a material obligation hereunder for
which the other Party shall have the right, notwithstanding the provisions of
Section 14.2 above, to immediately terminate this Agreement without allowance
of any period to remedy such breach, such termination to be immediately
effective upon the receipt by the breaching Party of written notice of
termination from the nonbreaching Party.
15.21 USAGE. Wherever any provision of this Agreement uses the
term "including" (or "includes"), such term shall be deemed to mean
"including without limitation" and "including but not limited to" (or
"includes without limitation" and "includes but is not limited to")
regardless of whether the words "without limitation" or "but not limited to"
actually follow the term "including" (or "includes").
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
NETSCAPE COMMUNICATIONS CORPORATION
REVIEWED BY By: /s/ ▇▇▇▇ ▇▇▇▇▇
NETSCAPE LEGAL ---------------------------
▇▇▇▇ ▇▇▇▇▇
INITIAL /s/ [ILLEGIBLE] 3/10/99 Executive Vice President
------------------------
IMGIS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
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EXHIBIT A
AD SERVING SERVICES
1. ADFORCE AD SERVING SERVICES.
A. ADFORCE SERVICE DEFINITION. The AdForce service ("AdForce Service")
is a proprietary Internet advertising administration system that will allow
NETSCAPE to manage advertising on its Internet properties. As part of the
AdForce Service, ADFORCE will provide NETSCAPE the ADFORCE "client"
("Client"), which NETSCAPE will use to (i) generate ad tags, (ii) schedule
advertising to run in the online environments in which NETSCAPE places those
ad tags, and (iii) generate reports on such advertising. In addition, ADFORCE
will maintain a centralized ADFORCE server complex from which ADFORCE will
electronically deliver advertising scheduled by NETSCAPE to the online
environments containing the ad tags placed by NETSCAPE. The delivery of
"Impressions," defined as the transmission of advertisements by ADFORCE to an
ADFORCE ad tag, will be verified by monthly third-party audits of the
AdForce Service, conducted by the Audit Bureau of Verification Services, Inc.
or another third party of comparable reputation chosen by ADFORCE. The
AdForce Service includes the targeting features and a suite of standard
reports available in the ADFORCE system listed below.
B. THE ADFORCE SERVICE. The AdForce Service includes the functionality
described in Section 1.A. above and as described below, with telephone client
services support from the hours of 6 a.m. to 6 p.m., Pacific Standard Time,
Monday-Friday, excluding major holidays. ADFORCE will also maintain 24 x 7
level technical service support via phone, cell phone or pager. In addition,
ADFORCE will provide up to four (4) days of account management support on
site at NETSCAPE each calendar month at [*]; unused days will not carry
over to subsequent calendar months. NETSCAPE may select the days and must
provide ADFORCE five (5) business days advance notice. Any additional days of
on-site training or support will be at a cost of $[*] per day. The twelve
(12) days of monthly on-site account support to be provided by ADFORCE will
not include training for major ADFORCE releases, which will be provided to
NETSCAPE separately at no cost.
C. CERTAIN NETSCAPE OBLIGATIONS. NETSCAPE agrees to implement the ad
tags per the ADFORCE User Guide and Help documentation, and to use the
ADFORCE Client to schedule advertising it wishes ADFORCE to serve onto
NETSCAPE's Web sites. NETSCAPE confirms its commitment to use the AdForce
Service and Technology to serve not less than ninety percent (90%) of the ad
Impressions NETSCAPE controls on its NETSCAPE Netcenter online property, as
measured beginning April 15, 1999. However, if ADFORCE fails for any period
of time to meet its obligations under Sections 3.2, 4.3, 5.1, or 10.2 of the
Agreement or Section 7 of Exhibit A, then NETSCAPE may at its option reduce
its percentage commitment to a level NETSCAPE deems necessary until such time
as ADFORCE has come back into compliance. NETSCAPE agrees to provide ADFORCE
monthly volume forecasts of Impressions to be delivered using the AdForce
Service; these forecasts will be provided no later than three (3) days prior
to the beginning of each calendar month. NETSCAPE shall indemnify and hold
harmless ADFORCE from any liability and damages and costs (including
reasonable costs and attorney's fees) arising out of or relating to
advertising placed by NETSCAPE using the AdForce Service, including, without
limitation, content, libel, invasion of privacy, and rights of publicity.
32
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
2. OWNERSHIP OF CLIENT AND LIMITATIONS ON USE. Subject to the terms and
conditions of this Agreement, NETSCAPE may use the Client on its premises
solely for purposes of using the AdForce Service. ADFORCE shall at all times
have sole and exclusive ownership of all right, title and interest in and to
such Client and the AdForce Service as a whole, any enhancements thereto
(except as provided in Section 2 above) and in any materials and data ADFORCE
provides to NETSCAPE. NETSCAPE may not copy, modify, alter, sell, distribute
or sublicense the Client, or reverse assemble, reverse compile or otherwise
attempt by any other method to create or derive the source programs of the
AdForce Service or the Client, nor authorize or contract with third parties
to do the same.
3. CONFIDENTIALITY. All passwords to ADFORCE, ADFORCE user guides, the
ADFORCE Client, and the ADFORCE "help" documentation, whether on-line or in
printed form, are confidential and proprietary to ADFORCE. All account
information input into the AdForce Service by NETSCAPE or ADFORCE for
campaigns running on NETSCAPE Web sites, such as advertiser contacts, costs
and billing information, and any NETSCAPE campaign-specific reports generated
by the AdForce Service are confidential to NETSCAPE.
4. ADFORCE SYSTEM DATA. As set forth in Section 3 above, ADFORCE
acknowledges the confidentiality of the account information input into the
AdForce Service by NETSCAPE or ADFORCE for NETSCAPE campaigns and any
NETSCAPE campaign-specific reports generated by the AdForce Service. However,
during the course of delivering advertising to visitors to NETSCAPE's sites
or to any other site of any other ADFORCE customer, ADFORCE will collect and
maintain information necessary to target advertising on behalf of all its
customers, including NETSCAPE. This information includes, but is not limited
to the user's IP address, cookie, browser type and operating system, as well
as the time, date and ad tag of the request. ADFORCE will provide NETSCAPE
the ability to run any reports referenced on Exhibit A against such
information, ADFORCE and NETSCAPE both own all right, title and interest in
and to such information. Use of such information by either party shall at all
times comply with NETSCAPE's privacy policy, set forth at
▇▇▇▇://▇▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇_▇▇▇▇▇▇▇/▇▇▇▇▇▇▇.▇▇▇▇ or at such other URL as
NETSCAPE may designate from time to time. ADFORCE shall have full freedom of
use of such information without need for accounting, however, such use shall
not expand beyond ADFORCE's actual use of such information as of the
Effective Date. Specifically, ADFORCE will provide to NETSCAPE on a weekly
basis the detailed HTTP server logs pertaining to user accesses on Netcenter.
The parties shall mutually agree to a procedure by which such logs will be
provided to NETSCAPE. Other logs may be requested with reasonable notice by
Netscape and such requests will not be unreasonably refused by ADFORCE.
Request for logs not generally provided by ADFORCE shall be subject to the
terms of Development Services as described in Article 5. All NETSCAPE requests
for system data will be on a prospective basis.
5. ADFORCE SERVICE DESCRIPTION
-------------------------------------------
AdForce BASIC
-------------------------------------------
Campaign Management Scheduling
Features Delivery
Inventory Forecast
Reporting
Targeting
-------------------------------------------
Auditing Free monthly audit
-------------------------------------------
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ADFORCE Reporting
The following reports are currently available with all levels of the AdForce
Service:
Network Reports Website Reports Advertiser Reports
----------------------------------------------------------------------------------------------------
Daily Campaign Details Activity by Advertiser Campaign On-line Summary
Daily Campaign Summary Activity by Area Code Summary by Area Code
Monthly Billing Report Activity by Browser Summary by Banner
Summary by Advertiser Activity by Content Unit Summary by Browser
Summary by Area Code Activity by Country Summary by Category
Summary by Browser Activity by Date Summary by Country
Summary by Category Activity by Domain Summary by Date
Summary by Country Activity by Keyword Summary by Domain
Summary by Date Activity by Hour Summary by Hour
Summary by Domain Activity by Operating System Summary by Operating System
Summary by Hour Activity by Pay Type Summary by Service Provider
Summary by Operating System Activity by Service Provider Summary by SIC Code
Summary by Payment Type Activity by SIC Code Summary by Website
Summary by Service Provider Website Revenue Campaign Summary
Summary by SIC Code Monthly Billing Report
Summary by Website
Website Revenue
NETSCAPE will have the right to receive all current and future reports that
are part of the standard reports made available to ADFORCE customers. Fees
for any additional reports added in the future and not included as part of the
standard reports made available to ADFORCE customers will be charged
according to the terms of Article 5.
6. TARGETING CAPABILITIES. The AdForce Service includes targeting on the
following parameters, when ADFORCE databases allow the parameter to be
resolved:
- BROWSER TYPE - Different campaigns can be delivered to visitors of
different browsers.
- OPERATING SYSTEM - Different campaigns can be delivered to visitors with
different operating systems.
- DOMAIN TYPE - Different campaigns can be delivered to visitors from
different domain types.
- SERVICE PROVIDER - Different campaigns can be delivered to visitors with
different ISPs.
- TELEPHONE AREA CODE - Different ads can be delivered to visitors in
different area codes.
- SIC CODE - Different ads can be delivered to visitors working for
companies with different SIC codes.
- COUNTRY - Different campaigns can be delivered to visitors from different
countries.
- FREQUENCY - An advertisement can be shown a specified number of times to
each visitor.
- SEQUENCE - A series of advertisements can be shown in sequence to a
visitor.
- KEYWORDS - Advertisements can be targeted on the basis of a search word
or phrase.
- SITE DATA - Ads can be targeted on the basis of a site's data (i.e. with
registered users).
- DAY/DATE/TIME OF DAY - Ads can be scheduled to run during specific times
and on specific days.
- CONTENT AREA - Ads can be targeted to a specific area of a site.
34
CONFIDENTIAL
7. PERFORMANCE METRICS
The Parties will measure real-world performance using a standard vendor such
as Keynote, Inverse Networks or another service mutually agreed upon.
NETSCAPE will be liable for the cost of the auditing services, not to exceed
$[*]. The ADFORCE system must provide:
A. Average ad delivery availability: [*]%, measured each calendar month,
with no scheduled downtime. This metric also includes tracking functions
such as impressions and click through counting. If the AdForce Service
fails to meet this target level of performance, in addition to the
response times referenced in Section 4.3, ADFORCE will provide NETSCAPE a
"make good" on any ads which did not serve during any downtime in excess
of the required availability metric (for example, if ad delivery is down
[*]% of a given calendar month, then AdForce's make good shall apply
only to the [*]% excess over the required metric). Accordingly, AdForce
will serve free of charge a number of ads equal to twice the number of ads
not served during such excess downtime. Finally, failure by the AdForce
Service to meet this performance metric for any four consecutive months
shall, at NETSCAPE's option, constitute a breach of the Agreement.
B. Administration system availability: [*]%, less scheduled maintenance,
measured each calendar quarter, with no scheduled downtime during Pacific
Standard Time working hours (8 a.m.-6 p.m.). Maximum scheduled downtime in
any given work week shall be 4 hours; measure also excludes monthly
rebuilding of summary tables, provided they are executed only during
weekend hours. Includes order entry/administration and reporting. Finally,
failure by the AdForce Service to meet this performance metric for any four
consecutive months shall, at NETSCAPE's option, constitute a breach of the
Agreement.
C. Single http-ad server delivery latency of no more than [*] seconds. This
requirement will not apply at times when the Keynote Business 40 Benchmark
Page latency is greater than three times its weekly average. Schedule for
regular weekly measurements to be mutually agreed upon.
D. Multiple ad delivery (maximum 9 ad requests) latency of no more than [*]
seconds. This requirement will not apply at times when the Keynote Business
40 Benchmark Page latency is greater than three times its weekly average.
Schedule for regular weekly measurements to be mutually agreed upon.
35
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
EXHIBIT B
FEES AND PAYMENT SCHEDULE
The current estimated obligation by NETSCAPE for the Initial Ad Serving
Services Term of the Agreement is:
FOR THE QUARTER BEGINNING: THE ESTIMATE IS:
February 1, 1999 $[*]
May 1, 1999 $[*]
August 1, 1999 $[*]
November 1, 1999 $[*]*
----------
TOTAL: $[*]
* The figure for the quarter beginning November 1, is a prorated amount based
on the 22 days from November 1, 1999 until the end of the Initial Ad Serving
Services Term.
NETSCAPE will pre-pay an amount equal to $[*], per Section 9.1.
Based on NETSCAPE's current impression forecast, this converts to an imputed
CPM rate as follows, and under no circumstances will NETSCAPE's CPM rate
exceed ADFORCE's own audited allocated CPM cost for the same period (defined
as ADFORCE's total cost of goods sold divided by ADFORCE's total
impressions), unless NETSCAPE chooses to increase ADFORCE's headcount
requirements:
FOR THE QUARTER BEGINNING: THE CPM ESTIMATE IS:
February 1, 1999 $[*]
May 1, 1999 $[*]
August 1, 1999 $[*]
November 1, 1999 $[*]
ADFORCE may use its audited allocation accounting methodology to ▇▇▇▇
NETSCAPE; however, this amount may not exceed the computation of direct
obligations contained in Exhibit C, after updating Exhibit C for actual
impressions, headcount and other calculations. Specifically, those updates
will be made in an electronic version of Exhibit C, and the maximum
obligation for any given quarter will be the sum of those calculations, which
are described below.
1. Actual impressions will be as measured and mutual agreed to by each party.
2. Headcount:
- Estimates will be adjusted per Section 9.1. It is currently estimated
that there are 9 full-time-equivalents at ADFORCE working on the NETSCAPE
account. It is agreed that 6 of these headcount, covering operations and
account support, will not increase in number at any time. The three
remaining headcount will work on providing quality assurance for campaign
management, and this number could increase or decrease at NETSCAPE's
option, depending on how NETSCAPE organizes this work in the future.
- The formula for calculating headcount costs will be: [Number of headcount]
multiplied by [$[*]] multiplied by [[*] if before July 15, [*] if after
July 15, 1999, or [*] if Section 6.2(a) controls]
36
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
3. Facilities costs will be calculated according to the following formula:
[Number of headcount in 1 above] multiplied by [$[*]] multiplied by
[[*] if before July 15, [*] if after July 15, 1999, or [*] if
Section 6.2(a) controls]
4. G&A will not change from Exhibit C, unless mutually agreed upon
5. Bandwidth will not change from Exhibit C, unless mutually agreed upon
6. Amortized capital, equipment and related costs will be based on Exhibit
C. Specifically, the formula for any given quarter in which NETSCAPE is
using the ADFORCE Ad Serving Service equals the sum of [the capital
depreciation for capital expenses in that same quarter] and [the capital
depreciation for capital expenses in any previous quarter in which NETSCAPE
used the ADFORCE Ad Serving Service where the depreciation schedule has not
expired].
(a) The initial calculations for any three-month quarter are:
(1) Small System units purchased in quarter = [[Average NETSCAPE
impressions served by ADFORCE per day] divided by [[*]]
multiplied by [[*]] less [the sum of the total number of Small
System units purchased in previous quarters]
(2) Small System units required in quarter = [Average NETSCAPE
impressions served by ADFORCE per day] divided by [[*]] multiplied
by [[*]]
(3) Cost of Small System purchased in quarter = [total small system
units purchased in the quarter] multiplied by [$[*]]
(4) PC units purchased in quarter = [Small System units purchased in
the quarter] divided by [[*]]
(5) Cost of PC's purchased in quarter = [PC units purchased in
quarter] multiplied by [$[*]]
(6) Square footage required for Infrastructure build-out in quarter
= [Small System units purchased in quarter] divided by [[*]] and
then multiplied by [[*]]
(7) Cost of Infrastructure build-out in quarter = [square footage
required for Infrastructure build-out in quarter] multiplied by
[$[*]]
(b) Summary calculations are:
(1) Capital expenses in the quarter = the sum of [5.a.3], [5.a.5]
and [5.a.7] above in the same quarter
(2) Depreciation for the capital expenses incurred in the quarter =
[5.b.1] divided by [[*]].
Not withstanding the foregoing, if less than a full quarter is completed the
maximum amount due will be prorated accordingly.
Not withstanding the foregoing, changes that may impact these actual
obligations include but are not limited to: NETSCAPE's assumption of
activities and operations that are provided by ADFORCE in the current
estimate, such as headcount, hardware, bandwidth, and facilities; and changes
to the impression forecast which impact these costs.
Specifically, unless the parties mutually agree otherwise, if NETSCAPE were
to assume any such activities and operations, NETSCAPE's obligation for the
subsequent periods would be reduced by a ratable amount in the
corresponding line item in Exhibit C, after adjusting for changes to Exhibit
C described above.
37
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
Unless the parties mutually agree otherwise, milestones regarding the timing
and adjustment of payments will be made per Section 9.1 of the Agreement.
38
CONFIDENTIAL
EXHIBIT C
MODEL AND FORMULA FOR ADJUSTMENTS
FINAL
ADFORCE COST ESTIMATE - WITH CORRECTION TO SURCHARGES
SURCHARGE QUARTER BEGINNING ON...
-------------------------------------------------------------------------------
OPERATING EXPENSES: Year 1 Year 2 2/1/99 5/1/99 8/1/99 11/1/99* Total
----------------------------------------------------------------------------------------------------------------------------------
Headcount (FTE) up to 7/15/1999 7/16/99 on [*] [*] [*] [*]
--------------------------- --- --- --- ----
Headcount Expense $[*] per/qtr [*]% [*]% $[*] $[*] $[*] $ [*]
-------------------------------------------------------------------------------------------------
G&A [*]% [*]% $[*] $[*] $[*] $ [*]
HW Depreciation [*]% [*]% $[*] $[*] $[*] $ [*]
Bandwith [*]% [*]% $[*] $[*] $[*] $ [*]
Facilities/IS Allocation $[*] per head [*]% [*]% $[*] $[*] $[*] $ [*]
-------------------------------------------------------------------------------------------------
Total Op Ex $[*] $[*] $[*] $ [*]
----------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses
(prorated to term) $[*] $[*] $[*] $ [*]
----------------------------------------------------------------------------------------------------------------------------------
CAPITAL EXPENSE ESTIMATE - DYNAMICALLY ADJUSTED BY IMPRESSION FORECAST
----------------------------------------------------------------------------------------------------------------------------------
Large Servers $[*] per unit
Capital Expense - Large Servers
Small Systems (Sun U2) $[*] per unit [*] [*] [*] [*]
CUMULATIVE SYSTEMS [*] [*] [*] [*]
Capital Expense - Small Servers $ [*] $ [*] $ [*] $ [*]
PC's $[*] per unit [*] [*] [*] [*]
Capital Expense - PC's $ [*] $ [*] $ [*] $ [*]
Infrastructure Build-out $[*] per sq. ft. [*] [*] [*] [*]
Capital Expense -
Infrastructure Build-out $ [*] $ [*] $ [*] $ [*]
----------------------------------------------------------------------------------------------------------------------------------
Total Capital Expense $ [*] $ [*] $ [*] $ [*]
----------------------------------------------------------------------------------------------------------------------------------
NETSCAPE IMPRESSION ESTIMATE - LAST UPDATED ON FEBRUARY 19
----------------------------------------------------------------------------------------------------------------------------------
QUARTER BEGINNING ON...
----------------------------------------------------------------------------------------
NOVEMBER QUARTER IS PRORATED TO TERM 2/1/99 5/1/99 8/1/99 11/1/99 Total
----------------------------------------------------------------------------------------------------------------------------------
Sito Impressions [*] [*] [*] [*] [*]
BannerX Impressions - [*] [*] [*] [*]
----------------------------------------------------------------------------------------------------------------------------------
Total Impressions [*] [*] [*] [*] [*]
----------------------------------------------------------------------------------------------------------------------------------
Total Impressions Prorated to Term [*] [*] [*] [*] [*]
----------------------------------------------------------------------------------------------------------------------------------
CPMs IMPLIED BY ADFORCE COST ESTIMATE
----------------------------------------------------------------------------------------------------------------------------------
SURCHARGE QUARTER BEGINNING ON...
----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES: up to 7/15/1999 7/16/99 on 2/1/99 5/1/99 8/1/99 11/1/99 Total
---------------------------------------------------------------------------------------
Headcount Expense [*]% [*]% $[*] $[*] $[*] $[*]
G&A [*]% [*]% $[*] $[*] $[*] $[*]
HW Depreciation [*]% [*]% $[*] $[*] $[*] $[*]
Bandwith [*]% [*]% $[*] $[*] $[*] $[*]
Facilities/IS Allocation [*]% [*]% $[*] $[*] $[*] $[*]
----------------------------------------------------------------------------------------------------------------------------------
Total Op Ex $[*] $[*] $[*] $[*]
Total Operating Expenses $[*] $[*] $[*] $[*]
----------------------------------------------------------------------------------------------------------------------------------
39
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
CONFIDENTIAL
EXHIBIT D
MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT
This Mutual Confidential Disclosure Agreement ("Agreement") is entered into
between NETSCAPE Communications Corporation ("NETSCAPE") and IMGIS, INC, dba
ADFORCE ("Company"), and is effective as of the date of execution by NETSCAPE
("Effective Date"). Each party (the "Receiving Party") understands that the
other party (the "Disclosing Party") may disclose certain Confidential
Information (as defined in Section 1 below) under this Agreement. NETSCAPE
and Company agree as follows:
1. DEFINITION. "Confidential Information" shall mean (i) all information
disclosed in tangible form by the Disclosing Party and marked
"confidential" or "proprietary", and (ii) all information disclosed
orally or otherwise in intangible form by the Disclosing Party and
designated as confidential or proprietary at the time of disclosure.
Confidential Information may include, without limitation, computer
programs, code, algorithms, names and expertise of employees and
consultants, know-how, formulas, processes, ideas, inventions (whether
patentable or not), schematics and other technical, business, financial
and product development plans, forecasts, strategies and information.
2. PURPOSE. The Receiving Party shall use the Confidential Information only
for the following purposes:
a) To evaluate whether to enter into a contemplated business transaction;
and
b) if NETSCAPE and Company enter into such contemplated business
transaction, to fulfill each party's commitments under the agreement for
such business transaction.
3. CONFIDENTIALITY OBLIGATION. The Receiving Party agrees to protect the
Confidential Information by using the same degree of care, but not less
than a reasonable degree of care, to prevent the unauthorized use,
dissemination or publication of the Confidential Information as the
Receiving Party uses to protect its own confidential or proprietary
information of a like nature. The Receiving Party shall limit the use of
and access to the Disclosing Party's Confidential Information to the
Receiving Party's employees or independent contractors who need to know
such Confidential Information for the purposes set forth in Section 2
above and who have entered into binding obligations of confidentiality
substantially similar to the obligations set forth herein.
4. TERM. The Receiving Party's obligations to protect Confidential
Information hereunder shall expire 3 years from the date of each such
disclosure of Confidential Information, except when such Confidential
Information disclosed by the Disclosing Party is source code, in which
case the Receiving Party's obligations to protect such Confidential
Information shall be perpetual.
5. EXCLUSION. Confidential Information as defined in Section 1 above shall
not include Confidential Information that: (i) is or becomes a matter of
public knowledge through no fault of the Receiving Party; or (ii) was in
the Receiving Party's possession or known by it prior to receipt from the
Disclosing Party; or (iii) was rightfully disclosed to the Receiving
Party by another person without restriction; or (iv) is independently
developed by the Receiving Party without access to Disclosing Party's
Confidential Information. The Receiving Party may disclose Confidential
Information pursuant to any statutory or regulatory authority or court
CONFIDENTIAL
order, provided the Disclosing Party is given prompt written notice of
such requirement and the scope of such disclosure is limited to the
extent possible.
6. INDEPENDENT DEVELOPMENT. The terms of confidentiality under this Agreement
shall not be construed to limit either party's right to independently
develop or acquire products without use of the other party's Confidential
Information. Further, Confidential Information as defined in Section 1
above shall not include the Residuals resulting from access to such
Confidential Information. The term "Residuals" means information in
intangible form which may be retained in the unaided memories of
Receiving Party's employees or independent contractors who have had
access to the information. An employee's or contractor's memory will be
considered to be unaided if the employee has not intentionally memorized
the Confidential Information for the purpose of retaining and
subsequently using or disclosing it. Neither party shall have any
obligation to limit or restrict the assignment of such persons or to pay
royalties for any work resulting from the use of Residuals. However, the
foregoing shall not be deemed to grant to either party a license under
the other party's copyrights or patents.
7. RETURN OF CONFIDENTIAL INFORMATION. Upon written request by the Disclosing
Party at any time, the Receiving Party shall: (i) turn over to the
Disclosing Party all Confidential Information of the Disclosing Party,
all documents or media containing the Confidential Information, and any
and all copies or extracts thereof, or (ii) destroy the Confidential
Information, and any and all copies or extracts thereof, and provide the
Disclosing Party with written certification of such destruction signed
by an authorized representative of the Receiving Party.
8. EQUITABLE RELIEF. The Receiving Party acknowledges and agrees that due to
the unique nature of the Disclosing Party's Confidential Information,
there may be no adequate remedy at law for any breach of its obligations.
The Receiving Party further acknowledges that any such breach may allow
the Receiving Party or third parties to unfairly compete with the
Disclosing Party resulting in irreparable harm to the Disclosing Party
and, therefore, that upon any such breach or any threat thereof, the
Disclosing Party shall be entitled to seek appropriate equitable relief
in addition to whatever remedies it may have at law. The Receiving Party
will notify the Disclosing Party in writing immediately upon the
occurrence of any such unauthorized release or other breach.
9. INTELLECTUAL PROPERTY RIGHTS. Neither party acquires any intellectual
property rights or any other rights under this Agreement or through any
disclosure hereunder, except the limited right to use the Confidential
Information in accordance with this Agreement.
10. WARRANTY. THE CONFIDENTIAL INFORMATION IS DISCLOSED UNDER THIS AGREEMENT
IS DELIVERED "AS IS," AND ALL REPRESENTATIONS OR WARRANTIES, WHETHER
EXPRESS OR IMPLIED, INCLUDING WARRANTIES OR CONDITIONS FOR FITNESS FOR A
PARTICULAR PURPOSE, MERCHANTABILITY, TITLE AND NONINFRINGEMENT, ARE
HEREBY DISCLAIMED.
11. NETSCAPE SUBSIDIARIES. NETSCAPE's wholly owned subsidiaries, by signing
this Agreement on behalf of NETSCAPE and returning a fully executed
original or copy to the NETSCAPE Legal Department, shall be entitled to
disclose NETSCAPE's Confidential Information and receive Company's
Confidential Information on a need to know basis only on behalf of
NETSCAPE under this Agreement, provided such subsidiaries comply with the
terms and conditions of this Agreement and further provided such
disclosures or receipt of
2
CONFIDENTIAL
Confidential Information are governed by the terms and conditions of this
Agreement.
12. GENERAL. This Agreement supersedes all prior discussions and writings
with respect to the subject matter hereof, and constitutes the entire
agreement between the parties with respect to the subject matter hereof.
No waiver or modification of this Agreement will be binding upon either
party unless made in writing and signed by a duly authorized
representative of each party and no failure or delay in enforcing any
right will be deemed a waiver. The parties understand that nothing herein
requires either party to proceed with any proposed transaction or
relationship in connection with which Confidential Information may be
disclosed. In the event that any of the provisions of this Agreement
shall be held by a court or other tribunal of competent jurisdiction to
be unenforceable, the remaining portions hereof shall remain in full force
and effect. This Agreement shall be governed by the laws of the State of
California without regard to conflicts of laws provisions thereof and each
party submits to the jurisdiction and venue of any California State or
federal court generally serving the Santa ▇▇▇▇▇ county area with respect to
the subject matter of this Agreement. The headings to the Sections of
this Agreement are included merely for reference and shall not affect the
meaning of the language included herein. If applicable, this Agreement
may be executed in counterparts or by facsimile, each of which shall be
deemed an original, and all of which together shall constitute one and
the same agreement. This Agreement is written in the English language
only, which language shall be controlling in all respects. Les parties
aux presentes confirment leur volonte que cette convention de meme que
tous les documents y compris tout avis qui s`y rattache, soient rediges
en language anglaise (translation: "The parties confirm that this
Agreement and all related documentation is and will be in the English
language.").
NETSCAPE COMMUNICATIONS COMPANY
CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------- ---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- -----------------------------
Print or Type Print or Type
Title: EVP, GM Netcenter Title: Chairman & CEO
-------------------------- -----------------------------
Date: January 1, 1999 Date: January 1, 1999
-------------------------- -----------------------------
Address: Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3