<PAGE>
As filed with the Securities and Exchange Commission on November 3, 1999
Registration No. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
Vicinity Corporation
(Exact name of registrant as specified in its charter)
---------------
<TABLE>
<S> <C> <C>
Delaware 7374 77-0414631
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
</TABLE>
1135A San Antonio Road
Palo Alto, California 94303
(650) 237-0300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Emerick M. Woods
Chief Executive Officer
Vicinity Corporation
1135A San Antonio Road
Palo Alto, California 94303
(650) 237-0300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies to:
<TABLE>
<S> <C>
Christopher L. Kaufman, Esq. Bruce Dallas, Esq.
Anthony J. Richmond, Esq. Davis Polk & Wardwell
Latham & Watkins 450 Lexington Avenue
135 Commonwealth Drive New York, New York 10017
Menlo Park, California 94025 (212) 450-4000
(650) 328-4600
</TABLE>
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
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- -------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Proposed Maximum Amount of
Title of Each Class of Securities to be Registered Aggregate Offering Price(1)(2) Registration Fee(2)
- --------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value....................... $57,500,000 $15,985
</TABLE>
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- -------------------------------------------------------------------------------
(1) Includes shares that the Underwriters have the option to purchase solely
to cover over-allotments, if any.
(2) Estimated pursuant to Rule 457(o) under the Securities Act of 1933, as
amended, solely for the purpose of computing the amount of the
registration fee.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the Se- +
+curities and Exchange Commission is effective. This prospectus is not an of- +
+fer to sell these securities, and we are not soliciting offers to buy securi- +
+ties, in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Prospectus Subject To Completion,
Dated November 3, 1999
Shares
[LOGO]
Vicinity Corporation
Common Stock
This is the initial public offering by Vicinity Corporation of shares of its
common stock.
We have filed an application to qualify the common stock for quotation on the
Nasdaq National Market under the symbol "VCNT." We estimate that the initial
public offering price will be between $ and $ per share.
Investing in our common stock involves material risks. See "Risk Factors"
beginning on page 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Discounts Vicinity
- -----------------------------------------------------
<S> <C> <C> <C>
Per Share $ $ $
- -----------------------------------------------------
Total $ $ $
- -----------------------------------------------------
</TABLE>
We have granted the underwriters the right to purchase up to an additional
shares of common stock to cover over-allotments.
J.P. Morgan & Co.
Bear, Stearns & Co. Inc.
U.S. Bancorp Piper Jaffray
, 2000
<PAGE>
[GRAPHIC- Vicinity logo in the upper left-hand corner. A picture of shoppers in
a store is under logo. Text in the upper right-hand corner reads "Vicinity
drives customers to the world's leading brands." The lower half of the page has
a white rectangle with the logos of some of Vicinity's clients.]
[GRAPHIC- Text across the top reads "Vicinity Reaches Customers Anytime.
Anywhere." Beneath that, text line reads "A day in the life of Vicinity
Customers" and shows five scenarios of how consumers can use Vicinity's
products.]
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary..................... 1
Risk Factors........................... 6
Forward-Looking Statements............. 17
Use of Proceeds........................ 18
Dividend Policy........................ 18
Capitalization......................... 19
Dilution............................... 20
Selected Financial Data................ 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations......................... 22
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Business................................................................... 29
Management................................................................. 46
Principal Stockholders..................................................... 55
Certain Transactions....................................................... 57
Description of Capital Stock............................................... 58
Shares Eligible for Future Sale............................................ 61
Underwriting............................................................... 63
Legal Matters.............................................................. 65
Experts.................................................................... 65
Additional Information..................................................... 65
Index to Financial Statements.............................................. F-1
</TABLE>
---------------
In deciding whether to buy our common stock, you should rely only on the
information contained in this prospectus. To understand this offering fully,
you should read this entire prospectus carefully, including the financial
statements and notes. Individual sections of this prospectus, such as the
section entitled "Prospectus Summary," are not complete and do not contain all
of the information that you should consider before investing in our company. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus regardless of the time of delivery of this
prospectus or of any sale of our common stock.
Until , 2000, all dealers that buy, sell or trade our common stock, whether
or not participating in this offering, may be required to deliver a prospectus.
This requirement is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
---------------
<PAGE>
Prospectus Summary
This summary highlights information found in greater detail elsewhere in this
prospectus. This summary is not complete and does not contain all of the
information that you should consider before investing in our common stock. We
urge you to read the entire prospectus carefully, especially the risks of
investing in our common stock discussed under "Risk Factors," before you decide
to buy our common stock.
Our Business
We are a leading provider of Internet-based marketing infrastructure services.
Our "clicks-and-mortar" solutions enable our clients to direct consumers
searching for a specific product or service to the nearest brick-and-mortar
location that carries that product or service. We have over 250 clients with an
aggregate of more than 2.5 million real world store locations. Our growing
client list includes leading companies in a number of industry segments such as
Barnes & Noble, Marriott, McDonald's, Mercedes-Benz and Nike.
While use of the Internet continues to grow rapidly and consumers are
increasingly going online to research products and services, an estimated 99%
of all retail transactions still take place at traditional brick-and-mortar
retail stores. We believe the reasons for the continuing preference for
shopping at retail stores include the ability to physically inspect and compare
products, the possibility of same-day fulfillment and the relative ease with
which products can be returned to the store where purchased. In addition, many
merchants, such as restaurants, hotels and gas stations, offer goods and
services that cannot be provided online. Jupiter Communications Inc., an
industry research firm, has stated that the key to success for retailers in the
Internet age will be to find compelling ways to direct consumers researching
products online to the nearest brick-and-mortar store where they can complete a
purchase.
We provide a suite of Internet-based marketing infrastructure services designed
to help our clients turn Web traffic into store traffic. We host our clients'
store location and product information and deliver that information to
potential customers on demand via the Internet, land-line telephones, wireless
telephones and other wireless devices. We can also provide information to
potential customers concerning which items are regularly stocked at given
locations and what promotions are being offered by participating merchants.
Using our services, our clients are able to:
. Direct visitors from our clients' Web sites to the nearest store
location carrying our clients' products or services. For example, Levi
Strauss uses our Web Business Finder to direct customers from its Web
site located at www.levi.com to the nearest store that stocks a
selected model of Levi's blue jeans.
. Provide customers with store and product location information via
telephone or wireless devices such as the Palm VII. For example, The
Wherehouse, Inc. uses our Telephone Business Finder to direct callers
to its toll-free number, 1-800-WHEREHOUSE, to the nearest Wherehouse
retail music store.
. Create a unique Web presence and extend local store-specific
promotions while maintaining brand integrity. For example, CarClub.com
uses our SiteMaker to permit each of its member locations to customize
individual Web sites with information such as store hours and special
promotions while maintaining control over CarClub.com's brand
integrity through the use of standard templates.
<PAGE>
. Provide customers with timely incentives designed to motivate
purchases. Through our relationship with Prio, Inc., our clients can
extend an "Act Now!" promotional message to potential customers
through a credit card rebate system that eliminates the need for paper
coupons and mail-in receipts.
. Extend their Web presence through our partnerships with Inktomi
Corporation, ShopNow.com, Inc. and other Internet portals and search
engines. For example, a consumer submitting a search request to a
participating search engine will receive a list generated by our
BrandFinder of nearby stores that carry the desired product.
Our Strategy
We intend to enhance our position as a leading provider of Internet-based
marketing infrastructure services that enable our clients to direct consumers
to real world retail locations. Key elements of our strategy include the
following:
. expand our client base of large companies with established consumer
brands;
. enhance our relationships with existing clients;
. continue to develop relationships with strategic technology and
distribution partners;
. expand our international presence;
. expand our service offerings; and
. develop our transactional revenue model to receive payments based on
leads generated by, and actual sales resulting from, our services.
Our Organization
Our principal executive offices are located at 1135A San Antonio Road, Palo
Alto, California 94303, and our telephone number is (650) 237-0300. Our
corporate Web site is located at www.vicinity.com. The information contained on
our Web site does not constitute a part of this prospectus.
2
<PAGE>
The Offering
<TABLE>
<C> <S>
Common stock offered............................ shares
Common stock outstanding after this offering.... shares
Use of proceeds................................. We intend to use the net
proceeds of this offering to
expand our sales and
marketing resources,
including expanding our
business in Europe and Asia,
to develop new technologies
and products and to use the
balance of the proceeds for
working capital and other
general corporate purposes.
Proposed Nasdaq National Market symbol.......... "VCNT"
</TABLE>
The shares of common stock outstanding after this offering is based on the
5,287,667 shares of common stock outstanding at July 31, 1999 and includes the
following:
. the conversion of all outstanding shares of our convertible preferred
stock into 11,813,373 shares of common stock upon the closing of this
offering; and
. the issuance of 952,381 shares of common stock upon the conversion of
shares of Series E Preferred Stock issuable to Oak Investment Partners
VIII, L.P. and Oak VIII Affiliates Fund, L.P. in respect of outstanding
warrants with an exercise price of $2.10 per share.
The shares of common stock outstanding after this offering exclude the
following:
. 2,064,000 shares of common stock issuable upon exercise of outstanding
stock options under our 1995 Stock Option Plan and 1996 Incentive Stock
Option Plan with a weighted average exercise price of $0.22 per share;
and
. shares of common stock issuable upon exercise of stock options to
be granted contemporaneously with the closing of this offering under our
2000 Equity Participation Plan with an exercise price equal to the price
to public listed on the cover of this prospectus.
Please see "Management--Employee Benefit Plans" and "Description of Capital
Stock."
Conventions Which Apply to this Prospectus
Unless we indicate otherwise, all information in this prospectus reflects the
following:
. our reincorporation in Delaware from California approved in October 1999
and effective in November 1999;
. the conversion of all outstanding shares of our convertible preferred
stock into 11,813,373 shares of common stock upon the closing of this
offering;
. the issuance of 952,381 shares of common stock upon the conversion of
shares of Series E Preferred Stock issuable to Oak Investment Partners
VIII, L.P. and Oak VIII Affiliates Fund, L.P. in respect of outstanding
warrants with an exercise price of $2.10 per share; and
. no exercise by the underwriters of their over-allotment option to
purchase up to additional shares of common stock.
3
<PAGE>
References in this prospectus to Vicinity, the "company," "we," "our" and "us"
refer to Vicinity Corporation, a Delaware corporation. References to the
offering refer to the initial public offering of our common stock being made by
this prospectus, and references to fiscal years refer to the fiscal year of our
company ended on July 31 of that year. We were incorporated as a California
corporation in October 1995 and reincorporated as a Delaware corporation in
November 1999. Vicinity(R) and MapBlast!(R) are registered marks of our
company. Each trademark, trade name or service mark of any other company
appearing in this prospectus belongs to its holder.
4
<PAGE>
Summary Financial Information
The following table sets forth summary financial data for our company. You
should read this information together with our financial statements and the
notes to those statements appearing elsewhere in this prospectus and the
information under "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The pro forma data
set forth below give effect to the following:
. the conversion of all outstanding shares of our redeemable
convertible preferred stock into 11,813,373 shares of common stock
upon the closing of this offering; and
. the issuance of 952,381 shares of common stock upon the conversion of
shares of Series E Preferred Stock issuable to Oak Investment
Partners VIII, L.P. and Oak VIII Affiliates Fund, L.P. in respect of
outstanding warrants with an exercise price of $2.10 per share.
The pro forma as adjusted data set forth below are further adjusted to give
effect to the sale by our company of the shares of common stock offered hereby
and the application of the proceeds from this offering at an assumed initial
public offering price of $ per share and after deducting underwriting
discounts and the estimated offering expenses payable by us.
<TABLE>
<CAPTION>
-----------------------------------
Year Ended July 31,
-----------------------------------
1997 1998 1999
In thousands, except per share data ----------- ---------- ----------
<S> <C> <C> <C>
Statement of Operations Data:
Revenues:
License and hosting fees................. $ 1,419 $ 4,386 $ 5,657
Service and transaction fees............. -- 424 767
----------- ---------- ----------
Total revenues.......................... 1,419 4,810 6,424
Gross profit (loss)....................... (557) 1,963 2,475
Loss from operations...................... (6,347) (2,469) (5,464)
Net loss.................................. (6,238) (2,481) (5,515)
Net loss applicable to common
stockholders............................. (6,621) (2,999) (6,553)
Basic and diluted net loss per share...... $ (1.61) $ (0.86) $ (1.61)
Weighted average shares outstanding used
in basic and diluted net loss per share
calculation.............................. 4,102 3,503 4,080
Pro forma basic and diluted net loss per
share (1)................................ $ (0.50)
Weighted average shares outstanding used
in pro forma basic and diluted net loss
per share calculation (1)................ 13,151
<CAPTION>
-----------------------------------
As of July 31, 1999
-----------------------------------
Pro Forma
As
Actual Pro Forma Adjusted
----------- ---------- ----------
<S> <C> <C> <C>
In thousands
Balance Sheet Data:
Cash and cash equivalents................. $ 9,060 $ 11,060
Working capital........................... 4,220 6,220
Total assets.............................. 13,203 15,203
Deferred revenue.......................... 4,955 4,955
Capital lease obligations, excluding
current portion.......................... 298 298
Redeemable convertible preferred stock and
warrants................................. 21,403 --
Total stockholders' equity (deficit)...... $ (16,569) $ 6,834
</TABLE>
- ------------------
(1) The pro forma basic and diluted net loss per share reflect the effect of
the conversion of the weighted average number of shares of the redeemable
convertible preferred stock as if the shares were converted as of the date
of issuance.
5
<PAGE>
Risk Factors
Any investment in our common stock involves a high degree of risk. You should
consider carefully the following information about these risks, together with
the other information contained in this prospectus, before you decide to buy
our common stock. If any of the following risks actually occurs, our business,
results of operations or financial condition would likely suffer. In any such
case, the market price of our common stock could decline, and you may lose all
or part of the money you paid to buy our common stock.
Risks Related to our Business
Our business is difficult to evaluate because we have a limited operating
history.
Our company was founded in October 1995, and our initial revenues were derived
from providing maps, driving directions and directory services. In early 1997,
we refocused our business strategy on our Business Finder service. Accordingly,
we have a limited operating history from which you can evaluate our present
business and future prospects. As a relatively new entrant to the Internet-
based marketing services business, we face risks and uncertainties relating to
our ability to implement our business plan successfully. Our prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets such as the Internet. If we are
unsuccessful in addressing these risks and uncertainties, our business, results
of operations, financial condition and prospects will be materially adversely
affected.
We have a history of losses and negative cash flows and anticipate continued
net losses because we intend to continue to invest in developing our business.
We have not generated enough revenues to exceed the substantial amounts we have
spent to develop our business. We incurred a net loss of approximately $5.5
million in fiscal 1999, $2.5 million in fiscal 1998 and $6.2 million in fiscal
1997. As of July 31, 1999, we had an accumulated deficit of approximately $15.1
million. We expect to continue to lose money for the foreseeable future because
we plan to continue to incur significant expenses as we expand our sales and
marketing resources, including expanding our business in Europe and Asia, and
develop new technologies and products. Moreover, we base current and future
expense levels on our operating plans and our estimates of future revenues. If
our revenues grow at a slower rate than we anticipate, or if our spending
exceeds our expectations or cannot be adjusted to reflect slower revenue
growth, we may not generate sufficient revenues to achieve profitability. If we
do achieve profitability, we may be unable to sustain or increase profitability
on a quarterly or annual basis in the future.
Our business is subject to quarterly fluctuations in operating results which
may negatively impact the price of our common stock.
Our quarterly net loss was approximately $2.4 million for the fiscal quarter
ended July 31, 1999, $1.5 million for the fiscal quarter ended April 30, 1999
and $0.9 million for the fiscal quarter ended January 31, 1999. Our quarterly
operating results may fluctuate significantly in the future due to a variety of
factors. These factors include the following, which are generally outside of
our control:
. competition in the markets for our services;
. the demand for Internet-based marketing infrastructure services and
seasonal trends relating to marketing spending;
. our ability to protect our systems from telecommunications failures,
power loss or equipment or software-related system failures; and
. economic conditions specific to the Internet as well as general
economic and market conditions.
6
<PAGE>
Other factors which may cause our quarterly operating results to fluctuate
significantly which are at least partially under our control include:
. the rate of new customer acquisitions;
. whether revenues related to new customer acquisitions are recognized
currently or deferred over future time periods;
. the timing and effectiveness of our development of new services;
. the timing and effectiveness of potential strategic alliances; and
. changes in our operating expenses.
In addition, our operating expenses are based on our expectations of our future
revenues and some of our operating expenses are relatively fixed in the short
term, including personnel costs, data support expenses and the cost of
licensing necessary information. We may be unable to reduce our expenses
quickly enough to offset any revenue shortfall, which would have a material
adverse effect on our business, operating results and financial condition.
Due to all of the foregoing factors and the other risks discussed in this
section, you should not rely on quarter-to-quarter comparisons of our operating
results as an indication of future performance. It is possible that in some
future periods our quarterly operating results may fall below the expectations
of public market analysts and investors. In this event, the price of our common
stock is likely to fall.
Demand and market acceptance of Internet marketing solutions is uncertain.
Our future success is highly dependent on an increase in the use of the
Internet as a marketing medium. The market for Internet-based marketing
services is new and rapidly evolving, and it cannot yet be compared with
traditional marketing media to gauge its effectiveness. Companies that have
historically relied on traditional marketing methods may be reluctant or slow
to adopt online marketing. As a result, demand and market acceptance for
Internet-based marketing solutions is uncertain. Many of our current and
potential clients have little or no experience using the Internet for marketing
purposes and may allocate only a limited portion of their marketing budgets to
the Internet. Companies that have invested substantial resources in traditional
methods of marketing may be reluctant to reallocate those resources to online
marketing. In addition, companies that have invested a significant portion of
their marketing budget in online marketing may decide after a time to return to
more traditional methods if they find that online marketing is a less effective
method of promoting their products and services than traditional marketing
methods. If demand for Internet-based marketing services fails to develop or
develops more slowly than we expect, we may not generate sufficient revenues to
achieve profitability.
We will continue to dedicate significant resources toward developing new
clients in Europe and Asia; any success in these efforts may prove not to have
been worth the associated expense.
Our current business plan includes expanding into Europe and Asia. To date, we
have limited experience in marketing our services internationally, and we
cannot predict our success in these international markets. In order to expand
overseas, we intend to enter into relationships with foreign businesses, and we
cannot predict whether those relationships will be successful. Our plans to
expand internationally are subject to inherent risks, including:
. the impact of economic fluctuations in economies outside of the United
States;
. greater difficulty in accounts receivable collection and longer
collection periods;
. unexpected changes in regulatory requirements, tariffs and other trade
barriers;
7
<PAGE>
. difficulties and costs of staffing and managing foreign operations due
to distance, as well as language and cultural differences;
. political instability, currency exchange fluctuations and potentially
adverse tax consequences; and
. reduced protection for intellectual property rights outside the United
States.
We cannot predict whether the expansion of our business internationally will be
successful. The results of our efforts may prove not to have been worth the
associated expense and opportunity cost.
Historically, we have depended on a limited number of services for most of our
revenues.
Historically, we have derived most of our revenues from our Web Business
Finder, maps, driving directions and directory services, which represented
approximately 86% of our revenues in fiscal 1999 and 91% of our revenues in
fiscal 1998. Our results of operations would be materially and adversely
affected by a reduction in demand or a change in the pricing structure for
these services.
We have relied on our ability to sell existing customers additional services to
generate revenue and the continued growth of our business depends on our
ability to continue to do so in the future.
Much of our past sales growth is the result of selling additional services to
existing clients. Our growth strategy depends on the introduction of new
services that we hope to sell to our existing clients. We cannot assure you
that we can develop any of these new services in a cost-effective and timely
manner, and we have insufficient experience with these new service offerings to
know whether they will be well received by our clients. Any new service we
introduce that is not favorably received could damage our relationships with
our clients. If our existing clients decide to maintain their current level of
service and not upgrade for additional services, we will fall short of our
projected sales and would have to cultivate new sales opportunities, which may
be expensive and might not materialize. In fiscal 1999, AutoTrader.com
accounted for approximately 10% of our revenues.
The pricing for our services is uncertain because our business is changing
rapidly as are the services that we provide.
Our current business model is to provide marketing infrastructure services to
our business clients. We may not achieve an acceptable level of profitability,
or become profitable at all, if our clients' marketing executives do not
perceive that the use of our services will improve the effectiveness of their
marketing campaigns or if they are otherwise unable to generate a significant
return on investment from using our products and services. Internet-based
marketing services are relatively new and unproven, and we cannot assure you
that they will achieve widespread customer acceptance. To be successful, we
must adapt to our rapidly changing market by continually enhancing the
technologies used in our services and introducing new technology to address the
changing needs of our clients. Under our current pricing structure, clients pay
for our services through set-up and annual fees. There is a risk that
competition with respect to products and services we provide will eventually
result in very low prices for our products and services. If we are unable to
maintain an adequate pricing structure, our business, financial condition and
results of operations would be materially adversely affected.
Our business is dependent on the continuous, reliable and secure operation of
our databases and the related services that we provide, and a system failure
could negatively impact our business.
Our operations are dependent on our ability to maintain our databases, servers
and communications equipment in effective working order and to protect them
from fire, natural disaster, sabotage, power loss, telecommunications failure,
human error or similar events. Although we maintain back-up data at
8
<PAGE>
a second site, a system failure or natural disaster could significantly disrupt
our operations. Any system failure, including a network, software or hardware
failure, that causes an interruption in the performance of our products and
services or a decrease in responsiveness of our services could result in lost
clients, reduced revenue and harm to our reputation. Despite the implementation
of security measures and standard operating procedures, our infrastructure may
also be vulnerable to computer viruses, hackers, human error or similar
problems caused by our employees, clients or Internet users. A party who is
able to circumvent our security measures could misappropriate proprietary
database information or cause interruptions in our operations. As a result, we
may be required to expend significant capital and other resources to help
protect against such security breaches or to alleviate problems caused by such
breaches. Our insurance may not adequately compensate us for any losses that
may occur due to any failure in our system or interruption in our service. In
addition, the growth of our business may strain the capacity of our computers
and telecommunications systems. If we are unable to maintain or upgrade our
systems, they could fail or suffer a degradation in performance. Any damage,
failure or delay that causes significant interruption in our databases or other
systems would have a material adverse effect on our business.
Our current business plan depends in significant part on third party
relationships, many of which are short-term or terminable.
We presently rely on our arrangements with strategic partners, including
Inktomi and Prio to provide key services, marketing opportunities,
technologies, clients and users. These arrangements can be terminated by our
partners in some circumstances. If our relationships with our strategic
partners were terminated, we would have to adapt our operations or business
plan, which may take time and may interrupt the provision of affected services.
In addition, many companies that we may approach for a strategic relationship
in the future may have conflicting relationships with others. As a result,
these companies may be reluctant to enter into strategic relationships with us.
Our business, operating results and financial condition could be materially and
adversely affected if we do not establish additional, and maintain existing,
strategic relationships on commercially reasonable terms or if our strategic
relationships do not result in an increase in the number of users of our
services. In addition, strategic relationships may be difficult to implement
and may not provide the anticipated benefits.
We are dependent on a limited number of third parties for a significant portion
of our geographic data.
Our products and services rely on the availability and accuracy of geographic
data. We have licensed a significant portion of our geographic data from a
limited number of sources through non-exclusive, short-term contractual
arrangements. If any of these third parties were to merge or be acquired, the
number of sources providing this geographic data would be further reduced.
Given the short terms of our geographic data licenses, we will have to
renegotiate our contracts in the foreseeable future which may result in
contractual terms that are not as favorable to us as our existing data
licenses. If we cannot maintain these data licenses or any other third-party
license arrangement on commercially reasonable terms, the accuracy of our
services may suffer. As a result, the marketability of our products and
services would be reduced.
The success of our business depends on the speed with which we generate
responses to queries and the accuracy of the information that we provide.
The accuracy of our services is substantially dependent on the accuracy of data
that we license from third parties. If we are unable to generate responses
quickly or if the responses we generate are not accurate, we may experience a
decline in the number of users of our services. We plan to update our
geographic databases periodically. However, in view of the complexity of
updating multiple databases, revising software and the need to obtain
geographic data for address information from third parties, we
9
<PAGE>
may not be able to perform these updates as planned. This could harm our
business, financial condition and results of operations.
We have recently experienced and currently anticipate rapid growth in our
business, and any inability to manage this growth could harm our business.
In order to execute our business plan, we must grow significantly. The number
of our employees grew from 49 as of October 31, 1998 to 112 as of October 31,
1999. We expect that the number of our employees will continue to increase for
the foreseeable future, in particular with respect to persons engaged in
product development, professional services and sales activities. This growth
has placed, and our anticipated future growth combined with the requirements we
will face as a public company will continue to place, a significant strain on
our management systems and resources. We expect that we will need to continue
to improve our financial and managerial controls and reporting systems and
procedures. We will also need to continue to expand and maintain close
coordination among our technical, finance, sales and marketing groups.
We will not be able to execute our business plan if we cannot increase our
direct and indirect sales channels.
We will need to expand substantially our direct and indirect sales operations,
both domestically and internationally, in order to increase market awareness
and sales of our products. Our products and services require a sophisticated
sales effort targeted at several people within our prospective clients'
organizations. We have recently expanded our direct sales force and plan to
hire additional sales personnel. Competition for qualified sales personnel is
intense, and we might not be able to hire the kind and number of sales
personnel we are targeting. In addition, we believe that our future success is
dependent upon establishing and maintaining productive relationships with a
variety of distribution partners, resellers, systems integrators and joint
marketing partners. We cannot be sure that we will be successful in signing up
desired partners or that our partners will devote adequate resources or have
the technical and other sales capabilities to sell our products.
Similarly, the complexity of our products and the difficulty of installing them
require highly trained customer service and support personnel. We currently
have a small customer service and support organization, and we will need to
increase our staff to support new services, new customers and the expanding
needs of existing customers. Competition for customer service and support
personnel is intense in our industry due to the limited number of people
available with the necessary technical skills and understanding of the
Internet.
Acquisitions or strategic investments may disrupt or otherwise have a negative
impact on our business.
We may acquire or make investments in complementary businesses, technologies,
services or products, or enter into strategic partnerships with parties who can
provide access to those assets, if appropriate opportunities arise. From time
to time we have had discussions and negotiations with companies regarding our
acquiring, investing in or partnering with their businesses, products, services
or technologies, and we regularly engage in such discussions and negotiations
in the ordinary course of our business. Some of those discussions also
contemplate the other party making an investment in our company. We may not
identify suitable acquisition, investment or strategic partnership candidates,
or if we do identify suitable candidates, we may not complete those
transactions on commercially acceptable terms or at all. If we acquire another
company, we could have difficulty in assimilating that company's personnel,
operations, technology and software. In addition, the key personnel of the
acquired company may decide not to work for us. If we make other types of
acquisitions, we could have difficulty in integrating the acquired products,
services or technologies into our operations. These
10
<PAGE>
difficulties could disrupt our ongoing business, distract our management and
employees and increase our expenses. Furthermore, we may incur indebtedness or
issue equity securities to pay for any future acquisitions. The issuance of
equity securities would dilute the ownership interests of the holders of our
common stock. As of the date of this prospectus, we have no agreement to enter
into any material investment or acquisition transaction.
We face competition and may face future competition from companies with
different revenue models.
We may be unable to compete successfully with current or future competitors. We
face competition from many companies, both traditional and online. Increased
competition could result in price reductions for our services, reduced gross
margins and loss of our market share.
Many of our existing competitors, as well as potential future competitors, have
longer operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than our
company. These advantages may allow them to respond more quickly and
effectively to new or emerging technologies and changes in customer
requirements. It may also allow them to engage in more extensive research and
development, undertake farther-reaching marketing campaigns, adopt more
aggressive pricing policies and make more attractive offers to potential
employees and strategic partners. One or more of these companies could adopt a
different revenue model which could allow them to charge fees that are lower
than ours in order to attract clients. In addition, current and potential
competitors have established or may establish cooperative relationships among
themselves or with third parties to increase the ability of their products or
services to address the needs of our current and prospective clients.
Online marketing is a rapidly developing industry, and new types of products
and services may emerge that are more attractive to consumers and marketers
than the types of services we offer. As a result, it is possible that new
competitors may emerge and rapidly acquire significant market share. See
"Business--Competition."
Without the continued growth in use of the Internet and wireless devices, we
may not experience a significant portion of the growth currently anticipated.
Our future success is substantially dependent upon continued growth and use of
the Internet and wireless devices such as cellular telephones. Rapid growth in
the use of and interest in the Internet and wireless devices is a relatively
recent phenomenon, and there can be no assurance that use of the Internet and
wireless devices will continue to grow at their current rates. Internet usage
may be inhibited for any of the following reasons:
. the inability of Web sites to provide security and authentication of
confidential information contained in transmissions over the Internet;
and
. the inability of Web sites to respond to privacy concerns of potential
users, including concerns related to the placement by Web sites of
information, so-called cookies, on a user's hard drive without the
user's knowledge or consent.
Even if the Internet and wireless services continue to experience significant
growth in the number of users and level of use, we cannot assure you that the
Internet and wireless services infrastructures will continue to be able to
support the demands placed upon them by such growth. Our success and the
viability of the Internet and wireless services as information media and
commercial marketplaces will depend in large part upon the development of
robust telecommunications infrastructure for providing Internet access and
carrying Internet and wireless traffic. If the use of the Internet and wireless
services do not continue to grow, if the necessary telecommunications
infrastructure or complementary
11
<PAGE>
products are not developed or do not effectively support growth that may occur
or if the Internet and wireless services do not become viable information media
and commercial marketplaces, we may not experience a significant portion of the
growth currently anticipated and our business, financial condition and results
of operations would be materially and adversely affected.
In order to execute our growth plan we must attract, retain and motivate highly
skilled employees.
Our future success depends on our ability to attract, train, motivate and
retain highly skilled employees. Competition for employees among Internet and
software companies is intense, particularly in the Silicon Valley area in which
our headquarters are located. We may be unable to retain our key employees or
attract, assimilate or retain other highly qualified employees in the future.
We have from time to time in the past experienced, and we expect to continue to
experience in the future, difficulty in hiring and retaining highly skilled
employees with appropriate qualifications. The inability to attract additional
qualified personnel could disrupt the implementation of our growth strategy
upon which the success of our business depends.
The acceptance and effectiveness of the Internet as a medium for consumer
transactions is not yet fully established.
The future success of a number of our products and services is dependent in
large part on an increase in the use of the Internet for business transactions
with consumers. The electronic commerce market is new and rapidly evolving and
the extent of consumer acceptance of the Internet is uncertain. If a
sufficiently broad base of consumers do not accept the use of the Internet for
transacting business, our business, financial condition and results of
operations could be materially and adversely affected.
If we fail to protect our intellectual property rights or face a claim of
intellectual property infringement by a third-party, we could lose our
intellectual property rights or be liable for significant damages.
Our success depends significantly upon our proprietary technology. We currently
rely on a combination of copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect our
proprietary rights. Our employees are generally required to execute
confidentiality and assignment agreements which transfer any rights they may
have in copyrightable works or patentable technologies to us. In addition,
prior to entering into discussions with strategic partners, we generally
require that such parties enter into a non-disclosure agreement. If these
discussions result in a license or other business relationship, we also
generally require that the agreement setting forth the parties' respective
rights and obligations include provisions for the protection of our
intellectual property rights. Our failure to enter into such agreements when
appropriate or our inability to enforce our rights under one or more of these
agreements could jeopardize our ability to protect our intellectual property.
This could materially and adversely affect our business.
We have applied for registration of certain service marks and trademarks,
including "Vicinity," "Business Finder" and "MapBlast!," in the United States
and in other countries, and will seek to register additional service marks and
trademarks, as appropriate. There can be no assurance that we will be
successful in obtaining the service marks and trademarks for which we have
applied. There can be no assurance that any patent with respect to our
technology will be granted or that if granted such patent will not be
challenged or invalidated. There also can be no assurance that we will develop
proprietary products or technologies that are patentable, that any issued
patent will provide us with any competitive advantages or will not be
challenged by third parties, or that the patents of others will not have a
material adverse effect on our ability to conduct business. Despite our efforts
to protect our proprietary rights, unauthorized parties may copy aspects of our
products or services or obtain and use
12
<PAGE>
information that we regard as proprietary. The laws of some foreign countries
do not protect proprietary rights to as great an extent as do the laws of the
United States, and we do not currently have any patents or patent applications
pending in any foreign country. There can be no assurance that our means of
protecting our proprietary rights will be adequate or that our competitors will
not independently develop similar technology or duplicate our products or
design around patents issued to us or our other intellectual property rights.
Our failure to protect our proprietary rights adequately or our competitors'
successful duplication of our technology could have a material adverse effect
on our business, financial condition and results of operations.
There has been frequent litigation in the computer industry regarding
intellectual property rights. We have in the past been subject to claims
regarding the alleged intellectual property rights of third parties. In fiscal
1999, we entered into a settlement agreement and agreed to pay $440,500 for a
patent license with respect to one such claim. There can be no assurance that
third parties will not in the future claim infringement by us with respect to
current or future products, trademarks or other proprietary rights. Any such
claims could be time-consuming, result in costly litigation, diversion of
management's attention, cause product or service release delays, require us to
redesign our products or services or require us to enter into royalty or
licensing agreements. These royalty or licensing agreements, if required, may
not be available on terms acceptable to us, or at all, any of which occurrences
could have a material adverse effect on our business.
Privacy concerns may adversely affect our ability to implement our Internet
solutions.
Web sites and Internet ad servers typically place a small file commonly known
as a "cookie" on a user's hard drive, generally without the user's knowledge or
consent. In the future, we may introduce products and services that are
dependent on the use of cookies to collect, sort and analyze information about
Internet users. Most currently available Internet browsers allow users to
modify their browser settings to prevent cookies from being stored on their
hard drive or to delete cookies at any time. In addition, some Internet
commentators and privacy advocates have suggested limiting or eliminating the
use of cookies. The effectiveness of our services would be greatly limited by a
significant reduction or limitation in the use of cookies. In addition, privacy
concerns may cause some Web users to be less likely to visit Web sites that use
cookies. If enough Web users choose not to visit sites that use cookies, our
ability to sell our future products and services that are dependent on the use
of cookies would be adversely affected. This could have a material adverse
effect on our business, financial condition or results of operation and may
require us to alter or adjust our business plan.
Legislation or regulations may be adopted that could affect our ability to
generate or use information for profiles and may hinder our ability to conduct
business.
The legal and regulatory environment governing the Internet and the use of
information about Internet users is uncertain and may change. United States
legislators in the past have introduced a number of bills aimed at regulating
the collection and use of personal data from Internet users and additional
similar bills may be considered during any congressional session. Although we
believe no current legislation has a material adverse effect on our business,
it is possible that a bill may be enacted into law that negatively affects our
ability to collect and use data about Internet users or that otherwise affects
our business. The European Union has recently adopted a directive addressing
data privacy that may result in limitations on the collection and use of
specific personal information regarding Internet users. In addition, Germany
has imposed its own laws protecting data that can become personally
identifiable through subsequent processing. Other countries may also enact
limitations on the use of personal data.
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<PAGE>
To date, these regulations have not materially restricted the use of our
products. However, legislation or regulations may in the future be adopted
which may limit our ability to target advertising or collect and use
information in one or more countries. Further, a number of laws and regulations
have been and may be adopted covering issues such as pricing, acceptable
content, taxation and quality of products and services on the Internet. Such
legislation could dampen the growth in use of the Internet generally and
decrease the acceptance of the Internet as a communications and commercial
medium. In addition, due to the global nature of the Internet, it is possible
that multiple federal, state or foreign jurisdictions might inconsistently
regulate our activities or the activities of ad networks or Web sites. Any of
the foregoing developments could have a material adverse effect on our
business, financial condition and results of operations.
Risks Related to this Offering
Our management will have broad discretion in using the proceeds from this
offering and therefore investors will be relying on the judgment of our
management to invest those funds effectively.
We intend to use the net proceeds of this offering to expand our sales and
marketing resources, including expanding our business in Europe and Asia, to
develop new technologies and products and for working capital and other general
corporate purposes. The amounts and timing of these expenditures will vary
significantly depending upon a number of factors, including the amount of cash
generated by our operations, the progress of our services development
activities and the market response to introduction of any new services. In
addition, we may use a portion of the net proceeds from this offering to
acquire or invest in businesses, products, services or technologies
complementary to our current business, through mergers, acquisitions, joint
ventures or otherwise. However, we have no specific agreements or commitments
and are not currently engaged in any negotiations with respect to such
transactions. Accordingly, our management will retain broad discretion with
respect to the expenditure of proceeds. Investors will be relying on the
judgment of our management regarding the application of the proceeds of this
offering.
The liquidity of our common stock is uncertain since it has not been publicly
traded.
We cannot predict the extent to which this offering will result in the
development of an active, liquid public trading market for our common stock.
Active, liquid trading markets generally result in lower price volatility and
more efficient execution of buy and sell orders for investors. Liquidity of a
securities market is often a function of the volume of the underlying shares
that are publicly held by unrelated parties.
Our need for additional financing is uncertain as is our ability to raise
further financing if required.
We may need to raise additional funds in the future in order to implement our
business plan, to fund more aggressive marketing programs or to acquire
complementary businesses, technologies or services. Any required additional
financing may be unavailable on terms favorable to us, or at all. If we raise
additional funds by issuing equity securities, you may experience significant
dilution of your ownership interest and such securities may have rights senior
to those of the holders of our common stock. If additional financing is not
available when required or is not available on acceptable terms, we may be
unable to fund our expansion, develop or enhance our products and services,
take advantage of business opportunities or respond to competitive pressures,
any of which could have a material adverse effect on our business, financial
condition and results of operations.
14
<PAGE>
Market prices of emerging Internet companies have been highly volatile, and the
market for our stock may exhibit volatility as well.
The financial markets have experienced significant price and volume
fluctuations, and the market prices of technology companies, particularly
Internet-related companies, have been and continue to be extremely volatile.
Volatility in the price of our common stock may be caused by factors outside of
our control and may be unrelated or disproportionate to our operating results.
In the past, following periods of volatility in the market price of a public
company's securities, securities class action litigation has often been
instituted against that company. Such litigation could result in substantial
costs and a diversion of our management's attention and resources.
We have negative net book value for accounting purposes, and new investors will
suffer immediate and substantial dilution in the tangible net book value of
their shares.
The purchase price of the common stock offered by this prospectus will be
substantially higher than the tangible book value of our outstanding common
stock. Any shares you purchase in this offering will have a post-closing net
tangible book value per share of $ per share less than the initial public
offering price paid, assuming an initial public offering price of $ per
share. Investors who purchase common stock in this offering will therefore
experience immediate and significant dilution in the tangible net book value of
their investment. For additional information regarding dilution to investors in
our common stock, please see "Dilution."
The large number of shares eligible for public sale after this offering could
cause our stock price to decline.
The market price of our common stock could decline as a result of sales of a
large number of shares after this offering or the perception that such sales
could occur. Such sales also might make it more difficult for us to sell common
stock in the future at a time and at a price that we deem appropriate. After
this offering, we will have an aggregate of shares outstanding. Of the
outstanding shares, the shares sold in this offering will be freely
tradable, other than shares purchased by our affiliates. The remaining shares
may be sold only pursuant to a registration statement under the Securities Act
or an exemption from the registration requirements of the Securities Act. Each
of our directors and executive officers and several of our current stockholders
has agreed not to offer, sell or agree to sell, directly or indirectly, or
otherwise dispose of any equity shares without the prior written consent of
J.P. Morgan Securities, Inc. for a period of 180 days from the date of this
prospectus. For additional information regarding possible future sales of our
securities, please see "Underwriting" and "Shares Eligible for Future Sale."
We do not plan to pay dividends in the foreseeable future.
We do not anticipate paying cash dividends to the holders of our common stock
in the foreseeable future. Accordingly, investors must rely on sales of their
common stock after price appreciation, which may never occur, as the only way
to realize on their investment. Investors seeking cash dividends should not
purchase our common stock.
A third party's ability to acquire us might be more difficult because of
certain anti-takeover provisions in our articles of incorporation and bylaws.
We are authorized to issue five million shares of undesignated preferred stock.
Our Board of Directors has the authority to issue the preferred stock in one or
more series and to fix the price, rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number
15
<PAGE>
of shares constituting a series or the designation of such series, without any
further vote or action by our stockholders. The issuance of preferred stock,
while providing desirable flexibility in connection with possible acquisitions
and other corporate purposes, could have the effect of delaying, deferring or
preventing a change in control of our company without further action by the
stockholders and may adversely affect the market price of our common stock and
the voting and other rights of the holders of our common stock. The issuance of
preferred stock with voting and conversion rights may adversely affect the
voting power of the holders of our common stock, including the loss of voting
control to others. We have no current plans to issue any shares of preferred
stock.
Certain provisions of our Certificate of Incorporation and Bylaws eliminate the
right of stockholders to act by written consent without a meeting, eliminate
the right of stockholders to call a special meeting of stockholders and specify
certain procedures for nominating directors and submitting proposals for
consideration at stockholder meetings. Such provisions are intended to enhance
the likelihood of continuity and stability in the composition of our Board of
Directors and in the policies formulated by our Board of Directors and to
discourage certain types of transactions which may involve an actual or
threatened change of control of our company. Such provisions are designed to
reduce the vulnerability of our company to an unsolicited acquisition proposal
and, accordingly, could discourage potential acquisition proposals and could
delay or prevent a change in control of our company. Such provisions are also
intended to discourage certain tactics that may be used in proxy fights but
could, however, have the effect of discouraging others from making tender
offers for our common stock and, consequently, may also inhibit fluctuations in
the market price of our common stock that could result from actual or rumored
takeover attempts. These provisions may also have the effect of preventing
changes in the management of our company.
Many corporate actions will be controlled by officers, directors and affiliated
entities regardless of the opposition of other investors or the desire of other
investors to pursue an alternative cause of action.
We anticipate that the executive officers, directors and entities affiliated
with them will, in the aggregate, beneficially own approximately % of our
outstanding common stock following the completion of this offering. These
stockholders, if acting together, would be able to significantly influence all
matters requiring approval by our stockholders, including the election of
directors and the approval of mergers or other business combination
transactions. See "Principal Stockholders."
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<PAGE>
Forward-looking Statements
This prospectus contains forward-looking statements that involve substantial
risks and uncertainties. You can identify these statements by forward-looking
words such as "may," "will," "expect," "intend," "anticipate," "believe,"
"estimate" and "continue" or similar words. You should read statements that
contain these words carefully because they discuss our future expectations,
contain projections of our future results of operations or of our financial
condition or state other forward-looking information. We believe that it is
important to communicate our future expectations to our investors. However,
there may be events in the future that we are not able to predict or control.
The factors listed in the sections captioned "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," as
well as any cautionary language in this prospectus, provide examples of risks,
uncertainties and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking statements. Before you
invest in our common stock, you should be aware that the occurrence of the
events described in the "Risk Factors" section and the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section and
elsewhere in this prospectus could have a material adverse effect on our
business, operating results and financial condition.
17
<PAGE>
Use of Proceeds
The net proceeds to us from the sale of the shares offered by this prospectus,
after deducting underwriting discounts and the estimated offering expenses, are
estimated to be approximately $ million ($ million if the
underwriters' over-allotment option is exercised in full), assuming an initial
public offering price of $ per share.
We intend to use the net proceeds of this offering to expand our sales and
marketing resources, including expanding our business in Europe and Asia, to
develop new technologies and products and for working capital and other general
corporate purposes. We have not yet determined the amount of net proceeds to be
used specifically for each of the foregoing purposes. Accordingly, management
will have significant flexibility in applying the net proceeds of this
offering. Pending any such use, as described above, we intend to invest the net
proceeds in high quality, interest-bearing instruments. See "Risk Factors--Our
management will have broad discretion in using the proceeds from this offering
and therefore investors will be relying on the judgment of our management to
invest those funds effectively."
Dividend Policy
We have not declared or paid any cash dividends on our capital stock since
inception and do not expect to pay any cash dividends for the foreseeable
future. We currently intend to retain future earnings, if any, to finance the
expansion of our business. You should not purchase our common stock with the
expectation of receiving cash dividends.
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Capitalization
The following table sets forth, as of July 31, 1999, the cash and cash
equivalents and the capitalization of our company on an actual, pro forma and
pro forma as adjusted basis:
The pro forma data set forth below give effect to the following:
. the conversion of all outstanding shares of our redeemable convertible
preferred stock into 11,813,373 shares of common stock upon the
closing of this offering; and
. the issuance of 952,381 shares of common stock upon the conversion of
shares of Series E Preferred Stock issuable to Oak Investment Partners
VIII, L.P. and Oak VIII Affiliates Fund, L.P. in respect of
outstanding warrants with an exercise price of $2.10 per share.
The pro forma as adjusted data set forth below are further adjusted to give
effect to the sale by our company of the shares of common stock offered hereby
and the application of the proceeds from this offering at an assumed initial
public offering price of $ per share and after deducting underwriting
discounts and the estimated offering expenses payable by us. This information
should be read in conjunction with our financial statements and the notes
relating to such financial statements appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
--------------------------------
As of July 31, 1999
--------------------------------
Pro Forma
Actual Pro Forma As Adjusted
In thousands, except per share data -------- --------- -----------
<S> <C> <C> <C>
Cash and cash equivalents...................... $ 9,060 $ 11,060
======== ========
Capital lease obligations, excluding current
portion....................................... $ 298 $ 298
Redeemable convertible preferred stock; $0.001
par value; 12,520 shares authorized; 11,217
shares issued and outstanding actual; no
shares issued and outstanding pro forma or pro
forma as adjusted............................. 21,403 --
Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 5,000
shares authorized; no shares issued and
outstanding actual, pro forma or pro forma
as adjusted................................. -- --
Common stock, $0.001 par value, 22,000
shares authorized actual and pro forma;
75,000 shares authorized pro forma as
adjusted; 5,288 shares issued and
outstanding actual; 18,053 shares issued
and outstanding pro forma; and shares
issued and outstanding pro forma as
adjusted.................................... 5 18
Additional paid-in capital................... (301) 23,089
Deferred stock-based compensation............ (1,044) (1,044)
Notes receivable from employees upon
purchase of stock........................... (98) (98)
Accumulated deficit.......................... (15,131) (15,131)
-------- --------
Total stockholders' equity (deficit)...... (16,569) 6,834
-------- --------
Total capitalization.................... $ 5,132 $ 7,132
======== ========
</TABLE>
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<PAGE>
Dilution
Our pro forma net tangible book value as of July 31, 1999 was $ , or
$ per share of common stock. Pro forma net tangible book value per share
is equal to the amount of our total tangible assets (total assets less
intangible assets) less total liabilities, divided by the pro forma number of
shares of common stock outstanding as of July 31, 1999. Assuming the sale by us
of the shares offered by this prospectus at an assumed initial public offering
price of $ per share and after deducting underwriting discounts and the
estimated offering expenses payable, our pro forma net tangible book value as
of July 31, 1999 would have been $ , or $ per share of common
stock. This represents an immediate increase in pro forma net tangible book
value of $ per share to existing stockholders and an immediate dilution
in pro forma net tangible book value of $ per share to new investors. The
following table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............... $
Pro forma net tangible book value per share as of July 31,
1999....................................................... $
Pro forma increase in net tangible book value attributable
to new investors........................................... $
--------
Pro forma net tangible book value per share after this
offering.....................................................
-------
Pro forma dilution per share to new investors................. $
=======
</TABLE>
The following table summarizes, on a pro forma basis as of July 31, 1999, the
total number of shares of common stock purchased from us, the total
consideration paid to us and the average price per share paid by existing
stockholders and by new investors purchasing shares in this offering:
<TABLE>
<CAPTION>
---------------------------------------------------------------
Shares Purchased Total Consideration
-------------------- ---------------------- Average Price
Number Percent Amount Percent Per Share
-------- -------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders... % $ % $
New investors........... $
-------- -------- ---------- --------
Total................. 100% $ 100%
======== ======== ========== ========
</TABLE>
- -------------------
The foregoing tables and calculations assume no exercise of outstanding options
or other derivative securities other than the issuance of 952,381 shares of
common stock upon the conversion of shares of Series E Preferred Stock issuable
to Oak Investment Partners VIII, L.P. and Oak VIII Affiliates Fund, L.P. in
respect of outstanding warrants with an exercise price of $2.10 per share. As
of July 31, 1999, there were 2,064,000 shares of common stock issuable upon
exercise of outstanding stock options under our 1995 Stock Option Plan and 1996
Incentive Stock Option Plan with a weighted average exercise price of $0.22 per
share. Please see "Management--Employee Benefit Plans" and "Description of
Capital Stock."
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<PAGE>
Selected Financial Data
The following selected financial data should be read in conjunction with the
financial statements and the notes to such financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus. The statement of operations
data for the fiscal years ended July 31, 1997, 1998 and 1999, and the balance
sheet data as of July 31, 1998 and 1999, are derived from our audited financial
statements included elsewhere in this prospectus. The statement of operations
data for the period ended July 31, 1996 and the balance sheet data at July 31,
1996 and 1997 are derived from audited financial statements not included in
this prospectus. Historical results are not indicative of the results to be
expected in the future.
<TABLE>
<CAPTION>
--------------------------------------------
October 15,
1995
(inception) Year Ended July 31,
to July 31, -------------------------------
In thousands, except per 1996 1997 1998 1999
share data ----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Statement of Operations Data:
Revenues:
License and hosting fees........ $ 20 $ 1,419 $ 4,386 $ 5,657
Service and transaction fees.... -- -- 424 767
--------- --------- --------- ---------
Total revenues................. 20 1,419 4,810 6,424
Cost of revenues................. 9 1,976 2,847 3,949
--------- --------- --------- ---------
Gross profit (loss).............. 11 (557) 1,963 2,475
Operating expenses:
Product development............. 285 1,703 1,551 1,748
Sales and marketing............. 298 2,959 1,676 3,588
General and administrative...... 297 1,128 1,205 1,995
Other........................... -- -- -- 441
Stock-based compensation........ -- -- -- 167
--------- --------- --------- ---------
Total operating expenses....... 880 5,790 4,432 7,939
--------- --------- --------- ---------
Loss from operations............. (869) (6,347) (2,469) (5,464)
Other expense (income), net...... (5) (109) 12 51
--------- --------- --------- ---------
Net loss......................... (864) (6,238) (2,481) (5,515)
Net loss applicable to common
stockholders.................... (898) (6,621) (2,999) (6,553)
Basic and diluted net loss per
share.......................... $ (0.20) $ (1.61) $ (0.86) $ (1.61)
Weighted average shares
outstanding used in basic and
diluted net loss per share
calculation..................... 4,458 4,102 3,503 4,080
<CAPTION>
--------------------------------------------
As of July 31,
--------------------------------------------
1996 1997 1998 1999
In thousands ----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents........ $ 1,015 $ 912 $ 264 $ 9,060
Working capital.................. 931 (106) (2,381) 4,220
Total assets..................... 1,509 1,623 1,821 13,203
Deferred revenue................. 114 885 2,477 4,955
Capital lease obligations,
excluding current portion....... -- -- -- 298
Redeemable convertible preferred
stock........................... 2,094 7,454 7,972 21,403
Total stockholders' deficit...... $ (890) $ (7,512) $ (10,287) $ (16,569)
</TABLE>
21
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Management's Discussion and Analysis
Financial Condition and Results of Operations
The following discussion of the financial condition and results of operations
of our company should be read in conjunction with the financial statements and
the notes to those statements included elsewhere in this prospectus. This
discussion contains forward-looking statements that involve risks and
uncertainties. Please see "Risk Factors."
Overview
We are a leading provider of Internet-based marketing infrastructure services.
Our clients use our services to direct consumers searching for a specific
product or service to the nearest brick-and-mortar store that carries that
product or service. Our company was formed in October 1995, and our initial
revenues were derived from providing maps, driving directions and directory
services to regional telephone companies and large portal companies. In fiscal
1997, we restructured our company by cutting staff and expenses, bringing in a
new chief executive officer and refocusing our strategy on our Business Finder
service.
In fiscal 1998, we grew our clients from 102 companies to 193 companies as a
result of the continued concentration of our efforts on Business Finder. We
continued to increase our revenues in fiscal 1998 despite the loss of our
biggest customer at the time, Yahoo!. In fiscal 1999, we recruited additional
key members of our management team and expanded our product offerings to
include Telephone Business Finder, SiteMaker and Print Maps. Historically, we
have generated substantially all of our revenues from our Web Business Finder,
maps, driving directions and directory services.
We have not achieved profitability on a quarterly or annual basis and expect to
continue to incur net losses for the foreseeable future. We anticipate
incurring significant sales and marketing, product development and
administrative expenses as we continue to expand our product offerings and
attempt to build our customer base.
Revenue Recognition
We primarily derive revenue from product license and hosting fees. These
revenues are recognized ratably over the life of the contract, which typically
has one year, non-refundable terms. Service and transaction fees consist of
revenue generated from project related professional services and to a lesser
degree from fees derived from advertising, sponsorship and e-commerce
transactions. These revenues are generally recognized as the services are
performed. To date, no revenues have been derived from barter transactions.
Deferred revenue consists of customer payments received and accounts receivable
recorded in advance of recognizing revenue.
Stock-based Compensation Expense
As of July 31, 1999, we recorded deferred stock-based compensation expense
aggregating $1.2 million for the difference at the date of grant between the
exercise price and the fair value of the common stock underlying stock options
granted in fiscal 1999. Of this amount, we recognized $0.2 million in fiscal
1999 and expect to recognize $0.5 million in fiscal 2000, $0.3 million in
fiscal 2001 and $0.2 million in later years. We also expect to accrue
additional compensation charges of approximately $ related to stock option
grants subsequent to July 31, 1999 and prior to the date of this offering, of
which we expect to recognize $ in fiscal 2000, $ in fiscal 2001 and
$ in later years.
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<PAGE>
Results of Operations
Comparison of fiscal 1999 to fiscal 1998
Revenues. In fiscal 1999, we had $6.4 million in total revenues, compared to
$4.8 million for fiscal 1998, representing an increase of $1.6 million, or 33%.
Revenues associated with license and hosting fees were $5.7 million in fiscal
1999, compared to $4.4 million in fiscal 1998, representing an increase of $1.3
million, or 30%. Our service and transaction fees were $0.8 million in fiscal
1999, compared to $0.4 million in fiscal 1998, representing an increase of $0.4
million, or 100%. In both cases, these increases were primarily attributable to
growth in our customer base due to increased market acceptance in each of our
targeted markets and the need for customized development work associated with
that customer growth. We grew our clients from 193 as of August 1, 1998 to 237
as of July 31, 1999.
Deferred revenues as of July 31, 1999 were $5.0 million, compared to $2.5
million as of July 31, 1998, representing an increase of $2.5 million, or 100%.
Cost of Revenues. These costs include salaries and benefits of our Web
development and operating personnel, the cost of acquiring data and content,
the leasing and depreciation cost of our computer hosting equipment, and
Internet connection and data center charges. Cost of revenues was $3.9 million
for fiscal 1999, compared to $2.8 million for fiscal 1998, representing an
increase of $1.1 million, or 39%. This increase was due to increases in each of
the elements described above to support our revenue growth.
Product Development. This expense consists primarily of salaries and benefits,
consulting expenses and equipment. To date, we have expensed all product
development costs as incurred. Product development expense was $1.7 million for
fiscal 1999, compared to $1.6 million for fiscal 1998, representing an increase
of $0.1 million, or 6%. This increase was primarily attributable to increases
in personnel and personnel-related costs due to our expanded product offerings.
We expect our product development expense to increase as we continue to add
members to our product development teams.
Sales and Marketing. This expense consists primarily of salaries, commissions,
promotions and advertising. Sales and marketing expense was $3.6 million for
fiscal 1999, compared to $1.7 million for fiscal 1998, representing an increase
of $1.9 million, or 112%. This increase was primarily attributable to increases
in personnel and personnel-related costs to support our expanded sales and
marketing efforts. We expect our sales and marketing expense to increase
significantly as a result of our anticipated aggressive expansion of our sales
and marketing efforts both domestically and internationally.
General and Administrative. This expense consists primarily of salaries and
related costs for our executive, administrative, finance and human resources
personnel as well as professional service fees. General and administrative
expense was $2.0 million for fiscal 1999, compared to $1.2 million for fiscal
1998, representing an increase of $0.8 million, or 67%. This increase was
primarily attributable to an increase in personnel and personnel-related costs
to support and grow our business. We expect general and administrative expense
to grow as additional personnel are hired and additional expenses are incurred
in connection with the growth of our business and our operation as a public
company.
Other. This expense was $0.4 million for fiscal 1999 representing a charge to
settle a patent infringement claim and obtain a perpetual license. There was no
similar expense for fiscal 1998.
Stock-Based Compensation. Stock-based compensation expense was $0.2 million for
fiscal 1999. There was no stock-based compensation expense in fiscal 1998.
23
<PAGE>
Comparison of fiscal 1998 to fiscal 1997
Revenues. In fiscal 1998, we had $4.8 million in total revenues, compared to
$1.4 million for fiscal 1997, representing an increase of $3.4 million, or
243%. Revenues associated with license and hosting fees were $4.4 million in
fiscal 1998, compared to $1.4 million in fiscal 1997, representing an increase
of $3.0 million, or 214%. Our service and transaction fees were $0.4 million in
fiscal 1998. We had no service and transaction fees in fiscal 1997. The
increase in service and transaction fees was primarily attributable to our
change in business strategy from maps, driving directions and directory
services to Internet-based marketing infrastructure services with the related
need for professional services.
Deferred revenues as of July 31, 1998 were $2.5 million, compared to $0.9
million as of July 31, 1997, representing an increase of $1.6 million, or 178%.
Cost of Revenues. Cost of revenues was $2.8 million for fiscal 1998, compared
to $2.0 million for fiscal 1997, representing an increase of $0.8 million, or
40%. This increase was primarily attributable to an increase in leasing and
depreciation costs of our computer hosting equipment, the cost of acquiring
content and salaries and benefits of our operating personnel associated with
our revenue growth.
Product Development. Product development expense was $1.6 million for fiscal
1998, compared to $1.7 million for fiscal 1997, representing a decrease of $0.1
million, or 6%. This decrease was primarily attributable to a decrease in
personnel and personnel-related costs associated with our refocused business
strategy.
Sales and Marketing. Sales and marketing expense was $1.7 million for fiscal
1998, compared to $3.0 million for fiscal 1997, representing a decrease of $1.3
million, or 43%. This decrease was primarily attributable to a decrease in
personnel and personnel-related costs associated with the restructuring of our
business in fiscal 1997 and our refocused business strategy.
General and Administrative. General and administrative expense was $1.2 million
for fiscal 1998, compared to $1.1 million for fiscal 1997, representing an
increase of $0.1 million, or 9%. This increase was primarily attributable to an
increase in consulting and professional services costs required to support our
business realignment.
24
<PAGE>
Quarterly Results of Operations Data
The following table sets forth certain unaudited quarterly statement of
operations data for each of the eight quarters ended July 31, 1999. In the
opinion of management, this data has been prepared substantially on the same
basis as the audited financial statements appearing elsewhere in this
prospectus, including all necessary adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of this data. The
quarterly data should be read in conjunction with the financial statements and
the notes to such financial statements appearing elsewhere in this prospectus.
In view of the rapidly evolving nature of our business and our limited
operating history, we believe that period-to-period comparisons of revenues and
operating results are not necessarily meaningful and should not be relied upon
as indications of future performance.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
<CAPTION>
Three Months Ended,
-------------------------------------------------------------------------------------------------
October 31, January 31, April 30, July 31, October 31, January 31, April 30, July 31,
In thousands, except per 1997 1998 1998 1998 1998 1999 1999 1999
share data ----------- ----------- ---------- ---------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues:
License and
hosting fees.......... $ 877 $ 1,107 $ 1,203 $ 1,199 $ 1,225 $ 1,352 $ 1,336 $ 1,744
Service and
transaction fees...... 69 103 75 177 267 69 91 340
--------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues........ 946 1,210 1,278 1,376 1,492 1,421 1,427 2,084
--------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Cost of revenues........ 603 699 679 866 874 907 1,035 1,133
--------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit (loss)..... 343 511 599 510 618 514 392 951
Operating expenses:
Product development.... 379 420 400 352 339 403 427 578
Sales and marketing.... 362 362 411 541 568 606 970 1,445
General and
administrative........ 218 261 257 468 362 425 448 760
Other.................. -- -- -- -- -- -- -- 441
Stock-based
compensation.......... -- -- -- -- -- 3 29 135
--------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses............. 959 1,043 1,068 1,361 1,269 1,437 1,874 3,359
--------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Loss from operations.... (616) (532) (469) (851) (651) (923) (1,482) (2,408)
Interest expense
(income)............... (10) 5 4 14 18 5 8 20
--------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loss................ $ (606) $ (537) $ (473) $ (865) $ (669) $ (928) $ (1,490) $ (2,428)
========= ========== ========== ========== ========== ========== ========== ==========
</TABLE>
As a result of our limited operating history, we do not have historical
financial data for a significant number of periods on which to base planned
operating expenses. Quarterly revenues and operating results depend
substantially on the rate of new customer acquisitions, whether the related
revenues are recognized immediately or deferred over future time periods, the
timing and effectiveness of our development of new services, the timing and
effectiveness of any strategic alliances into which we enter and changes in our
operating expenses. Accordingly, these factors could have a material adverse
effect on our business, results of operations and financial condition. We may
be unable to adjust spending in a timely manner to compensate for any
unexpected revenue shortfall, and any significant shortfall in revenue in
relation to our expectations would have an immediate adverse effect on our
business, results of operation and financial condition. Due to the foregoing
factors, it is possible that in some future periods our operating results may
be below the expectations of public market analysts and investors. In this
event, the price of our common stock may underperform or fall.
25
<PAGE>
Liquidity and Capital Resources
Since inception, we have financed our operations primarily through the private
placement of equity securities, raising an aggregate of approximately $23.2
million, including approximately $10.4 million in July and August 1999. As of
July 31, 1999, we had cash and cash equivalents of $9.1 million. In fiscal
1998, we obtained a $1.0 million line of credit with a variable interest rate
that was approximately 8.5% as of July 31, 1999. This line of credit expires in
May 2000. This debt was guaranteed by CMGI, Inc., an affiliate of our largest
stockholder, CMG@Ventures, and secured by our assets. As of July 31, 1999, the
outstanding balance of this line of credit was $1.0 million. In August 1999, we
repaid this outstanding balance, and we are currently in the process of
negotiating a new line of credit. We currently have $2.4 million in equipment
financing outstanding with an equipment leasing company. In August 1999, we
entered into an agreement with another equipment financing company for an
additional $4.0 million equipment leasing line.
Cash used in operating activities was $5.3 million in fiscal 1997, $1.7 million
in fiscal 1998 and $3.5 million in fiscal 1999. These increases in cash used in
operating activities were primarily due to increased net losses. Cash provided
by investing activities was $219,000 in fiscal 1997, and cash used by investing
activities was $8,000 in fiscal 1998 and $214,000 in fiscal 1999. These
increases in cash used in investing activities were primarily due to
infrastructure expansion to meet our growth and capital expenditures for
computers and other equipment for our data centers. Cash provided by financing
activities was $5.0 million in fiscal 1997, $1.1 million in fiscal 1998 and
$12.5 million in fiscal 1999. The increases in cash provided by financing
activities in fiscal 1997 and fiscal 1999 were primarily related to the sale of
preferred stock. In fiscal 1998, the increase in cash provided by financing
activities primarily reflects bank borrowings and, to a lesser degree, the sale
of common stock warrants.
Future capital requirements will depend upon many factors, including the rate
of expansion of our sales and marketing resources and the timing and magnitude
of research and product development efforts. We expect to continue to expend
significant amounts on expansion of facility infrastructure, computers and
related data center equipment, as well as personnel. We believe that our cash
and cash equivalents balances and funds available under our existing line of
credit, together with the proceeds of this offering, will be sufficient to
satisfy our cash requirements for at least the next 12 months. We intend to
invest our excess cash in high quality, interest-bearing securities.
Qualitative and Quantitative Disclosures About Market Risk
We develop products in the United States and market our products in North
America and Europe. As a result, our financial results could be affected by
factors such as changes in foreign currency exchange rates or weak economic
conditions in foreign markets. Since all of our sales are currently made in
U.S. dollars, a strengthening of the dollar could make our products less
competitive in foreign markets.
Our interest income is sensitive to changes in the general level of U.S.
interest rates, particularly since the majority of our investments are in
short-term instruments. Due to the short-term nature of our investments, we
believe that we are not subject to any material market risk exposure.
Impact of the Year 2000
Many currently installed computer systems and software products are coded to
accept or recognize only two digit entries in the date code field. These
systems may recognize a date using "00" as the year 1900 rather than the year
2000. As a result, computer systems and/or software used by many
26
<PAGE>
companies and governmental agencies may need to be upgraded to comply with such
Year 2000 requirements or risk system failure or miscalculations causing
disruptions of normal business activities.
State of Readiness
Costs. To date, we have not incurred any material costs in identifying or
evaluating Year 2000 compliance issues. Most of our expenses have related to,
and are expected to continue to relate to, the operating costs associated with
time spent by employees in the evaluation process and Year 2000 compliance
matters generally. We do not presently anticipate that such expenditures will
be material.
Risks. We have made a preliminary assessment of the Year 2000 readiness of our
operating and administrative systems and the third-party software, hardware and
services used to host our services. Our assessment plan consists of:
. contacting third-party vendors of material software, hardware and
services that are both directly and indirectly related to the
delivery of our services;
. assessing and implementing repair or replacement of such components
as required; and
. creating contingency plans in the event of Year 2000 failures.
Many of our vendors of material software, hardware and services have indicated
that the products used by us are currently Year 2000 compliant. We plan to
complete this process by the end of 1999. We are not currently aware of any
internal Year 2000 compliance problems that could reasonably be expected to
have a material adverse effect on our business, results of operations and
financial condition, without taking into account our efforts to avoid or fix
such problems. However, there can be no assurance that we will not discover
Year 2000 compliance problems in our computer infrastructure that will require
substantial revisions or replacements. In addition, there can be no assurance
that third-party software, hardware or services incorporated into our material
systems or other systems upon which we are reliant will not need to be revised
or replaced, which could be time consuming and expensive.
In addition, we cannot assure you that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside of our control will be Year 2000 compliant. The failure by such
entities to be Year 2000 compliant could result in a systemic failure beyond
our control, such as a prolonged Internet, telecommunications or electrical
failure, which could also prevent us from delivering our services, decrease the
use of the Internet or prevent users from accessing databases we maintain on
our servers, any of which would have a material adverse effect on our business,
results of operations and financial condition.
Contingency Plan
As discussed above, we are engaged in an ongoing Year 2000 assessment and have
developed preliminary contingency plans. The results of our analyses and the
responses received from third-party vendors and service providers will be taken
into account to revise our contingency plans as necessary. It is our goal to
finalize our contingency plans by the end of 1999.
Impact of Recently Issued Accounting Standards
In March 1998, the American Institute of Certified Public Accountants, or
AICPA, issued Statement of Position, or SOP, 98-1, Accounting for the Cost of
Computer Software Developed or Obtained for Internal Use. SOP 98-1 is effective
for financial statements for years beginning after December 15,
27
<PAGE>
1998. SOP 98-1 provides guidance over accounting for computer software
developed or obtained for internal use, including the requirement to capitalize
specified costs and amortization of such costs. We do not expect the adoption
of SOP 98-1 to have a material effect on our financial statements.
In June 1998, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No.
133 establishes accounting and reporting standards for derivative instruments,
including derivative instruments embedded in other contracts, and for hedging
activities. SFAS No. 133, as amended by SFAS No. 137, is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. To date, we have
not entered into any derivative financial instruments or hedging activities.
28
<PAGE>
Business
The following description of our business should be read in conjunction with
the information included elsewhere in this prospectus. This description
contains forward-looking statements that involve risks and uncertainties. Our
actual results could differ significantly from the results discussed in these
forward-looking statements as a result of certain of the factors set forth in
"Risk Factors" and elsewhere in this prospectus. The Forrester Research, Harris
Interactive, IDC and Jupiter Communications market data presented below and
elsewhere in this prospectus are estimates derived by them from a combination
of vendor, user and other market sources and therefore may differ from numbers
claimed by specific vendors using different market definitions or methods.
There can be no assurance that any of these projected amounts will be achieved.
Overview
We are a leading provider of Internet-based marketing infrastructure services.
Our "clicks-and-mortar" solutions enable our clients to direct consumers
searching for a specific product or service to the nearest brick-and-mortar
location that carries that product or service. Our services are currently
utilized by more than 250 companies with an aggregate of more than 2.5 million
real world locations. Our growing client list includes leading companies in a
number of industry segments such as Barnes & Noble, Marriott, McDonald's,
Mercedes-Benz and Nike.
We use our expertise in designing and maintaining complex databases to provide
a suite of Internet-based services, ranging from store locators for clients
with a few hundred locations to the design and maintenance of complex, multi-
attribute databases for clients with millions of product records that include
information such as regularly stocked products and current promotional offers.
We have also developed methods to use the vast amount of store location and
product data and our strategic relationships with Inktomi, Prio and other major
search engines, portal and wireless companies to offer transaction-based lead
generation services for our clients. With our services, companies can direct
potential customers to the nearest store location, introduce those customers to
a local retailer's Web site and provide customers with timely incentives
designed to motivate a purchase. Our solutions enable our clients to take
advantage of the marketing potential of the Internet while recognizing that an
estimated 99% of retail transactions still take place in traditional stores.
Industry Background
The Internet and its Impact on Traditional Retailing
The Internet is a very important element in commerce. Together with other
relatively new communications mediums such as wireless telephones and other
wireless devices, the Internet is reshaping the way consumers and businesses
obtain and disseminate information, purchase goods and transact business.
Jupiter Communications Inc., an industry research firm, estimates that 157
million Americans, representing 56% of the U.S. population, will use the
Internet by the end of 2003. International Data Corporation, or IDC, an
industry research firm, estimates that the total number of Internet users
worldwide will surpass 502 million by 2003. The Internet is becoming accessible
from an increasing range of devices. IDC projects that over 93 million
Internet-enabled appliances will be sold during the four-year period from 1999
to 2002 and that the annual shipments of Internet appliances will surpass
shipments of personal computers within the next six years.
People frequently go online to research products for possible purchase.
According to Jupiter Communications, 72% of Internet users use the Web to
research products and services with only electronic mail and search engines
attracting a higher percentage of Internet users. In response, consumer
products companies and national chains have established Web sites to promote
their brands.
29
<PAGE>
This has resulted in a proliferation of Web sites where businesses provide
information, market goods and services and conduct business. To support this
growth, Forrester Research estimates that retailers will increase their
spending on outsourced Internet-related services from $10.6 billion in 1999 to
$64.8 billion in 2003.
While retailers are increasingly focusing attention on the Internet, the
overwhelming majority of consumer spending still occurs in traditional brick-
and-mortar locations. Forrester Research estimates that $20.2 billion will be
spent online for retail products and services in 1999, representing less than
one percent of estimated total retail spending for the year. Forrester
estimates that annual online retail spending will increase to $184 billion by
2004, representing seven percent of total retail spending for that year. Thus
even with enormous projected growth in online commerce, Forrester predicts that
online purchases will remain only a small part of total retail purchases. We
believe the reasons for consumers' continuing preference for "real world"
shopping include the ability to physically inspect and compare products, the
possibility of same-day fulfillment and the relative ease with which products
can be returned to the store where purchased. In addition, many merchants, such
as restaurants, hotels and gas stations, offer goods and services that cannot
be provided online. These merchants require customers to visit a physical
location for a transaction to be consummated.
Challenge for Retailers
The challenge for retailers and consumer product companies is to determine how
best to respond to the growth of the Internet. Where it was once thought to be
enough for a traditional retail brand to be on the Web with basic information
and advertising, consumer research has identified a benefit in connecting
individuals using the Internet for product research with store locations in the
real world. A recent consumer survey conducted by Jupiter Communications
reported that 51% of people who research products or services online do not use
the Internet to make purchases. However, Jupiter Communications found that
approximately 83% of consumers who shop online indicated that research
conducted online at least occasionally influences their purchases off-line.
Jupiter concluded that the key to success for retailers in the Internet age
will be to find compelling ways to direct consumers researching products online
to the nearest brick-and-mortar store where they can complete a purchase.
Advocates of integrating a retailer's online presence with its presence off-
line have dubbed this approach "clicks-and-mortar."
One way for a retailer to execute a clicks-and-mortar strategy is to provide
product information to potential customers online and then direct those
customers to convenient store locations that carry a desired product. Existing
consumer awareness of national brands and traditional off-line marketing and
advertising efforts already combine to direct consumers to the Web sites
maintained by these companies. Once on a brand's Web site, consumers can be
motivated to make a purchase and, if a consumer prefers to transact business
off-line, directed to the nearest store carrying the brand's products. In many
cases, retailers prefer that consumer transactions be conducted in physical
stores where shoppers can be exposed to other product offerings. According to
Harris Interactive, an industry research firm, Internet shoppers spend twice as
much money off-line when they first browse for specific products online and
spend four to nine times as much money off-line on products for which they used
the Internet to research.
Retailers are under increasing pressure to develop strategies that will enable
them to capitalize on the opportunities created by the Internet quickly and
effectively. While most established retailers have begun initiatives involving
the Internet, Jupiter Communications reported that few retailers have found
ways to allow online and off-line channels to work together with synergy.
Forrester Research estimates that firms struggling to improve their
communications with online consumers will increase spending on outsourced
marketing services from $422 million in 1999 to over $6.4 billion in 2002.
30
<PAGE>
Our Solution
We provide a complete outsourced marketing infrastructure service to our
business clients. We host our clients' store location and product information
and deliver that information to potential customers on demand over the
Internet, land-line telephones, wireless telephones or other wireless devices.
With our services, our clients are able to direct potential customers to the
nearest store location, introduce those consumers to local retailers through
store-specific Web sites, display product and product availability information
and provide a timely incentive to motivate potential customers to make a
purchase.
Our services provide the necessary infrastructure for companies to exploit the
growing potential of Internet marketing while leveraging their real world
presence. Our Internet-based marketing infrastructure services link traditional
off-line marketing programs, such as advertising and direct mail, to online Web
marketing initiatives.
Our services offer the following features and benefits to our clients:
. Clicks-and-Mortar Solution. Our services provide our clients a means
of directing online consumers who are interested in purchasing our
clients' products to the local brick-and-mortar stores where the
overwhelming majority of transactions still occur.
. Expanded Lead Generation. Our services extend the reach of our
clients' Internet presence by providing a link through major portals
and search engines to consumers using the Internet to research
products and services prior to making a purchase decision.
. Multiple Platform Access. Our services enable potential customers to
access information regarding our clients' products and services not
only over the Internet, but also via land-line telephones, wireless
telephones and other wireless devices, such as the Palm VII.
. Local Web Marketing with Brand Integrity. Our SiteMaker product allows
each of our clients' locations to create a unique Web presence and
extend local store specific promotions while maintaining national
brand integrity.
. Cost Efficient Outsourced Services. Our automated services provide our
clients' customers with accurate and easy to use location, product and
product availability information on demand 24 hours per day, seven
days per week.
. Rapid Deployment. We are able to deploy our clicks-and-mortar
infrastructure solutions in an average of three to four weeks.
. Reporting and Feedback. Our record-keeping and reporting features
allow our clients to refine their online marketing approach and
effectively coordinate and evaluate off-line marketing efforts.
Finally, our location and product information provide consumers researching
products and services with the information that they need to choose the most
convenient means of purchasing goods or services. In some cases, our services
offer consumers the option of buying online or buying off-line.
Strategy
Key elements of our business strategy include:
Expand Our Client Base
We currently target large companies with established consumer brands that offer
their products or services in multiple locations. Our sales channels include
our direct sales force and our international channel partners. We intend to
expand our direct sales force and our network of channel partners to
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both refer business to us and to sell our services under private-label
arrangements. We will also continue to maintain strong relationships with
advertising, promotional and Web marketing agencies that often incorporate our
services into the projects they manage for their clients.
Enhance Relationships with Clients
Working closely with our clients and select partners, we have recently
developed several new offerings that are designed to extend the capabilities of
the services that we already provide to our more than 250 clients. Several
clients utilizing our core Web Business Finder Service have recently licensed
our Telephone Business Finder and Wireless Business Finder products. In
September 1999, we launched our SiteMaker product which enables each location
within a national chain to have a unique Web site and extend local store
specific promotions. These and other product offerings are designed to allow us
to enhance our relationships with clients.
Continue to Develop Relationships with Strategic Partners
Our technology expertise and strong customer base have allowed us to attract
numerous partners with whom we have agreed to co-develop and co-market new
products and services. In June 1999, we entered into an agreement with Inktomi
to provide our services as part of the "Local" section of their shopping engine
product. Shortly thereafter, we entered into an agreement with Prio to develop
and market an Internet-based program that provides consumers incentives to make
purchases. This type of partnership extends our clients' Web presence beyond
their Web sites by allowing product searches (e.g., "blue jeans") on major
portals to return local stores that carry our clients' products (e.g., Levi's).
We intend to continue to identify and develop mutually beneficial partnerships
with search engines, major portals, wireless data providers and other partners.
Expand International Presence
Our multinational clients have responded to the world-wide growth in Internet
use by requesting application of our services in markets outside the United
States. We will respond to these requests by making our services available in
markets that support the wide-spread consumer use of Internet and wireless
devices. We launched our services in Europe in June 1999 and, in October 1999,
our services are available in 12 European nations and in seven languages. As we
expand into these new markets, we plan to establish local relationships and
attract local clients. One of our first Europe-based projects was the co-
development of a travel-related Web site covering ten European countries for
Shell International Petroleum Company Limited. Forrester Research estimates
that the leading European markets will experience rapid growth in Internet
services beginning approximately two years after similar developments in the
United States and that Japan will follow approximately two years behind
Europe's leaders. In preparation for this projected growth, we have selected a
strong group of channel partners in Europe, including Aperto Multimedia in
Germany, Gruppo L'Espresso in Italy and Icon MediaLab which is well established
in several European nations. We are also in discussions with several potential
partners within Asia and we plan to offer our services in Japan in the first
half of calendar year 2000.
Expand Product Offerings
Through internal product development and through partnerships, we have
implemented services that deliver our clients' data to land-line and wireless
telephones and other wireless devices. We intend to continue to develop
additional products and services, tailored to the needs of large multi-location
retailers and service companies by enhancing our technology, delivering
localized content, expanding our directory services and offering effective data
management capabilities. We intend to continue to develop new products
internally and we will continue to build partnerships and work closely with
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manufacturers of smart phones, automotive personal computers, and other new
devices to offer our clients' data across any capable device or platform.
Develop Transactional Revenue Model
Historically, we have generated most of our revenue through annual license fees
charged to our clients for hosting and delivery services principally related to
our core Business Finder applications. Recently we commenced offering
distribution of this same data, on behalf of our customers, across several
highly trafficked Web sites and via wireless telephones and other wireless
devices. Additionally, through our relationship with Prio, we are beginning to
deploy services that generate a transaction-based fee as a result of driving a
consumer from a national brand's Web site to a participating local merchant's
store. Finally, we can offer similar distribution arrangements for advertisers
who participate in regional yellow pages listings.
Vicinity Services
[GRAPHIC Upper text reads "Vicinity Product Universe." Below that is
an oval containing a five-pointed star. Text in the center of the
graphic reads "Product and Location Data." Names and brief
descriptions of Vicinity's five principal products are arranged
between the points of the star.]
Vicinity Business Finder
Business Finder uses our proprietary proximity search technology to allow a
client's customers to find the store location nearest to an address input by
the customer. Because Business Finder is able to search hundreds of attributes,
it can also be used to locate a specific product stocked at a retailer. For
example, Nike and Levi's utilize a version of Web Business Finder to direct
customers on their Web sites to stores that carry the specific product the
customers are searching for, such as a pair of Nike basketball shoes or Levi's
501 blue jeans.
There are currently four search categories employed by Vicinity Business
Finder: proximity, attribute, keyword and custom. These different categories
can be used singly or in combination with each other. One customer,
AutoTrader.com, hired us to manage a database of more than one million used
automobiles that is updated several times per day and which is searchable by
location and attribute. AutoTrader's customers are able to search the database
using one or more selected variables. As an example, an AutoTrader shopper
might search for a four-door Ford Taurus that is less than three years old,
costs no more than $12,000 and is located within five miles of the shopper's
home. While we have not yet been asked to provide the service, Business Finder
is also capable of serving as a real-time outsourced inventory management
system.
We refer to our search capabilities as "boundary-less" (i.e., searches for the
nearest items without regard for boundaries such as city, state, zip code, or
latitude-longitude boundaries). This search methodology starts at a designated
point and then spirals outward to find the nearest items. We believe this
methodology to be superior to common zip code matching techniques which can
misdirect callers to locations that while in the same zip code are more distant
than locations within adjoining zip codes. This process is also extremely
scalable and allows us to support the millions of queries that we receive per
day. While most Business Finder applications return locations in proximity
order, some of our customers require other orderings, or require that searches
respect dealer territory restrictions. Business Finder has the flexibility to
handle these requirements.
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Web Business Finder
Web Business Finder is a private-label service incorporated into our clients'
Web sites. Though the pages viewed by customers are often hosted and served by
our servers, the end user is unaware that he has left the branded site he chose
to visit. Using Web Business Finder, our clients' customers can quickly and
easily obtain a listing of our clients' nearest store locations with the
distance to each location provided. Web Business Finder can be customized to
provide information about each location, such as its address, telephone number
or hours of operation. McDonald's uses this service to indicate whether a
particular restaurant features a McDonald's Playland and to allow customers to
locate every McDonald's location along a given route. Another client, VISX,
Inc., uses our telephone and Internet services to help potential customers
interested in laser vision correction to locate VISX-certified doctors within
their community. Our clients have the option of including within the search
results dynamic maps showing a specified number of nearby locations and
customized driving directions to those locations. We currently offer Web
Business Finder services in the United States, 12 European nations and in seven
languages.
Telephone Business Finder
Telephone Business Finder gives potential customers access via any land-line
telephone to the same database we maintain for each of our client's Web
Business Finder service. Telephone Business Finder provides street addresses
automatically and is able to instantly connect a caller directly to a store or
to the client's customer service representatives. The service uses an
interactive voice response system to provide automated interaction with
callers. Caller identification can be used to instantly recognize the location
of a caller and direct him to the nearest store locations or the service can be
set to allow callers to search for stores in their locality or another area
simply by entering in a zip code or telephone area code. The Wherehouse, a
chain of retail music stores, is currently utilizing Telephone Business Finder.
Callers can dial 1-800-WHEREHOUSE and find Wherehouse locations by inputting
their zip code or telephone number.
Wireless Business Finder
Through our partnership with GTE Telecommunications Services, Inc., we are
developing Wireless Business Finder, a service to identify the area from which
a wireless device user is calling. Once operational, the caller will be
automatically directed to the client location closest to his current position
and, if desired, connected to that store or transferred to a customer service
representative. The technology can also be used to assist human operators or to
send short text messages to advanced wireless phones and other devices.
Our clients will soon be able to further promote their brands through the use
of vanity telephone numbers whereby consumers will be able to locate nearby
merchants by dialing easy to remember telephone numbers related to the brand
name. One of the key benefits of this service will be our clients' ability to
further extend the reach of the location and product information available
through our Web Business Finder service. Since the penetration of wireless
devices currently surpasses the penetration of personal computers into U.S.
households, we believe this ability to address the wireless market will be a
distinct competitive advantage for participating branded merchants.
Vicinity SiteMaker
SiteMaker allows each store location of a national branded chain or franchise
to create its own Web site. SiteMaker provides a national brand with increased
visibility through promotions, discounts and other marketing programs at the
local level while allowing national control over brand integrity. These Web
sites can be customized with information such as store hours, calendars and
special promotions.
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The sites conform to design standards mandated by the corporate parent. Local
store managers can add photographs, product graphics, unique local content and
interactive objects to their SiteMaker sites. The SiteMaker product is designed
to allow these changes to be made by almost anyone and no knowledge of Internet
programming languages, such as HTML, is required. We provide a unique local map
for each site. Since the sites are hosted by us, the stores are not required to
maintain any server hardware. SiteMaker is fully integrated with our Web
Business Finder product. For example, CarClub.com, a comprehensive online
source of automotive information, products and services, uses a customized
Business Finder to allow visitors to its Web site to search for the appropriate
CarClub.com affiliated auto dealers, lenders, insurers or mechanics in their
area. Each participating CarClub.com merchant is able to manage and maintain
their own Web site complete with product descriptions, photographs, pricing and
store location information.
We also offer a secure credit card e-commerce module for franchisees who want
to sell their products and services directly over the Internet. This approach
gives the franchiser the ability to participate in the growth of direct to
consumer e-commerce while avoiding the channel conflict associated with selling
direct from the brand owner's corporate Web site in competition with existing
stores or franchisees.
In July 1999, we entered into a partnership with Prio to integrate Prio's
purchase incentive capabilities into SiteMaker, which was a significant
addition to our local merchant services. With this technology, Vicinity-enabled
stores can extend an "Act Now!" promotional message to potential customers by
offering credit on their MasterCard, American Express or Visa credit cards
without requiring the need to print and submit paper coupons to the merchant.
This partnership adds timeliness to our clicks-and-mortar solution. In addition
to directing a potential customer to a client's retail location, we now have
the ability through this partnership to motivate that individual to visit a
store within a certain time period in order to redeem a promotional offer.
Vicinity BrandFinder
BrandFinder is a consumer lead generation tool that we provide to our clients
through Web sites, wireless devices and shopping engines that allows
individuals online to search a designated area for a retailer that carries a
specific branded product. The first implementation of BrandFinder was the
result of a partnership with Inktomi in which we built and host the local
portion of the Inktomi shopping engine using our BrandFinder service. More than
20 leading portal and destination sites, including CNET, CNNfn and American
Express have signed up to utilize the Inktomi shopping engine.
[GRAPHIC-- Text above graphic reads "the Clicks-and-Mortar
Process." On the left-hand side are three persons, to the right of
them are pictures of two devices and two Web sites that customers
can use to access our services. To the right of the devices/Web
sites is the text "BrandFinder." To the right of that, text reads
"SiteMaker" with lines pointing to "Incentive" and "E-commerce."
On the far right is a column of five pictures, showing products
consumers can find using our services.]
An individual consumer might come into contact with BrandFinder in a number of
ways. For example, if an individual is interested in purchasing a pair of blue
jeans, he or she might start out on an Internet portal powered by Inktomi by
typing in a generic search request, such as "pants," or a brand-specific
request, such as "Levi's." Alternatively, if the individual did not have
current access to a computer, he or she could make a similar request via a Palm
VII, a wireless telephone utilizing the
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new Wireless Applications Protocol, or WAP, or through other Internet-enabled
devices. With BrandFinder, users can instantly generate information on a wide
array of businesses from banks and cash machines, to restaurants, gas stations
and hotels.
Once a search has been initiated, BrandFinder returns a list of the stores that
carry the desired product in the area in which the individual is searching. If
the consumer is online, he or she might also be presented the option to visit a
local store's Web site powered by SiteMaker. On the store's local Web site, the
individual might be exposed to promotional incentives from Prio, which, if
acted on, would appear as rebates on his credit card statement. BrandFinder is
designed to direct consumers to one of our clients' store locations with the
benefit of the following characteristics or information:
. the storefront offers known national brand products and services;
. the locations are the ones nearest to the address specified;
. the locations identified carry the desired product or service;
. which of the locations is running a special offer (e.g., "Save $5!")
through a Prio promotion;
. when the locations are open; and
. whether each location accepts a specified credit card.
The combination of the access to a large number of shoppers and the ability to
offer each of those shoppers a specific incentive to visit a client's retail
location leaves us well positioned to take advantage of the explosive growth of
Internet usage. We link shoppers utilizing portals to browse for their
preferred brands and the brick-and-mortar stores that carry those brands.
MapBlast! Brand Mapping Service
Our MapBlast! business unit operates a leading consumer destination site that
attracts more than 1.3 million unique users and serves more than 21 million
pages a month. In addition to providing interactive U.S. and European maps and
driving directions, the MapBlast! Web site offers information on services and
products near a user's address or travel route, lodging information and
reservation capabilities, scheduling services, traffic reports and local points
of interest. MapBlast! also provides maps and driving directions to many small
businesses and several Internet portals as well as notable destination sites
including RandMcNally.com. Our partners include Hilton Hotels, Barnes & Noble,
AvantGo, WorldRes, Inc., ShopNow.com and TimeDance. In August 1999, MapBlast!
was selected to provide driving directions on interactive ATMs located in
Texaco service stations nationwide.
Professional Services
While our regular service offerings have been designed for scalability and ease
of implementation, our clients frequently request special features and
applications that must be custom built. In addition, we help design, maintain
and manage large databases that incorporate geographic or location-based
information. For example:
. Network Solutions selected us to build and host their "dot com
directory," a database of registered domain names designed to allow
individuals to search for specific attributes such as location or site
content;
. Prio selected us to host, maintain and deliver all of the
participating store and product data for its Web-based promotions; and
. Shell International Petroleum Company selected us to co-design and
deploy a European Trip Planner Web site.
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Because these projects require special skill and attention, we have recently
decided to create a professional services organization within our company to
manage these projects. Our professional services group will apply our
specialized knowledge to specific business problems and develop solutions that
would be impractical for our clients to design or implement themselves.
Services, for which we will charge on an hourly or project basis, will range
from concept development and project design of clicks-and-mortar solutions to
the tracking, data-mining and analysis of Internet users' online activity.
Strategic Relationships
A key contributor to our growth has been the ability to develop strategic
relationships with leaders in other markets. These partnerships provide us with
valuable local content as well as distribution outlets. These relationships
also have enabled us to significantly expand our service offerings in 1999.
Technology and Infrastructure Partners
We continuously evaluate and enter into relationships with companies who are
leaders in their respective fields when a partnership will create more value
than we can create alone. Through these relationships, we attempt to create
unique products designed to extend the power of our clicks-and-mortar service
solutions by providing new functionality to our clients, Web sites and
consumers.
Prio, Inc.
Prio is a provider of electronic commerce solutions designed to drive commerce
both online and in traditional retail environments. The Prio platform presents
personalized, valuable promotions to consumers over the Internet. In July 1999,
we entered into an agreement with Prio to integrate Prio's incentive
capabilities into our SiteMaker service. With this technology, Vicinity-enabled
stores can now extend an "Act Now!" promotional message to potential customers
by offering credits on their Mastercard, American Express or Visa credit cards
without requiring the need to print and submit paper coupons to the merchant.
Prio's promotional capabilities can be used to verify that a specific user that
originated on a client's Web site or a portal partner's search engine later
consummated a purchase with a participating local merchant. With this new
infrastructure technology, national brands as well as the local merchant are
presented with the opportunity to generate qualified leads through incentives
directed at consumers using the Internet to research products and services.
Because the Prio system tracks consumers' responsiveness to various incentive
programs, participating merchants can gain valuable insight into their
customer's purchasing behavior. Our company and Prio share in transactional
fees based on the value of the promotion offered by our clients.
GTE Telecommunications Services, Inc.
GTE TSI provides integrated wireless solutions for more than 180 wireless
operators throughout North America, Latin America and Europe. In February 1999,
we entered into a partnership with GTE TSI to offer GTE's INPosition service
with our Wireless Business Finder. Once this service becomes operational,
callers will be able to locate nearby businesses through a system that is able
to automatically identify the caller's approximate location. Wireless Business
Finder will take advantage of new wireless infrastructure technology currently
being installed to accurately determine an emergency 911 caller's location.
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Phone.com
Phone.com develops, markets and supports infrastructure software and
applications that enable the convergence of the Internet and mobile telephony.
In October 1999, in cooperation with Phone.com, we deployed BrandFinder on WAP
telephones. In addition, as a member of Phone.com's Alliances Program, we have
gained access to wireless equipment vendors around the world who we plan to
work with to distribute our content.
Kleline
In August 1999, we entered into a set of agreements with Kleline, a subsidiary
of BNP Paribas Group, to enable us to process credit card payments securely and
cost-effectively in multiple currencies across Europe and North America.
Kleline will also act as a reseller, promoting our services to its own
customers.
US West DEX
US West DEX, the directory publishing and Internet yellow pages division of US
West, has contracted with Vicinity to give wider exposure to DEX listings
through geographically oriented search results in its various shopping and
searching services. This distribution provides extremely targeted exposure to
DEX listings.
Distribution Partners
Through our relationships with search engines, Internet portals and other
partners, we enable our clients and partners to reach a wide consumer audience.
This integration of our corporate locator content and services with major
Internet sites provides our national brand clients access to a large online
distribution network.
Inktomi
Inktomi provides search engines, online comparison shopping solutions and
network cache software to some of the world's largest Internet infrastructure
and media companies. In June 1999, we entered into a partnership with Inktomi
in which we agreed to build and host the "Local" section of Inktomi's shopping
engine, which gives online shoppers the capability to more easily find a wide
variety of products and services both online and in the real world. This
integration of our corporate locator content and services with Inktomi's
shopping engine provides our national brand clients access to a large online
distribution network while providing Inktomi a large amount of accurate local
content. More than 20 leading portal and destination sites have signed up to
use the Inktomi shopping engine.
Northern Light
Northern Light, one of the world's most comprehensive search engines, prides
itself on the accuracy and usefulness of the search results it gleans from some
5,400 sources. In March 1999, we entered into a technology development and
marketing agreement with Northern Light to deploy our GeoSearch technology
within the Northern Light search engine. GeoSearch allows Northern Light to add
a geographic component to its searches by filtering tens of millions of Web
pages based on the addresses they contain. This technology permits individuals
online to conduct proximity related searches with far greater success than the
alternative of inputting the names of all neighboring towns as keywords in the
search.
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ShopNow.com
ShopNow.com provides shoppers and merchants with an online marketplace and a
broad array of e-commerce and direct marketing solutions by aggregating more
than one million products and services from more than 29,000 merchants at one
Web site that can be rapidly and efficiently searched by category, merchant or
product. ShopNow's mission is to sell anything to anyone at anytime, anywhere.
In July 1999, we entered into an agreement with ShopNow.com in which we will
provide a "go local" capability through our BrandFinder service. In other
words, if a consumer is searching for jeans, ShopNow can now present them with
an array of online jeans merchants from their own database and, with our
services, also offer a selection of relevant real world stores near their home.
Our clients are prominently featured in this result, bringing highly-targeted
choices and offers to the consumer and valuable leads to our clients.
Resellers
We operate an active channel partner program encouraging leading companies
worldwide to integrate our services into their own products and service
offerings or refer customers to us.
Aperto Multimedia
Aperto Multimedia is one of the leading multimedia agencies in Berlin and
provides Web marketing services to Coca-Cola, Siemens and Sony in Germany. In
June 1999, we signed a partnership establishing Aperto as one of our leading
channel partners for the German market. The companies started conducting joint
sales calls and producing German language marketing materials in July 1999.
Exodus
Exodus is a leading provider of secure communications systems and network
management solutions for enterprises with mission-critical Internet operations.
Two of our three existing data centers are located within Exodus facilities.
Since all Exodus customers with real-world stores are candidates for our
services, and because many of our customers may consider Exodus for their
Internet hosting requirements, in October 1999 our company and Exodus joined
each other's alliance partner programs. Under this arrangement, our company and
Exodus will work together to refer each party's existing customers to the
other.
Icon MediaLab
Icon MediaLab is a Web development and consulting firm, headquartered in
Stockholm with offices across Europe and in San Francisco. In June 1999, Icon
became a channel partner, promoting our services to its global clients who
operate real-world sales locations.
Kataweb
Kataweb is the Internet subsidiary of Gruppo Editoriale L'Espresso S.p.A.,
Italy's largest media company. In April 1999, our company and Kataweb entered
into a partnership in which we will create a searchable online classified ad
site for Gruppo L'Espresso's publishing group and expose the Italian consumer
and business markets to our technology and capabilities. Kataweb also agreed to
become a channel partner and is utilizing its sales force to sell our services
in Italy.
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Clients
We have more than 250 clients including many of the leading names in the
retail, hospitality, food and beverage, shipping, banking, automotive,
technology and manufacturing industries. Examples of our existing clients
include:
<TABLE>
<CAPTION>
Consumer Brands Retailers Hospitality
--------------- --------- -----------
<S> <C> <C>
Harley-Davidson Barnes & Noble British Airways
Levi Strauss The Gap Choice Hotels
Nike Home Depot Hilton Hotels
Olympus Kmart Marriott
Tommy Hilfiger Nordstrom Starwood
<CAPTION>
Food and Beverage Shipping Banking/Financing
----------------- -------- -----------------
<S> <C> <C>
KFC Airborne Express Edward Jones
McDonald's DHL Fleet Financial/Bank Boston
Pizza Hut FedEx Novus/Discover
Taco Bell United Parcel Service Prudential
Starbucks U-Haul Wells Fargo/Norwest
<CAPTION>
Automotive Technology Manufacturing
---------- ---------- -------------
<S> <C> <C>
Ford Epson America AC Delco
General Motors Hewlett-Packard Avery Dennison
Honda Iomega Bridgestone/Firestone
Mercedes-Benz NEC Technologies John Deere
Toyota Oracle Whirlpool
</TABLE>
Historically, we have been successful in retaining existing clients. Of the
more than 230 Business Finder clients served since the beginning of fiscal
1998, more than 94% remained as Business Finder clients as of November 1, 1999.
The contract value of the Business Finder clients lost during that period would
have represented less than three percent of our revenues during fiscal 1999. We
believe that our unique service offerings and our ability to provide a complete
outsourced solution for our clients have been significant factors contributing
to our high historical retention rates.
While we offer a variety of service offerings, all of our clients turn to us
for assistance in implementing a strategy. With each client relationship, we
work with the client to identify additional ways to leverage the technology
deployed by us. Examples include:
Federal Express
Federal Express maintains tens of thousands of drop-box locations and offices
throughout the United States with more being added or relocated on a daily
basis. The problem Federal Express faced was providing a way for its customers
to conveniently find the nearest location and to do this in a cost effective
manner. Even though Federal Express's business requires mastery of location
information, their internal review of the problem revealed that Web Business
Finder provided the most efficient solution available.
Marriott
Marriott has implemented our clicks-and-mortar services in an effort to
accomplish two goals. First, our services help turn visitors to Marriott's Web
site into reservations at Marriott properties by directing users to specific
sites that best fit their interests. Whether a customer is seeking the hotel
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closest to the convention center or the hotel that has a heated indoor pool, he
can utilize our search and database capabilities to find the appropriate
property. In addition, by utilizing our reports, Marriott is able to determine
which features of a particular property, such as a pool or business center, are
most important to potential visitors to that property.
Second, Marriott wanted visitors to its Web site to have easy access to local
content and information such as the location of nearby restaurants and popular
nearby tourist attractions. By providing this information, Marriott believes
that visitors to its Web site will spend more time on the site. This objective
is sometimes referred to as making the Web site "sticky." We helped Marriott
accomplish this goal by making available local information for each hotel
location such as restaurants and popular nearby tourist sites. By providing
this information on its site through us, Marriott is able to keep visitors on
its Web site to plan their visits rather than sending them to another travel
planning destination. Marriott's vice president of interactive business
operations estimates 60% of the visitors to the Web site utilize our services.
Shell International Petroleum Company
For several years we have provided Shell with a Web Business Finder solution
for its gas stations located within the U.S. In late 1999, Shell decided to
build a destination Web site incorporating an elaborate Trip Planning Guide to
give Shell customers driving directions and points-of-interest guidance in
local languages across 12 European countries. Shell contracted with Vicinity
and USWeb/CKS to co-develop this site which went live in October 1999.
Eveready Battery Company
Eveready is one of the world's largest manufacturers of dry cell batteries.
Although its Energizer and Eveready brands are known worldwide and sold in more
than 160 countries, consumers frequently do not know which Eveready battery is
the right one for their calculators, toys, watches or other electronic devices.
To solve this problem, Eveready worked with us to build and host a product
search engine and store locator. Using our technology, the "Rechargeable"
section of Eveready's Web site allows customers to search a database of 8,500
cellular phones, camcorders and cordless phones to determine the right Eveready
product to power each device. Customers can type in any or all of the following
information: brand, model number, as well as other useful information, or click
on a picture of the product, and be directed to the correct Eveready battery
and a local store that regularly carries that battery.
Network Solutions, Inc.
NSI is the world's leading registrar of Internet domain names. NSI registers
the majority of Web addresses worldwide through various channels including
almost 200 companies in its Premier program. In April 1999, we entered into a
partnership in which we are building and hosting significant portions of the
database and search engine for NSI's "dot com directory," a new search engine
that locates businesses through information linked to their domain name
registration. NSI intends the "dot com directory" to be the Web's definitive
source for locating online businesses.
Sales and Marketing
Our services are sold through an in-house direct sales team as well as an
outsourced telemarketing agency. We also utilize our network of channel
partners to both refer business to us and to sell our services under their own
private-labels. Current channel partners include SpeechWorks International,
Inc., Icon MediaLab, Aperto Multimedia, Gruppo L'Espresso, Price Interactive,
Inc., Netopia, Inc. and Prio. We also maintain strong relationships with
advertising, promotional and Web marketing agencies
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that often incorporate our services into projects they manage for their brand
clients. We are working aggressively to expand our existing internal sales and
marketing capabilities as well as the company's channel partner program.
Our target markets for sale of our clicks-and-mortar services include:
. large companies with an established consumer brand;
. companies with a branded product line sold through retail
distribution;
. companies with a branded chain of stores;
. advertising agencies servicing national brands;
. web development agencies servicing national brands;
. direct marketing agencies servicing national brands;
. franchisers and their franchisees; and
. shopping and search engines.
We build awareness and demand for our services through marketing programs
including direct marketing, print and Internet advertising, trade shows and
events, public relations, international marketing, channel marketing and
telemarketing. Sales are implemented through a team of direct sales
representatives and channel partners. The sales cycle, from identifying a
prequalified lead to the signing of a services contract, is typically two to
four months, though in some cases this cycle is accelerated due to a client's
desire to implement a solution quickly or meet a promotional or season
deadline, such as the holiday shopping season. Frequently with a potential new
client, the initial competitor to our service offering is the client's own in-
house information systems department which may initially believe that it can
duplicate our services at a lower cost. This often delays the sales process,
but we are currently unaware of any retailer or merchant that has decided to
build its own solution after having been exposed to our service offerings.
Technology and Infrastructure
Our core competency is the ability to design, build, implement and manage
projects involving large databases that contain product, location and attribute
information. Our technical expertise spans many software development
specialties including system-level programming, cross-platform solutions, user-
interface and template design, production system operation and localization.
Our most important skill is the development of high performance spatial
databases that are used to manage our location-specific data and to manage
large amounts of client information, including store location and product
availability data. Through an automated process, our customers update this data
set based on their own business rules.
Architecture
The architectural model for our services is a general purpose template
processing engine which handles user events, controls program flow and calls
component sub-servers that manage our Web Business Finder service to handle all
content-specific transactions. The sub-servers handle service requests as
socket-based stateless transaction processors. Since the engine and the various
sub-servers are all continuously running processes, it is not necessary to
start-up any processes in order to handle a request. These processes are
adjusted to respond to system load as well as recovery from the occasional
system error. This architecture allows maximum flexibility of resource
deployment across multiple networked machines.
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Service Delivery
We deliver our services to customers through either an application programming
interface, or API, or through our Web development organization which produces a
specific template set for an individual customer. The API allows the customer
to control the interface and provide the customer with maximum flexibility in
terms of creative control. Whether delivered via templates generated by us or
using the API, the service is built around customer supplied data that may be
updated in batch mode, net change, or on a transaction basis depending on
customer needs. Our customer service organization maintains contact with
customers to help them work through any issues before, during and after
deployment of their application.
Reporting and Data Mining Capabilities
The usage and reporting data generated by the system are measured in gigabytes
per day and are a valuable tool for customers to understand the effectiveness
of their marketing efforts. We report usage results through standard secure
reports by customer, category, keyword, designated marketing area or other
custom requirements.
Scalability and Stability
We have invested significant resources in the hardware systems that deliver our
services with the objective of 99.9% availability in a fully scalable
environment across multiple data centers. Our front-end Web servers and
database servers are Sun Enterprise systems designed for reliability,
availability and serviceability to support the operation of our customer's
mission-critical applications. We have designed the servers to tolerate power,
cooling, or storage failures without affecting system operation and to recover
from most failures with minimal disruption. These systems are optimized to
provide extremely high throughput.
Our services are monitored on a 24 hours per day, seven days per week basis. At
the present time, our system is generally running at less than 40% of rated
capacity at peak usage to permit quick application response. We do not intend
to permit the production system to be allowed to exceed 50% of its rated
capacity. This excess capacity is designed to ensure availability despite
partial system failure. In addition, the system is protected by a high
performance firewall and balanced through a state-of-the-art load balancing
solution.
We currently operate three geographically separate data centers. A typical data
center configuration has front-end servers processing requests from our
customers through switches connected to a load balancing solution. These front-
end servers make specific requests to multiple back-end database machines as
well as systems that process geographic content such as maps and driving
directions. For security reasons, back-end systems cannot be accessed from the
Internet and process only specially formed queries from the front-end machines.
Each of these sub-systems is fully redundant both in terms of software and
hardware. In the event of a sub-system failure, the load is automatically
transferred to the next available machine. Monitoring software automatically
notifies the on-duty operator of a problem so that immediate action can be
taken.
Competition
The market in which we compete is relatively new and our services are highly
specialized. While competition exists for most of our service offerings, the
number of companies with which we compete is relatively small and we are
unaware of any one company that competes against us across our full range of
services. We expect competition with our services to increase over time as the
market for our services grows. Competition may also increase as a result of
industry consolidation.
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In the markets occupied by our higher-end products such as Web Business Finder,
we face competition from companies including InfoNow Corporation, which
provides outsourced Web-based inquiry management services, and Where 2 Get It
Inc., which provides Internet-based dealer locator service. Our SiteMaker
service competes indirectly with companies that provide free or low-cost web
creation and hosting services in conjunction with internet service provider, or
ISP, services. Finally, with many potential new clients, the initial competitor
to our service offerings is the client's own in-house information systems
department which may initially believe that it can duplicate our services at a
lower cost. This often delays the sale process, but we are currently unaware of
any retailer or merchant that has decided to build its own solution after
having been exposed to our service offerings. In each competitive situation
that we face, we believe the factors that cause potential clients to consider
our services include the depth of our service offerings, our ability to
integrate our services into larger marketing initiatives, the quality and
reliability of our services, our speed of implementation and the overall
quality of our technology and client service.
Our MapBlast! business unit focuses on providing simple maps and driving
directions and faces significant competition from a variety of companies,
including MapQuest.com, Inc., Zip2 Corporation, now known as AltaVista Local
Portal Services, and Switchboard Incorporated, all of which are able to provide
these services at very competitive prices. Competitive factors within this
marketplace include being the first to offer a mapping solution to a potential
customer, product and service pricing and the quality of the products and
services offered.
We believe that our ability to compete depends upon many factors, including our
ability to provide depth and accuracy of destination information, to increase
our sales force and to implement our sales and marketing initiatives, in
addition to the introduction and acceptance of new and enhanced products and
services developed either by us or our competitors and the ease of use of
products and services developed either by us or our competitors.
Intellectual Property
We have filed several applications for U.S. patents in order to protect
proprietary intellectual property that we believe is important to our business.
These include an application entitled "Method and Apparatus for Efficient
Proximity Searching," "A Method and Apparatus of Expanding Web Searching
Capabilities" and "A Method and System for Providing a Web-Shareable Personal
Database."
Our products and services rely on the availability and accuracy of geographic
data. We have licensed a significant portion of our geographic data from a
limited number of sources through non-exclusive, short-term contractual
arrangements. If any of these third parties were to merge or be acquired, the
number of sources providing this geographic data would be further reduced.
Given the short terms of our geographic data licenses, we will have to
renegotiate our contracts in the foreseeable future which may result in
contractual terms that are not as favorable to us as the existing data
licenses. If we cannot maintain these data licenses or any other third-party
license arrangement on commercially reasonable terms, the accuracy of our
services may suffer.
Government Regulation
We are subject, both directly and indirectly, to various laws and governmental
regulations relating to our business. There are currently few laws or
regulations directly applicable to commercial online services or the Internet.
However, due to increasing popularity and use of commercial online services and
the Internet, it is possible that a number of laws and regulations may be
adopted with respect to commercial online services and the Internet. These laws
and regulations may cover issues including, for example, user privacy,
liability for information retrieved from or transmitted over the Internet,
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<PAGE>
online content regulation, user privacy, taxation and domain name registration.
Moreover, the applicability to the Internet of existing laws governing issues
such as intellectual property ownership and infringement, copyright, patent,
trademark, trade secret, obscenity, libel, employment and personal privacy is
uncertain and developing. Any new legislation or regulation or the application
of existing laws and regulations to the Internet could have a material and
adverse effect on our business.
As our services are available over the Internet anywhere in the world, multiple
jurisdictions may claim that we are required to qualify to do business as a
foreign corporation in each of those jurisdictions. Our failure to qualify as a
foreign corporation in a jurisdiction where we are required to do so could
subject us to taxes and penalties for the failure to qualify. It is possible
that state and foreign governments might also attempt to regulate our
transmissions of content on our Web site or on the Web sites of others or
prosecute us for violations of their laws. We cannot assure you that violations
of local laws will not be alleged or charged by state or foreign governments,
that we might not unintentionally violate these laws or that these laws will
not be modified, or new laws enacted, in the future.
Employees
As of October 31, 1999, we had 112 employees, including five hourly personnel
and consultants, employed in engineering, sales, marketing, business
development, customer support and related activities, and general and
administrative functions. None of our employees is represented by a labor
union, and we consider our relations with our employees to be good. See "Risk
Factors--In order to execute our growth plan we must attract, retain and
motivate highly skilled employees."
Facilities
Our headquarters facilities consist of approximately 25,600 square feet located
in Palo Alto, California which we occupy under leases expiring in June 2000. We
occupy 11,500 square feet in New Hampshire under a three year lease which is
used for engineering and product development. We also lease approximately 1,200
square feet in San Francisco, California for satellite office space. We
consider this space adequate for our current operations and plan to evaluate
our long-term need for office space in early 2000. We also lease space in a
number of data centers in which we locate our equipment.
Legal Proceedings
We are not currently engaged in any material legal proceedings.
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Management
The following table sets forth, as of November 1, 1999, the name, age and
position of each of our directors and executive officers.
<TABLE>
<CAPTION>
Name Age Position
- --------------------------- --- -----------------------------------------------
<S> <C> <C>
Emerick Woods.............. 44 President and Chief Executive Officer, Director
Scott Young................ 41 Senior Vice President, Operations
David Seltzer.............. 45 Vice President and Chief Financial Officer
Gregory Beasley............ 36 Vice President, Business Development
Mary Gavin................. 42 Vice President, Engineering
Elaine Hamilton............ 52 Vice President, Human Resources
Dinesh Wadhawan............ 42 Vice President, Sales
Eric Winkler............... 33 Vice President, Marketing
David Cherner.............. 35 General Manager, MapBlast!
Scott Shuda................ 33 General Counsel and Secretary
Herbert M. Dwight, Jr. 69 Chairman of the Board of Directors
(1)(2)....................
Jonathan Callaghan......... 30 Director
James J. Geddes, Jr........ 49 Director
Fred Gibbons (2)........... 50 Director
Peter Mills................ 48 Director
Norman Nie (1)............. 56 Director
Michael Sears (2).......... 43 Director
Peter Ziebelman (1)........ 43 Director
</TABLE>
- -------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Emerick Woods has served as our President and Chief Executive Officer since
August 1997 and as a Director since February 1998. From August 1996 to August
1997, Mr. Woods was the President and Chief Executive Officer of TuneUp.com,
Inc., an Internet based computing updating service. In May 1997, TuneUp.com
filed a voluntary petition for Chapter 11 bankruptcy, after which it was
reorganized and sold to Quarterdeck Corporation, a provider of software
utilities. From November 1994 to June 1997, Mr. Woods was a Vice President and
General Manager of Quarterdeck Corporation. Mr. Woods holds a B.S. in Computer
Science from Yale University and an M.B.A. from Harvard University. Mr. Woods
is also a Director of ClickAction, Inc., a provider of Internet marketing
solutions.
Scott Young has served as our Senior Vice President, Operations since October
1997. From October 1996 to October 1997, Mr. Young was our Director of
Operations. From February 1994 to October 1996, Mr. Young was the Vice
President of Sales and Marketing of Infrastructures for Information, Inc., a
provider of integrated information management systems software. From August
1989 to October 1994, Mr. Young was the Director of Technology and Government
Relations for Semiconductor Equipment and Materials International, an industry
consortium for the semiconductor industry. Mr. Young holds a B.A. and a J.D.
from the University of Kansas.
David Seltzer has served as our Vice President and Chief Financial Officer
since June 1998. From August 1998 to May 1999, Mr. Seltzer also served as our
Secretary. From August 1997 to May 1998, Mr. Seltzer was an independent
financial consultant. From June 1994 to July 1997, Mr. Seltzer was Vice
President and Chief Financial Officer of Portrait Displays, Inc., a developer
of pivoting displays and image rotation software. From April 1992 to May 1994,
Mr. Seltzer was the Corporate Controller for Truevision, formerly known as
RasterOps, a provider of digital video computer products. Mr. Seltzer holds a
B.A. in Business Studies from the College of Technology in Glasgow, Scotland.
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Gregory Beasley has served as our Vice President, Business Development since
August 1998. From 1996 to 1998, Mr. Beasley was the Chief Executive Officer of
Skytech, Inc., an Internet business development company. From 1994 to 1996, Mr.
Beasley was Co-Founder, Vice President of Marketing and General Manager of the
Consumer Division of Worlds, Inc., a developer of graphic chat spaces on the
Internet. Mr. Beasley holds a B.A. in Computer Science and Psychology from
Dartmouth College, and an M.B.A. from Harvard University.
Mary Gavin has served as our Vice President, Engineering since August 1999.
From October 1997 to August 1999, Ms. Gavin was our Director of Engineering
Projects. From March 1997 to October 1997, Ms. Gavin was our Project Manager.
In 1996, Ms. Gavin was a Marketing Manager of NetRights, LLC, a start-up
Internet company. In 1995, Ms. Gavin was a Support and Training Manager of
Codman Research Group, a developer of decision support systems for the health
care industry. Ms. Gavin holds a B.A. from Ripon College.
Elaine Hamilton has served as our Vice President, Human Resources since October
1999. From June 1998 to October 1999, Ms. Hamilton was the Vice President of
Human Resources of Geron Corporation, a biopharmaceutical company providing
therapeutic and diagnostic products for cancer and other age-related diseases.
From April 1995 to June 1998, Ms. Hamilton was the Director of Human Resources
for Metricom, Inc., a provider of prism-coupling products used to evaluate
polymers. Ms. Hamilton holds a B.A. in Education and Psychology from the
University of Iowa and an M.S. in Human Resources and Organization Development
from the University of San Francisco.
Dinesh Wadhawan has served as our Vice President, Sales since March 1999. From
October 1995 to March 1999, Mr. Wadhawan was the Director of Operations,
Western North America of Systems Union, Inc., a provider of international
business and financial software. From January 1994 to September 1995, Mr.
Wadhawan was the Global Manager, Oil and Gas, of Systems Union Limited, the
United Kingdom component of Systems Union. Mr. Wadhawan holds a B.S. and a Post
Graduate Diploma in Business Management from the University of Delhi, India.
Eric Winkler has served as our Vice President, Marketing since January 1999.
From 1998 to 1999, Mr. Winkler was a Director of Consumer Marketing for the
consumer software division of IBM. From 1994 to 1998, Mr. Winkler was a
Marketing and Communications Department Manager and then Director for
Broderbund Software, a software publisher. Mr. Winkler holds a B.A. from the
Allen School of Advertising at the University of Oregon.
David Cherner has served as our General Manager, MapBlast! since April 1999.
From October 1997 through April 1999, Mr. Cherner was a management consultant
to several early-stage Internet companies, including Third Age Media, eWork
Exchange and Vicinity. During that time, Mr. Cherner also served as Vice
President of the Panterra Group, a management consulting organization. In
February 1996, Mr. Cherner founded i-Health, Inc., an Internet health content
community, where he served as President and Chief Executive Officer until
September 1997. From 1994 to 1996, Mr. Cherner was a senior manager, business
development of Access Health, Inc., an information services company. Mr.
Cherner holds a B.A. in Economics from Emory University and an M.B.A. from the
Haas School of Business at the University of California, Berkeley.
Scott Shuda has served as our General Counsel and Secretary since May 1999.
From May 1998 to May 1999, Mr. Shuda was a corporate associate in the Silicon
Valley office of the law firm of Latham & Watkins. From September 1996 to May
1998, Mr. Shuda was a corporate associate in the law firm of O'Sullivan, Graev
& Karabell in New York. From September 1994 to August 1996, Mr. Shuda was a
corporate associate in the law firm of Roger & Wells in New York. Mr. Shuda
holds a B.A., an M.B.A. and a J.D. from Georgetown University.
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Herbert M. Dwight, Jr. has served as Chairman of the Board of Directors since
October 1999. Mr. Dwight has served in a number of positions for Optical
Coating Laboratory, Inc., a manufacturer of optical thin films, including
Chairman of the Board since August 1991, President from August 1991 to November
1997, Chief Executive Officer from August 1991 to April 1998 and Chief
Financial Officer from December 1993 to April 1995. Mr. Dwight was Chairman,
President and Chief Executive Officer of Superconductor Technologies, Inc., a
telecommunications technology company, from 1988 through August 1991 and
continued to served as Chairman from 1991 until May 1994. Mr. Dwight holds a
B.S. and an M.S. in Electrical Engineering from Stanford University. Mr. Dwight
is also a Director of Applied Materials, Inc., Applied Magnetics Corporation
and Advanced Fiber Communications, Inc.
Jonathan Callaghan has served as a Director since May 1997. Since May 1997, Mr.
Callaghan has been a General Partner of CMG@Ventures, a venture capital firm.
From June 1991 to June 1995, Mr. Callaghan was an associate of Summit Partners,
a venture capital firm. Mr. Callaghan holds a B.A. from Dartmouth College and
an M.B.A. from Harvard University. Mr. Callaghan is also a Director of Chemdex
Corporation, Hotlinks Corporation, Exp.com, Inc. and several private companies.
James J. Geddes, Jr. has served as a Director since August 1999. Since
September 1995, Mr. Geddes has been the Managing Director of Trans Cosmos USA,
Inc., an investment management company, which is an affiliate of the EnCompass
Group, Inc. From August 1993 to August 1995, Mr. Geddes was the President and
Chief Executive Officer of InVision Systems Corporation, a provider of
Internet-based desktop video software. Mr. Geddes holds a B.S. in Electrical
Engineering from the University of Maryland.
Fred Gibbons has served as a Director since October 1995. From October 1995 to
October 1999, Mr. Gibbons was the Chairman of the Board of Directors. From 1995
to 1999, Mr. Gibbons was a Lecturer at Stanford University's Graduate School of
Engineering. Since 1994, Mr. Gibbons has been the principal of Venture-
Concept.com, a concept stage venture management firm. Mr. Gibbons holds a B.S.
in Science Engineering and a M.S. in Computer Engineering from the University
of Michigan and an M.B.A. from Harvard University. Mr. Gibbons is also a
Director of MIPS technologies, Inc., Inverse Networks, Inc. and several private
companies.
Peter Mills has served as a Director since February 1996. Since March 1995, Mr.
Mills has been a General partner of CMG@Ventures, a venture capital firm. From
March 1992 to March 1994, Mr. Mills was the Chief Executive Officer of the
United States Display Consortium, a non-profit consortium for the development
of flat panel displays. Mr. Mills holds a B.S. in Communications from Ithaca
College and an M.B.A. from Columbia University.
Norman Nie has served as a Director since December 1998. Since 1997, Mr. Nie
has been a Technology Partner of Oak Investments, a venture capital firm. From
1975 to 1991, Mr. Nie was the Chief Executive Officer of SPSS, Inc., a provider
of statistical software and service solutions. Mr. Nie holds a B.A. from the
University of Washington and an M.A. and a Ph.D from Stanford University.
Mr. Nie is also a director of SPSS, Inc. and several private companies.
Michael Sears has served as a Director since June 1998. Mr. Sears is currently
the Chief Executive Officer of Black Pearl, Inc., a retailer of specialty
jewelry. From 1997 to 1999, Mr. Sears was the General Manager of Spyglass,
Inc., a provider of Internet connectivity solutions. From 1996 to 1997, Mr.
Sears was an independent consultant, and from 1990 to 1996, Mr. Sears was a
General Manager of Sun Microsystems, Inc. Mr. Sears holds a B.S. from the
United States Naval Academy, and a J.D. and an M.B.A. from Stanford University.
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Peter Ziebelman has served as a Director since June 1997. Mr. Ziebelman is a
Founding Partner of 21st Century Internet Venture Partners, a venture capital
firm. From 1988 to October 1996, Mr. Ziebelman was a partner of Thompson Clive
Venture Capital, an international venture capital firm. Mr. Ziebelman holds a
B.S. in Computer Science and Psychology from Yale University, and an M.S. in
Management from Stanford Graduate School of Business.
Board Composition
We currently have nine authorized directors. Each of our directors is elected
at each annual meeting of stockholders to hold office until the next annual
meeting. Each director, including a director elected to fill a vacancy, holds
office until the expiration of the term for which he or she was elected and
until a successor has been elected and qualified.
Board Committees
Audit Committee
The Audit Committee of the Board of Directors reviews, acts on and reports to
the Board of Directors with respect to various auditing and accounting matters,
including the recommendation of our independent auditors, the scope of the
annual audits, fees to be paid to the independent auditors, the performance of
our independent auditors and our accounting practices. The members of the Audit
Committee are Messrs. Dwight, Gibbons and Sears.
Compensation Committee
The Compensation Committee of the Board of Directors determines the salaries,
benefits and stock option grants for our employees, consultants, directors and
other individuals compensated by our company. The Compensation Committee also
administers our stock-based compensation plans. The members of the Compensation
Committee are Messrs. Dwight, Nie and Ziebelman.
Director Compensation
Historically, we have not paid any cash compensation to our Directors for
serving on our Board of Directors, but have reimbursed them for their out-of-
pocket expenses incurred in connection with attending meetings of our Board of
Directors and, in certain instances, granted them options to purchase shares of
our common stock. After the closing of this offering, we anticipate providing
customary compensation to our non-employee directors. However, the amount and
nature of this compensation has not yet been determined. We anticipate that we
will continue to reimburse all Directors for their out-of-pocket expenses
incurred in attending meetings of our Board of Directors.
Compensation Committee Interlocks And Insider Participation
Our Compensation Committee currently consists of Messrs. Dwight, Nie and
Ziebelman. Each is a Director and none is an employee. None of our executive
officers served as a director or member of the Compensation Committee or other
board committee performing equivalent functions of another corporation, one of
whose executive officers served on our Board of Directors or Compensation
Committee.
Employment, Severance And Other Agreements
Employment Agreement with Emerick Woods
Effective February 1998, we entered into an employment agreement with Emerick
Woods pursuant to which Mr. Woods agreed to serve as our President and Chief
Executive Officer. This employment agreement provides that Mr. Woods will
receive an annual base salary of $200,000 and is eligible to
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<PAGE>
receive an annual incentive bonus of up to $100,000. In addition, we agreed to
grant Mr. Woods options to purchase 955,137 shares of our common stock, 25% of
which vested immediately on the date of grant with a ratable portion of the
balance of the options vesting each month for a three-year period commencing
March 1998. In the event of specified merger or reorganization transactions, an
aggregate additional 50% of these options will become immediately vested,
subject to specified conditions. Under the employment agreement, Mr. Woods
receives a housing subsidy and is eligible to participate in employee benefit
plans available to our employees. In the event that Mr. Woods' employment is
terminated without cause or due to death or disability, the contract provides
that the base salary will be continued for up to nine months.
Stock Option Acceleration Rights of Executive Officers
We have entered into agreements with a number of our executive officers
providing that up to 25% of their stock options will become immediately vested
in the event of specified merger or reorganization transactions.
Executive Compensation
The following table sets forth all compensation awarded to, earned by or paid
to our Chief Executive Officer and the four other most highly compensated
executive officers of our company whose annual salary and bonus exceeded
$100,000 in fiscal 1999, or Named Executive Officers, for services rendered in
all capacities to us during fiscal 1999.
<TABLE>
<CAPTION>
---------------------------------
Long-Term
Annual Compensation
Compensation(1) Awards
-------------------- ------------
Shares
Underlying
Name and Principal Position Salary Bonus Options
- --------------------------- -------- -------- ------------
<S> <C> <C> <C>
Emerick Woods, President and Chief Executive
Officer..................................... $200,000(2) $100,000 0
Scott Young, Senior Vice President,
Operations.................................. 130,000 30,000 190,000
David Seltzer, Vice President and Chief
Financial Officer........................... 130,000 20,000 0
Gregory Beasley, Vice President, Business
Development................................. 117,468 20,000 180,000
Mary Gavin, Vice President, Engineering...... 92,083 10,000 55,000
</TABLE>
- -------------------
(1) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted for the Named Executive Officers because the aggregate
amount of such perquisites and other personal benefits constituted less
than the lesser of $50,000 or 10% of the total of annual salary and bonuses
for each of such Named Executive Officers in fiscal 1999.
(2) Excludes $33,000 related to housing expenses paid by us on behalf of Mr.
Woods.
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Option Grants In Last Year
The following table sets forth certain information regarding stock options
granted to each of the Named Executive Officers during fiscal 1999. We have not
granted any stock appreciation rights.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Option Term(1)
Options Employees in Exercise Market Expiration ------------------------------
Name Granted(1) Fiscal Year Price Price Date 5% 10%
- ---- ---------- ------------ -------- ------ ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Emerick Woods........... 0 0% -- -- -- -- --
Scott Young............. 0 0 -- -- -- -- --
David Seltzer........... 0 0 -- -- -- -- --
Gregory Beasley......... 180,000 15.4 $0.15 $ 8/19/08
Mary Gavin.............. 5,000 0.4 0.15 8/19/08
</TABLE>
- -------------------
(1) Potential realizable values are net of exercise price before taxes, and are
based on the assumption that our common stock appreciates at the annual
rate shown compounded annually from the date of grant until the expiration
of the ten-year term. These numbers are calculated based on Securities and
Exchange Commission requirements and do not reflect our projection or
estimate of future stock price growth.
Option Exercises and Fiscal Year-End Option Values
The following table sets forth certain information concerning stock option
exercises in fiscal 1999 and the number and value of unexercised options held
by each of the Named Executive Officers at July 31, 1999.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Shares July 31, 1999 July 31, 1999(1)
Acquired Value ------------------------------- -------------------------------
Name on Exercise Realized Exercisable(2) Unexercisable(2) Exercisable(2) Unexercisable(2)
- ---- ----------- -------- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Emerick Woods........... 955,137 0 0
Scott Young............. 50,000 190,000 0
David Seltzer........... 130,000 0 0
Gregory Beasley......... 0 180,000 0
Mary Gavin.............. 0 55,000 0
</TABLE>
- -------------------
(1) There was no public trading market for the common stock as of July 31,
1999. Accordingly, these values have been calculated on the basis of the
assumed initial public offering price of $ per share, less the
applicable exercise price per share, multiplied by the number of shares
underlying such options.
(2) All options granted under our stock option plans are immediately
exercisable; unvested shares issued upon such exercise are subject to
repurchase by our company.
Employee Benefit Plans
1995 Stock Option Plan
Our 1995 Stock Option Plan was adopted by our Board of Directors in October
1995, and approved by our stockholders in February 1996. Under the 1995 Plan, a
total of 2,000,000 shares of common stock were authorized and 1,362,143 shares
were issued, 1,050,585 of which have subsequently been retired. No further
grants will be made under the 1995 Plan.
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<PAGE>
The 1995 Plan may be administered by our Board of Directors, or a committee
thereof. Subject to the Act, Delaware corporate and securities laws, the
Internal Revenue Code and the rules of the Nasdaq National Market, our Board of
Directors may adjust the size and composition of the committee, or remove the
committee and administer the 1995 Plan directly. Our Board of Directors may
amend, alter, suspend or discontinue the 1995 Plan at any time. However, such
action will not affect the rights of previously granted options, unless there
is a written agreement to that affect signed by the option holder and our
company.
Upon any changes in our capitalization, such as a stock split or stock
dividend, the number of shares subject to each option and the shares
authorized, as well as the per share exercise price will be adjusted
proportionally. However, issues of any class of stock, or securities
convertible into shares of stock, will not trigger this proportional
adjustment. In the event of our proposed dissolution or liquidation, our Board
of Directors will notify each option holder before such action is taken. All
unexercised options will terminate immediately before the completion of such
transaction. If we merge or sell substantially all our assets, the outstanding
options must be assumed or substituted for by the successor corporation and/or
its affiliates. If the successor corporation refuses to honor or substitute the
outstanding options, they will become immediately and fully vested and
exercisable.
1996 Incentive Stock Option Plan
Our 1996 Incentive Stock Option Plan was adopted by our Board of Directors and
approved by our stockholders in November 1996. Under the 1996 Plan, a total of
4,291,317 shares of common stock were authorized and shares were
issued, of which have subsequently been retired. Upon the completion
of this offering, no further grants will be made under the 1996 Plan.
The 1996 Plan may be administered by our Board of Directors, or a committee
thereof. Subject to the Act, Delaware corporate and securities laws, the
Internal Revenue Code and the rules of the Nasdaq National Market, our Board of
Directors may adjust the size and composition of the committee, or remove the
committee and administer the 1996 Plan directly. Our Board of Directors may
amend, alter, suspend or discontinue the 1996 Plan at any time. However, such
action will not affect the rights of previously granted options, unless there
is a written agreement to that affect signed by the option holder and our
company.
Upon any changes in our capitalization, such as a stock split or stock
dividend, the number of shares subject to each option and the shares
authorized, as well as the per share exercise price will be adjusted
proportionally. However, issues of any class of stock, or securities
convertible into shares of stock, will not trigger this proportional
adjustment. In the event of our proposed dissolution or liquidation, our Board
of Directors will notify each option holder before such action is taken. All
unexercised options will terminate immediately before the completion of such
transaction. If we merge or sell substantially all our assets, the outstanding
options must be assumed or substituted for by the successor corporation and/or
its affiliates. If the successor corporation refuses to honor or substitute the
outstanding options, they will become immediately and fully vested and
exercisable.
2000 Equity Participation Plan
Our 2000 Equity Participation Plan was adopted by our Board of Directors in
1999 as a successor equity plan to our 1996 Incentive Stock Option
Plan. The 2000 Plan will become effective upon the completion of this offering.
A number of shares equal to up to percent of our outstanding common stock at
the beginning of each fiscal year may be issued under the 2000 Plan, provided
that the aggregate number of shares issuable upon the exercise of incentive
stock options, within the meaning of Section 422 of the Internal Revenue Code
of 1986, may not exceed .
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<PAGE>
The 2000 Plan provides for the discretionary grant of incentive stock options
to employees and for the grant of nonstatutory stock options, stock
appreciation rights, performance awards, dividend equivalents, stock payments
and deferred stock to employees and consultants. The 2000 Plan provides that we
cannot issue incentive stock options after November 1, 2009. The 2000 Plan also
provides for formula grants to the non-employee directors of nonstatutory stock
options to purchase shares of common stock upon initial election to
the Board of Directors and shares of common stock annually thereafter,
except that no annual grant will be made if the director was first appointed to
the board within 90 days of the applicable annual meeting of stockholders.
The 2000 Plan may be administered by our Board of Directors or a committee
thereof. The administrator has the power to determine the terms of the options
or other awards granted, including the exercise price of the options or other
awards, the number of shares subject to each option or other award (up to
per year per participant), the exercisability thereof, and the form of
consideration payable upon such exercise. In addition, the administrator has
the authority to amend, suspend or terminate the 2000 Plan, provided that no
such action may affect any share of common stock previously issued and sold or
any option previously granted under the 2000 Plan without the consent of the
holder. The exercise price of nonstatutory stock options and other awards
granted under the 2000 Plan is determined by the administrator, but with
respect to nonstatutory stock options intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Internal Revenue
Code, the exercise price must be at least equal to the fair market value of the
common stock on the date of grant. With respect to any participant who owns
stock possessing more than 10% of the voting power of all classes of our
outstanding capital stock, the exercise price of any incentive stock option
granted must be at least equal 110% of the fair market value on the grant date
and the term of such incentive stock option must not exceed five years. The
term of all other options granted under the 2000 Plan may not exceed ten years.
In the case of restricted stock, unless the administrator determines otherwise,
the restricted stock purchase agreement will grant us a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
employment or consulting relationship with our company for any reason,
including death or disability. The purchase price for shares repurchased
pursuant to a restricted stock purchase agreement must be the original price
paid by the purchaser. The repurchase option will lapse at a rate determined by
the administrator. Options and other awards granted under the 2000 Plan are
generally not transferable by the optionee, and each option and other award is
exercisable during the lifetime of the optionee only by such optionee. Options
granted under the 2000 Plan must generally be exercised within three months
after the end of optionee's status as an employee, director or consultant, or
within one year after such optionee's termination by disability or death,
respectively, but in no event later than the expiration of the option's term.
The 2000 Plan provides that, in the event of a merger of Vicinity with or into
another corporation, the administrator will have the authority, but not the
obligation to accelerate the vesting of each outstanding option and other
award, except that options issued to non-employee directors will vest in full
upon the closing of such a transaction.
Contemporaneously with this offering, we will grant options to purchase
shares of common stock. The exercise price of these options will be the price
to public disclosed on the cover of this prospectus.
Employee Stock Purchase Plan
The Vicinity Corporation 2000 Employee Stock Purchase Plan was adopted by our
Board of Directors and our stockholders in 1999. A total of
shares of common stock has been reserved for issuance under the purchase plan.
As of the date of this prospectus, no shares have been
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<PAGE>
issued under the purchase plan. The purchase plan, which is intended to qualify
under Section 423 of the Internal Revenue Code, contains consecutive offer
periods that are generally six months in duration. The offer periods start and
end on September 15 and March 15 of each year, except for the first offer
period, which will commence on the date immediately preceding the first date on
which a share of common stock is traded on an exchange or quoted on Nasdaq or a
successor quotation system and end on September 15, 2000. Employees are
eligible to participate if they are customarily employed by us or any
participating subsidiary for at least twenty hours per week. However, no
employee may be granted a right to purchase stock under the purchase plan (1)
to the extent that, immediately after the grant of the right to purchase stock,
the employee would own, or be treated as owning, stock possessing 5% or more of
the total combined voting power or value of all classes of our capital stock or
(2) to the extent that his or her rights to purchase stock under all of our
employee stock purchase plans accrues at a rate which exceed $25,000 worth of
stock for each calendar year.
The purchase plan permits participants to purchase common stock through payroll
deductions of up to 15% of the participant's base compensation. Base
compensation is defined as the participant's gross base compensation, excluding
overtime payments, sales commissions, incentive compensation, bonuses, expense
reimbursements, fringe benefits and other special payments. The maximum number
of shares a participant may purchase with respect to a single offer period is
shares. Amounts deducted and accumulated by the participant are used
to purchase shares of common stock at the end of each offer period. The price
of stock purchased under the purchase plan is 85% of the lesser of the fair
market value of the common stock (1) the first day of the offer period or (2)
the last day of the offer period. Participants may end their participation at
any time other than the final fourteen days of an offer period, and they will
be paid their payroll deductions to date. Participation ends automatically upon
termination of employment with Vicinity.
Rights to purchase stock granted under the purchase plan are not transferable
by a participant other than by will, the laws of descent and distribution, or
as otherwise provided under the purchase plan. The purchase plan provides that,
in the event of a merger of Vicinity with or into another corporation or a sale
of substantially all of our assets, each outstanding right to purchase stock
may be assumed or substituted for by the successor corporation. Our Board of
Directors has the authority to amend or terminate the purchase plan. However,
no such action by our Board may adversely affect any outstanding rights to
purchase stock under the purchase plan, except that our Board may terminate an
offer period on any exercise date if our Board determines that the termination
of the purchase plan is in the best interests of Vicinity and our stockholders.
Registration under the Securities Act
We intend promptly after the completion of this offering to register on Form S-
8 all shares of common stock issuable under our compensatory stock plans other
than shares which may be resold under Rule 701 without registration.
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<PAGE>
Principal Stockholders
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of November 1, 1999, and as
adjusted to reflect the conversion of the preferred stock into common stock
immediately prior to the completion of this offering and sale of the shares of
common stock offered by this prospectus, by:
. each person, or group of affiliated persons, who is known by us to
beneficially own 5% or more of our common stock;
. each of our directors and Named Executive Officers; and
. all of our directors and executive officers as a group.
Share ownership in each case includes shares issuable upon exercise of
outstanding options and warrants that are exercisable within 60 days of
November 1, 1999, as described in the footnotes below. Percentage of ownership
is calculated according to SEC Rule 13d-3(d)(1). Percentage ownership
calculations before and after this offering are based on 18,263,594 shares and
shares, respectively, of common stock outstanding. The address for all
executive officers and directors is c/o Vicinity Corporation, 1135A San Antonio
Road, Palo Alto, CA 94303.
<TABLE>
<CAPTION>
------------------------------------------
Percentage of
Common Stock
Number of Beneficially Owned (1)
Shares -----------------------------
Name and Address of Beneficially Before the After the
Beneficial Owner Owned (1) Offering Offering
- ------------------- ------------ ----------- ----------
<S> <C> <C> <C>
CMG@Ventures (2)........... 5,788,536 31.7%
Oak Investment Partners
(3)....................... 4,252,994 23.3
21st Century Internet Fund,
L.P. (4).................. 1,850,000 10.1
EnCompass Group, Inc. (5).. 1,332,000 7.3
Emerick Woods.............. 755,137 4.1
Scott Young................ 240,000 1.3
David Seltzer.............. 130,000 *
Gregory Beasley............ 205,000 1.1
Mary Gavin................. 80,000 *
Herbert M. Dwight, Jr...... 210,000 1.2
Jon Callaghan (2).......... 5,788,536 31.7
Jim J. Geddes, Jr. (5)..... 200,000 1.1
Fred Gibbons (6)........... 108,576 *
Peter Mills (2)............ 5,788,536 31.7
Norman Nie................. 31,905 *
Michael Sears.............. 20,000 *
Peter Ziebelman (4)........ 1,850,000 10.1
All directors and executive
officers as a group (18
persons).................. 10,174,154 55.7
</TABLE>
- -------------------
* Less than 1% of total.
(1) Gives effect to the shares of common stock issuable within 60 days of
November 1, 1999 upon the exercise of all options and other rights
beneficially owned by the indicated stockholders on that date. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes voting and investment power with respect
to shares. Unless otherwise indicated, the persons named in the table have
sole voting and sole investment control with respect to all shares
beneficially owned.
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<PAGE>
(2) Consists of 5,788,536 shares held by CMG@Ventures I, an affiliate of
CMG@Ventures. Messrs. Callaghan and Mills are each a General Partner of
CMG@Ventures and may be deemed to have voting and investment powers over
these shares. Messrs. Callaghan and Mills disclaim beneficial ownership of
these shares, except to the extent of each of their interests in
CMG@Ventures and CMG@Ventures I.
(3) Includes 952,381 shares issuable upon exercise of warrants exercisable
within 60 days of November 1, 1999. Excludes 31,905 shares held by Norman
Nie, one of our Directors and a limited partner of Oak VIII Affiliates
Fund, L.P.
(4) Consists of 1,850,000 shares held by 21st Century Internet Fund, L.P., an
affiliate of 21st Century Internet Management Partners, LLC. Mr. Ziebelman,
is a General Partner of 21st Century Internet Management Partners, LLC, and
may be deemed to have voting and investment powers over these shares. Mr.
Ziebelman disclaims beneficial ownership in these shares, except to the
extent of his interest in 21st Century Internet Management Partners, LLC.
(5) Includes 932,000 shares held by EnCompass Group, Inc., 200,000 shares held
by U.S. Information Technology Financing L.P., 190,000 shares held by Trans
Cosmos USA, Inc., and 10,000 shares held by TCI Club. Mr. Geddes is
Managing Director of Trans Cosmos USA, Inc., and may be deemed to have
voting and investment powers over the shares held by Trans Cosmos USA, Inc.
and TCI Club. Mr. Geddes disclaims beneficial ownership in these shares,
except to the extent of his interest in Trans Cosmos USA, Inc. and TCI
Club.
(6) All shares are held by a trust with respect to which Mr. Gibbons maintains
sole voting power.
56
<PAGE>
Certain Transactions
We have entered into various service agreements with NaviSite Internet Services
Corporation pursuant to which NaviSite agreed to host a portion of our data
center equipment and provide Internet connections and we agreed to pay NaviSite
various setup and service fees. Our current agreement with NaviSite, entered
into in June 1998, had an original one year term with automatic annual renewals
unless either party provides notice to the other of its intention to terminate.
NaviSite's largest stockholder is CMGI, Inc., an affiliate of our largest
stockholder, CMG@Ventures. We paid NaviSite approximately $246,000, $149,000
and $190,000 in fiscal 1997, 1998 and 1999, respectively.
In July 1999, we loaned approximately $96,000 to Emerick Woods, our President
and Chief Executive Officer, to enable Mr. Woods to exercise options to
purchase shares of our common stock. This recourse loan bears interest at a
rate equal to 8 1/4% and is payable by Mr. Woods on the first to occur of the
following:
.18 months after an initial public offering of our common stock;
.30 days after the sale of our company;
.90 days after the termination of Mr. Woods' employment; and
.July 2004.
In October 1999, we loaned approximately $113,000 to Dinesh Wadhawan, our Vice
President, Sales, to enable Mr. Wadhawan to exercise options to purchase shares
of our common stock. This recourse loan bears interest at a rate equal to 8
1/4% and is payable by Mr. Wadhawan on the first to occur of the following:
.18 months after an initial public offering of our common stock;
.30 days after the sale of our company;
.90 days after the termination of Mr. Wadhawan's employment; and
.October 2004.
57
<PAGE>
Description of Capital Stock
The following description of our capital stock and certain provisions of our
Restated Certificate of Incorporation as will be in effect upon the closing of
this offering, or Certificate, and Bylaws as will be in effect upon the closing
of this offering, or Bylaws, are summaries of these documents and are qualified
by reference to the Certificate and the Bylaws. Copies of these documents have
been filed with the Securities and Exchange Commission as exhibits to our
registration statement, of which this prospectus forms a part. The descriptions
of the common stock and preferred stock reflect changes to our capital
structure that will occur upon the closing of this offering.
The authorized capital stock of our company consists of 75,000,000 shares of
common stock, par value $.001 per share, and 5,000,000 shares of preferred
stock, par value $.001 per share.
Common Stock
As of July 31, 1999, there were 5,287,667 shares of common stock outstanding
and held of record by 24 stockholders assuming conversion of all outstanding
shares of preferred stock.
Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and they do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefor, subject to any preferential dividend rights
of any outstanding preferred stock. Upon the liquidation, dissolution or
winding up of our company the holders of common stock are entitled to receive
ratably our net assets available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding preferred stock.
Holders of the common stock have no preemptive, subscription, redemption or
conversion rights. The rights, preferences and privileges of holders of common
stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which we may designate and
issue in the future. Upon the closing of this offering, there will be no shares
of preferred stock outstanding.
Preferred Stock
Upon the closing of this offering, our Board of Directors will be authorized,
without further stockholder approval, to issue from time to time up to an
aggregate of 5,000,000 shares of preferred stock in one or more series and to
fix or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each such series thereof,
including the dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption including sinking fund provisions, redemption price
or prices, liquidation preferences and the number of shares constituting any
series or designations of such series. We have no present plans to issue any
shares of preferred stock. See "Anti-Takeover Effects of Certain Provisions of
Delaware Law and our Certificate of Incorporation and Bylaws."
Registration Rights
Pursuant to the terms of the Amended and Restated Information and Registration
Rights Agreement, after the closing of this offering the holders of 16,682,100
shares of common stock will be entitled to certain demand and piggyback
registration rights with respect to the registration of their shares under the
Securities Act. Please see "Shares Eligible for Future Sale."
58
<PAGE>
Anti-Takeover Effects of Certain Provisions of Delaware Law and Our Certificate
of Incorporation and Bylaws
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, as amended, or DGCL. Subject to certain exceptions, Section
203 of the DGCL prohibits a publicly-held Delaware corporation from engaging in
a "business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an
interested stockholder, unless the interested stockholder attained such status
with the approval of the board of directors or unless the business combination
is approved in a prescribed manner. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns, or
within three years did own, 15% or more of a corporation's voting stock. This
statute could prohibit or delay the accomplishment of mergers or other takeover
or change in control attempts with respect to our company and, accordingly, may
discourage attempts to acquire us.
In addition, certain provisions of the Certificate and Bylaws, which provisions
will be in effect upon the closing of this offering and are summarized in the
following paragraphs, may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a stockholder
might consider in its best interest, including those attempts that might result
in a premium over the market price for the shares held by our stockholders.
Board of Directors Vacancies. The Certificate authorizes our Board of Directors
to fill vacant directorships or increase the size of the Board of Directors.
This may deter a stockholder from removing incumbent directors and
simultaneously gaining control of the Board of Directors by filling the
vacancies created by such removal with its own nominees.
Stockholder Action; Special Meeting of Stockholders. The Certificate provides
that stockholders may not take action by written consent, but only at a duly
called annual or special meeting of stockholders. The Certificate further
provides that special meetings of stockholders of our company may be called
only by the Chairman of the Board of Directors or a majority of the Board of
Directors.
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. The Bylaws provide that stockholders seeking to bring business
before an annual meeting of stockholders, or to nominate candidates for
election as directors at an annual meeting of stockholders, must provide timely
notice thereof in writing. To be timely, a stockholder's notice must be
delivered to or mailed and received at our principal executive offices not less
than 120 days nor more than 150 days prior to the first anniversary of the date
of our notice of annual meeting provided with respect to the previous year's
annual meeting of stockholders; provided, that if no annual meeting of
stockholders was held in the previous year or the date of the annual meeting of
stockholders has been changed to be more than 30 calendar day earlier than or
60 calendar days after such anniversary, notice by the stockholder, to be
timely, must be so received not more than 90 days nor later than the later of
(1) 60 days prior to the annual meeting of stockholders or (2) the close of
business on the 10th day following the date on which notice of the date of the
meeting is given to stockholders or made public, whichever first occurs. The
Bylaws also specify certain requirements as to the form and content of a
stockholder's notice. These provisions may preclude stockholders from bringing
matters before an annual meeting of stockholders or from making nominations for
directors at an annual meeting of stockholders.
Authorized But Unissued Shares. The authorized but unissued shares of common
stock and preferred stock are available for future issuance without stockholder
approval, subject to certain limitations imposed by the Nasdaq National Market.
These additional shares may be utilized for a variety of
59
<PAGE>
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The existence of
authorized but unissued and unreserved common stock and preferred stock could
render more difficult or discourage an attempt to obtain control of our company
by means of a proxy contest, tender offer, merger or otherwise.
The DGCL provides generally that the affirmative vote of a majority of the
shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or bylaws, unless a corporation's certificate of
incorporation or bylaws, as the case may be, requires a greater percentage. We
have provisions in our certificate and bylaws that require a super-majority
vote of the stockholders to amend, revise or repeal provisions that may have an
anti-takeover effect.
Limitation of Liability and Indemnification Matters
The Certificate includes provisions to (1) eliminate the personal liability of
our Directors for monetary damages resulting from breaches of their fiduciary
duty to the extent permitted by the DGCL and (2) indemnify our Directors and
officers to the fullest extent permitted by the DGCL, including circumstances
in which indennification is otherwise discretionary.
We have entered into agreements to indemnify our directors and officers, in
addition to the indemnification provided for in the Bylaws. We believe that
these provisions and agreements are necessary to attract and retain qualified
directors and officers. Our Bylaws also permit us to secure insurance on behalf
of any officer, director, employee or other agent for any liability arising out
of his or her actions, regardless of whether the DGCL would permit
indemnification.
Transfer Agent And Registrar
Upon the closing of this offering, the transfer agent and registrar for the
common stock will be .
60
<PAGE>
Shares Eligible for Future Sale
Prior to this offering, there has not been any public market for the common
stock, and no prediction can be made as to the effect, if any, that market
sales of shares of common stock or the availability of shares of common stock
for sale will have on the market price of the common stock prevailing from time
to time. Nevertheless, sales of substantial amounts of common stock in the
public market, or the perception that such sales could occur, could adversely
affect the market price of the common stock and could impair our company's
future ability to raise capital through the sale of its equity securities. See
"Risk Factors--The large number of shares eligible for public sale after this
offering could cause our stock price to decline."
Upon the closing of this offering, we will have an aggregate of shares of
common stock outstanding, assuming no exercise of the underwriters' over-
allotment option and no exercise of outstanding options or warrants. Of the
outstanding shares, the shares sold in this offering will be freely tradable,
except that any shares held by our "affiliates," as defined in Rule 144 under
the Securities Act, may only be sold in compliance with the limitations
described below. The remaining shares of common stock will be deemed
"restricted securities" as defined under Rule 144. Restricted securities may be
sold in the public market only if registered or if they qualify for an
exemption from registration under Rules 144, 144(k) or 701 promulgated under
the Securities Act, which rules are summarized below. Subject to the lock-up
agreements described below and the provisions of Rules 144, 144(k) and 701,
additional shares will be available for sale in the public market as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Number of Shares Date
- ---------------- -----------------------------------------------------------------------------------
<S> <C> <C>
After the date of this prospectus
Upon the filing of a registration statement to register for resale shares of common
stock issuable upon the exercise of options granted under our company's stock
option plan
At various times after 90 days from the date of this prospectus (Rule 144)
After 180 days from the date of this prospectus (subject, in some cases, to volume
limitations)
At various times after 180 days from the date of this prospectus (Rule 144)
</TABLE>
In general, under Rule 144, as currently in effect, a person (or persons whose
shares are required to be aggregated), including an affiliate, who has
beneficially owned shares for at least one year is entitled to sell, within any
three-month period commencing 90 days after the date of this prospectus, a
number of shares that does not exceed the greater of 1% of the then outstanding
shares of common stock (approximately shares immediately after this
offering) or the average weekly trading volume in the common stock during the
four calendar weeks preceding the date on which notice of such sale is filed,
subject to certain restrictions. In addition, a person who is not deemed to
have been our affiliate at any time during the 90 days preceding a sale and who
has beneficially owned the shares proposed to be sold for at least two years
would be entitled to sell such shares under Rule 144(k) without regard to the
requirements described above. To the extent that shares were acquired from any
of our affiliates, such person's holding period for the purpose of effecting a
sale under Rule 144 commences on the date of transfer from the affiliate.
Our directors and officers and stockholders who hold shares in the aggregate,
together with the holders of options to purchase shares of common stock
and the holders of warrants to purchase shares of common stock, have
agreed that they will not offer, sell or agree to sell, directly or
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<PAGE>
indirectly, or otherwise dispose of any shares of common stock without the
prior written consent of J.P. Morgan Securities, Inc. for a period of 180 days
from the date of this prospectus. Please see "Underwriting."
Any of our employees or consultants who purchased his or her shares pursuant to
a written compensatory plan or contract is entitled to rely on the resale
provisions of Rule 701, which permits nonaffiliates to sell their Rule 701
shares without having to comply with the public information, holding period,
volume limitation or notice provisions of Rule 144 and permits affiliates to
sell their Rule 701 shares without having to comply with the Rule 144 holding
period restrictions, in each case commencing 90 days after the date of this
prospectus. As of July 31, 1999, the holders of options exercisable into
approximately shares of common stock will be eligible to sell their
shares on the expiration of the 180-day lockup period or subject in some cases
to vesting of such options. We intend to file one or more registration
statements on Form S-8 under the Securities Act to register all shares of
common stock subject to outstanding stock options and common stock issued or
issuable under our stock plans which are not eligible for resale under Rule
701. We expect to file this registration statement within 180 days after the
date of this prospectus, thus permitting the resale of such shares by
nonaffiliates in the public market without restriction under the Securities
Act.
We have agreed not to sell or otherwise dispose of any shares of common stock
during the 180-day period following the date of the prospectus, except that we
may issue, and grant options to purchase, shares of common stock under the 2000
Equity Participation Plan. In addition, we may issue shares of common stock in
connection with any acquisition of another company if the terms of such
issuance provide that such common stock shall not be resold prior to the
expiration of the 180-day period referenced in the preceding sentence. See
"Risk Factors--The sale of shares eligible for future sale and expectations of
future sales of these shares could depress share prices."
Following this offering, holders of shares of outstanding common stock will
have demand registration rights with respect to their shares of common stock
(subject to the 180-day lock-up arrangement described above) to require us to
register their shares of common stock under the Securities Act, and they will
have certain rights to participate in any future registration of our
securities. These holders are subject to lock-up periods of not more than 180
days following the date of this prospectus or any subsequent prospectus. See
"Description of Capital Stock--Registration Rights."
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<PAGE>
Underwriting
Under the terms and subject to the conditions contained in an underwriting
agreement dated the date of this prospectus, the underwriters named below, for
whom J.P. Morgan Securities, Inc., Bear, Stearns & Co. Inc. and U.S. Bancorp
Piper Jaffray Inc., are acting as representatives, have severally agreed to
purchase, and we have agreed to sell to them, the respective number of shares
of common stock set forth opposite their names below.
<TABLE>
<CAPTION>
---------
Number of
Underwriters Shares
------------ ---------
<S> <C>
J.P. Morgan Securities, Inc.....................................
Bear, Stearns & Co. Inc.........................................
U.S. Bancorp Piper Jaffray Inc..................................
----
Total...........................................................
====
</TABLE>
The underwriters are offering the common stock subject to their acceptance of
the common stock and subject to prior sale. The underwriting agreement provides
that the obligations of the several underwriters to purchase shares of common
stock are subject to receipt of an opinion of their counsel and other
conditions. If any of the shares of common stock are purchased by the
underwriters under the underwriting agreement, all of the shares, other than
the shares covered by the over-allotment option described below, must be
purchased.
The underwriters propose initially to offer the shares of common stock directly
to the public at the public offering price set forth on the cover page of this
prospectus and to certain dealers at such price less a concession not in excess
of $ per share. The underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per share to certain other dealers. After the
initial public offering of the common stock, the offering price and other
selling terms may be changed from time to time by the underwriters.
The underwriters have informed us that they do not intend sales to their
customer accounts as to which they have discretionary trading authority to
exceed five percent of the total number of shares offered.
We have granted to the underwriters an option, exercisable for 30 days from the
date of this prospectus, to purchase up to additional shares of common
stock, on the same terms and conditions as set forth on the cover page hereof.
The underwriters may exercise such option solely to cover over-allotments, if
any, made in connection with the sale of shares of common stock offered hereby.
If the underwriters' option is exercised in full, the total price to public
would be $ the total underwriting discounts and commissions would be $ ,
and the total proceeds to us would be $ , before deducting $ in
estimated expenses payable by Vicinity.
Vicinity and our officers, directors and holders of an aggregate of shares of
its common stock have agreed that, without the prior written consent of J.P.
Morgan Securities, Inc., during the period beginning from the date of this
prospectus and continuing to and including the date 180 days after the date of
this prospectus they will not:
. offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares
of common stock or any of our securities which are substantially
similar to the common stock, including
63
<PAGE>
but not limited to any securities that are convertible into or
exercisable or exchangeable for, or that represent the right to receive
common stock or any such substantially similar securities; or
. enter into any swap, option, future, forward or other agreement that
transfers, in whole or in part, the economic consequences of ownership
of common stock or any securities substantially similar to the common
stock.
The restrictions described in this paragraph do not apply to:
. the issuance of shares under our employee stock option or stock
purchase plans;
. the grant by us of employee stock options;
. the issuance of shares by us upon exercise of warrants outstanding on
the date of this prospectus; or
. the issuance of common stock in connection with the transactions
described in this prospectus
The underwriters have reserved for sale, at the initial public offering price,
shares of the common stock for some of our directors, officers, employees,
friends and family who, after receiving a preliminary prospectus and a letter
explaining our directed share program, have expressed an interest in
purchasing such shares of common stock in the offering. These persons are
expected to purchase, in the aggregate, not more than five percent of the
common stock offered in the offering. The number of shares available for sale
to the general public in the offering will be reduced to the extent such
persons purchase such reserved shares. Any reserved shares not so purchased
will be offered to the general public on the same basis as the other shares
offered by this prospectus.
We have agreed to indemnify the underwriters against certain liabilities,
losses and expenses, including liabilities under the Securities Act, or to
contribute to payments that the underwriters may be required to make in
respect thereof.
It is expected that delivery of the shares will be made to investors on or
about , 2000.
In connection with this offering, the underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the common stock.
Specifically, the underwriters may over-allot in connection with this
offering, creating a syndicate short position. In addition, the underwriters
may bid for, and purchase, shares of common stock in the open market to cover
syndicate short positions or to stabilize the price of the common stock.
Finally, the underwriting syndicate may reclaim selling concessions allowed
for distributing the common stock in the offering, if the syndicate
repurchases previously distributed common stock in syndicate covering
transactions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the common stock
above independent market levels. The underwriters are not required to engage
in these activities, and may end any of these activities at any time.
Prior to this offering, there has been no public market for the common stock.
The initial public offering price for the shares of common stock offered
hereby will be determined by agreement between us and the underwriters. Among
the factors considered in making such determination were the history of and
the prospects for the industry in which we compete, an assessment of our
management, our present operations, our historical results of operations and
the trend of our revenues and earnings, the prospects for our future earnings,
the general condition of the securities markets at the time of the offering
and the prices of similar securities of generally comparable companies. We
cannot assure you that an active trading market will develop for our common
stock or that our common stock will trade in the public market at or above the
initial public offering price.
64
<PAGE>
Legal Matters
The validity of the shares of common stock offered hereby will be passed upon
for Vicinity Corporation by Latham & Watkins, Menlo Park, California. Certain
legal matters in connection with this offering will be passed upon for the
underwriters by Davis Polk & Wardwell, New York, New York.
Experts
The financial statements of Vicinity Corporation as of July 31, 1998 and 1999
and for each of the years in the three-year period ended July 31, 1999, have
been included herein and in the registration statement in reliance on the
report of KPMG, LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of that firm as experts in accounting
and auditing.
Available Information
We have filed with the Securities and Exchange Commission a Registration
Statement on Form S-1, including the exhibits, schedules and amendments
thereto, under the Securities Act with respect to the shares of common stock to
be sold in this offering. This prospectus does not contain all the information
set forth in the registration statement. For further information regarding our
company and the shares of common stock to be sold in this offering, please
refer to the registration statement. Statements contained in this prospectus as
to the contents of any contract, agreement or other document referred to are
not necessarily complete, and in each instance reference is made to the copy of
such contract, agreement or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
such reference.
You may read and copy all or any portion of the registration statement or any
other information that we file at the Securities and Exchange Commission's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You
can request copies of these documents, upon payment of a duplicating fee, by
writing to the Securities and Exchange Commission. Please call the Securities
and Exchange Commission at 1-800-732-0330 for further information on the
operation of the public reference rooms. Our Securities and Exchange Commission
filings, including the registration statement, are also available to you on the
Securities and Exchange Commission's Web site located at www.sec.gov.
As a result of this offering, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934, as amended, and
in accordance therewith will file periodic reports, proxy statements and other
information with the Securities and Exchange Commission. Upon approval of the
common stock for the quotation on the Nasdaq National Market, reports, proxy
and information statements and other information may also be inspected at the
offices of Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006.
65
<PAGE>
Vicinity Corporation
Index to Financial Statements
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report.............................................. F-2
Balance Sheets as of July 31, 1998 and 1999............................... F-3
Statements of Operations for the fiscal years ended July 31, 1997, 1998
and 1999................................................................. F-4
Statements of Redeemable Convertible Preferred Stock and Stockholders'
Deficit for the fiscal years ended July 31, 1997, 1998 and 1999.......... F-5
Statements of Cash Flows for the fiscal years ended July 31, 1997, 1998
and 1999................................................................. F-6
Notes to Financial Statements............................................. F-7
</TABLE>
F-1
<PAGE>
Independent Auditors' Report
The Board of Directors
Vicinity Corporation:
We have audited the accompanying balance sheets of Vicinity Corporation (the
Company) as of July 31, 1998 and 1999, and the related statements of
operations, redeemable convertible preferred stock and stockholders' deficit
and cash flows for each of the years in the three-year period ended July 31,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vicinity Corporation as of
July 31, 1998 and 1999, and the results of its operations and its cash flows
for each of the years in the three-year period ended July 31, 1999 in
conformity with generally accepted accounting principles.
KPMG LLP
Mountain View, California
September 22, 1999, except as to Note 11
for which the date is November 2, 1999
F-2
<PAGE>
Vicinity Corporation
Balance Sheets
<TABLE>
<CAPTION>
----------------------------
Year Ended July 31,
----------------------------
1998 1999
ASSETS ------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents.................... $ 263,944 $ 9,060,393
Accounts receivable, net of allowance for
doubtful accounts of none and $80,000 in
1998 and 1999, respectively................. 1,181,302 2,847,372
Prepaid expenses and other current assets.... 310,009 382,995
<CAPTION>
------------ ------------
<S> <C> <C>
Total current assets....................... 1,755,255 12,290,760
Property and equipment, net.................... 65,853 912,489
<CAPTION>
------------ ------------
<S> <C> <C>
Total assets............................... $ 1,821,108 $ 13,203,249
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Bank note.................................... $ 800,000 $ 1,000,000
Accounts payable............................. 484,846 491,290
Capital lease obligations, current portion... -- 379,545
Accrued liabilities.......................... 210,775 1,245,234
Deferred revenue............................. 2,476,988 4,954,878
Payable to related party..................... 163,686 --
<CAPTION>
------------ ------------
<S> <C> <C>
Total current liabilities.................. 4,136,295 8,070,947
Capital lease obligations, excluding current
portion....................................... -- 298,009
<CAPTION>
------------ ------------
<S> <C> <C>
4,136,295 8,368,956
<CAPTION>
------------ ------------
<S> <C> <C>
Series A, B, C, D, E and F redeemable
convertible preferred
stock and Series E warrants, $0.001 par value;
authorized
10,000,000 in 1998 and 12,519,768 in 1999;
issued and outstanding
7,137,250 in 1998 and 11,217,387 in 1999;
aggregate liquidation
preference of $7,971,578 in 1998 and
$32,074,344 in 1999;
aggregate redemption amount of $7,971,578 in
1998 and
$22,641,677 in 1999........................... 7,971,578 21,403,089
Commitments
Stockholders' deficit:
Common stock, $0.001 par value; 22,000,000
shares authorized;
issued and outstanding 3,760,081 in 1998 and
5,287,667 in 1999 .......................... 3,761 5,289
Additional paid-in capital, net of preferred
stock accretion............................. (671,691) (300,941)
Deferred stock-based compensation............ -- (1,044,132)
Notes receivable from employees upon purchase
of stock.................................... (2,138) (97,652)
Accumulated deficit.......................... (9,616,697) (15,131,360)
<CAPTION>
------------ ------------
<S> <C> <C>
Total stockholders' deficit................ (10,286,765) (16,568,796)
<CAPTION>
------------ ------------
<S> <C> <C>
Total liabilities and stockholders'
deficit................................... $ 1,821,108 $ 13,203,249
<CAPTION>
============ ============
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
Vicinity Corporation
Statements of Operations
<TABLE>
<CAPTION>
-------------------------------------
Year Ended July 31,
-------------------------------------
1997 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
Revenues:
License and hosting fees.............. $ 1,419,404 $ 4,386,235 $ 5,656,529
Service and transaction fees.......... -- 423,648 767,122
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Total revenues....................... 1,419,404 4,809,883 6,423,651
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Cost of revenues....................... 1,976,653 2,847,089 3,949,081
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Gross profit (loss).................. (557,249) 1,962,794 2,474,570
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Operating expenses:
Product development................... 1,703,365 1,550,937 1,747,754
Sales and marketing................... 2,958,917 1,676,208 3,588,502
General and administrative............ 1,127,471 1,204,240 1,995,384
Other................................. -- -- 440,500
Stock-based compensation.............. -- -- 166,668
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Total operating expenses............. 5,789,753 4,431,385 7,938,808
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Loss from operations................. (6,347,002) (2,468,591) (5,464,238)
Other expense (income), net............ (108,907) 12,025 50,425
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Net loss............................. (6,238,095) (2,480,616) (5,514,663)
Accretion on redeemable convertible
preferred stock and warrants.......... 383,379 517,965 1,038,230
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Net loss applicable to common
stockholders........................ $(6,621,474) $(2,998,581) $(6,552,893)
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Net loss per common share--basic and
diluted............................... $ (1.61) $ (0.86) $ (1.61)
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Weighted average shares--basic and
diluted............................... 4,101,579 3,502,850 4,079,754
<CAPTION>
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
Vicinity Corporation
Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Additional Notes
paid-in receivable
capital, from
Redeemable convertible net of employees
preferred stock Common stock preferred upon
---------------------- ------------------- stock purchase
Shares Amount Shares Amount accretion of stock
---------- ----------- ---------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balances, July 31, 1996..................... 3,833,250 $ 2,094,246 4,647,600 $ 4,648 $ 9,232 $ (5,750)
Issuance of preferred stock for cash........ 3,304,000 4,975,988 -- -- -- --
Accretion on redeemable preferred stock..... -- 383,379 -- -- (383,379) --
Issuance of common stock for cash........... -- -- 10,000 10 990 --
Repurchase of unvested common stock......... -- -- (2,191,666) (2,192) (3,287) 3,612
Net loss.................................... -- -- -- -- -- --
---------- ----------- ---------- ------- ---------- --------
Balances, July 31, 1997..................... 7,137,250 7,453,613 2,465,934 2,466 (376,444) (2,138)
---------- ----------- ---------- ------- ---------- --------
Accretion on redeemable preferred stock..... -- 517,965 -- -- (517,965) --
Exercise of common stock warrant for cash... -- -- 275,512 276 207,918 --
Issuance of common stock for cash........... -- -- 1,018,635 1,019 14,800 --
Net loss.................................... -- -- -- -- -- --
---------- ----------- ---------- ------- ---------- --------
Balances, July 31, 1998..................... 7,137,250 7,971,578 3,760,081 3,761 (671,691) (2,138)
---------- ----------- ---------- ------- ---------- --------
Issuance of preferred stock and warrants
for cash................................... 4,080,137 12,393,281 -- -- -- --
Accretion on redeemable preferred stock
and warrants............................... -- 1,038,230 -- -- (1,038,230) --
Issuance of common stock for cash and note
receivable................................. -- -- 1,527,586 1,528 198,180 (95,514)
Deferred compensation related to option
grants..................................... -- -- -- -- 1,210,800 --
Amortization of stock-based compensation.... -- -- -- -- --
Net loss.................................... -- -- -- -- -- --
---------- ----------- ---------- ------- ---------- --------
Balances, July 31, 1999..................... 11,217,387 $21,403,089 5,287,667 $ 5,289 $ (300,941) $(97,652)
========== =========== ========== ======= ========== ========
<CAPTION>
Deferred Total
stock-based Accumulated stockholders'
compensation deficit deficit
------------- ------------- --------------
<S> <C> <C> <C>
Balances, July 31, 1996..................... $ -- $ (897,986) $ (889,856)
Issuance of preferred stock for cash........ -- -- --
Accretion on redeemable preferred stock..... -- -- (383,379)
Issuance of common stock for cash........... -- -- 1,000
Repurchase of unvested common stock......... -- -- (1,867)
Net loss.................................... -- (6,238,095) (6,238,095)
------------- ------------- --------------
Balances, July 31, 1997..................... -- (7,136,081) (7,512,197)
------------- ------------- --------------
Accretion on redeemable preferred stock..... -- (517,965)
Exercise of common stock warrant for cash... -- -- 208,194
Issuance of common stock for cash........... -- -- 15,819
Net loss.................................... -- (2,480,616) (2,480,616)
------------- ------------- --------------
Balances, July 31, 1998..................... -- (9,616,697) (10,286,765)
------------- ------------- --------------
Issuance of preferred stock and warrants
for cash................................... -- -- --
Accretion on redeemable preferred stock
and warrants............................... -- -- (1,038,230)
Issuance of common stock for cash and
note receivable............................ -- -- 104,194
Deferred compensation related to
option grants.............................. (1,210,800) -- --
Amortization of stock-based compensation.... 166,668 -- 166,668
Net loss.................................... -- (5,514,663) (5,514,663)
------------- ------------- --------------
Balances, July 31, 1999..................... $(1,044,132) $(15,131,360) $(16,568,796)
============= ============= ==============
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
Vicinity Corporation
Statements of Cash Flows
<TABLE>
<CAPTION>
-------------------------------------
Year Ended July 31,
-------------------------------------
1997 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................... $(6,238,095) $(2,480,616) $(5,514,663)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization......... 16,805 13,963 191,338
Amortization of stock-based
compensation......................... -- -- 166,668
Allowance for doubtful accounts....... -- -- 80,000
Changes in operating assets and
liabilities:
Accounts receivable.................. (165,389) (1,023,207) (1,746,070)
Prepaid expenses and other current
assets.............................. (265,316) 98,870 (72,986)
Accounts payable..................... 325,308 61,530 6,444
Accrued liabilities.................. 42,655 54,258 1,034,459
Deferred revenue..................... 771,197 1,591,591 2,477,890
Payable to related party............. 216,162 (52,476) (163,686)
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Net cash used in operating
activities......................... (5,296,673) (1,736,087) (3,540,606)
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment... (302,334) (105,782) (214,351)
Proceeds from sale of property and
equipment............................ 520,885 97,296 --
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Net cash provided by (used in)
investing activities............... 218,551 (8,486) (214,351)
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank note................ -- 800,000 200,000
Proceeds from factoring receivables.... -- 72,961 --
Principal payments for capital lease
obligations........................... -- -- (146,069)
Proceeds from exercise of common stock
warrant............................... -- 208,194 --
Proceeds from sale of preferred stock.. 4,975,988 -- 12,393,281
Proceeds from sale of common stock..... 1,000 15,819 104,194
Repurchase of unvested common stock.... (1,867) -- --
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Net cash provided by financing
activities......................... 4,975,121 1,096,974 12,551,406
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Net (decrease) increase in cash and cash
equivalents............................ (103,001) (647,599) 8,796,449
Cash and cash equivalents at beginning
of year................................ 1,014,544 911,543 263,944
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Cash and cash equivalents at end of
year................................... $ 911,543 $ 263,944 $ 9,060,393
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Supplemental disclosure of cash flow
information:
Cash paid during the year for
interest.............................. $ -- $ 23,520 $ 97,205
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Schedule of noncash investing and
financing activities:
Equipment purchased under capital
lease................................. $ -- $ -- $ 823,623
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Common stock repurchased with
forgiveness of notes receivable....... $ 3,612 $ -- $ --
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Accretion on redeemable preferred stock
and warrants.......................... $ 383,379 $ 517,965 $ 1,038,230
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Common stock issued for note
receivable............................ $ -- $ -- $ 95,514
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Deferred compensation related to stock
option grants......................... $ -- $ -- $ 1,210,800
<CAPTION>
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
Vicinity Corporation
Notes to Financial Statements
1. Description of Business and Summary of Significant Accounting Policies
(a) Description of Business
The Company provides a suite of Internet-based marketing infrastructure
services designed to help clients turn Web traffic into store traffic. The
Company hosts clients' store location and product information and delivers that
information to potential customers on demand via the Internet, land-line
telephones, wireless telephones and other wireless devices. The Company can
also provide information to potential customers concerning which items are
regularly stocked at given locations and what promotions are being offered by
participating merchants.
(b) Concentration of Credit Risk
Financial instruments that subject the Company to concentration of credit risk
consist primarily of cash and cash equivalents, and trade accounts receivable.
The Company places its cash and cash equivalents primarily in depository
accounts and money market accounts of recognized financial institutions. To
reduce credit risk with trade accounts receivable, the Company performs
evaluations of the credit worthiness of its customers on an ongoing basis. The
Company does not generally require collateral or other security. The Company
historically has not experienced any significant credit losses.
(c) Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of their carrying cost or fair value less
costs to sell.
(d) Revenue Recognition
The Company primarily derives its revenues from product license and hosting
fees. These revenues are recognized ratably over the life of the contract,
which typically has one year, non-refundable terms. Service and transaction
fees consist of revenue generated from project related professional services
and to a lesser degree from fees derived from advertising, sponsorship and e-
commerce transactions. These revenues are generally recognized as the services
are performed. To date, no revenues have been derived from barter transactions.
Accounts receivable consists of amounts due from customers under signed
contracts where performance on the contract has commenced. Deferred revenue
consists of customer payments received and accounts receivable recorded in
advance of recognizing revenue.
(e) Cost of Revenues
Cost of revenues include salaries and benefits of the Company's web development
and operating personnel, the cost of acquiring data and content, the leasing
and depreciation cost of the Company's computer hosting equipment and internet
connection and data center charges.
(f) Cash Equivalents
The Company considers all highly liquid investments purchased with remaining
maturities of three months or less to be cash equivalents.
(g) Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is calculated using the straight-line method over the estimated
useful lives of the equipment, generally three to five years. Leasehold
improvements are amortized over the lesser of the remaining life of the lease
or five years.
F-7
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
(h) Income Taxes
The Company accounts for income taxes using the asset and liability method. In
accordance with this method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using the enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(i) Software Development Costs
Costs related to the development of new products and enhancements to existing
products are charged to operations as incurred. Software development costs are
required to be capitalized when a product's technological feasibility has been
established by completion of a working model of the product. To date,
completion of a working model of the Company's products and general release
have substantially coincided. As a result, the Company has not capitalized any
software development costs.
(j) Advertising Expense
The cost of advertising is expensed as incurred. Such costs totaled
approximately $119,000, $1,200 and $287,000 for the years ended July 31, 1997,
1998 and 1999, respectively.
(k) Per Share Computations
Basic net loss per share is computed by dividing net loss applicable to common
stockholders by the weighted-average number of common shares outstanding for
the period. Diluted net loss per share is computed by dividing net loss
applicable to common stockholders by the weighted-average number of common and,
when dilutive, potential common equivalent shares outstanding during the
period. Common equivalent shares include the effect of redeemable convertible
preferred stock, outstanding warrants and stock options. All potential common
shares have been excluded from the computation of diluted net loss per share
for all periods presented because the effect would be antidilutive.
Diluted net loss per share does not include the effect of the following
antidilutive common equivalent shares (in thousands):
<TABLE>
<CAPTION>
-------------------
Year ended July 31,
-------------------
1997 1998 1999
----- ------ ------
<S> <C> <C> <C>
Stock options............................................... 995 2,873 2,064
Shares of common stock subject to repurchase................ -- -- 971
Convertible preferred warrants.............................. -- -- 953
Convertible preferred stock (as if converted)............... 6,357 7,733 9,278
<CAPTION>
----- ------ ------
<S> <C> <C> <C>
7,352 10,606 13,266
<CAPTION>
===== ====== ======
</TABLE>
The weighted-average exercise prices of stock options were $0.10, $0.11 and
$0.22 as of July 31, 1997, 1998 and 1999, respectively. The weighted-average
exercise price of shares of common stock subject to repurchase was $0.12 as of
July 31, 1999.
(l) Stock-Based Compensation
The Company accounts for its stock-based compensation arrangements for
employees using the intrinsic-value method pursuant to Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees. As such,
compensation expense is recorded for the Company's stock options on the date of
grant, to the extent the fair value of the underlying common stock exceeds the
exercise price for stock options or the purchase price for common stock.
Options granted to consultants and other nonemployees are considered
compensatory and are accounted for at fair value pursuant to Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation. The Company discloses the pro forma effect of using the fair
value method of accounting for all stock-based compensation arrangements, in
accordance
F-8
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
with SFAS No. 123. (See footnote 5(e)). Because the options generally vest
ratably over a four year period, the service period over which compensation is
accrued as a charge to expense is determined separately for each 25 percent
portion of the total award, in accordance with Financial Accounting Standards
Board (FASB) Interpretation No. 28 (FIN 28). The result of applying FIN 28 is
that approximately 52% of the unearned deferred compensation will be amortized
in the first year, 27% in the second year, 15% in the third year and 6% in the
fourth year following the date of grant.
(m) Segment Information
During fiscal 1999, the Company adopted the provisions of SFAS No. 131,
Disclosures About Segments of an Enterprise and Related Information. SFAS No.
131 established annual and interim reporting standards for a company's
operating segments. SFAS No. 131 requires disclosures of selected segment-
related financial information about products, major customers and geographic
areas.
(n) Comprehensive Loss
The Company has no significant components of other comprehensive loss, and
accordingly, comprehensive loss is the same as net loss for all periods
presented.
(o) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
(p) Recent Accounting Pronouncements
In March 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) 98-1, Accounting for the Cost of Computer
Software Developed or Obtained for Internal Use. SOP 98-1 is effective for
financial statements for years beginning after December 15, 1998. SOP 98-1
provides guidance over accounting for computer software developed or obtained
for internal use, including the requirement to capitalize specified costs and
amortization of such costs. The Company does not expect the adoption of SOP 98-
1 to have a material effect on its financial statements.
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
establishes accounting and reporting standards for derivative instruments
(including derivative instruments embedded in other contracts) and for hedging
activities. SFAS No. 133, as amended by SFAS No. 137, is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. To date, the
Company has not entered into any derivative financial instruments or hedging
activities.
2. Balance Sheet Components
(a) Cash and Cash Equivalents
Cash and cash equivalents consisted of the following:
<TABLE>
<CAPTION>
-------------------
July 31,
-------------------
1998 1999
-------- ----------
<S> <C> <C>
Cash........................................................ $261,221 $ 121,444
Money market funds.......................................... 2,723 8,938,949
<CAPTION>
-------- ----------
<S> <C> <C>
$263,944 $9,060,393
<CAPTION>
======== ==========
</TABLE>
F-9
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
(b) Property and Equipment
Property and equipment consisted of the following as of July 31:
<TABLE>
<CAPTION>
----------------------
July 31,
----------------------
1998 1999
---------- ----------
<S> <C> <C>
Furniture and fixtures.................................. $ -- $ 14,749
Computer equipment...................................... 8,822 144,418
Purchased software...................................... 68,625 103,506
Equipment under capital leases.......................... -- 823,623
Leasehold improvements.................................. -- 29,125
<CAPTION>
---------- ----------
<S> <C> <C>
77,447 1,115,421
Less accumulated depreciation and amortization.......... (11,594) (202,932)
<CAPTION>
---------- ----------
<S> <C> <C>
$ 65,853 $ 912,489
<CAPTION>
========== ==========
</TABLE>
During fiscal 1999, the Company entered into capital lease arrangements for
certain equipment. Accumulated depreciation on the leased equipment totaled
approximately $151,000 as of July 31, 1999. Amortization of assets under
capital leases is included in depreciation and amortization expense.
(c) Accrued Liabilities
A summary of accrued liabilities as follows:
<TABLE>
<CAPTION>
---------------------
July 31,
---------------------
1998 1999
---------- ----------
<S> <C> <C>
Accrued compensation..................................... $ 176,701 $ 433,295
Accrued legal settlement................................. -- 440,500
Accrued expenses......................................... 34,074 371,439
<CAPTION>
---------- ----------
<S> <C> <C>
$ 210,775 $1,245,234
<CAPTION>
========== ==========
</TABLE>
In fiscal 1999, the Company entered into a settlement agreement and agreed to
pay $440,500 for a patent license with respect to an intellectual property
rights claim.
3. Line of Credit
In fiscal 1998, the Company entered into a line of credit agreement with a
credit limit of $1,000,000 and a variable interest rate that was approximately
8.5% as of July 31, 1999. The debt was guaranteed by CMGI, Inc., an affiliate
of the Company's largest stockholder, CMGI@Ventures, and was secured by the
assets of the Company. The Company had $800,000 and $1,000,000 outstanding
under the line of credit agreement as of July 31, 1998 and 1999, respectively.
In August 1999, the Company paid the outstanding balance of $1,000,000 and is
currently in the process of negotiating a new line of credit with a major bank.
F-10
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
4. Redeemable Convertible Preferred Stock
A summary of redeemable convertible preferred stock as of July 31, 1998 and
1999 follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------
Shares outstanding Liquidation Liquidation Redemption Redemption
-------------------- preference premium per price per premium
1998 1999 per share share share per share
--------- ---------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Series A.... 1,852,000 1,852,000 $0.270 $0.019 $0.270 $0.019
Series B.... 1,981,250 1,981,250 0.800 0.056 0.800 0.056
Series C.... 3,304,000 3,304,000 1.510 0.110 1.510 0.110
Series D.... -- 2,300,613 4.350 0.152 2.173 0.152
Series E.... -- 59,524 4.200 0.147 2.100 0.147
Series F.... -- 1,720,000 7.500 -- 5.000 0.350
<CAPTION>
--------- ----------
<S> <C> <C> <C> <C> <C> <C>
7,137,250 11,217,387
<CAPTION>
========= ==========
</TABLE>
In the event of any liquidation event, the holders of the Series A, B, C, D and
E preferred stock are entitled to receive the liquidation preference per share
plus the liquidation premium per share per annum from the date of issuance of
such shares, plus all declared but unpaid dividends. Shares of Series F
preferred stock shall have a liquidation preference of $7.50 per share, plus
all declared but unpaid dividends, in the event of a dissolution or winding up,
either voluntary or involuntary, of the Company. Upon the sale of the Company,
shares of Series F preferred stock have a liquidation preference of $5.00 per
share, plus all declared but unpaid dividends.
The holders of the redeemable convertible preferred stock may request
redemption of their shares plus the redemption premium per share per annum from
the date of issuance of such shares, plus all declared but unpaid dividends.
The redemption may be requested on or after January 31, 2003 and must be paid
in cash by the Company within two years and three months from the date that a
written request for redemption is received. The redemption premium is charged
to the statement of operations as accretion on redeemable convertible preferred
stock. For the years ended July 31, 1997, 1998 and 1999, the amount of
accretion recorded by the Company was $383,379, $517,965 and $945,820,
respectively. The Series D preferred stock was issued at a price per share less
than the redemption price per share. This difference which amounted to
approximately $1.2 million is being charged to the statement of operations as a
component of accretion on redeemable convertible preferred stock through
January 31, 2003.
A summary of the liquidation and redemption amounts as of July 31, 1998 and
1999 follows:
<TABLE>
<CAPTION>
------------------------------------------------
Liquidation Amount Redemption Amount
------------------------ -----------------------
1998 1999 1998 1999
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Series A..................... $ 576,880 $ 614,185 $ 576,880 $ 614,185
Series B..................... 1,810,900 1,923,033 1,810,900 1,923,033
Series C..................... 5,583,798 5,952,838 5,583,798 5,952,838
Series D..................... -- 10,423,520 -- 5,415,853
Series E..................... -- 253,212 -- 128,212
Series F..................... -- 12,907,556 -- 8,607,556
<CAPTION>
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
$ 7,971,578 $ 32,074,344 $ 7,971,578 $22,641,677
<CAPTION>
=========== ============ =========== ===========
</TABLE>
Each share of Series A, C, D, E and F preferred stock is convertible into 1.0
share of common stock. Each share of Series B preferred stock is convertible
into 1.3 shares of common stock. Upon completion of an initial public offering
(IPO) all shares are automatically converted to common stock and the holders of
such shares will not be paid the redemption premium. The redemption premium
accrued through that date will be credited to additional paid in capital.
Holders of Series A, B, C, D, E and F preferred stock vote equally with holders
of common stock on an as-if-converted basis.
No dividends have been declared or paid on the preferred stock or common stock
since the Company's inception.
F-11
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
5. Stockholder's Deficit
(a) Warrants
In connection with the Series D preferred stock issuance, the Company issued
warrants to a venture capital firm to purchase 952,381 shares of Series E
preferred stock with an exercise price of $2.10 per share. The warrants are
exercisable at any time, but in no case later than the earlier of either
December 9, 1999 or the closing of a firm commitment underwritten IPO, and were
valued at approximately $551,000 using the Black-Scholes option pricing model
with the following assumptions: a risk-free interest rate of approximately
5.6%; a contractual life of one year; no dividends; and an expected volatility
of 65%. The value of these warrants was recorded as a reduction in the value of
the Series D preferred stock. This $551,000 warrant value is being charged to
the statement of operations as a component of accretion on redeemable
convertible preferred stock through January 31, 2003. For the year ended July
31, 1999, $92,410 of accretion was recorded by the Company.
In addition, in June and July 1999, the Company entered into agreements with
two separate business partners whereby the Company agreed to issue warrants for
the purchase of common stock contingent upon the attainment of certain
performance milestones. The first agreement, signed in June 1999, provides for
the issuance of warrants exercisable for up to 50,000 shares of common stock at
an exercise price of $0.50 per share as certain performance milestones are
achieved, and expires in June 2002. Upon issuance of the warrants, the
difference between the fair value and the exercise price at the date of
achievement of the performance milestone will be recorded as an expense.
The second agreement, signed in July 1999, provides for the issuance of
warrants exercisable for up to 275,000 shares of common stock, contingent upon
the attainment of certain performance milestones and expires in July 2002. The
exercise price for these warrants shall be determined as of the date when a
specific milestone is achieved and shall be equal to the price per share
received by the Company in the most recent private equity financing round of
the Company or, following an IPO, the average trading price of the Company's
common stock over the five trading days immediately prior to the date of
issuance of these warrants. Upon issuance of the warrants, any difference
between the fair value and the exercise price at the date of achievement of the
performance milestone will be recorded as an expense.
At July 31, 1999, no performance milestones under either agreement had been met
or determined to be probable and, accordingly, no warrants have been issued or
related expense recorded.
(b) Common Stock
The Company has reserved a total of 11,813,373 shares of common stock for the
conversion of preferred stock.
The Company issues stock options which may be exercised by note or by cash to
purchase common stock at any time subsequent to issuance. Such shares of common
stock may be subject to vesting. The Company has the right to repurchase all
unvested shares at the original exercise price in the event of employee
termination. The number of shares subject to the repurchase right decreases as
the shares vest under the original option terms, generally four years. As of
July 31, 1999, there were 970,995 shares subject to repurchase at prices
ranging from $0.10 to $0.50, with a weighted-average repurchase price of $0.12
per share.
(c) 1995 Stock Option Plan
In October 1995, the Company's Board of Directors approved the 1995 Stock
Option Plan (1995 Plan) and reserved 1,000,000 shares of common stock for
issuance under the Plan. In fiscal 1996, an additional 1,000,000 shares of
common stock were approved by the Board of Directors and reserved for issuance
under the 1995 Plan. During fiscal 1997, the Board of Directors elected to
reduce the number of shares of common stock reserved under the 1995 Plan and
1,353,400, 296,448 and 28,281 shares were retired from the 1995 Plan in fiscal
1997, 1998 and 1999, respectively. The 1995 Plan provides for stock options to
be granted to employees, consultants, officers, and directors. Options may be
granted at an exercise price not less than 100% of the estimated fair market
value, as determined by the Company's Board of Directors, for incentive stock
options, and 85% of the estimated fair market value at the date of grant for
nonqualified stock options. All options are granted at the discretion of the
Company's Board of Directors and have a term not greater than ten years from
the date of grant. Options issued generally vest ratably over four years (25%
one year after the grant date and at a rate of 1/48 per month thereafter).
F-12
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
(d) 1996 Incentive Stock Option Plan
In November 1996, the Company's Board of Directors approved the 1996 Incentive
Stock Option Plan (1996 Plan), which is effective for a term of ten years. The
Board of Directors reserved 809,132 shares of common stock for issuance under
the 1996 Plan at that time. During fiscal 1998 and 1999, additional shares of
common stock of 2,482,185 and 600,000, respectively, were approved by the Board
of Directors and reserved for issuance under the 1996 Plan. Options may be
granted at an exercise price not less than 100% of the estimated fair market
value, as determined by the Company's Board of Directors, for incentive stock
options, and 85% of the estimated fair market value at the date of grant for
nonqualified stock options. All options are granted at the discretion of the
Company's Board of Directors and have a term not greater than ten years from
the date of grant. Options issued generally vest ratably over four years (25%
one year after the grant date and at a rate of 1/48 per month thereafter).
(e) Accounting for Stock-Based Compensation
The Company uses the intrinsic-value method prescribed in APB No. 25 in
accounting for its stock-based compensation arrangements with employees. Stock-
based compensation expense is recognized for employee stock option grants in
those instances in which the fair value of the underlying common stock exceeds
the exercise price of the stock options at the date of grant. The Company
recorded deferred stock-based compensation expense of $1,210,800 during the
year ended July 31, 1999. Because the option grants generally vest ratably over
a four-year period, the service period over which compensation is accrued as a
charge to expense is determined separately for each 25 percent portion of the
total award, in accordance with Financial Accounting Standards Board (FASB)
Interpretation No. 28 (FIN 28). The result of applying FIN 28 is that
approximately 52% of the unearned deferred compensation will be amortized in
the first year, 27% in the second year, 15% in the third year and 6% in the
fourth year following the date of the grant. Approximately $167,000 of stock-
based compensation expense was recognized in the year ended July 31, 1999.
A summary of all stock option activity follows:
<TABLE>
<CAPTION>
----------------------------------
Options Weighted-
available average
for future Options exercise
grant outstanding price
---------- ----------- ---------
<S> <C> <C> <C>
Balances as of July 31, 1996................ 1,952,400 -- $ --
Authorized................................ 809,132 -- --
Shares retired............................ (1,353,400) -- --
Options granted........................... (1,810,043) 1,810,043 0.10
Options exercised......................... -- (10,000) 0.10
Options canceled.......................... 805,543 (805,543) 0.10
<CAPTION>
---------- ----------- ---------
<S> <C> <C> <C>
Balances as of July 31, 1997................ 403,632 994,500 0.10
Authorized................................ 2,482,185 -- --
Shares retired............................ (296,448) -- --
Options granted........................... (2,530,637) 2,530,637 0.11
Options exercised......................... -- (136,135) 0.10
Options canceled.......................... 516,365 (516,365) 0.11
<CAPTION>
---------- ----------- ---------
<S> <C> <C> <C>
Balances as of July 31, 1998................ 575,097 2,872,637 0.11
Authorized................................ 600,000 -- --
Shares retired............................ (28,281) -- --
Options granted at fair value............. (349,000) 349,000 0.15
Options granted below fair value.......... (822,500) 822,500 0.42
Options exercised......................... -- (1,527,586) 0.13
Options canceled.......................... 452,551 (452,551) 0.10
<CAPTION>
---------- ----------- ---------
<S> <C> <C> <C>
Balances as of July 31, 1999................ 427,867 2,064,000 $ 0.22
<CAPTION>
========== =========== =========
</TABLE>
There were 692,470 and 547,042 options exercisable as of July 31, 1998 and
1999, respectively.
F-13
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
The following table summarizes information about stock options under the plans
as of July 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Options outstanding Options exercisable
- -------------------------------------------------------- ------------------------
Weighted-
average Weighted- Weighted-
Range of Number of remaining life average Number of average
xerciseeprices shares (in years) exercise price shares exercise price
- --------------- --------- -------------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C>
$0.10 1,084,500 8.0 $0.10 539,750 $0.09
0.15 424,000 9.1 0.15 7,292 0.15
0.20 76,500 9.6 0.20 -- --
0.50 390,000 9.7 0.50 -- --
0.75 to 1.25 89,000 9.9 0.77 -- --
<CAPTION>
- --------------- --------- -------------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C>
$0.10 to 1.25 2,064,000 8.7 $0.22 547,042 $0.10
<CAPTION>
=============== ========= ============== ============== ========= ==============
</TABLE>
The weighted-average fair value of employee stock options granted at fair value
during fiscal 1997, 1998 and 1999 was $0.02, $0.02, and $0.03, respectively.
The weighted average fair value of employee stock options granted below fair
value during fiscal 1999 was $1.51. The fair value of employee options granted
was estimated on the date of grant using the Black-Scholes option pricing
model. The following weighted-average assumptions were used in these
calculations: a risk-free interest rate of 6.6%, 5.6% and 5.2% for the years
ended July 31, 1997, 1998 and 1999, respectively; an expected life of six years
for the years ended July 31, 1997 and 1998 and four years for the year ended
July 31, 1999; dividend yield of 0%; and volatility of 0%.
Had compensation cost for the Company's stock-based compensation plans been
determined consistent with the fair value approach set forth in SFAS No. 123,
the Company's net losses for the years ended July 31, 1997, 1998 and 1999 would
have been as follows:
<TABLE>
<CAPTION>
-------------------------------------
1997 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
Net loss applicable to common
stockholders - as reported............ $(6,621,474) $(2,998,581) $(6,552,893)
Pro forma stock-based compensation
expense............................... (4,632) (16,735) (37,045)
<CAPTION>
----------- ----------- -----------
<S> <C> <C> <C>
Net loss applicable to common
stockholders - pro forma.............. $(6,626,106) $(3,015,316) $(6,589,938)
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Basic and diluted net loss per share:
As reported.......................... $ (1.61) $ (0.86) $ (1.61)
<CAPTION>
=========== =========== ===========
<S> <C> <C> <C>
Pro forma............................ $ (1.62) $ (0.86) $ (1.62)
<CAPTION>
=========== =========== ===========
</TABLE>
6. Income Taxes
The Company incurred no income tax expense for the years ended July 31, 1997,
1998 and 1999. The income tax expense differed from the amounts computed by
applying the U.S. federal income tax rate of 34% to pretax income as a result
of the following:
<TABLE>
<CAPTION>
-----------------------------------
1997 1998 1999
----------- --------- -----------
<S> <C> <C> <C>
Computed expected tax (benefit)........... $(2,121,228) $(839,729) $(1,794,799)
Current year net operating losses and
temporary differences for which no tax
benefit is recognized.................... 2,113,848 833,315 1,782,440
Other..................................... 7,380 6,414 12,359
<CAPTION>
----------- --------- -----------
<S> <C> <C> <C>
$ -- $ -- $ --
<CAPTION>
=========== ========= ===========
</TABLE>
F-14
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
The effects of temporary differences that give rise to significant portions of
deferred tax assets as of July 31 are as follows:
<TABLE>
<CAPTION>
------------------------
1998 1999
----------- -----------
<S> <C> <C>
Deferred tax assets:
Accruals and reserves............................... $ 1,171,151 $ 2,428,136
Net operating loss carryforwards and credits........ 3,470,201 3,853,027
<CAPTION>
----------- -----------
<S> <C> <C>
Total gross deferred tax assets before valuation
allowance......................................... 4,641,352 6,281,163
Valuation allowance.................................. (4,641,352) (6,281,163)
<CAPTION>
----------- -----------
<S> <C> <C>
Net deferred tax assets............................ $ -- $ --
<CAPTION>
=========== ===========
</TABLE>
As of July 31, 1999, the Company has available net operating losses for federal
and state income tax purposes of $9,530,784 and $6,929,414, respectively. The
federal net operating loss carryforward will expire, if not utilized, in the
year 2011. The California net operating loss carryforwards will expire, if not
utilized, in the year 2004. The Company has research credit carryforwards for
federal income tax purposes of $181,689. The Company has a valuation allowance
for the full amount of the deferred tax assets as of July 31, 1998 and 1999, as
management does not believe it is more likely than not that the value of the
assets is recoverable.
Federal and state tax laws impose substantial restrictions on the utilization
of net operating loss carryforwards in the event of an "ownership change" as
defined in Section 382 of the Internal Revenue Code. The Company has not yet
determined whether an ownership change occurred due to significant stock
transactions in each of the reporting years disclosed. If an ownership change
has occurred, utilization of the net operating loss carryforwards could be
significantly deferred.
7. Commitments
(a) Leases
The Company leases equipment and its facilities under noncancelable operating
and capital leases with expiration dates through 2003. Future minimum lease
payments under the Company's noncancelable operating and capital leases as of
July 31, 1999 are as follows:
<TABLE>
<CAPTION>
------------------------
Year Ending Capital Operating
July 31, leases leases
- ----------- ----------- -----------
<S> <C> <C>
2000.................................................. $ 396,902 1,006,007
2001.................................................. 308,960 156,113
2002.................................................. 13,389 6,590
2003.................................................. -- 3,346
<CAPTION>
----------- -----------
<S> <C> <C>
Total minimum lease payments......................... 719,251 $ 1,172,056
<CAPTION>
===========
<S> <C> <C>
Less amount representing interest..................... (41,697)
<CAPTION>
-----------
<S> <C> <C>
Present value of minimum lease payments............... 677,554
Less current portion.................................. (379,545)
<CAPTION>
-----------
<S> <C> <C>
$ 298,009
<CAPTION>
===========
</TABLE>
Rental expense amounted to approximately $841,000, $771,000 and $1,142,000 for
the years ended July 31, 1997, 1998 and 1999, respectively. Approximately
$142,000 of rental expense was paid to Navisite, a subsidiary of CMGI, during
the years ended July 31, 1997, 1998 and 1999.
F-15
<PAGE>
Vicinity Corporation
Notes to Financial Statements--(Continued)
(b) License Fees
The Company has entered into agreements with certain content providers. As of
July 31, 1999, the terms of such agreements include the following future
minimum license fees.
<TABLE>
<CAPTION>
Year Ending
July 31,
- -----------
<S> <C>
2000................................................................. $ 575,146
2001................................................................. 283,956
2002................................................................. 141,667
2003................................................................. 75,000
2004................................................................. 6,575
<CAPTION>
----------
<S> <C>
$1,082,344
<CAPTION>
==========
</TABLE>
8. Segment Information
During fiscal 1999, the Company adopted the provisions of SFAS No. 131,
Disclosures About Segments of an Enterprise and Related Information. SFAS No.
131 requires disclosures of selected segment-related financial information
about products, major customers and geographic areas.
The Company's chief operating decision maker (CODM) is considered to be the
Company's CEO. The CODM evaluates performance, makes operating decisions and
allocates resources based on financial data consistent with the presentation in
the accompanying financial statements. Therefore, the Company operates in a
single segment for purposes of disclosure under SFAS No. 131.
The Company's revenues have been earned from customers in the United States
with the exception of approximately $8,000, $2,000, and $50,000 in revenues in
fiscal 1997, 1998, and 1999, respectively, which were earned from customers in
Europe. During fiscal 1997 and 1998, the Company had sales to one customer that
accounted for 48% and 26%, respectively, of the Company's revenues. During
fiscal 1999, the Company had sales to one customer that accounted for 11% of
revenues.
All of the Company's long-lived assets are located in the United States.
9. Related Party Transaction
As of July 31, 1998, the Company had a noninterest bearing payable to Navisite
Internet Services, a subsidiary of CMGI, for $163,686, relating to the lease of
computer equipment that was paid during fiscal 1999.
In addition to rental expense paid to Navisite, approximately $105,000, $8,000
and $49,000 was paid for data center services during the years ended July 31,
1997, 1998 and 1999.
10. Retirement Plan
Effective March 1997, the Company established a qualified 401(k) plan (the
Plan) available to all employees who meet the Plan's eligibility requirements.
Participants may elect to contribute a percentage of their compensation to the
Plan up to a statutory maximum amount. The Company may make matching
contributions to the Plan on a discretionary basis. The Company did not make
any contributions to the Plan in fiscal 1997, 1998 or 1999.
11. Subsequent Events
In August 1999, the Company signed a $4,000,000 equipment leasing agreement
with a finance company. The facility is cancellable by either party upon thirty
days notice. Equipment leased under this facility will have an initial term of
24 months from the date of equipment acceptance.
In August 1999, the Company issued an additional 350,000 shares of Series F
preferred stock for aggregate proceeds of $1,750,000.
In October 1999, the Board of Directors authorized the filing of a registration
statement with the Securities and Exchange Commission that would permit the
Company to sell shares of the Company's stock in connection with a proposed
initial public offering.
In October 1999, the Board of Directors authorized a reincorporation of the
Company in the State of Delaware.
F-16
<PAGE>
[GRAPHIC--Vicinity logo in the upper left-hand corner. Text in the upper right-
hand corner reads "What Customers Have to Say About Vicinity." The body of the
graphic displays four client testimonials.]
<PAGE>
[LOGO]
<PAGE>
Part II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than the
underwriting discount, payable by the Registrant in connection with the sale of
the Common Stock being registered. All amounts are estimates except the SEC
registration fee, the NASD filing fees and the Nasdaq National Market listing
fee.
<TABLE>
<CAPTION>
Amount to
Be Paid
---------
<S> <C>
SEC registration fee.............................................. $15,985
NASD filing fee................................................... 6,250
Nasdaq National Market listing fee................................ *
Legal fees and expenses........................................... *
Accounting fees and expenses...................................... *
Printing and engraving............................................ *
Blue sky fees and expenses (including legal fees)................. *
Transfer agent fees............................................... *
Miscellaneous..................................................... *
---------
Total........................................................... *
=========
</TABLE>
-------------------
* To be provided by amendment.
Item 14. Indemnification of Directors and Officers
Our Certificate of Incorporation in effect as of the date hereof, and our
Restated Certificate of Incorporation to be in effect upon the closing of this
offering (collectively, the "Certificate") provides that, except to the extent
prohibited by the Delaware General Corporation Law, as amended (the "DGCL"),
the Registrant's directors shall not be personally liable to the Registrant or
its stockholders for monetary damages for any breach of fiduciary duty as
directors of the Registrant. Under the DGCL, the directors have a fiduciary
duty to the Registrant which is not eliminated by this provision of the
Certificate and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of nonmonetary relief will remain available. In
addition, each director will continue to be subject to liability under the DGCL
for breach of the director's duty of loyalty to the Registrant, for acts or
omissions which are found by a court of competent jurisdiction to be not in
good faith or involving intentional misconduct, for knowing violations of law,
for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
prohibited by the DGCL. This provision also does not affect the directors'
responsibilities under any other laws, such as the Federal securities laws. The
Registrant may obtain for liability insurance for its officers and directors.
Section 145 of the DGCL empowers a corporation to indemnify its directors and
officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers, provided that this
provision shall not eliminate or limit the liability of a director: (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) arising under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit. The DGCL provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's bylaws, any agreement, a vote of stockholders or otherwise. The
Certificate eliminates the
II-1
<PAGE>
personal liability of directors to the fullest extent permitted by Section
102(b)(7) of the DGCL and provides that the Registrant may fully indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (whether civil,
criminal, administrative or investigative) by reason of the fact that such
person is or was a director or officer of the Registrant, or is or was serving
at the request of the Registrant as a director or officer of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding.
Item 15. Recent Sales of Unregistered Securities
(a) Issuances of Shares of Preferred Stock and warrants exercisable for
Preferred Stock
On December 12, 1996, the Registrant issued and sold 3,304,000 shares of its
Series C Preferred Stock to 21st Century Internet Fund, L.P., CMG@Ventures I,
L.P. and EnCompass Group, Inc.
On December 9, 1998, the Registrant issued and sold 2,300,613 shares of its
Series D Preferred Stock and warrants exercisable for up to 952,381 shares of
Series E Preferred Stock at an exercise price of $2.10 per share to Oak
Investment Partners VIII, L.P.
On March 19, 1999, the Registrant issued and sold 59,524 shares of its Series E
Preferred Stock to two individual accredited investors.
Between July 12, 1999 and August 31, 1999, the Registrant issued and sold
2,070,000 shares of its Series F Preferred Stock to EnCompass Group, Inc., 21st
Century Internet Fund, L.P. and ten other individual accredited institutional
investors.
(b) Issuances of Shares of Common Stock
On February 1, 1998, the Registrant issued 882,500 shares of its Common Stock
in consideration of Settlement and Release Agreements entered into on that day
between the Registrant and each of three former employees.
On July 27, 1998, the Registrant issued and sold 275,512 shares of its Common
Stock pursuant to the early exercise of outstanding warrants by CMG@Ventures I,
L.P.
Between July 8, 1997 and November 1, 1999, the Registrant issued and sold
2,485,625 shares of its Common Stock to 40 individuals upon exercise of
outstanding employee incentive stock options.
(c) Issuances of Options to Employees, Directors and Consultants
Between November 25, 1996 and November 1, 1999, the Registrant issued options
exercisable for 3,916,917 shares (net of cancellations) of its Common Stock
pursuant to Registrant's 1996 Incentive Stock Option Plan to 138 individuals.
Of this amount, options for 2,311,667 shares of Common Stock had been exercised
as of November 1, 1999.
The sale of the above securities were deemed to be exempt from registration
under the Securities Act in reliance on Section 4(2) of the Securities Act, or
Regulation D promulgated thereunder, or, with respect to compensatory issuances
to employees, directors and consultants, Rule 701 promulgated under Section
3(b) of the Securities Act as transactions by an issuer not involving a public
offering or transactions pursuant to compensatory benefit plans and contracts
relating to compensation as
II-2
<PAGE>
provided under such Rule 701. The recipients of securities in each such
transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the instruments
representing such securities issued in such transactions.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1* Certificate of Incorporation.
3.2* Form of Restated Certificate of Incorporation to be in effect upon the
closing of this offering.
3.3* Bylaws.
3.4* Form of Restated Bylaws to be in effect upon the closing of this
offering.
4.1* Specimen Common Stock certificate.
5.1* Opinion of Latham & Watkins.
10.1 1995 Stock Option Plan.
10.2 1996 Incentive Stock Option Plan.
10.3* 2000 Equity Participation Plan.
10.4* 2000 Employee Stock Purchase Plan
10.5 Amended and Restated Registration and Information Rights Agreement,
dated as of December 9, 1998, by and among Vicinity Corporation, Rama
Aysola, Eddie Babcock, Timothy Bacci, James DiSanto and the investors
named on Schedule I thereto.
10.6 Amended and Restated Shareholders Agreement, dated as of December 9,
1998, by and among Vicinity Corporation, Rama Aysola, Eddie Babcock,
Timothy Bacci, James DiSanto and the investors named in Schedule I
thereto.
10.7 Voting Agreement, dated as of December 12, 1996, by and among Vicinity
Corporation, Rama Aysola, Eddie Babcock, Timothy Bacci, James DiSanto
and the investors named in Schedule I thereto.
10.8 Employment Agreement, dated June 17, 1998, by and between Vicinity
Corporation and Emerick M. Woods.
10.9 Loan Agreement, dated July 14, 1999, by and between Vicinity
Corporation and Emerick M. Woods.
10.10 Form of 1996 Incentive Stock Option Plan Stock Option Agreement.
10.11 Amendment to Incentive Stock Option Plan Agreement, dated August 19,
1998, by and between Vicinity Corporation and Scott Young.
10.12 Amendment to Incentive Stock Option Plan Agreement, dated August 19,
1998, by and between Vicinity Corporation and David Seltzer.
10.13 Amendment to Incentive Stock Option Plan Agreement, dated August 19,
1998, by and between Vicinity Corporation and Mary Gavin.
10.14+ Management Support Agreement, dated June 11, 1999, by and between
Vicinity Corporation and Aperto Multimedia GMBH.
10.15 Management Support Agreement dated July 27, 1999, by and between
Vicinity Corporation and Invision AG.
10.16* Equipment Lease Agreement, dated July 27, 1999, by and between
Vicinity Corporation and Compaq.
10.17* Equipment Lease Agreement, dated April 24, 1996, by and between
Vicinity Corporation and Pacific Atlantic.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.18+ Joint Marketing Agreement, dated June 23, 1999, by and between Vicinity
Corporation and Prio, Inc.
10.19+ Service and Distribution Agreement, dated June 14, 1999, by and between
Vicinity Corporation and Inktomi Corporation.
10.20 NaviSite Siteharbor Co-Location Services Agreement, dated June 30,
1998, by and between Vicinity Corporation and NaviSite Internet
Services Corporation.
10.21 Sublease Agreement, dated October 1, 1996, by and between Vicinity
Corporation and Attachmate Corporation.
10.22 First Sublease Agreement Amendment, dated August 6, 1997, by and
between Vicinity Corporation and Attachmate Corporation.
10.23 Second Sublease Agreement Amendment, dated September 22, 1998, by and
between Vicinity Corporation and Attachmate Corporation.
10.24 Sub-Sublease Agreement, dated August 1, 1999, by and between Vicinity
Corporation and E*Trade Group, Inc.
10.25 Lease Agreement, dated August 10, 1999, by and between Vicinity
Corporation and Gordon E. and Blanche M. Bagley.
23.1 Consent of KPMG LLP.
23.2* Consent of Latham & Watkins (included in Exhibit 5.1).
24.1 Powers of Attorney (See Signature Page on Page S-1).
27.1 Financial Data Schedule.
</TABLE>
- -------------------
+ Registrant has requested confidential treatment pursuant to Rule 406 for a
portion of the referenced exhibit and has separately filed such exhibit with
the Commission.
* To be supplied by amendment.
(b) Financial Statement Schedules.
Independent Auditors' Report on Financial Statement Schedule
Schedule II--Valuation and Qualifying Accounts
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriter at
the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424 (b)(1) or
(4), or 497(h) under the Securities Act of 1933, shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and this offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Palo Alto, State of
California, on this 3rd day of November, 1999.
Vicinity Corporation
By: /s/ Emerick M. Woods
--------------------------------------
Name: Emerick M. Woods
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Emerick M.
Woods, David Seltzer and Scott A. Shuda, and each of them, as attorney-in-fact
with the power of substitution, for him or her in any and all capacities, to
sign any amendment to this registration statement (including post-effective
amendments and registration statements filed pursuant to Rule 462 and
otherwise), and to file the same, with exhibits thereto and other documents in
connection therewith, with the SEC, granting to said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as her or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact or each of them
individually, or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Emerick M. Woods Chief Executive Officer November 3, 1999
______________________________________ and Director (Principal
Emerick M. Woods Executive Officer)
/s/ David Seltzer Chief Financial Officer November 3, 1999
______________________________________ (Principal Financial and
David Seltzer Accounting Officer)
Chairman of the Board of November , 1999
______________________________________ Directors
Herbert M. Dwight, Jr.
/s/ Jonathan Callaghan Director November 3, 1999
______________________________________
Jonathan Callaghan
/s/ James J. Geddes, Jr. Director November 3, 1999
______________________________________
James J. Geddes, Jr.
______________________________________ Director November , 1999
Fred Gibbons
/s/ Peter Mills Director November 3, 1999
______________________________________
Peter Mills
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director November , 1999
______________________________________
Norman Nie
/s/ Michael Sears Director November 3, 1999
______________________________________
Michael Sears
/s/ Peter Ziebelman Director November 3, 1999
______________________________________
Peter Ziebelman
</TABLE>
S-2
<PAGE>
Independent Auditors' Report on Financial Statement Schedule
The Board of Directors
Vicinity Corporation:
Under the date of September 22, 1999 except as to Note 11 for which the date is
November 2, 1999, we reported on the balance sheets of Vicinity Corporation as
of July 31, 1998 and 1999, and the related statements of operations, redeemable
convertible preferred stock and stockholders' deficit, and cash flows for each
of the years in the three-year period ended July 31, 1999, which are included
in the registration statement. In connection with our audits of the
aforementioned financial statements, we also audited the accompanying financial
statement schedule. The financial statement schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion on this
financial statement schedule based on our audit.
In our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
KPMG LLP
Mountain View, California
September 22, 1999
<PAGE>
Vicinity Corporation
Schedule II--Valuation and Qualifying Accounts
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
Balance Addition
at Charged Balance
Beginning to at End of
Description of Period Expense Deduction Period
- ----------- --------- -------- --------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Year ended July 31, 1997:
Allowance for doubtful accounts......... $ -- $ -- $ -- $ --
======= ======= ======= =======
Year ended July 31, 1998:
Allowance for doubtful accounts......... $ -- $ -- $ -- $ --
======= ======= ======= =======
Year ended July 31, 1999
Allowance for doubtful accounts......... $ -- $ 80 $ -- $ 80
======= ======= ======= =======
</TABLE>
<PAGE>
Exhibits
<TABLE>
<CAPTION>
Number Description of Document
------ -----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1* Certificate of Incorporation.
3.2* Form of Restated Certificate of Incorporation to be in effect upon the
closing of this offering.
3.3* Bylaws.
3.4* Form of Restated Bylaws to be in effect upon the closing of this
offering.
4.1* Specimen Common Stock certificate.
5.1* Opinion of Latham & Watkins.
10.1 1995 Stock Option Plan.
10.2 1996 Incentive Stock Option Plan.
10.3* 2000 Equity Participation Plan.
10.4* 2000 Employee Stock Purchase Plan
10.5 Amended and Restated Registration and Information Rights Agreement,
dated as of December 9, 1998, by and among Vicinity Corporation, Rama
Aysola, Eddie Babcock, Timothy Bacci, James DiSanto and the investors
named on Schedule I thereto.
10.6 Amended and Restated Shareholders Agreement, dated as of December 9,
1998, by and among Vicinity Corporation, Rama Aysola, Eddie Babcock,
Timothy Bacci, James DiSanto and the investors named in Schedule I
thereto.
10.7 Voting Agreement, dated as of December 12, 1996, by and among Vicinity
Corporation, Rama Aysola, Eddie Babcock, Timothy Bacci, James DiSanto
and the investors named in Schedule I thereto.
10.8 Employment Agreement, dated June 17, 1998, by and between Vicinity
Corporation and Emerick M. Woods.
10.9 Loan Agreement, dated July 14, 1999, by and between Vicinity
Corporation and Emerick M. Woods.
10.10 Form of 1996 Incentive Stock Option Plan Stock Option Agreement.
10.11 Amendment to Incentive Stock Option Plan Agreement, dated August 19,
1998, by and between Vicinity Corporation and Scott Young.
10.12 Amendment to Incentive Stock Option Plan Agreement, dated August 19,
1998, by and between Vicinity Corporation and David Seltzer.
10.13 Amendment to Incentive Stock Option Plan Agreement, dated August 19,
1998, by and between Vicinity Corporation and Mary Gavin.
10.14+ Management Support Agreement, dated June 11, 1999, by and between
Vicinity Corporation and Aperto Multimedia GMBH.
10.15 Management Support Agreement dated July 27, 1999, by and between
Vicinity Corporation and Invision AG.
10.16* Equipment Lease Agreement, dated July 27, 1999, by and between Vicinity
Corporation and Compaq.
10.17* Equipment Lease Agreement, dated April 24, 1996, by and between
Vicinity Corporation and Pacific Atlantic.
10.18+ Joint Marketing Agreement, dated June 23, 1999, by and between Vicinity
Corporation and Prio, Inc.
10.19+ Service and Distribution Agreement, dated June 14, 1999, by and between
Vicinity Corporation and Inktomi Corporation.
10.20 NaviSite Siteharbor Co-Location Services Agreement, dated June 30,
1998, by and between Vicinity Corporation and NaviSite Internet
Services Corporation.
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.21 Sublease Agreement, dated October 1, 1996, by and between Vicinity
Corporation and Attachmate Corporation.
10.22 First Sublease Agreement Amendment, dated August 6, 1997, by and between
Vicinity Corporation and Attachmate Corporation.
10.23 Second Sublease Agreement Amendment, dated September 22, 1998, by and
between Vicinity Corporation and Attachmate Corporation.
10.24 Sub-Sublease Agreement, dated August 1, 1999, by and between Vicinity
Corporation and E*Trade Group, Inc.
10.25 Lease Agreement, dated August 10, 1999, by and between Vicinity
Corporation and Gordon E. and Blanche M. Bagley.
23.1 Consent of KPMG LLP.
23.2* Consent of Latham & Watkins (included in Exhibit 5.1).
24.1 Powers of Attorney (See Signature Page on Page S-1).
27.1 Financial Data Schedule.
</TABLE>
- -------------------
+ Registrant has requested confidential treatment pursuant to Rule 406 for a
portion of the referenced exhibit and has separately filed such exhibit with
the Commission.
* To be supplied by amendment.
<PAGE>
EXHIBIT 10.1
VICINITY CORPORATION
1995 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Incentive Stock Option
--------------------
Plan are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or nonstatutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees appointed
-------------
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
-----
(c) "Code" means the Internal Revenue Code of 1986, as amended.
----
(d) "Committee" means a Committee appointed by the Board of Directors
---------
in accordance with Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
------------
(f) "Company" means Vicinity Corporation, a California corporation.
-------
(g) "Consultant" means any person who is engaged by the Company or
----------
any Parent or Subsidiary to render consulting or advisory services and is
compensated for such services, and any director of the Company whether
compensated for such services or not. If and in the event the Company registers
any class of any equity security pursuant to the Exchange Act, the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------
employment or consulting relationship with the Company, any Parent or Subsidiary
is not interrupted or terminated. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave. For purposes of Incentive Stock Options, no
such leave may exceed 90 days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract, including Company policies. If
reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 91st day of such leave any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option.
<PAGE>
(i) "Employee" means any person, including officers and directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(k) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
------
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but
not on the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination, or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(n) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) "Option" means a stock option granted pursuant to the Plan.
------
(p) "Optioned Stock" means the Common Stock subject to an Option.
--------------
(q) "Optionee" means an Employee or Consultant who receives an
--------
Option.
(r) "Parent" means a "parent corporation", whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 1996 Incentive Stock Option Plan.
----
2
<PAGE>
(t) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 11 below.
(u) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
-------------------------
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 1,000,000 shares of Common Stock. The shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Initial Plan Procedure. Prior to the date, if any, upon which
----------------------
the Company becomes subject to the Exchange Act, the Plan shall be administered
by the Board or a committee appointed by the Board.
(b) Plan Procedure after the Date, if any, upon Which the Company
-------------------------------------------------------------
Becomes Subject to the Exchange Act.
- -----------------------------------
(i) Administration with Respect to Directors and Officers.
-----------------------------------------------------
With respect to grants of Options to Employees who are also officers or
directors of the Company, the Plan shall be administered by (A) the Board if the
Board may administer the Plan in compliance with Rule 16b-3 promulgated under
the Exchange Act or any successor thereto ("Rule 16b-3") with respect to a plan
intended to qualify thereunder as a discretionary plan, or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply with Rule 16b-3
with respect to a plan intended to qualify thereunder as a discretionary plan.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as
a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by Rule
------------------------------
16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors nor
officers.
(iii) Administration With Respect to Consultants and Other
----------------------------------------------------
Employees. With respect to grants of Options to Employees or Consultants who
- ---------
are neither directors nor officers of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the
3
<PAGE>
legal requirements relating to the administration of incentive stock option
plans, if any, of California corporate and securities laws, of the Code, and of
any applicable stock exchange (the "Applicable Laws"). Once appointed, such
---------------
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.
(c) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom Options
may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions of any award granted
hereunder;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common Stock;
(viii) to amend the terms of any Option previously granted under
the Plan; and
(ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(d) Effect of Administrator's Decision. All decisions,
----------------------------------
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
4
<PAGE>
5. Eligibility.
-----------
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value:
(i) of Shares subject to an Optionee's Incentive Stock Options
granted by the Company, any Parent or Subsidiary, which
(ii) become exercisable for the first time during any calendar
year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(c) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.
(d) Upon the Company or a successor corporation issuing any class of
common equity securities required to be registered under Section 12 of the
Exchange Act or upon the Plan being assumed by a corporation having a class of
common equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Options to
Employees:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 1,000,000 Shares.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11.
(iii) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 11), the canceled Option will be counted against the limit
set forth in Section 5(d)(i). For this purpose, if the exercise price of an
Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
6. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company, as
5
<PAGE>
described in Section 17 of the Plan. It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
--------------
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
---------------------------------------
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant
of such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of the grant.
(B) granted to any person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
6
<PAGE>
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment or Consulting Relationship. In the
----------------------------------------------------
event that an Optionee's Continuous Status as an Employee or Consultant
terminates (but not in the event of a change of status from Employee to
Consultant (in which case an Employee's Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the ninety-first (91st)
day following such change of status) or from Consultant to Employee), other than
upon the Optionee's death or disability, the Optionee may exercise his or her
Option, but only within such period of time as is determined by the
Administrator (but in no event less than thirty (30) days after the date of
termination), and only to the extent that the Optionee was entitled to exercise
it at the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the Shares covered by the unexercisable portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
7
<PAGE>
(c) Disability of Optionee. In the event that Optionee's Continuous
----------------------
Status as an Employee or Consultant terminates as a result of his or her
disability, Optionee may, but only within six (6) months from the date of such
termination (and in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination; provided,
however, that if such disability is not a "disability" as such term is defined
in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically convert to a Nonstatutory Stock
Option on the day three months and one day following such termination. To the
extent that Optionee is not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death,
the Optionee's estate or a person who acquired the right to exercise the Option
by bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b)
----------
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer to
-----------------
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. Options may not be sold, pledged,
------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization or Merger.
----------------------------------------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for
8
<PAGE>
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option may be assumed or an equivalent option
or right may be substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation does not agree to assume each outstanding Option or to substitute an
equivalent option or right, each outstanding Option shall become fully vested
and exercisable, including as to Shares as to which it would not otherwise be
exercisable. If an Option becomes fully vested and exercisable in the event of
a merger or sale of assets, the Administrator shall notify the Optionee that the
Option shall be fully exercisable for a period of fifteen (15) days from the
date of such notice, and the Option will terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
12. Time of Granting Options. The date of grant of an Option shall, for
------------------------
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
9
<PAGE>
13. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16. Agreements. Options shall be evidenced by written agreements in such
----------
form as the Board shall approve from time to time.
17. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is
10
<PAGE>
adopted. Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and the rules of any stock
exchange upon which the Common Stock is listed.
18. Information to Optionees and Purchasers. The Company shall provide to
---------------------------------------
each Optionee, not less frequently than annually, copies of annual financial
statements. The Company shall also provide such statements to each individual
who acquires Shares pursuant to the Plan while such individual owns such Shares.
The Company shall not be required to provide such statements to key employees
whose duties in connection with the Company assure their access to equivalent
information.
11
<PAGE>
EXHIBIT 10.2
VICINITY CORPORATION
1996 INCENTIVE STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Incentive Stock Option Plan
--------------------
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or nonstatutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
-----
(c) "Code" means the Internal Revenue Code of 1986, as amended.
----
(d) "Committee" means a Committee appointed by the Board of Directors
---------
in accordance with Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
------------
(f) "Company" means Vicinity Corporation, a California corporation.
-------
(g) "Consultant" means any person who is engaged by the Company or any
----------
Parent or Subsidiary to render consulting or advisory services and is
compensated for such services, and any director of the Company whether
compensated for such services or not. If and in the event the Company registers
any class of any equity security pursuant to the Exchange Act, the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------
employment or consulting relationship with the Company, any Parent or Subsidiary
is not interrupted or terminated. Continuous Status as an Employee or Consultant
shall not be considered interrupted in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. A leave of
absence approved by the Company shall include sick leave, military leave, or any
other personal leave. For purposes of Incentive Stock Options, no such leave may
exceed 90 days, unless reemployment upon expiration of such leave is guaranteed
by statute or contract, including Company policies. If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed,
on the 91st day of such
<PAGE>
leave any Incentive Stock Option held by the Optionee shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.
(i) "Employee" means any person, including officers and directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(k) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
------
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination, or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(n) "Officer" means a person who is an officer of the Company within
------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) "Option" means a stock option granted pursuant to the Plan.
------
(p) "Optioned Stock" means the Common Stock subject to an Option.
--------------
(q) "Optionee" means an Employee or Consultant who receives an Option.
--------
2
<PAGE>
(r) "Parent" means a "parent corporation", whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 1996 Incentive Stock Option Plan.
----
(t) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 11 below.
(u) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
-------------------------
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 3,291,317 shares of Common Stock. The shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Initial Plan Procedure. Prior to the date, if any, upon which the
----------------------
Company becomes subject to the Exchange Act, the Plan shall be administered by
the Board or a committee appointed by the Board.
(b) Plan Procedure after the Date, if any, upon Which the Company
-------------------------------------------------------------
Becomes Subject to the Exchange Act.
- -----------------------------------
(i) Administration with Respect to Directors and Officers. With
-----------------------------------------------------
respect to grants of Options to Employees who are also officers or directors of
the Company, the Plan shall be administered by (A) the Board if the Board may
administer the Plan in compliance with Rule 16b-3 promulgated under the Exchange
Act or any successor thereto ("Rule 16b-3") with respect to a plan intended to
qualify thereunder as a discretionary plan, or (B) a Committee designated by the
Board to administer the Plan, which Committee shall be constituted in such a
manner as to permit the Plan to comply with Rule 16b-3 with respect to a plan
intended to qualify thereunder as a discretionary plan. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by Rule 16b-3 with respect to a
plan intended to qualify thereunder as a discretionary plan.
3
<PAGE>
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-3,
------------------------------
the Plan may be administered by different bodies with respect to directors, non-
director officers and Employees who are neither directors nor officers.
(iii) Administration With Respect to Consultants and Other
----------------------------------------------------
Employees. With respect to grants of Options to Employees or Consultants who are
- ---------
neither directors nor officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the legal requirements relating to
the administration of incentive stock option plans, if any, of California
corporate and securities laws, of the Code, and of any applicable stock exchange
(the "Applicable Laws"). Once appointed, such Committee shall continue to serve
---------------
in its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(c) Powers of the Administrator. Subject to the provisions of the Plan
---------------------------
and, in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions of any award granted
hereunder;
(vii) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(f) instead of Common Stock;
(viii) to amend the terms of any Option previously granted under
the Plan; and
4
<PAGE>
(ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(d) Effect of Administrator's Decision. All decisions, determinations
----------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
5. Eligibility.
-----------
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value:
(i) of Shares subject to an Optionee's Incentive Stock Options
granted by the Company, any Parent or Subsidiary, which
(ii) become exercisable for the first time during any calendar
year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(c) The Plan shall not confer upon any Optionee any right with respect
to continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with his or her right or the Company's right to
terminate his or her employment or consulting relationship at any time, with or
without cause.
(d) Upon the Company or a successor corporation issuing any class of
common equity securities required to be registered under Section 12 of the
Exchange Act or upon the Plan being assumed by a corporation having a class of
common equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Options to
Employees:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 1,000,000 Shares.
(ii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 11.
5
<PAGE>
(iii) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 11), the canceled Option will be counted against the limit
set forth in Section 5(d)(i). For this purpose, if the exercise price of an
Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
------------
of its adoption by the Board of Directors or its approval by the shareholders of
the Company, as described in Section 17 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 13 of the
Plan.
7. Term of Option. The term of each Option shall be the term stated in the
--------------
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
---------------------------------------
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described
in the preceding paragraph, the per Share exercise price shall be no less than
100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant of such
Option, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of the grant.
(B) granted to any person, the per Share exercise price shall
be no less than 85% of the Fair Market Value per Share on the date of grant.
6
<PAGE>
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment or Consulting Relationship. In the event
----------------------------------------------------
that an Optionee's Continuous Status as an Employee or Consultant terminates
(but not in the event of a change of status from Employee to Consultant (in
which case an Employee's Incentive Stock Option shall automatically convert to a
Nonstatutory Stock Option on the ninety-first (91st) day following such change
of status) or from Consultant to Employee), other than upon
7
<PAGE>
the Optionee's death or disability, the Optionee may exercise his or her Option,
but only within such period of time as is determined by the Administrator (but
in no event less than thirty (30) days after the date of termination), and only
to the extent that the Optionee was entitled to exercise it at the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(c) Disability of Optionee. In the event that Optionee's Continuous
----------------------
Status as an Employee or Consultant terminates as a result of his or her
disability, Optionee may, but only within six (6) months from the date of such
termination (and in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination; provided,
however, that if such disability is not a "disability" as such term is defined
in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically convert to a Nonstatutory Stock
Option on the day three months and one day following such termination. To the
extent that Optionee is not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b) of
----------
the Exchange Act must comply with Rule 16b-3 and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
(f) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Non-Transferability of Options. Options may not be sold, pledged,
------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of
8
<PAGE>
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization or Merger.
----------------------------------------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option may be assumed or an equivalent option
or right may be substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation does not agree to assume each outstanding Option or to substitute an
equivalent option or right, each outstanding Option shall become fully vested
and exercisable, including as to Shares as to which it would not otherwise be
exercisable. If an Option becomes fully vested and exercisable in the event of a
merger or sale of assets, the Administrator shall notify the Optionee that the
Option shall be fully exercisable for a period of fifteen (15) days from the
date of such notice, and the Option will terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor or its
9
<PAGE>
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Stock subject to the Option, to be solely common
stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the merger or
sale of assets.
12. Time of Granting Options. The date of grant of an Option shall, for
------------------------
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
10
<PAGE>
15. Reservation of Shares. The Company, during the term of this Plan, will
---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16. Agreements. Options shall be evidenced by written agreements in such
----------
form as the Board shall approve from time to time.
17. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.
18. Information to Optionees and Purchasers. The Company shall provide to
---------------------------------------
each Optionee, not less frequently than annually, copies of annual financial
statements. The Company shall also provide such statements to each individual
who acquires Shares pursuant to the Plan while such individual owns such Shares.
The Company shall not be required to provide such statements to key employees
whose duties in connection with the Company assure their access to equivalent
information.
11
<PAGE>
EXHIBIT 10.5
AMENDED AND RESTATED
REGISTRATION AND INFORMATION RIGHTS AGREEMENT
This Amended and Restated Registration and Information Rights Agreement
(the "Agreement") is made and entered into as of December 9, 1998 by and among
Vicinity Corporation, a California corporation (the "Company"), Rama Aysola,
-------
Eddie Babcock, Timothy Bacci and James DiSanto (the "Founders") and the
--------
investors named on Schedule I hereto (the "Investors").
---------
RECITALS
--------
WHEREAS, the Company, the Founders and certain of the Investors are parties
to that certain Registration and Information Rights Agreement made and entered
into as of December 12, 1996; and
WHEREAS, simultaneous with the execution and delivery of this Agreement the
Company is entering into that certain Series D Preferred Stock and Warrant
Purchase Agreement (the "Purchase Agreement"), pursuant to which the Company has
------------------
agreed to issue and sell to certain of the Investors and such Investors have
agreed to purchase from the Company shares of the Company's Series D Preferred
Stock (the "Series D Preferred") and warrants exercisable for shares of the
------------------
Company's Series E Preferred Stock ( the "Warrants").
--------
WHEREAS, in further consideration of the Company's issuance and sale and
the new Investors' purchase of the Series D Preferred and the Warrants, the
several parties hereto desire to enter into this Agreement. This Agreement
amends and restates the Registration and Information Rights Agreement dated as
of December 12, 1996 among the Company and the persons named therein, which
agreement in turn, superseded the Registration and Information Rights Agreement
dated as of June 4, 1996 among the Company and the persons named therein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the Company, the Founders, and the Investors agree as
follows:
Section 1 Certain Definitions.
-------------------
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" shall mean the Securities and Exchange Commission or
----------
any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Company's common stock, par value
------------
$0.001 per share.
1
<PAGE>
"Conversion Shares" shall mean the Common Stock issued or issuable
-----------------
upon conversion of the Preferred Stock.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended, or any similar successor federal statute, and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"Holders" shall mean (i) each Investor for so long such Investor
-------
holds Preferred Stock or Registrable Securities, (ii) each Founder for so long
as such Founder hold Registrable Securities, and (iii) any person holding
Registrable Securities to whom the rights under this Agreement have been
transferred in accordance with Section 5.9 hereof.
"Initiating Holders" shall mean Holders of not less than 40% of the
------------------
Registrable Securities then held by all Holders.
"Preferred Stock" shall mean the Company's preferred stock, par
---------------
value $0.001 per share.
The terms "register," "registered" and "registration" refer to a
-------- ---------- ------------
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" shall mean (i) Common Stock held by the
----------------------
Founders free of any right of repurchase in favor of the Company, (ii) the
Conversion Shares, (iii) Common Stock held by Investors; and (iv) any Common
Stock of the Company issued or issuable in respect of the Preferred Stock or
Conversion Shares or other securities issued or issuable with respect to the
Preferred Stock or Conversion Shares upon any stock split, stock dividend,
recapitalization, or similar event, or any Common Stock otherwise issued or
issuable with respect to the Preferred Stock or Conversion Shares; provided,
--------
however, that shares of Common Stock or other securities shall only be treated
- -------
as Registrable Securities if and so long as they have not (A) been sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, (B) been sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale, (C) been
transferred in a transaction pursuant to which the registration rights are not
also assigned in accordance with Section 5.9 hereof, or (D) become, along with
all other Shares, Conversion Shares or Common Stock held by the Holder thereof,
eligible for sale (without limitation on the amount of securities to be sold)
under Rule 144 of the Securities Act (or any similar or successor rule) within a
ninety (90) day period.
"Registration Expenses" shall mean all expenses, except as
---------------------
otherwise stated below, incurred by the Company in complying with Sections 5.1,
5.2 and 5.3 hereof including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the
2
<PAGE>
Company) and the reasonable fees and disbursements of one counsel for all
Holders as appointed by the Holders (other than the Founders), but excluding the
Selling Expenses.
"Restricted Securities" shall mean the securities of the Company
---------------------
required to bear the legend set forth in Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended,
--------------
and the rules and regulations promulgated thereunder or any similar federal
statute and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
----------------
commissions and stock transfer taxes applicable to the securities registered by
the Holders and, except as set forth under "Registration Expenses", all fees and
disbursements of counsel for any Holder.
"Shares" shall mean any shares of capital stock of the Company or
------
any securities of the Company convertible into or exchangeable for such capital
stock .
Section 2. Restrictions on Transferability. No Founder or Investor shall
-------------------------------
sell, assign, transfer or pledge any Shares except upon the conditions specified
in this Agreement, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Each Founder and each Investor will cause any
proposed purchaser, assignee, transferee or pledgee of any Shares held by such
Founder or Investor to agree to take and hold such Shares subject to the
provisions and upon the conditions specified in this Agreement.
Section 3. Restrictive Legend. Each certificate representing the Shares
------------------
shall (unless otherwise permitted by the provisions of Section 4 below) be
stamped or otherwise imprinted with a legend in substantially the following form
(in addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID
ACT. COPIES OF THE AGREEMENTS COVERING THE PURCHASE OF THESE SHARES AND
RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
3
<PAGE>
Each Holder consents to the Company making a notation on its records and
giving instructions to any transfer agent of the Preferred Stock or the Common
Stock in order to implement the restrictions on transfer established in this
Agreement.
Section 4. Notice of Proposed Transfers. The holder of each certificate
----------------------------
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 4. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership, (ii) in transactions
involving the distribution without consideration of Restricted Securities by any
Investor to any of its partners, or retired partners, to the estate of any of
its partners or retired partners, or liquidating trust for the benefit of any
its partners, (iii) in transactions involving the transfer without consideration
of Restricted Securities by an Investor during his or her lifetime by way of
gift or on death by will or intestacy, (iv) in transactions in compliance with
Rule 144, or (v) to any investment fund or other entity controlled or managed by
an affiliate of an Investor), unless there is in effect a registration statement
under the Securities Act covering the proposed transfer, the holder thereof
shall give written notice to the Company of such holder's intention to effect
such transfer, sale, assignment or pledge. Each such notice shall describe the
manner and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail, and shall be accompanied, at such holder's expense, by either
(i) an unqualified written opinion of legal counsel who shall be, and whose
legal opinion shall be, reasonably satisfactory to the Company addressed to the
Company, to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act, or (ii) a "no
action" letter from the Commission to the effect that the transfer of such
securities without registration will not result in a recommendation by the staff
of the Commission that action be taken with respect thereto, whereupon the
holder of such Restricted Securities shall be entitled to transfer such
Restricted Securities in accordance with the terms of the notice delivered by
the holder to the Company. Each certificate evidencing the Restricted Securities
transferred as above provided shall bear, except if such transfer is made
pursuant to Rule 144, the appropriate restrictive legend set forth in Section 3
above, except that such certificate shall not bear such restrictive legend if,
in the opinion of counsel for such holder and the Company, such legend is not
required in order to establish compliance with any provision of the Securities
Act.
Section 5. Registration.
------------
5.1. Requested Registration.
----------------------
(a) Request for Registration. In case the Company shall receive
------------------------
from the Initiating Holders a written request with respect to the Registrable
Securities held by such Initiating Holders that the Company effect any
registration, qualification or compliance with an anticipated aggregate offering
price, net of underwriting discounts and commissions, of Five Million Dollars
($5,000,000), the Company will:
(i) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its reasonable best efforts to
effect such
4
<PAGE>
registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within 20 days after receipt of such written notice from the
Company.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 5.1:
(i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(ii) prior to the earlier to occur of: (x) February 1, 2001 and (y)
---
six months after the effective date of the Company's first registered public
offering of shares of its Common Stock;
(iii) during the period starting with the date sixty (60) days
prior to the Company's estimated date of filing of, and ending on the date six
(6) months immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective;
(iv) if the Company has effected one such registration pursuant to
this subparagraph 5.1(a) in the preceding twelve months, and such registration
has been declared or ordered effective and remains effective until the earlier
to occur of (x) 90 days or (y) the sale of all the securities offered pursuant
to each such registration;
(v) if the Company shall furnish to such Initiating Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its shareholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 5.1 shall be deferred for a period not to
exceed 120 days from the date of receipt of written request from the Initiating
Holders, provided that the Company may not exercise this deferral right for more
than once in any twelve month period;
(vi) if such registration, qualification or compliance is proposed
to be part of a firm commitment underwritten public offering with underwriters
not reasonably acceptable to the Company.
5
<PAGE>
Subject to the foregoing clauses (i) through (vi), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Initiating Holders. The Company may include in such registration (and
related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, (i) authorized but unissued shares of Common
Stock or shares of Common Stock held by the Company or (ii) shares of Common
Stock held by holders other than the Holders of Registrable Securities but only
to the extent that such inclusion will not diminish the number of securities
included by the Holders of Registrable Securities who have requested their
securities to be included in such registration.
(c) Underwriting. In the event of a registration pursuant to Section
------------
5.1, the Company shall advise the Holders as part of the notice given pursuant
to Section 5. 1(a)(i) that the right of any Holder to registration pursuant to
Section 5.1 shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 5.1, and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein.
The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by a
majority in interest of the Initiating Holders, but subject to the Company's
reasonable approval. Notwithstanding any other provision of this Section 5.1, if
the managing underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all holders of Registrable
Securities and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders desiring to participate in such registration and underwriting in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by all such Holders at the time of filing the registration
statement. No Registrable Securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
To facilitate the allocation of shares in accordance with the above provisions,
the Company or the underwriters may round the number of shares allocated to any
Holder to the nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to 180 days after the effective date
of such registration, or such other shorter period of time as the underwriters
may require.
5.2. Company Registration.
(a) Notice of Registration. If at any time or from time to time the
----------------------
Company shall determine to register any of its equity securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans,
6
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(ii) a registration relating solely to a Rule 145 transaction, or (iii) a
registration in which the only equity security being registered is capital stock
issuable upon conversion of convertible (or exchange of exchangeable) debt
securities which are also being registered, the Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within twenty (20) days after receipt of such written notice from
the Company, by any Holder.
(b) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 5.2(a)(i). In such event, the right of any Holder to
registration pursuant to Section 5.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting shall be limited to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this Section 5.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities to be included in such registration (i) in the case of
the Company's initial public offering, to zero, and (ii) in the case of any
other offering, to an amount not less than 25% of the total number of securities
to be included in such registration and underwriting; provided that in each such
case, no shares held by any Holder other than a Founder shall be so excluded
from such registration until all shares held by the Founders are excluded from
such registration. The Company shall so advise all Holders and other holders
distributing their securities through such underwriting and the number of shares
of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all the Holders desiring to participate in
such registration and underwriting in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders at the
time of filing the Registration Statement. To facilitate the allocation of
shares in accordance with the above provisions, the Company may round the number
of shares allocated to any Holder or other holder to the nearest 100 shares.
If any of the Holders disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice to the Company and
the managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) Right to Terminate Registration. The Company shall have the right
-------------------------------
to terminate or withdraw any registration initiated by it under this Section 5.2
prior to the effectiveness of such registration whether or not any Holder has
elected to include Registrable
7
<PAGE>
Securities in such registration.
5.3. Registration on Form S-3.
(a) If any of the Holders request that the Company file a registration
statement on Form S-3 (or any successor form to Form S-3) for a public offering
of shares of the Registrable Securities the reasonably anticipated aggregate
price to the public of which would exceed $1,000,000, and the Company is a
registrant entitled to use Form S-3 to register the Registrable Securities for
such an offering, the Company shall use its best efforts to cause such
Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as such
Holder or Holders may reasonably request. The Company shall inform other Holders
of the proposed registration and offer them the opportunity to participate. In
the event the registration is proposed to be part of a firm commitment
underwritten public offering, the substantive provisions of Section 5.1(c) shall
be applicable to each such registration initiated under this Section 5.3.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 5.3:
(i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(ii) if the Company has effected one such registration pursuant to
subparagraph 5.3(a) above in the preceding six months, such registration having
been declared or ordered effective and remained effective until the earlier to
occur of (x) 90 days or (y) the sale of all the securities offered pursuant to
each such registration,
(iii) if the Company, within ten (10) days of the receipt of the
request of the Initiating Holders, gives notice of its bona fide intention to
---- ----
effect the filing of a registration statement with the Commission within ninety
(90) days of receipt of such request (other than with respect to a registration
statement relating to a Rule 145 transaction, an offering solely to employees,
or any other registration which is not appropriate for the registration of
Registrable Securities);
(iv) during the period starting with the date sixty (60) days prior
to the Company's estimated date of filing of, and ending on the date six (6)
months immediately following, the effective date of any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an offering solely to employees, or
any other registration which is not appropriate for the registration of
Registrable Securities), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; or
(v) if the Company shall furnish to such Holder or Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of
8
<PAGE>
Directors it would be seriously detrimental to the Company or its shareholders
for registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall be
deferred for a period not to exceed 120 days from the receipt of the request to
file such registration by such Holder or Holders, provided that the Company may
not exercise this deferral right more than once in any twelve month period.
5.4. Expenses of Registration. The Registration Expenses incurred in
------------------------
connection with (i) one registration per twelve month period pursuant to Section
5.1, (ii) all registrations pursuant to Section 5.2, and (iii) all registrations
pursuant to Section 5.3 shall be borne by the Company; provided that the Company
shall not be required to pay the Registration Expenses of any registration
proceeding begun pursuant to Section 5.1, the request of which has been
subsequently withdrawn by the Holders of a majority of the Registrable
Securities to be registered. In such case, (i) the Holders of Registrable
Securities to have been registered shall bear all such Registration Expenses
pro rata on the basis of the number of shares to have been registered, and (ii)
- --- ----
the Company shall be deemed not to have effected a registration pursuant to
subparagraph 5.1(b) of this Agreement. Notwithstanding the foregoing, if at the
time of such withdrawal, the Holders have learned of a material adverse change
in the condition, business, or prospects of the Company from that known to the
Initiating Holders at the time of their request and have withdrawn the request
with reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay the Registration
Expenses and shall be entitled to such numbers of registrations pursuant to
Section 5.1, 5.2 and 5.3 as if such requested and subsequently withdrawn
registration had never been requested.
Unless otherwise stated, all Selling Expenses relating to securities
registered on behalf of the Holders and all other unspecified registration
expenses shall be borne by the Holders of such securities pro rata on the basis
--- ----
of the number of shares so registered.
5.5. Registration Procedures. In the case of each registration,
-----------------------
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each of the Holders advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Company will:
(a) prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least one hundred
twenty (120) days or until the distribution described in the registration
statement has been completed, whichever first occurs;
(b) furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
(c) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
current and to comply with the
9
<PAGE>
provisions of the Securities Act with respect to the sale of or other
disposition of all Registrable Securities covered by such registration statement
including such amendments and supplements as may be necessary to reflect the
intended method of disposition of the prospective seller or sellers of such
Registrable Securities but for no longer than one hundred twenty (120) days
subsequent to the effective date of such registration in the case of a
registration statement on Form S-1 or any similar form of registration statement
required to set forth substantially identical information) provided, however
-------- -------
that (i) such period shall be extended for a period of time equal to the period
the underwriter recommends that all the Holders refrain from selling the
securities included in such registration due to marketing conditions or other
conditions which adversely affect the offer and sale of such securities; and
(ii) in the case of any registration of Registrable Securities on Form S-3 which
is intended to be offered on a continuous or delayed basis such period shall be
extended, if necessary, to keep the registration statement effective until all
such Registrable Securities are sold, provided that Rule 415 permits an offering
on a continuous or delayed basis, and provided further that applicable rules
under the Securities Act governing the obligation to file post-effective
amendment permit, in lieu of filing a post-effective amendment that (x) includes
any prospectus required by Section 10(a)(3) of the Securities Act or (y)
reflects facts or events representing a material or fundamental change in the
information set forth in the registration statement, the incorporation by
reference of information required to be included in (x) and (y) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement.
(d) Furnish to each prospective seller of Registrable Securities such
number of copies of prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as such seller may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities of such seller.
(e) Notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result if which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing.
(f) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange or approved for quotation on
any inter-dealer quotation system on which similar securities issued by the
Company are then listed or quoted.
(g) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
of all such Registrable Securities in each case not later than the effective
date of such registration.
10
<PAGE>
(h) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first month after the effective date of the Registration Statement,
which earnings statement shall satisfy the provisions of section 11(a) of the
Securities Act.
(i) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.
Each seller of Registrable Securities hereby agrees that, after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus, it will not
(until further notice) effect sales of Shares covered by any such registration
statement.
5.6. Indemnification.
---------------
(a) The Company will indemnify each Holder of securities, each of its
officers, directors and partners, and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, (commenced or threatened), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and will reimburse each such Holder, each of its officers,
directors, and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided, however, that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statement, alleged untrue statement, omission or alleged omission made in
a preliminary prospectus on file with the Commission at the time the
registration statement becomes effective or the amended prospectus filed with
the Commission pursuant to Rule 424(b) (the "Final Prospectus"), such indemnity
agreement shall not inure to the benefit of: (1) any Holder, (i) if there is no
underwriter, and a copy of the Final Prospectus was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act and the Final Prospectus would have
cured the defect giving rise to the loss, liability, claim or damage (to the
extent that such Holder was obligated by law to provide a copy of the Final
Prospectus to such person), or (ii) to the extent that such untrue statement,
alleged untrue statement, omission or
11
<PAGE>
alleged omission is made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder and stated to be specifically for use therein; or (2) any underwriter,
(i) if a copy of the Final Prospectus was not furnished to the person asserting
the loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act and the Final Prospectus would have cured the
defect giving rise to the loss, liability, claim or damage, or (ii) to the
extent that such untrue statement, alleged untrue statement, omission or alleged
omission is made in reliance on and in conformity with written information
furnished to the Company by an instrument duly executed by such underwriter and
stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers, directors, and partners, and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and liabilities
(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation (commenced or threatened), arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to such
registration, qualification or compliance, or any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and will reimburse the Company, such Holders, such
directors, officers, persons, underwriters or control persons for any legal and
any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this
subsection 5.6(b) shall be limited in an amount equal to the net proceeds
received by such Holder from the sale of shares in such registration, unless
such liability arises out of or is based on willful misconduct by such Holder.
(c) Each party entitled to indemnification under this Section 5.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the
12
<PAGE>
Indemnifying Party of its obligations under this Agreement, unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action, and provided further that the Indemnifying Party shall
not assume the defense for matters as to which there is a conflict of interest
or separate and different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(d) If the indemnification provided for in this Section 5.6 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
5.7. Information by Holders. The Holder or Holders of Registrable
----------------------
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
5.8. Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, after such
time as a public market exists for the Common Stock of the Company, the Company
agrees to use all reasonable efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times during
normal business hours after the effective date that the Company becomes subject
to the reporting requirements of the Securities Act or the Exchange Act.
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934, as amended (at any time after it has become subject to
such reporting requirements); and
(c) So long as any of the Holders owns any Restricted Securities, to
furnish to such Holders forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective
13
<PAGE>
date of the first registration statement filed by the Company for an offering of
its securities to the general public), and of the Securities Act and the
Securities Exchange Act of 1934 (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents of the Company and other
information in the possession of or reasonably obtainable by the Company as such
Holders may reasonably request in availing themselves of any rule or regulation
of the Commission allowing the Holders to sell any such securities without
registration
5.9. Transfer of Registration Rights. The rights to cause the Company to
-------------------------------
register securities granted to the Holders under Sections 5.1, 5.2 and 5.3 may
be assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by an Investor or Founder only if such
transferee or assignee, as appropriate, acquires at least 250,000 shares (as
adjusted for stock splits, stock dividends, recapitalizations and the like) of
the Company's Common Stock, Preferred Stock or Conversion Shares, provided
written notice thereof is promptly given to the Company and the transferee
agrees to be bound by the provisions of this Agreement. Notwithstanding the
foregoing, the rights to cause the Company to register securities may be
assigned, without restriction as to minimum shareholdings, to any investment
fund or other entity controlled or managed by an affiliate of a Holder, or any
constituent partner or retired partner of a Holder which is a partnership, or an
affiliate of a Holder which is a corporation, a family member or trust for the
benefit of a Holder who is an individual, or a liquidating trust for the benefit
of any of its partners, provided written notice thereof is promptly given to the
Company and the transferee agrees to be bound by the provisions of this
Agreement.
5.10. Termination of Registration Rights. The rights granted pursuant to
----------------------------------
Sections 5.1, 5.2 and 5.3 of this Agreement shall terminate on the five (5) year
anniversary of the Company's initial public offering pursuant to an effective
registration statement under the Securities Act, or as to any Holder at such
time as the Company has registered its shares of Common Stock under the
Securities Exchange Act of 1934, as amended, and such Holder is able to sell all
such Registrable Securities as are held by such Holder under Rule 144
promulgated under the Securities Act within a 90-day period.
Section 6. Financial Information.
---------------------
6.1. The Company will provide the following reports to each Investor for
so long as such Investor continues to hold at least 250,000 shares of Preferred
Stock or Conversion Shares (as adjusted for stock splits, stock dividends,
recapitalizations and the like):
(a) as soon as practicable after the end of each fiscal year, and
in any event within 90 days thereafter, consolidated balance sheets of the
Company and its subsidiaries, if any, as of the end of such fiscal year, and
consolidated statements of operations and consolidated statements of cash flows
and shareholders' equity of the Company and its subsidiaries, if any, for such
year, prepared in accordance with generally accepted accounting principles and
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and audited by independent public
accountants of national standing selected by the Company, and a capitalization
table in reasonable detail for such fiscal year;
14
<PAGE>
(b) at the time of delivery of each annual financial statement
pursuant to paragraph (a) above, a certificate executed by the Chief Financial
Officer of the Company stating that such officer has caused this Agreement and
the Related Agreements (as defined in the Purchase Agreement) to be reviewed and
that such officer has no knowledge of any default by the Company in the
performance or observance of any of the provisions of this Agreement or the
Related Agreements or, if such officer has such knowledge, specifying such
default and the nature thereof;
(c) as soon as practicable after the end of each calendar month, and
in any event within 30 days thereafter, a consolidated balance sheet of the
Company and its subsidiaries, if any, as of the end of each such month, and
consolidated statements of operations, consolidated statements of cash flows of
the Company and its subsidiaries for such period and for the current fiscal year
to date, including a comparison between the actual financial statements and the
projected figures according to the operating budget referenced in paragraph (g)
below;
(d) promptly following receipt by the Company, each audit response
letter, accountant's management letter and other written report submitted to the
Company by its independent public accountants in connection with an annual or
interim audit of the books of the Company or any of its subsidiaries;
(e) promptly after the commencement thereof, notice of all actions,
suits, claim proceedings, investigations and inquiries of the type described in
Section 2.6 of the Stock Purchase Agreement that could materially or adversely
affect the Company or any of its subsidiaries, if any;
(f) promptly upon sending, making available or filing the same, all
press releases, reports and financial statements that the company sends or makes
available to its stockholders or directors or files with the Commission;
(g) as soon as practicable following the submission to and approval
by the Board of Directors of the Company and in any event at least 30 days prior
to the end of a given fiscal year, an annual operating budget and plan for the
succeeding fiscal year for the Company in the form approved by the Board of
Directors;
(h) prior to each regularly scheduled meeting of the Board of
Directors or, if not otherwise delivered, on a quarterly basis, a management
narrative report explaining all significant variances from forecasts and all
significant current developments in staffing, marketing, sales and operations;
and
(i) promptly, from time to time, such other information regarding the
business, prospects, financial condition, operations, property or affairs of the
Company and its subsidiaries as such Investor reasonably may request.
The Company reserves the right to exclude from any such information or material
to be provided to the Investors any material or portions thereof if the Company
believes it reasonably necessary to protect highly confidential proprietary
information or upon advice of its counsel that such
15
<PAGE>
exclusion is reasonably necessary to preserve the attorney-client privilege.
6.2. The rights granted pursuant to this Section 6 may be assigned to a
transferee or assignee in connection with any transfer or assignment of
Registrable Securities by a Investor only if such transferee or assignee, as
appropriate, acquires at least 250,000 shares (as adjusted for stock splits,
stock dividends, recapitalizations and the like) of the Company's Preferred
Stock or Conversion Shares, provided written notice thereof is promptly given to
the Company. Notwithstanding the foregoing, the rights granted pursuant to
Section 6 may be assigned to any investment fund or other entity controlled or
managed by an affiliate of a Holder, or any constituent partner or retired
partner of a Holder which is a partnership, or an affiliate of a Holder which is
a corporation, a family member or trust for the benefit of a Holder who is an
individual, or liquidating trust for the benefit of any of its partners,
provided written notice thereof is promptly given to the Company.
6.3. Each of the Investors acknowledges and agrees that any information
obtained pursuant to this Section 6 which may be considered "inside" non-public
information will not be utilized by any Investor in connection with purchases or
sales of the Company's securities except in compliance with applicable state and
federal securities laws.
6.4. The covenants set forth in this Section 6 shall terminate and be of
no further force or effect upon the consummation of a firm commitment
underwritten public offering or at such time as the Company is required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, whichever shall occur first.
Section 7. Reserve for Conversion Shares. The Company shall at all times
-----------------------------
reserve and keep available out if its authorized but unissued shares of Common
Stock, for the purpose of affecting the conversion of the Preferred Shares and
otherwise complying with the terms of this Agreement, such number of its duly
authorized shares of Common Stock as shall be sufficient to effect the
conversion of the Preferred Shares from time to time outstanding or otherwise to
comply with the terms of this Agreement. If at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of the Preferred Shares or otherwise to comply with the terms of this
Agreement, the Company will forthwith take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes. The Company will
obtain any authorization, consent, approval or other action by or make any
filing with any court or administrative body that may be required under
applicable state securities laws in connection with the issuance of shares of
Common Stock upon conversion of the Preferred Shares.
Section 8. Inspection, Consultation and Advice. The Company shall permit
-----------------------------------
and cause each of its subsidiaries (if any) to permit each Investor and such
persons as it may designate, who are reasonably acceptable to the Company, at
such Investor's expense, to visit and inspect any of the properties of the
Company and its subsidiaries, examine their books and take copies and extracts
therefrom, discuss the affairs, finances and accounts of the Company and its
subsidiaries with their officers, employees and public accountant (and the
Company hereby authorizes said accountants to discuss with such Investor and
such designees such affairs,
16
<PAGE>
finances, and accounts), and consult with and advise the management of the
Company and its subsidiaries as to their affairs, finances and accounts, all at
reasonable times and upon reasonable notice The Company, acting through its
Board of Directors, shall be entitled to exclude such designees from access to
material or meeting or portion thereof, if the Company believes upon advice of
counsel that such exclusion is reasonably necessary to preserve the attorney-
client privilege, to protect highly confidential proprietary information or for
other similar reasons.
Section 9. Transactions with Affiliates. Except for transactions
----------------------------
contemplated by this Agreement or as otherwise approved by the Board of
Directors, neither the Company nor any of its subsidiaries shall enter into any
transaction with any director, officer, employee or holder of more than 5% of
the outstanding capital stock of any class or series of capital stock of the
Company or any of its subsidiaries, member of the family of any such person, or
any corporation, partnership, trust or other entity in which any person, or
member of the family of any such person, is a director, officer, trustee,
partner or holder of more than 5% of the outstanding capital stock thereof,
except for transactions on customary terms related to such person's employment.
Section 10. Expenses of Directors. The Company shall promptly reimburse
---------------------
in full, each director of the Company who is not an employee of the Company and
who was elected as a director solely or in part by the holders of Series A
Convertible Preferred Stock, for all of his reasonable out-of-pocket expenses
incurred as a result of travel to and from each meeting of the Board of
Directors of the Company or any Committee thereof.
Section 11. Standoff Agreement. In connection with any public offering of
------------------
the Company's securities in connection with an effective registration statement
under the Securities Act, each Holder agrees, upon the request of the Company or
the underwriters managing any underwritten offering of the Company's securities,
not to: (1) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock of the Company
(whether such shares or any such securities are now owned by the Holder or are
hereafter acquired); or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock of the Company, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise (other than those included
in the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time, not to exceed one
hundred eighty (180) days (or such lesser period as officers or directors are so
restricted with respect to the transfer of shares of capital stock of the
Company held by them) after the effective date of the registration statement
relating thereto. Each of the Investors and each Holder agrees that the Company
may instruct its transfer agent to place stop-transfer notations in its records
to enforce the provisions of this Section 7.
Section 12. Additional Parties. The parties hereto agree that additional
------------------
holders of securities of the Company may, with the consent only of the Company,
be added as parties to this Agreement with respect to any or all securities of
the Company held by them, and shall
17
<PAGE>
thereupon be deemed for all purposes "Investors" hereunder; provided, however,
that from and after the date of this Agreement, the Company shall not without
the prior written consent of each Investor, enter into any agreement with any
holder or prospective holder of any securities of the Company providing for the
grant to such holder of rights superior to those granted herein. Any such
additional party shall execute a counter-part of this Agreement, and upon
execution by such additional party and by the Company, shall be considered a
Investor for purposes of this Agreement.
Section 13. Amendment. Any provision of this Agreement may be amended or
---------
the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company, the Holders of two-thirds of the Registrable Securities;
provided that, subject to the provisions of Section 8 hereof; no such amendment
shall impose or increase any liability or obligation or impair any right of a
Holder without the consent of such Holder. Any amendment or waiver effected in
accordance with this Section 9 shall be binding upon each Holder of Registrable
Securities at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company.
Section 14. Governing Law. This Agreement and the legal relations between
-------------
the parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
Section 15. Entire Agreement. This Agreement constitutes the full and
----------------
entire understanding and agreement between the parties regarding the matters set
forth herein. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon the successors,
assigns, heirs, executors and administrators of the parties hereto.
Section 16. Notices. Etc. All notices and other communications required
------------
or permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or three (3) days after
deposit with the United States mail, by registered or certified mail, postage
prepaid, addressed (a) if to a Investor, at the address of such Investor set
forth on Schedule I hereto, as it may be amended from time to time, or at such
other address as the Investor shall have furnished to the Company in writing in
accordance with this Section 16, (b) if to a Founder, at the address of such
Founder as it appears on the books and records of the Company, (c) if to any
other Holder, at such address as such Holder shall have furnished the Company in
writing in accordance with this Section 16, or, until any such holder so
furnishes an address to the Company, then to and at the address of the last
holder thereof who has so furnished an address to the Company, (d) if to the
Company, at its principal office, with a copy addressed to Latham & Watkins, 135
Commonwealth Drive, Menlo Park, California, 94025, to the attention of Allen
Morgan, or (e) if to Oak Investment Partners VIII, L.P., with a copy addressed
to Finn Dixon & Herling, LLP, One Landmark Square, Suite 1400, Stamford,
Connecticut 06880, to the attention of Michael Herling.
Section 17. Counterparts. This Agreement may be executed in any number of
------------
18
<PAGE>
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
* * * * *
19
<PAGE>
IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers or representatives have set their hands hereunto effective
upon the date first written above.
"COMPANY"
VICINITY CORPORATION
By: _______________________________
Name: Emerick Woods
Title: President
Signature Page to Vicinity Corporation
Amended and Restated to Registration and Information Rights Agreement
<PAGE>
"FOUNDERS"
________________________________________
Rama Aysola
________________________________________
Eddie Babcock
________________________________________
Timothy Bacci
________________________________________
James DiSanto
Signature Page to Vicinity Corporation
Amended and Restated to Registration and Information Rights Agreement
<PAGE>
"INVESTORS"
CMG @ VENTURES I, LLC
By: ____________________________________
Name: Peter Mills
Title: General Partner
FRED GIBBONS SEPARATE PROPERTY
TRUST dated FEBRUARY 16, 1996
By: ____________________________________
Name: Fred Gibbons
Title: Trustee
WS INVESTMENT COMPANY 96A
By: ____________________________________
Name:
Title:
WSGR RETIREMENT PLAN U/A DTD
02/01/78 FBO DAVID J. SEGRE
By: ____________________________________
Name:
Title:
________________________________________
David J. Segre
Signature Page to Vicinity Corporation
Amended and Restated to Registration and Information Rights Agreement
<PAGE>
________________________________________
Adit Khorana
________________________________________
Rob Tarkoff
________________________________________
Scott Swimley
21ST CENTURY INTERNET FUND, L.P.
By: ____________________________________
Name: Neil Weintraut
Title: General Partner
ENCOMPASS GROUP, INC.
By: ____________________________________
Name: Yasuki Matsumoto
Title: General Partner
OAK INVESTMENT PARTNERS VIII, L.P.
By: ____________________________________
Name:
Title:
Signature Page to Vicinity Corporation
Amended and Restated to Registration and Information Rights Agreement
<PAGE>
OAK VIII AFFILIATES FUND,
LIMITED PARTNERSHIP
By: ____________________________________
Name:
Title:
________________________________________
Norman H. Nie
________________________________________
Jim Willenborg
Signature Page to Vicinity Corporation
Amended and Restated to Registration and Information Rights Agreement
<PAGE>
SCHEDULE I
Shares of Company Stock Currently Held
--------------------------------------
Founders Common Stock
-------- ------------
Rama Aysola 705,000
260 Gabarda Way
Portola Valley, CA 94028
Eddie Babcock 187,500
1219 Phelps Avenue
San Jose, California 95117
Timothy Bacci 770,000
1136 Webster Street
Palo Alto, California 94123
James DiSanto 548,334
281 Erica Way
Portola Valley, CA 94028
<PAGE>
<TABLE>
<CAPTION>
Type of
Investors Number of Shareholding
- --------- --------- ------------
Shares
------
<S> <C> <C>
CMG @ Ventures 275,512 Common Stock
2420 Sand Hill Road, Suite 101 1,852,000 Series A Preferred
Menlo Park, California 94025 1,875,000 Series B Preferred
1,222,000 Series C Preferred
Fred Gibbons Separate Property Trust 67,600 Common Stock
dated February 16, 1996
11800 Murietta Lane
Los Altos Hills, California 94022
WS Investment Company 96a 18,750 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
WSGR Retirement Plan U/A Dtd 02/01/78 9,375 Series B Preferred
FBO David J. Segre
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
David J. Segre 3,125 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Adit Khorana 3,125 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Rob Tarkoff 3,125 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Type of
Investors Number of Shareholding
- --------- --------- ------------
Shares
------
<S> <C> <C>
Scott Swimley 6,250 Series B Preferred
68 Oakmont Avenue
Piedmont, California 94610-1110
21st Century Internet Fund, L.P. 1,750,000 Series C Preferred
5900 Hollis Street, Suite R
Emeryville, California 94608
Encompass Group, Inc. 332,000 Series C Preferred
777-108th Avenue NE
Bellevue, Washington 98004
Oak Investment Partners VIII, L.P. 981,000 Common Stock
One Gorham Island 2,256,901 Series D Preferred
Westport, Connecticut 06880 934,286 Series E Preferred subject
Tel: 203-226-8346 to exercise of warrants
Fax: 203-227-0372 therefor
Oak VIII Affiliates Fund, L.P. 19,000 Common Stock
One Gorham Island 43,712 Series D Preferred
Westport, Connecticut 06880 18,095 Series E Preferred subject
Tel: 203-226-8346 to exercise of warrants
Fax: 203-227-0372 therefor
Norman H. Nie 11,905 Series E Preferred
Oak Investment Partners
525 University Avenue, Suite 1300
Palo Alto, CA 94301
Tel: 650-614-3700
Fax: 650-328-6345
Jim Willenborg 47,619 Series E Preferred
2898 Broadway
San Francisco, CA 94115-1061
</TABLE>
<PAGE>
EXHIBIT 10.6
================================================================================
VICINITY CORPORATION
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
================================================================================
Dated: December 9, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1. RIGHT OF FIRST REFUSAL ON COMPANY ISSUANCES..................... 1
1.1 Right of First Refusal............................................... 1
1.2 Pro Rata Share....................................................... 1
1.3 "New Securities"..................................................... 1
1.4 Procedure............................................................ 2
1.5 Waiver of Right of First Refusal..................................... 3
1.6 Fees and Expenses of Valuation of New Securities..................... 3
1.7 Company Right to Terminate Issuance of New Securities................ 3
ARTICLE 2. RIGHTS OF FIRST OFFER........................................... 3
2.1. Company Right of First Offer......................................... 3
2.2. Non-Selling Investor Right of First Offer............................ 4
2.3. Procedure............................................................ 4
2.4. Definition of Transfer Pro Rata Share................................ 5
2.5. Fees and Expenses of Valuation of Transfer Shares.................... 5
2.6. Rights of Co-Sale.................................................... 5
2.7. Procedure............................................................ 6
2.8. Transfer of Shares Upon Failure to Exercise Rights of First Offer
or Co-Sale........................................................... 6
2.9. Effect on Transferee................................................. 7
2.10 Limitations to the Right of First Offer and Co-Sale.................. 7
ARTICLE 3. ADDITIONAL PARTIES.............................................. 7
ARTICLE 4. GENERAL......................................................... 7
4.1. Governing Law........................................................ 8
4.2. No Assignment or Transfer; Legends................................... 8
4.3. Termination Of Rights................................................ 8
4.4. Modification; Waiver................................................. 9
4.5. Third Parties........................................................ 9
4.6. Entire Agreement..................................................... 9
4.7. Severability......................................................... 9
4.8. Notices.............................................................. 9
4.9. Spousal Consent...................................................... 10
4.10 Counterparts......................................................... 10
</TABLE>
<PAGE>
AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT
This Amended and Restated Shareholders Agreement (the "Agreement") is made
---------
and entered into as of this 9th day of December, 1998 by and among Vicinity
Corporation, a California corporation (the "Company"), Rama Aysola, Eddie
-------
Babcock, Timothy Bacci and James DiSanto (the "Founders") and the investors
--------
named on Schedule I hereto (the "Investors" and together with the Founders, the
---------- ---------
"Shareholders").
------------
RECITALS
--------
A. Simultaneous with the execution and delivery of this Agreement the
Company is entering into that certain Series D Preferred Stock and Warrant
Purchase Agreement (the "Series D Purchase Agreement"), pursuant to which the
---------------------------
Company has agreed to issue and sell to certain of the Investors and such
Investors have agreed to purchase from the Company shares of the Company's
Series D Preferred Stock (the "Series D Preferred") and warrants exercisable for
------------------
shares of the Company's Series E Preferred Stock ( the "Warrants").
--------
B. In further consideration of the Company's issuance and sale and the
new Investors' purchase of the Series D Preferred and the Warrants, the several
parties hereto desire to enter into this Agreement. This Agreement amends and
restates the Shareholders Agreement dated as of December 12, 1996 among the
Company and the persons named therein, which agreement in turn, superseded the
Shareholders Agreement dated as of June 4, 1996 among the Company and the
persons named therein.
In consideration thereof, the parties hereto agree as follows:
ARTICLE 1.
RIGHT OF FIRST REFUSAL ON COMPANY ISSUANCES
1.1. Right of First Refusal. The Company hereby grants to each Investor
----------------------
who continues to hold not less than 250,000 shares of Preferred Stock (or shares
of the Company's Common Stock issued upon conversion of such Preferred Stock,
the "Conversion Stock") of the Company a right of first refusal
----------------
("Right of First Refusal") to purchase such Investor's Pro Rata Share (as
----------------------
defined in Section 1.2 hereof) of any New Securities (as defined in Section 1.3
hereof) which the Company may, from time to time, propose to issue and sell.
1.2. Pro Rata Share. Each Investor's "Pro Rata Share," for purposes of
-------------- ---------------
this Article 1, is equal to the fraction obtained by dividing (a) the number of
shares of Common Stock held by such Investor by (b) the aggregate number of
shares of Common Stock then outstanding, assuming in each case the conversion,
exercise or exchange of all securities by their terms convertible into or
exercisable for Common Stock and the exercise of all options to purchase or
rights to subscribe for Common Stock or such convertible or exchangeable
securities.
1.3. "New Securities". Except as set forth below, "New Securities" shall
-------------- --------------
mean any
1
<PAGE>
shares of capital stock of the Company, including Common Stock and Preferred
Stock, whether or not now authorized, and rights, options or warrants to
purchase said shares of Common Stock or Preferred Stock and securities of any
type whatsoever that are, or may by their terms become, convertible into said
shares of Common Stock or Preferred Stock. Notwithstanding the foregoing, "New
---
Securities" does not include the Series D Preferred or the Warrants issued
- ----------
pursuant to the Series D Purchase Agreement or securities issued or issuable (i)
upon the conversion of Preferred Stock, (ii) to employees, officers, directors,
consultants or advisors of the Company pursuant to any one or more stock
incentive plans or agreements approved by the Company's board of directors (the
"Board"), (iii) pursuant to commercial transactions approved by the Board
-----
including, but not limited to, equipment leases or bank lines of credit,
provided that the specific issuance is approved by the Board and does not exceed
in the aggregate 100,000 shares of capital stock (as adjusted for any
combinations, considerations or subdivisions), (iv) as a dividend or
distribution on, or in connection with a split of, any of the capital stock of
the Company, (v) in connection with a recapitalization or reorganization of the
Company, relating to the Company's merger with or acquisition of another
corporation or other entity, (vi) upon exercise or conversion of warrants
(including the Warrants), options, rights, or convertible securities if the
issuance of such warrants, options, rights or convertible securities was subject
to the right of first refusal granted under this Article 1 or (vi) pursuant to a
registered public offering of shares of the Company's Common Stock pursuant to
an effective registration statement under the Securities Act of 1933, as amended
("Public Offering").
---------------
1.4. Procedure. (a) In the event the Company proposes to undertake an
---------
issuance of New Securities, it shall give each Investor written notice (the
"Company Notice") of its intention, describing the amount and type of New
--------------
Securities to be issued, and the price and terms upon which the Company proposes
to issue the same. Each Investor shall have ten (10) days from the date of
receipt of the Company Notice to exercise such Investor's Right of First Refusal
to purchase up to such Investor's respective Pro Rata Share of such New
Securities for the price and upon the terms specified in the Company Notice by
delivering written notice (the "Right of First Refusal Election Notice") to the
--------------------------------------
Company and stating therein the quantity of New Securities to be purchased.
(b) Settlement for the New Securities to be purchased by the
Investors pursuant to this Section 1.4 shall be made either in cash or cash
equivalents or through repayment of indebtedness within twenty (20) days from
the Investors' deemed date of receipt of the Company Notice; provided, however,
that if the terms of payment for the New Securities specified in the Company
Notice were for other than cash against delivery or promissory notes payable
over time, each Investor shall pay in cash to the Company the fair market value
of such consideration as mutually agreed upon by the Company and a majority of
the Investors who elect to purchase New Securities or, if no such agreement is
reached, as determined by an investment banking firm mutually acceptable to the
Company and a majority of the Investors who elect to purchase New Securities,
which appraisal shall be final, within five (5) days of such determination if
such determination is made after fifteen (15) days following receipt of the
Company Notice.
(c) In the event that the Investors have not elected to purchase all
of the New
2
<PAGE>
Securities within the applicable period of either ten (10) days after the deemed
receipt of Company Notice pursuant to clause (a) above or within five (5) days
after such determination of fair market value pursuant to clause (b) above, the
Company shall have ninety (90) days thereafter to sell the New Securities not
elected to be purchased by a Investor at the price and upon the terms no more
favorable to the purchasers of such securities than specified in the Company
Notice. In the event the Company has not sold some or all of the New Securities
within said ninety (90) day period, the Company shall not thereafter issue or
sell any unsold New Securities without first offering such securities to the
Investors in the manner provided above.
(d) If any Investor shall have failed to deliver to the Company its
Right of First Refusal Election Notice within the time period described in this
Section 1.4, such Investor shall be deemed to have waived its Right of First
Refusal.
1.5. Waiver of Right of First Refusal. The Right of First Refusal may be
--------------------------------
waived as to any given issuance of New Securities on behalf of all Investors, by
Investors holding not less than eighty (80) percent of the shares of Common
Stock and Common Stock issuable upon conversion of any Preferred Stock then held
by all Investors or their permitted assignees or transferees.
1.6. Fees and Expenses of Valuation of New Securities. The fees and
------------------------------------------------
expenses of any investment banking firm retained in connection with the
determination of the fair market value of the consideration to be paid for the
New Securities pursuant to Section 1.4(a) shall be born proportionately by the
Company and each Investor who exercises such Investor's Right of First Refusal
to purchase New Securities according to the relative number of the New
Securities, if any, actually (i) sold by the Company to a third party and (ii)
purchased by such Investor from the Company.
1.7. Company Right to Terminate Issuance of New Securities.
-----------------------------------------------------
Notwithstanding the foregoing, the Company may in its sole discretion terminate
any proposed issuance of New Securities in respect to which the Company has
given Company Notice, at any time prior to the consummation thereof. The
foregoing provision shall apply even in the event one or more Investors shall
have exercised their Rights of First Refusal hereunder; provided, however, that
no New Securities shall then have been issued.
ARTICLE 2.
RIGHTS OF FIRST OFFER
---------------------
2.1. Company Right of First Offer. In the event that Shareholder (a
----------------------------
"Selling Shareholder") proposes to sell, transfer or otherwise dispose of or
-------------------
pledge, grant a security interest in or otherwise encumber (a "Transfer") any
--------
shares of capital stock of the Company or options, warrants or other securities
by their terms convertible or exercisable for shares of capital stock of the
Company (the "Transfer Shares"), owned as of the date hereof or hereafter
---------------
acquired by such Selling Shareholder, to any proposed purchaser or transferee
(each a "Transferee"), the Selling Shareholder shall first offer to the Company
----------
and the Company or its designee shall have a right to purchase up to all of such
Transfer Shares (the "Company Right of First Offer") on the terms and conditions
----------------------------
described below. In the event that the Board determines, in its sole discretion,
that
3
<PAGE>
the Company is prohibited by law or by contract from exercising the Company
Right of First Offer, the Company may specify another individual or entity
(other than a Shareholder) as its designee to purchase such Transfer Shares upon
the exercise of the Company Right of First Offer, as set forth in Section 2.3(d)
hereof.
2.2. Non-Selling Investor Right of First Offer. In the event the Company
-----------------------------------------
or its designee shall not repurchase or shall elect to repurchase less than all
of the Transfer Shares pursuant to Section 2.1 hereof, the Selling Shareholder
shall then offer to each (or each other, as applicable) Investor that holds at
least 250,000 shares of Preferred Stock (or Conversion Stock issued in respect
thereof), as appropriately adjusted for stock splits, stock dividends,
combinations and the like (collectively, the "Non-Selling Investors") and each
---------------------
Non-Selling Investor shall have a right to purchase such Non-Selling Investor's
Transfer Pro Rata Share (as defined in Section 2.4 hereof) of any Transfer
Shares as to which the Company shall not have exercised the Company Right of
First Offer pursuant to Section 2.1 hereof (the "Investor Right of First Offer")
-----------------------------
on the terms described herein.
2.3. Procedure. (a) Each Selling Shareholder shall deliver a notice (the
---------
"Transfer Notice") to each Non-Selling Investor and to the Company, stating (i)
---------------
such Selling Shareholder's bona fide intention to Transfer the Transfer Shares,
(ii) the number of Transfer Shares to be transferred, (iii) the price and
material terms and conditions upon which the proposed Transfer is to be made,
and (iv) the identity of the Transferee. The Transfer Notice shall include a
copy of any written proposal or letter of intent or other agreement relating to
the proposed Transfer.
(b) Within fifteen (15) days after delivery of the Transfer Notice
to the Company, the Company or its designee shall indicate to the Selling
Shareholder and to each Non-Selling Investor in writing (the "Company Election
----------------
Notice") whether it elects to purchase any or all of the Shares to which the
- ------
Transfer Notice refers at the price per share and on the terms and conditions
specified in the Transfer Notice. In the event that the Company or its designee
elects to purchase less than all of the Transfer Shares, within fifteen (15)
days of the Company's receipt of the Company Election Notice, each Non-Selling
Investor shall indicate to the Selling Shareholder and the Company in writing
(the "Investor Election Notice") whether such Non-Selling Investor elects to
------------------------
exercise such Non-Selling Investor's Investor Right of First Offer to purchase
any or all of the Transfer Shares as to which the Company or its designee shall
not have exercised the Company Right of First Offer pursuant to Section 2.1
hereof, at the price per share and on the terms and conditions specified in the
Transfer Notice.
(c) In the event the Company or its designee elects to acquire
Transfer Shares, out of funds legally available therefor, settlement thereof
shall be made in cash within thirty (30) days after delivery of the Transfer
Notice; provided, however, that if the terms of payment set forth in the
Transfer Notice were other than cash against delivery or promissory notes
payable over time, the Company or its designee shall pay in cash the fair market
value of such consideration as determined by an investment banking firm mutually
acceptable to the Selling Shareholder and the Company, which appraisal shall be
final within five (5) days of such determination if such determination is made
after twenty-five (25) days following delivery of the Transfer Notice.
4
<PAGE>
(d) In the event the Company elects to acquire Transfer Shares, and
the Board determines, in its sole discretion, that the Company is prohibited by
law or by contract from acquiring the Transfer Shares itself, the Company may
specify in the Company Election Notice another person or entity (other than a
Founder or Investor) as its designee to purchase such Shares; provided, however,
that the designation of another person or entity to purchase such Transfer
Shares pursuant to this Section 2.3(d) shall constitute a legally binding
obligation of the Company to complete such purchase if its designee shall fail
to do so.
(e) Subject to Section 2.1 hereof, in the event any Non-Selling
Investor elects to acquire Transfer Shares, such Non-Selling Investor shall
specify in its Investor Election Notice the number of Transfer Shares (up to its
Transfer Pro Rata Share of the remaining unpurchased Transfer Shares) it has
elected to purchase. Settlement for the Transfer Shares to be purchased by such
Non-Selling Investors shall be made in cash within thirty (30) days after
delivery of the Transfer Notice; provided, however, that if the terms of payment
set forth in the Transfer Notice were other than cash against delivery or
promissory notes payable over time, such Non-Selling Investor shall pay in cash
the fair market value of such consideration as determined by an investment
banking firm mutually acceptable to the Selling Shareholder and to a majority of
the Non-Selling Investors who elect to exercise their right to purchase shares
hereunder, which appraisal shall be final, within five (5) days of such
determination if such determination is made after twenty-five (25) days
following delivery of the Transfer Notice.
2.4. Definition of Transfer Pro Rata Share. Each Non-Selling Investor's
-------------------------------------
"Transfer Pro Rata Share" for purposes of this Article 2 is equal to the
-----------------------
fraction obtained by dividing (a) the number of shares of Common Stock held by
such Non-Selling Investor by (b) the aggregate number of shares of Common Stock
then outstanding and held by all Non-Selling Investors, assuming in each case
the conversion, exercise or exchange of all securities by their terms
convertible into or exercisable for Common Stock and the exercise of all options
to purchase or rights to subscribe for Common Stock or such convertible or
exchangeable securities.
2.5. Fees and Expenses of Valuation of Transfer Shares. The fees and
-------------------------------------------------
expenses of any investment banking firm retained in connection with the
determination of the fair market value of the consideration to be paid for the
Transfer Shares pursuant to Section 2.3(e) shall be born proportionately by the
Company, the Selling Shareholder and each Non-Selling Investor according to the
relative number of the Transfer Shares, if any, actually (i) purchased by the
Company, (ii) sold by the Selling Shareholder to a third party, and/or (iii)
purchased by such Non-Selling Investor.
2.6. Rights of Co-Sale. If at any time any Shareholder proposes to
-----------------
transfer any Transfer Shares to any Transferee and the Company (or its designee)
and the Non-Selling Investors shall not have elected to purchase all of the
Transfer Shares pursuant to their Company Right of First Offer and Investor
Right of First Offer (collectively, the "First Offer Rights") set forth at
------------------
Sections 2.1 and 2.2, respectively, each Non-Selling Investor shall have a right
to sell such Non-Selling Investor's Co-Sale Pro Rata Share of any Transfer
Shares which have remained unpurchased by the Company or the Non-Selling
Investors pursuant to the First Offer Rights (the "Co-Sale Rights"), on the
--------------
terms described herein. For purposes of this Section 2.6, each Non-
5
<PAGE>
Selling Investor's "Co-Sale Pro Rata Share" is equal to the fraction obtained
----------------------
by dividing (a) the number of shares of Common Stock held by such Non-Selling
Investor by (b) the aggregate number of shares of Common Stock then outstanding
and held by all Non-Selling Investors and the Selling Shareholder, assuming in
each case the conversion, exercise or exchange of all securities by their terms
convertible into or exercisable for Common Stock and the exercise of all options
to purchase or rights to subscribe for Common Stock or such convertible or
exchangeable securities.
2.7. Procedure. (a) Within five (5) days following any settlement for the
---------
Transfer Shares of the Selling Shareholder pursuant to exercise of the First
Offer Rights, such Selling Shareholder shall deliver a second Transfer Notice to
the Company and each Non-Selling Investor containing the information described
in Section 2.3, but reflecting the prior settlement of any First Offer Rights,
or if there has been no exercise of such First Offer Rights within thirty five
(35) days following the original Transfer Notice delivered by such Selling
Shareholder.
(b) Within ten (10) days after delivery of the second Transfer
Notice, each Non-Selling Investor shall indicate to the Selling Shareholder and
the Company in writing (the "Co-Sale Election Notice") whether such Non-Selling
-----------------------
Investor elects to exercise its Co-Sale Rights to sell up to such Non-Selling
Investor's Co-Sale Pro Rata Share at the per share price and on the terms and
conditions specified in the Transfer Notice and shall accompany such Co-Sale
Election Notice with one or more certificates, properly endorsed for transfer,
which represent: (i) the type and number of shares of Common Stock which such
Non-Selling Investor elects to sell, or (ii) that number of shares of Preferred
Stock which is at such time convertible into the number of shares of Common
Stock which such Non-Selling Investor elects to sell; provided, however, that if
the prospective Transferee objects to the delivery of Preferred Stock in lieu of
Common Stock, such Non-Selling Investor shall convert such Preferred Stock into
Common Stock and deliver Common Stock as provided in clause (i) above. The
Company agrees to make any such conversion concurrent with the actual transfer
of such shares to the Transferee.
(c) The stock certificate or certificates that the Non-Selling
Investor delivers to the Selling Shareholder pursuant to Section 2.7(b) shall be
transferred to the Transferee in consummation of the sale of the Common Stock
pursuant to the terms and conditions specified in the Co-Sale Election Notice
delivered by the Selling Shareholder pursuant to Section 2.7(a) above, and the
Selling Shareholder shall concurrently therewith remit to such Non-Selling
Investor that portion of the sale proceeds to which such Non-Selling Investor is
entitled by reason of its participation in such sale. To the extent that any
prospective Transferee or Transferees prohibits such assignment or otherwise
refuses to purchase shares of other securities from a Non-Selling Investor
pursuant to its exercise of its Co-Sale Rights hereunder, the Selling
Shareholder shall not sell to such prospective Transferee or Transferees any
such Transfer Shares unless and until, simultaneously with such sale, the
Selling Shareholder shall purchase such shares or other securities from such
Non-Selling Investor.
2.8. Transfer of Shares Upon Failure to Exercise Rights of First Offer or
--------------------------------------------------------------------
Co-Sale. Subject to the First Offer Rights of Section 2.1 and 2.2 and the Co-
- -------
Sale Rights of Section 2.6, the Selling Shareholder may, not later than ninety
(90) days following delivery to the Non-
6
<PAGE>
Selling Investors and the Company of the Transfer Notice, conclude a Transfer of
any or all of the Transfer Shares covered by the Transfer Notice on terms and
conditions not materially more favorable to the Transferee than those described
in the Transfer Notice. Any proposed Transfer on terms and conditions materially
more favorable to the Transferee than those described in the Transfer Notice, as
well as any subsequent proposed Transfer of any of the Transfer Shares by the
Selling Shareholder, shall again be subject to the First Offer Rights of
Sections 2.1 and 2.2 and the Co-Sale Rights of Section 2.6 and shall require
compliance by the Selling Shareholder with the procedures described in this
Article 2.
2.9. Effect on Transferee. The Company Right of First Offer, the Non-
--------------------
Selling Investor Rights of First Offer and Co-Sale Rights shall not be binding
upon any Transferee of Transfer Shares other than the Company or any other
Investor acquiring Shares in a transaction which complies with this Article 2.
2.10. Limitations to the Right of First Offer and Co-Sale. The First Offer
---------------------------------------------------
Rights and Co-Sale Rights shall not apply to: (i) cumulative transfers with
respect to a given Shareholder of less than 50,000 shares (unless the Transferee
would as a result of such proposed Transfer become the holder of 50% or more of
the outstanding voting power of the Company), (ii) pledges of shares, (iii)
gifts of shares, (iv) transfers to family members or descendants or trusts
therefor, in the case of individuals, or to corporate subsidiaries, affiliates
or parents thereof, in the case of corporate entities, or to general or limited
partners or to a liquidating trust established for the benefit of any such
general or limited partners, in the case of partnership entities, or to any
investment fund or other entity controlled or managed by an affiliate of such
partnership entities, in each of cases (ii), (iii) or (iv) hereof so long as the
transferee shall have assumed the obligations of the transferor under the
agreement with respect to subsequent transfers. In addition, such rights shall
not apply to a Public Offering or to the transfer by the Founders of 1,000,000
shares of Common Stock pursuant to the terms of that Common Stock Purchase
Agreement, dated the date hereof, among the Founders and the Investors named
therein.
ARTICLE 3.
ADDITIONAL PARTIES
------------------
The parties hereto agree that additional holders of securities of the
Company may, with the consent only of the Company, be added as parties to this
Agreement with respect to any or all securities of the Company held by them, and
shall thereupon be deemed for all purposes "Investors" and/or "Shareholders"
hereunder, as appropriate, and Schedule I hereto shall be amended to
----------
accordingly; provided, however, that from and after the date of this Agreement,
the Company shall not without the prior written consent of each Investor, enter
into any agreement with any holder or prospective holder of any securities of
the Company providing for the grant to such holder of rights superior to those
granted herein. Any such additional party shall execute a counterpart of this
Agreement, and upon execution by such additional party and by the Company, shall
be considered an Investor and or a Shareholder, as appropriate, for purposes of
this Agreement.
ARTICLE 4.
7
<PAGE>
GENERAL
-------
4.1. Governing Law This Agreement shall be governed by and construed
-------------
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
4.2. No Assignment or Transfer; Legends. (a) The Right of First Refusal,
----------------------------------
the Right of First Offer and the Right of Co-Sale may not be assigned or
transferred except upon death by will or laws of intestacy to the successors,
heirs, executors or administrators of the Investors in the case of individuals,
or to affiliates in the case of corporate entities, or to general or limited
partners or to a liquidating trust established for the benefit of any such
general or limited partners, in the case of partnership entities, or to any
investment fund or other entity controlled or managed by an affiliate of such
partnership entities, so long as such assignees or transferees shall have
assumed the obligations set forth in Article 1 and Article 2. All such assignees
or transferees of the Right of First Refusal, the Right of First Offer and the
Right of Co-Sale shall be bound by the restrictions and obligations set forth in
Article 1 and Article 2, respectively, as if they were a Investor under the
terms of this Agreement.
(b) All certificates or instruments representing shares of the
Company's capital stock held by the Shareholders or any Transferee within the
meaning of Article 2 hereof, whether now outstanding or subsequently issued,
shall be surrendered to the Company for endorsement or be endorsed by the
Company prior to their issuance with the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO, AND MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH, AN AGREEMENT AMONG THE COMPANY, THE HOLDER OF THESE
SECURITIES AND CERTAIN OTHER HOLDERS OF THE COMPANY'S
CAPITAL STOCK, WHICH AGREEMENT INCLUDES RIGHTS OF FIRST
REFUSAL, FIRST OFFER AND CO-SALE, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL OFFICE OF THE ISSUER."
The Company shall not transfer any of the shares of capital stock subject
to this Agreement on its books without first ascertaining compliance with all of
the applicable provisions of this Agreement with respect to such transfer.
4.3. Termination Of Rights. Each of the Right of First Refusal, the
---------------------
Company Right of First Offer, the Investor Right of First Offer and Co-Sale
Rights shall terminate on the earliest to occur of: (i) the closing of a firm
commitment underwritten public offering of shares of the Company's Common Stock
pursuant to an effective registration statement under the Securities Act of
1933, as amended, (ii) the merger or consolidation of the Company with or into
any other corporation or entity, other than a wholly-owned subsidiary of the
Company, or a sale of all or substantially all of the assets of the Company
(unless shareholders of the Company immediately prior to any such transaction
are holders of at least a majority of the voting securities of the surviving or
acquiring corporation thereafter, and for the purposes of this calculation,
voting securities of the surviving or acquiring corporation which any
shareholder of the corporation
8
<PAGE>
owned immediately prior to such merger or consolidation as shareholders of
another party to the transaction shall be disregarded) or (iii) as to each
Shareholder, at such time and for so long as such Shareholder shall no longer be
the beneficial owner of any shares of capital stock of the Company.
4.4. Modification; Waiver. Except as otherwise expressly provided herein,
--------------------
no modification or waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless approved in writing by each of the
Investors, each of the Founders and the Company. Any modification or waiver so
approved shall be binding on all of the Investors, all Founders and the Company.
Each Investor shall have the absolute right to exercise or refrain from
exercising any right or rights that such Investor may have by reason of this
Agreement, including, without limitation, the right to consent to the waiver or
modification of any obligation under this Agreement, and such Investor shall not
incur any liability to any other holder of any securities of the Company as a
result of exercising or refraining from exercising any such right or rights.
4.4.1. Conditions to Exercise of the Investors' Rights. Exercise of the
-----------------------------------------------
Investors' Rights of First Refusal, First Offer and Co-Sale under this Agreement
shall be subject to and conditioned upon, and the Company and any Selling
Shareholder shall use their best efforts to assist Investors exercising such
rights in, compliance with applicable federal and state securities laws;
provided, however, that in connection therewith neither the Company nor such
Selling Shareholder shall be required to file a general consent to service of
process in any jurisdiction where not previously subject to such process.
4.5. Third Parties. Nothing in this Agreement, express or implied, is
-------------
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as otherwise expressly
provided herein.
4.6. Entire Agreement. This Agreement contains the entire agreement
----------------
among the parties hereto with respect to the transactions contemplated herein
and supersedes in their entirety all prior agreements and understandings among
the parties relating to the subject matter hereof.
4.7. Severability. If any provision of this Agreement or any portion
------------
thereof is finally determined to be unlawful or unenforceable, such provision or
portion thereof shall be deemed to be severed from this Agreement. Every other
provision, and any portion of such an invalidated provision that is not
invalidated by such a determination, shall remain in full force and effect.
4.8. Notices. Any notice required or permitted under this Agreement
-------
shall be given in writing and shall be deemed effectively given upon personal
delivery; upon confirmed transmission by telecopy or telex; or three (3) days
following deposit with the United States Post Office, by certified mail, postage
prepaid, addressed to the Company, the Investors and the Founders at their
respective addresses as set forth on the signature pages hereto or subsequent
address appearing on the books of the Company. A copy of all notices to the
Company shall also concurrently be delivered to Latham & Watkins, 135
Commonwealth Drive, Menlo Park,
9
<PAGE>
California, 94025, to the attention of Allen Morgan.
4.9. Spousal Consent. The spouse of each Investor and Founder who is an
---------------
individual and who is married shall execute a Spousal Consent in substantially
the form of Attachment A hereto.
4.10. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
10
<PAGE>
IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers or representatives have set their hands hereunto effective
upon the date first written above.
"COMPANY"
VICINITY CORPORATION
By: ______________________
Name: Emerick Woods
Title: President
Signature Page to Vicinity Corporation
Amended and Restated Shareholders Agreement
<PAGE>
"FOUNDERS"
____________________________
Rama Aysola
____________________________
Eddie Babcock
____________________________
Timothy Bacci
____________________________
James DiSanto
Signature Page to Vicinity Corporation
Amended and Restated Shareholders Agreement
<PAGE>
"INVESTORS"
CMG @ VENTURES I, LLC
By:__________________________________
Name: Peter Mills
Title: General Partner
FRED GIBBONS SEPARATE PROPERTY
TRUST dated FEBRUARY 16, 1996
By:__________________________________
Name: Fred Gibbons
Title: Trustee
WS INVESTMENT COMPANY 96A
By:__________________________________
Name:
Title:
WSGR RETIREMENT PLAN U/A DTD
02/01/78 FBO DAVID J. SEGRE
By:__________________________________
Name:
Title:
_____________________________________
David J. Segre
Signature Page to Vicinity Corporation
Amended and Restated Shareholders Agreement
<PAGE>
_____________________________________
Adit Khorana
_____________________________________
Rob Tarkoff
_____________________________________
Scott Swimley
21ST CENTURY INTERNET FUND, L.P.
By:__________________________________
Name: Neil Weintraut
Title: General Partner
ENCOMPASS GROUP, INC.
By:__________________________________
Name: Yasuki Matsumoto
Title: General Partner
OAK INVESTMENT PARTNERS VIII, L.P.
By:__________________________________
Name:
Title:
Signature Page to Vicinity Corporation
Amended and Restated Shareholders Agreement
<PAGE>
OAK VIII AFFILIATES FUND,
LIMITED PARTNERSHIP
By:___________________________
Name:
Title:
______________________________
Norman H. Nie
______________________________
Jim Willenborg
Signature Page to Vicinity Corporation
Amended and Restated Shareholders Agreement
<PAGE>
SCHEDULE I
Shares of Company Stock Currently Held
--------------------------------------
Founders Common Stock
- -------- ------------
Rama Aysola 705,000
260 Gabarda Way
Portola Valley, CA 94028
Eddie Babcock 187,500
1219 Phelps Avenue
San Jose, California 95117
Timothy Bacci 770,000
1136 Webster Street
Palo Alto, California 94123
James DiSanto 548,334
281 Erica Way
Portola Valley, CA 94028
<PAGE>
SCHEDULE I
Shares of Company Stock Currently Held
--------------------------------------
<TABLE>
<CAPTION>
Number of Type of
Investors Shares Shareholding
- --------- --------- ------------
<S> <C> <C>
CMG @ Ventures 275,512 Common Stock
2420 Sand Hill Road, Suite 101 1,852,000 Series A Preferred
Menlo Park, California 94025 1,875,000 Series B Preferred
1,222,000 Series C Preferred
Fred Gibbons Separate Property Trust 67,600 Common Stock
dated February 16, 1996
11800 Murietta Lane
Los Altos Hills, California 94022
WS Investment Company 96a 18,750 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
WSGR Retirement Plan U/A Dtd 02/01/78 FBO 9,375 Series B Preferred
David J. Segre
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
David J. Segre 3,125 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Adit Khorana 3,125 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
</TABLE>
2
<PAGE>
SCHEDULE I
Shares of Company Stock Currently Held
--------------------------------------
<TABLE>
<CAPTION>
Number of Type of
Investors Shares Shareholding
- --------- --------- ------------
<S> <C> <C>
Rob Tarkoff 3,125 Series B Preferred
c/o Wilson, Sonsini, Goodrich
& Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Scott Swimley 6,250 Series B Preferred
68 Oakmont Avenue
Piedmont, California 94610-1110
21st Century Internet Fund, L.P. 1,750,000 Series C Preferred
5900 Hollis Street, Suite R
Emeryville, California 94608
Encompass Group, Inc. 332,000 Series C Preferred
777-108th Avenue NE
Bellevue, Washington 98004
Oak Investment Partners VIII, L.P. 981,000 Common Stock
One Gorham Island 2,256,901 Series D Preferred
Westport, Connecticut 06880 934,286 Series E Preferred subject
Tel: 203-226-8346 to exercise of warrants
Fax: 203-227-0372 therefor
Oak VIII Affiliates Fund, L.P. 19,000 Common Stock
One Gorham Island 43,712 Series D Preferred
Westport, Connecticut 06880 18,095 Series E Preferred subject
Tel: 203-226-8346 to exercise of warrants
Fax: 203-227-0372 therefor
</TABLE>
3
<PAGE>
SCHEDULE I
Shares of Company Stock Currently Held
--------------------------------------
<TABLE>
<CAPTION>
Number of Type of
Investors Shares Shareholding
- --------- --------- ------------
<S> <C> <C>
Norman H. Nie 11,905 Series E Preferred
Oak Investment Partners
525 University Avenue, Suite 1300
Palo Alto, CA 94301
Tel: 650-614-3700
Fax: 650-328-6345
Jim Willenborg 47,619 Series E Preferred
2898 Broadway
San Francisco, CA 94115-1061
</TABLE>
4
<PAGE>
ATTACHMENT A
Consent of Spouse
-----------------
I, ____________________, spouse of ____________________, have read and
approve of the foregoing Amended and Restated Shareholders Agreement dated as of
December 9, 1998 (the "Agreement"). In consideration of the rights granted
therein, I hereby appoint my spouse as my attorney-in-fact in respect of the
rights granted and obligations assumed with respect to the capital stock of
Vicinity Corporation under the Agreement and agree to be bound by the provisions
of said Agreement insofar as I may have any rights in said Agreement or in any
of such capital stock under the community property laws or similar laws relating
to marital property in effect in the state of our residence as of the date of
the signing of the foregoing Agreement.
Dated:_____________________ ____________________________
<PAGE>
EXHIBIT 10.7
VOTING AGREEMENT
This Agreement is entered into as of this 12th day of December, 1996,
by and among Vicinity Corporation, a California corporation (the "Company"),
Rama Aysola, Eddie Babcock, Timothy Bacci, and James DiSanto (each a "Founder"
and collectively, the "Founders"), the undersigned holder of Series A Preferred
Stock and Series B Preferred Stock of the Company (the "Series A and Series B
Shareholder"), and the undersigned purchaser of Series C Preferred Stock of the
Company (collectively, "the Series C Shareholders"). Collectively, the Founders,
the Series A and B Shareholders, and the Series C Shareholders are referred to
herein as the "Shareholders."
RECITALS
--------
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Series C Shareholders are purchasing shares of Series C Preferred
Stock ("Series C Preferred") pursuant to the Vicinity Corporation Series C
Preferred Stock Purchase Agreement of even date herewith and;
WHEREAS, as a condition precedent to the investment by the Series C
Shareholders, each of the signatories hereto, and any subsequent holder of
record who acquires shares from the signatories hereto (except such persons who
acquire such shares pursuant to a public disposition), desires to enter into and
agree to be bound by this Agreement, and each of the signatories hereto is
willing to enter into and agree to be bound by this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth below the adequacy and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
(1) Shares Subject to Agreement. The Shareholders each agree as to
---------------------------
all of the shares of Series A Preferred Stock ("Series A Preferred"), Series B
Preferred Stock ("Series B Preferred"), Series C Preferred, and Common Stock of
the Company which are now held by them or may be issued upon conversion of any
of the foregoing securities owned by them, together with any securities issued
to the foregoing persons upon any exchange, stock split, stock dividend,
recapitalization or the like (the "Shares") that they shall vote all such Shares
in accordance with the provisions of this Agreement.
(2) Obligation to Vote Shares for Specific Nominees.
-----------------------------------------------
(a) Obligation as to Directors Elected by Preferred Stock and
------------------------------------------------------------
Common Stock Voting Together as a Single Class. Until the termination of this
- ----------------------------------------------
Agreement pursuant to Section 6 hereof, each of the Shareholders hereby agrees,
at any shareholder meeting, or upon any action by written consent in lieu of
meeting, for the purpose of electing directors, to cast not less than such
minimum number of votes which, whether or not cumulative voting is in effect,
when combined with the votes cast by each other of the Shareholders and any
other person who shall cast such
1
<PAGE>
votes in person or by proxy, shall be necessary to cause the election to the
Company's Board of Directors, pursuant to the terms of the Company's Amended and
Restated Articles of Incorporation providing for the election by the holders of
the Preferred Stock and Common Stock of the Company (voting together as a single
class) of two members of the Board of Directors, of the President of the Company
(the "President") and a nominee mutually agreed upon by the parties who is not
an employee of the Company, the Series A and B Shareholder, or the Series C
Shareholders (the "Industry Designee"). Unless and until his successor shall be
duly elected and qualified, such Industry Designee shall be Fred Gibbons.
(b) Obligation in the Event of Conversion of Series A and B Preferred.
-----------------------------------------------------------------
(i) Subject to the provisions of subparagraph (ii) of this
Section (2)(b), if any shares of Series A Preferred or Series B Preferred held
by the Series A and B Shareholders have been converted into Common Stock of the
Company, the Series A and B Shareholder hereby agree with respect to all such
shares of Series A Preferred or Series B Preferred as have been converted into
Common Stock of the Company, at any shareholder meeting or upon any action by
written consent in lieu of meeting, for the purpose of electing directors, to
cast not less than such minimum number of votes which, whether or not cumulative
voting is in effect, when combined with the votes cast by each other of the
holders of Common Stock of the Company, as applicable, shall be necessary to
cause the election to the Company's Board of Directors, pursuant to the terms of
the Company's Amended and Restated Articles of Incorporation providing for class
voting of the Common Stock, of a nominee designated by the Founders (the
"Founders' Designee"). Unless and until a successor Founders' Designee is
nominated by a majority of the Founders, such Founders' Designee shall be
Timothy Bacci.
(ii) Subsequent to such date as all shares of Series A
Preferred or Series B Preferred have been converted to Common Stock of the
Company, notwithstanding the foregoing subparagraph (i) of this Section (2)(b),
in the event the votes held by the Series A and B Shareholders shall be
insufficient to elect the nominee previously elected by the Series A Preferred
and Series B Preferred holders pursuant to the terms of the Company's Amended
and Restated Articles of Incorporation providing for class voting for the Series
A Preferred and Series B Preferred (the "Series A and B Nominee") and all three
directors as set forth in Subsections (2)(a) and (2)(b)(i), the Series A and B
Shareholder shall be entitled to cast all of its votes, or such lesser number of
votes, as shall be necessary to elect the Series A and B Nominee and any
remaining votes of such Series A and B Shareholder, or such lesser number of
votes when combined with the votes of all other votes cast by other
shareholders, as shall be necessary to elect in order of priority: (x) the
Founders' Designee, (y) the President, and (z) the Industry Designee.
(c) Obligation in the Event of Conversion of Series C Preferred.
-----------------------------------------------------------
(i) Subject to the provisions of subparagraph (ii) of this
Section (2)(c), if any shares of Series C Preferred have been converted into
Common Stock of the Company, each of the Series C Shareholders hereby agrees
with respect to all such shares of Series C Preferred as have been converted
into Common Stock of the Company, at any shareholder meeting, or upon any action
by written consent in lieu of meeting, for the purpose of electing
2
<PAGE>
directors, to cast not less than such minimum number of votes which, whether or
not cumulative voting is in effect, when combined with the votes cast by each
other of the holders of the Common Stock of the Company, shall be necessary to
cause the election to the Company's Board of Directors, pursuant to the terms of
the Company's Amended and Restated Articles of Incorporation providing for class
voting of the Common Stock, of the Founders' Designee.
(ii) Subsequent to such date as all shares of Series C Preferred
have been converted to Common Stock of the Company, notwithstanding the
foregoing subparagraph (i) of this Section (2)(c), in the event the votes held
by the Series C Shareholders shall be insufficient to elect the nominee
previously elected by the Series C Preferred holders pursuant to the terms of
the Company's Amended and Restated Articles of Incorporation providing for class
voting for the Series C Preferred (the "Series C Nominee") and all three
directors as set forth in Subsections (2)(a) and (2)(c)(i), the Series C
Shareholders shall be entitled to cast all of their votes, or such lesser number
of votes, as shall be necessary to elect the Series C Nominee and any remaining
votes of such Series C Shareholders, or such lesser number of votes when
combined with the votes of all other votes cast by other shareholders, as shall
be necessary to elect in order of priority: (x) the Founders' Designee, (y) the
President, and (z) the Industry Designee.
(3) Nomination and Notice. The Company shall use its best efforts to
---------------------
cause the representatives chosen by each of Series A and B Shareholder, the
Series C Shareholders, the Founders' Designee, the President, and the Industry
Designee to be set forth on any ballot, proxy or other written instrument for
nomination for and election to the Board of Directors for the duration of this
Agreement. The Company shall furnish written notice to each of the Shareholders
at least ten (10) days prior to any meeting or proposed action by written
consent for the purpose of electing directors.
(4) Designation of Nominees. In the absence of notice to the contrary
-----------------------
by the applicable entity or persons, as the case may be, the directors then
serving on behalf of each such entity or persons shall be deemed to continue as
the nominee of such entity or persons.
(5) Additional Parties to the Agreement. In connection with any sale,
-----------------------------------
transfer, succession, or assignment by any Shareholder subsequent to the date of
this Agreement, other than by virtue of a sale to the public (pursuant to a
registered public offering, Rule 144 transaction or 4(1) transaction), the
Company and the Shareholders shall require such purchaser, transferee,
successor, or assignee, as a condition of such transfer, succession or
assignment, to agree in writing to be bound by all the terms and conditions of
this Agreement. Each such purchaser, transferee, successor or assignee shall be
deemed to be one of the Shareholders under this Agreement.
(6) Termination. This Agreement shall terminate on the earliest to
----------
occur of (a) five (5) years after the date of this Agreement, (b) the date of
the closing of a firm commitment underwritten public offering of shares of the
Company's Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or (c) the merger or consolidation of the
Company with or into any other corporation or entity, other than a wholly-owned
subsidiary of the Company, or a sale or all or substantially all of the assets
of the
3
<PAGE>
Company (unless shareholders of the Company immediately prior to such
transaction are holders of at least a majority of the voting securities of the
surviving or acquiring corporation thereafter, and for the purposes of this
calculation, voting securities of the surviving or acquiring corporation which
any shareholder of the corporation owned immediately prior to such merger or
consolidation as shareholders of another party to the transaction shall be
disregarded).
(7) Successors in Interest. The provisions of this Agreement shall be
----------------------
binding upon the successors in interest to any of the Shares, except as to
Shares sold to the public (pursuant to a registered public offering, Rule 144
transaction or 4(1) transaction). The Company shall not permit the transfer of
any of the Shares on its books or issue a new certificate representing any of
the Shares unless and until the person to whom such security is to be sold or
transferred shall have executed a written agreement, substantially in the form
of this Agreement, pursuant to which such person becomes a party to this
Agreement and agrees to be bound by all the provisions hereof as if such person
were a Shareholder, as defined herein; provided, however, that nothing in this
Agreement shall in any way limit the ability of each Shareholder to sell any or
all Shares to the public (pursuant to a registered public offering, Rule 144
transaction or 4(1) transaction). Any Shares so distributed shall be subject to
this Agreement.
(8) Inscription on Share Certificates.
---------------------------------
(a) Each certificate representing any of the Shares shall be
marked by the Company with a legend reading as follows:
"THE SHARES REPRESENTED HEREBY ARE SUBJECT TO A
VOTING AGREEMENT (A COPY OF WHICH MAY BE OBTAINED
FROM THE ISSUER). ANY PERSON ACCEPTING ANY INTEREST
IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND SHALL
BECOME BOUND BY ALL THE PROVISIONS OF SUCH VOTING
AGREEMENT."
(b) The Company agrees that, during the term of this Agreement,
it will not remove, and will not permit to be removed (upon registration of
transfer, reissuance or otherwise), the legend from any such certificate and
will place or cause to be placed the legend on any new certificate issued to
represent Shares theretofore represented by a certificate carrying the legend.
(9) Notices. Any notice required or permitted to be given to a party
-------
pursuant to this Agreement shall be in writing and shall be effective upon
personal delivery or upon deposit in the U.S. mail registered or certified, with
postage prepaid and property to the party to be notified.
(10) Validity and Severability; Amendments. The Shares, as of the
-------------------------------------
date hereof, are not subject to a proxy, voting agreement or other obligation,
restriction or agreement affecting the validity of this Agreement. If any
provisions of this Agreement shall be held invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby. This Agreement may be amended only
in writing upon
4
<PAGE>
the concurrence of the holders of a majority in interest of the Series A
Preferred, Series B Preferred, and Series C Preferred (or Common Stock issued
upon conversion thereof).
(11) Governing Law. This Agreement shall be governed by and construed
-------------
by the laws of the State of California as applied to contracts between
California residents entered into and to be performed entirely within the State
of California.
(12) Counterparts. This Agreement may be executed in two or more
------------
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
5
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed on the date
herein above set forth.
"COMPANY"
VICINITY CORPORATION
By:
----------------------------------------------
Hal Logan, President
"FOUNDERS"
--------------------------------------------------
Rama Aysola
--------------------------------------------------
Eddie Babcock
--------------------------------------------------
Timothy Bacci
--------------------------------------------------
James DiSanto
--------------------------------------------------
"SERIES A AND B SHAREHOLDERS"
CMG @ VENTURES
By:
-----------------------------------------------
Peter Mills, General Partner
"SERIES C SHAREHOLDERS"
TWENTY-FIRST CENTURY INTERNET FUND, L.P.
By:
-----------------------------------------------
Neil Weintraut, General Partner
6
<PAGE>
CMG @ VENTURES
By:
-----------------------------------------------
Peter Mills, General Partner
ENCOMPASS GROUP, INC.
By:
-----------------------------------------------
Yasuki Matsumoto, President
7
<PAGE>
EXHIBIT 10.8
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is dated as of the 17th day of June, 1998, by and
between Vicinity Corporation, a California corporation (the "Company"), and
Emerick M. Woods (the "Employee").
Recitals
--------
A. The Employee is currently serving as Chief Executive Officer ("CEO") of
the Company on an interim basis subject to a consulting agreement between
Employee and the Company;
B. The Company desires to employ the Employee and continue to retain the
services of Employee as CEO of the Company; and
C. Employee has required as a condition to his providing continued
services to the Company certain terms of such employment set forth herein,
including the acceleration of vesting of his stock options upon the occurrence
of certain events;
THEREFORE, IT IS HEREBY AGREED by and between the parties hereto as
follows:
1. Effectiveness of Agreement; Employment.
--------------------------------------
(a) Effectiveness of Agreement; Term. This Agreement shall be
--------------------------------
effective as of February 18, 1998 (the "Effective Time"). The initial term of
this Agreement shall commence as of the Effective Time, and, unless sooner
terminated pursuant to the provisions of Section 3, shall terminate at the close
of business on the date that is eighteen months from the Effective Time. (The
initial term of this Agreement and additional terms, if any, agreed to between
the parties, collectively the "Term").
(b) Duties. The Company hereby employs Employee to serve during the
------
Term as the Company's President and Chief Executive Officer reporting to the
Board of Directors of the Company. Employee agrees to perform such
responsibilities and duties in this capacity as may, from time to time, be
required of him by the Board of Directors of the Company. The Employee shall
carry out his duties and responsibilities hereunder in a diligent and competent
manner and shall devote his full business time, attention and energy thereto.
(c) Employment At-Will. The Company and the Employee acknowledge and
------------------
agree that the Employee's employment hereunder is at-will, as defined under
applicable law, and as such Employee's employment with the Company is terminable
by the Company at any time with or without Cause (as herein defined), with or
without notice.
(d) Board of Directors Membership. The parties agree that so long as
-----------------------------
Employee serves as CEO of the Company, he shall also serve as a member of the
Company's Board of Directors. The Company hereby agrees to take all actions that
are necessary to elect Employee, and thereafter continue Employee in office, as
a member of the Board of Directors of
<PAGE>
the Company. Employee agrees to resign from the Board of Directors of the
Company at such time as Employee ceases to be CEO of the Company.
2. Compensation and Benefits.
-------------------------
(a) Base Compensation and Bonus. The Company shall pay the Employee as
---------------------------
compensation for his services a base salary at the annualized rate of $200,000
(the "Base Compensation") beginning February 18, 1998 and continuing through
February 18, 1999. In addition, the Company shall pay the Employee an additional
incentive bonus (the "Bonus") in the amount of up to $100,000, $50,000 of which
will be based upon the Company's achievement of those certain milestones set
forth on Exhibit A hereto and $50,000 of which will be based upon milestones to
---------
be agreed to by Employee and the Company's Board of Directors. Base Compensation
and Bonus shall be subject to applicable tax withholding and shall be paid
periodically in accordance with normal Company payroll practices, and such Bonus
shall be determined and paid twice yearly, on or about August 18 and February 18
of each year. The Company covenants and agrees that, prior to November 1, 1998,
the Company's Board of Directors, or the compensation committee thereof, will
propose target Base Compensation and Bonus amounts for payment to the Employee
during the twelve months ending February 17, 2000.
(b) Employee Benefits. Employee shall be eligible to participate in
-----------------
the employee benefit plans and arrangements which are available or which become
available to other employees of the Company including any benefit plans and
arrangements which are only made available to executive employees of the
Company, subject in each case to the generally applicable terms and conditions
of the plans or programs in question and to the determination of any committee
administering such plan or program.
(c) Options. Employee shall be granted stock options (the "Option") to
-------
purchase 955,137 shares of Common Stock of the Company at the next regular
meeting of the Board of Directors with an exercise price equal to the fair
market value of such shares on the date of grant. Such Option is intended to
qualify as an incentive stock option as defined in Section 422 of the Internal
Revenue Code of 1986, as amended. Shares purchased upon exercise of such Option
shall be free of any rights of first refusal or repurchase. Twenty-five percent
(25%) of the shares subject to such Option shall be immediately vested and
exercisable as of the date of grant, with one thirty-sixth (1/36th) of the
balance of the shares subject to such Option to vest upon the expiration of each
full month after February 18, 1998. (e.g. March 18, April 18, etc.) Upon
termination of Employee's employment for any reason, Employee shall have the
right to exercise the Option to the extent then vested in accordance with the
applicable Stock Option Plan of the Company and related option agreements and
the provisions of this Agreement; provided, however, that if the Employee's
employment terminates as a result of Involuntary Termination (as defined below),
in addition to any accelerated vesting as provided in Section 2(d) hereof, an
additional number of shares subject to the Option shall become immediately
vested and exercisable, as of the date of such Involuntary Termination, equal to
the total number of additional shares which would vest after the date of such
Involuntary Termination if Employee remained an employee of the Company for the
greater of (i) nine (9) months after the date of such
2
<PAGE>
Involuntary Termination, or (ii) that number of full months between the date of
such Involuntary Termination and the end of the Term.
(d) Acceleration in the Event of Acquisition. In the event of a
----------------------------------------
merger or reorganization which results in the shareholders of the Company prior
to the transaction owning 50% or less of the voting power of the surviving
entity after such transaction or a sale of all or substantially all the assets
of the Company (unless the stockholders of the Company prior to the sale own
more than 50% of the surviving entity) (in each case, a "Reorganization"), then
upon such Reorganization an aggregate additional 50% of the shares subject to
such Option will become immediately vested and exercisable. As a condition to
such accelerated vesting, Employee agrees to remain (or accept employment) as an
Employee of the surviving entity for a period of not less than nine months
following, such Reorganization if such employment is offered, provided, however,
that such condition on such accelerated vesting shall apply only in the event of
the following: (i) Employee remains in a position of equivalent responsibility
and authority to Employee's prior position at the Company (it being agreed
between the parties hereto that a position of CEO or President of the Company,
if the Company is the surviving entity, or of general manager (or similar
function) of a division or other business unit of the acquiring entity that
contains all or substantially all of the business of the Company, if the Company
is not the surviving entity, shall be deemed to be a position of equivalent
responsibility and authority), (ii) any remaining unvested shares subject to
such Option continue to vest on at least an equivalent vesting schedule, and
(iii) Employee receives at least the same Base Compensation on a monthly basis
as was received prior to such Reorganization. The acceleration provisions of
this Agreement, including the acceleration provisions of this Section 2(d), are
in addition to, and not in lieu of or limitation of, any acceleration or similar
provisions set forth in the Company's Stock Option Plan or related option
agreement.
(e) Vacation Benefits. Employee shall be entitled to 20 days of paid
-----------------
vacation time during each calendar year of employment with the Company. Vacation
days earned but not used will be carried forward to the following year.
(f) Personal Family Visits. Employee shall be reimbursed by the
----------------------
Company for all reasonable and documented expenses associated with one visit of
Employee's family to the San Francisco Bay Area per calendar quarter.
(g) Housing Subsidy. The Company agrees to pay all reasonable and
---------------
documented housing expenses associated with Employee's maintaining Employee's
existing or equivalent housing in the San Francisco Bay Area. Reasonable housing
expenses shall include, but are not limited to, rent payments and furnishing
such housing in a manner suitable for visitation by Employee's family.
(h) Relocation Allowances. In the event that Employee relocates to
---------------------
the San Francisco Bay Area, the Company shall pay all reasonable and documented
relocation costs associated with Employee's move to the San Francisco Bay Area,
including but not limited to moving of household goods, any remaining lease
payments on Employee's current residence in Southern California (not to exceed
six months in the aggregate), the costs of house hunting trips and other
reasonable and documented costs associated with Employee's relocation. The
Company
3
<PAGE>
further agrees to negotiate an agreement in good faith with the Employee to
subsidize Employee's housing in the San Francisco Bay Area in the event of such
relocation.
(i) Tax Liabilities. The Company agrees to reimburse Employee for any
---------------
and all federal and state tax liabilities (including any penalties) assessed
against Employee as a result of Employee's previous status as a consultant to
the Company to the extent and only to the extent they result from the Company's
failure to withhold income taxes, FICA taxes and social security taxes from
amounts paid to Employee during the period of such consultancy.
3. Severance Payments.
------------------
(a) Involuntary Termination Not for Cause. Notwithstanding the Term
-------------------------------------
of this Agreement, if Employee's employment with the Company terminates as a
result of an Involuntary Termination at any time prior to the end of the Term,
then Employee shall continue to receive his Base Compensation (payable on the
Company's regularly scheduled payroll dates), and employee benefits referenced
in Section 2(b) above, and arrangements of the Company governing such benefit
plans, for the greater of (i) nine (9) months from the date of such Involuntary
Termination or (ii) that number of full months between the date of such
Involuntary Termination and the end of the Term.
(b) Voluntary Resignation, Termination for Cause. If the Employee's
--------------------------------------------
employment terminates by reason of Employee's voluntary termination or
resignation, or if the Employee is terminated for Cause, Employee shall not be
entitled to receive severance payments or other benefits as described under
Section 3(a), other than those, if any, to which he is entitled under the
Company's existing benefit plans at the time of such termination, nor shall
Employee be entitled to any further vesting of the Option as described in
Section 2(c) hereof.
(c) Death or Disability. If the Employee's employment terminates as a
-------------------
result of his death or disability, then such termination shall be treated as if
it were an Involuntary Termination and severance and other benefits shall be
provided (to the Employee in the event of disability, to Employee's estate in
the event of death) in accordance with Section 2 and Section 3(a) hereof.
4. Covenant Not to Compete and Not to Solicit.
------------------------------------------
(a) Upon the termination of Employee's employment with the Company
with or without Cause, Employee agrees that he shall not, for a period equal to
Employee's severance period under Section 3 )(a) hereof, and if and only to the
extent Employee continues to receive the amounts referred to in such Section
3(a) engage anywhere in the Restricted Territory (as defined below) , on his own
behalf, or as owner, manager, advisor, principal, agent, partner, consultant,
director, officer, or employee of any business entity, in the development of
goods or services which are directly competitive with the goods or services
provided by the Company as of the date hereof, without the express written
consent of the Board of Directors of the Company. The term Restricted Territory
shall mean each and every country, province, state, city or other political
subdivision of the world in which the Company is currently engaged as of the
date hereof in business or otherwise sells its products or services. The
foregoing covenant shall not be deemed
4
<PAGE>
to prohibit Employee from acquiring an investment of not more than thirty
percent of the capital stock of a competing business within the Restricted
Territory, whose stock is traded on a national securities exchange or through
the automated quotation system of a registered securities association.
(b) Upon the termination of Employee's employment with the Company
with or without Cause, Employee agrees that he shall not, for a period equal to
Employee's severance under Section 3(a) hereof, solicit the hiring of any person
who is an employee of the Company as of the date of Employee's termination, or
induce any such person to discontinue his employment with the Company.
5. Definitions. As used herein, the terms
-----------
(a) Cause. "Cause" means the termination by the Company of the
-----
Employee's employment hereunder only upon:
(i) The substantial and continuing failure of the Employee
to render services to the Company in accordance with the Employee's assigned
duties, which failure materially and adversely affects the business prospects,
financial condition, operations, property or affairs of the Company if such
failure to render services to the Company remains uncured for a period of 30
days following delivery of notice by the Board of Directors of the Company to
the Employee specifically identifying the basis of such failure;
(ii) The conviction of the Employee of a felony under the
laws of the United States or any State thereof, either in connection with the
performance of the Employee's obligations to the Company or which materially and
adversely affects the Employee's ability to perform such obligations;
(iii) A willful act by the Employee which constitutes gross
negligence in the performance of his duties hereunder and is injurious to the
Company and which remains uncured for a period of 30 days following delivery of
notice by the Board of Directors of the Company to the Employee; or
(iv) The commission of an act of fraud or embezzlement
which results in a material loss, damage or injury to the Company.
(b) Involuntary Termination. "Involuntary Termination" shall mean any
-----------------------
purported termination of the Employee by the Company which is not voluntary on
the part of Employee and which is not effected for Cause. Without limitation to
the foregoing, Involuntary Termination shall include any voluntary termination
by Employee following a Reorganization in which Employee is not offered a
position meeting the requirements set forth in 2(d)(i) and (iii) above.
5
<PAGE>
6. Notices. Any notice, report or other communication required or
-------
permitted to be given hereunder shall be in writing to both parties and shall be
deemed given on the date of delivery, if delivered, or three days after mailing,
if mailed first-class mail, postage prepaid, to the following addresses:
If to the Employee, at the address set forth below the Employee's signature
at the end hereof.
If to the Company:
Vicinity Corporation
1135A San Antonio Road
Palo Alto, California 94303
Attn: Scott Young
or to such other address as any party hereto may designate by notice given as
herein provided.
7. Governing Law. This Employment Agreement shall be governed by and
-------------
construed and enforced in accordance with the internal substantive laws, and not
the choice of law rules, of the State of California.
8. Amendments. This Employment Agreement shall not be changed or modified
----------
in whole or in part except by an instrument in writing signed by each party
hereto.
9. Severability. The invalidity or unenforceability of any provision or
------------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
10. Legal Fees. Company agrees to pay all legal fees and expenses
----------
associated with the review and negotiation of the Agreement by Employee's
attorney.
11. Successors.
----------
(a) Company's Successors. Any successor to the Company (whether direct
--------------------
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this Agreement by
operation of law.
(b) Employee's Successors. The terms of this Agreement and all rights
---------------------
of the Employee hereunder shall inure to the benefit of, and be enforceable by,
the Employee's personal
6
<PAGE>
or legal representatives, executors, administrators, successor, heirs,
distributees, devisees or legatees.
12. Entire Agreement. This Agreement shall supersede and replace all prior
----------------
agreements or understandings relating to the subject matter hereof, and no
agreement, representations or understandings (whether oral or written or whether
express or implied) which are not expressly set forth in this Agreement have
been made or entered into by either party with respect to the relevant matter
hereof.
13. Counterparts. This Employment Agreement may be executed in several
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
14. Effect of Headings. The section headings herein are for convenience
------------------
only and shall not affect the construction or interpretation of this Employment
Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement effective of the Effective Time as defined herein.
Vicinity Corporation
By:
Name:___________________________
Title:__________________________
EMPLOYEE
________________________________
Emerick M. Woods
________________________________
________________________________
(Print Address)
________________________________
(Print Telephone Number)
8
<PAGE>
Exhibit A to Employment Agreement
---------
Bonus Objectives for Q3 and Q4 of FY 98 and Q1 and Q2 of FY 99
--------------------------------------------------------------
1. Vicinity Corporation (the "Company") shall pay Emerick M. Woods (the
"Employee") an incentive bonus in the amount of up to $50,000.00 upon the
achievement of the milestones set forth below. Partial completion of any of the
milestones set forth below shall earn Employee partial payment by the Company of
the $50,000.00 incentive bonus.
Up to $25,000.00 upon achievement of the following milestones:
To be achieved in Q3 FY 98 (Feb.-April 1998):
Achieve $1.4 million in bookings
Achieve $1.0 million in recognized revenue
To be achieved in Q4 FY 98 (May-July 1998)
Vice President Sales and Chief Financial Officer hired
Achieve $1.5 million in bookings
Achieve $1.1 million in recognized revenue
Approval of FY 99 operating plan
Secure equity investment of $2 million or acquisition.
Complete company-wide performance appraisals and human resource audit
Up to $25,000.00 upon achievement of the following milestones:
To be achieved in Q1 FY 99 (Aug.-October 1998):
Achieve $1.5 million in bookings (vs. 1.0 FY 98)**
Achieve Q1=FY 99 operating plan recognized revenue target**
Achieve Q1=FY 99 operating plan operating profitability target **
Major progress toward closing major partnership agreement > $250K
On schedule to release major new service in H1'99
To be achieved in Q2 FY 99 (Nov. 1998-Jan. 1999)
Achieve bookings of $2.0 million (versus 1.1 FY 98)**
Achieve Q2=FY 99 operating plan recognized revenue target**
Achieve Q2=FY 99 operating plan operating profitability target**
Close major partnership agreement initiated in Q1
9
<PAGE>
Launch major new service initiated in Q1
** (Final objectives for operating numbers in FY 99 are to be updated and
consistent with the FY 99 operating plan when it is approved by the
board in Q4 FY 98.)
2. In addition to the above incentive bonus, with respect to the same time
periods, the Company shall pay the Employee an additional incentive bonus in the
amount of up to $50,000.00 upon the achievement of milestones to be agreed to by
the Employee and the Compensation Committee of the Company's Board of Directors
(which such milestones may be substantially the same as set forth above).
Partial completion of any of such milestones shall earn Employee partial payment
by the Company of the $50,000.00 additional incentive bonus.
3 The Compensation Committee of the Company's Board of Directors will give
Employee quarterly performance feedback as to progress toward achievement of
semiannual bonus awards and review of then current bonus objectives.
<PAGE>
EXHIBIT 10.9
LOAN AGREEMENT
This Loan Agreement is entered into as of the 14th day of July, 1999,
by and between Vicinity Corporation, a California corporation ("Vicinity"), and
Emerick Woods, an individual ("Employee").
RECITALS
A. Employee is employed as the President of Vicinity.
B. To enable Employee to exercise options exercisable for Common
Stock of Vicinity, Employee and Vicinity desire that the Vicinity make a loan to
the Employee as set forth herein.
NOW, THEREFORE, Vicinity and Employee agree as follows:
AGREEMENT
1. The Loan. Vicinity agrees, on the terms of and subject to the
--------
conditions specified in this Agreement, to lend to Employee the aggregate
principal amount of NINETY FIVE THOUSAND FIVE HUNDRED THIRTEEN DOLLARS AND
SEVENTY CENTS ($95,513.70) (the "Loan"). To evidence the Loan, Employee shall
execute and deliver to Vicinity a promissory note (the "Promissory Note") in the
form of Exhibit A. The Loan shall bear interest as set forth in the Promissory
---------
Note. The Loan including all accrued and unpaid interest thereon shall be due
and payable on the earliest to occur of the following: (i) the date eighteen
(18) months following the date of a Qualified Public Offering (ii) the date
thirty (30) days following a Sale of the Company, (iii) the date ninety (90)
days following Employee's voluntary termination of employment with Vicinity or
the termination of Employee's employment by Vicinity and (iv) the fifth
anniversary of the Closing Date (as defined below), unless prepaid on or
accelerated to an earlier date pursuant to the terms hereof (the "Maturity
Date").
For purposes of this Agreement, "Qualified Public Offering" shall mean
a sale of the Vicinity's Common Stock to the general public pursuant to a
registration statement declared effective under the Securities Act of 1933, as
amended (the "Act") with aggregate proceeds to Vicinity of not less than
$10,000,000. For purposes of this Agreement, "Sale of the Company" shall mean
the acquisition by a third-party of all or substantially all of the stock or
assets of Vicinity, but only if the consideration received by the shareholders
of Vicinity is received in the form of cash or unrestricted publicly-traded
securities. In the event that the consideration received by the shareholders of
Vicinity is in the form of securities that are restricted or that are not
publicly-traded, a Sale of the Company for purposes hereof shall be deemed to
have occurred on the date forty-five (45) days following the date such private
or restricted securities received by Employee shall become unrestricted and/or
publicly tradable.
2. Place and Date of Closing. The closing of the Loan (the
-------------------------
"Closing") will be held at the offices of Vicinity, 1135A San Antonio Road, Palo
Alto, California, 94303, on July 14, 1999 at 10:00 a.m. or at such other time
and place as the parties shall mutually agree (the "Closing Date"). At the
Closing:
<PAGE>
(a) Vicinity shall deliver to Employee $95,513.70 in immediately
available funds;
(b) Employee shall execute and deliver to Vicinity the
Promissory Note; and
(c) Employee and Vicinity shall execute and deliver a security
agreement in substantially the form attached hereto as Exhibit B (the "Security
---------
Agreement") pursuant to which, Employee shall pledge to Employee, as security
for the Loan, all of Vicinity's capital stock (or any proceeds therefrom) now
owned or hereafter acquired by Employee (the "Shares").
3. Scope of Liability. Notwithstanding any other provisions of this
------------------
Agreement, the Promissory Note or the Security Agreement, Vicinity shall have
recourse against Employee for any liability arising in connection with this
Agreement, the Promissory Note and the Security Agreement.
4. Employee understands that the loan provided for herein is not
transferable by Employee and is conditioned upon the future performance of
substantial services by Employee.
5. This Agreement, the Promissory Note and the Security Agreement
constitute the full and entire understanding and agreement among the parties
hereto with regard to the subject hereof. Any amendment of this Agreement, the
Promissory Note or the Security Agreement must be signed by all the parties to
this Agreement. Any term hereof may be waived, discharged or terminated only by
a written instrument signed by the party against whom enforcement of any such
waiver, discharge or termination is sought.
6. Employee understands that this Agreement does not constitute an
employment agreement or a promise by Vicinity to continue Employee's employment.
7. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery to the party to be notified, or five days after deposit with
the United States mail, by registered or certified mail, postage prepaid,
addressed to the address set forth on the signature page hereto (and in the case
of Vicinity, to the attention of the Chief Financial Officer), or such other
address as a party may furnish to the other party.
8. No party may assign its rights and/or duties under this Agreement
to a third party without the prior written consent of the other parties to this
Agreement, except that Vicinity may assign its rights and duties under this
Agreement, and may assign the Promissory Note in the event of a merger with or
into another entity or a sale of all or substantially all of the stock or assets
of Vicinity and the surviving or acquiring entity agrees in writing to be bound
by the transferor's rights and duties under this Agreement.
9. This Agreement shall be governed in all respects by the laws of
the State of California.
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Loan Agreement
as of the date first written above.
EMERICK WOODS VICINITY CORPORATION
___________________________________ By:___________________________
___________________________________ Title:________________________
(address)
1135A San Antonio Road
___________________________________ Palo Alto, California, 94303
CONSENT OF SPOUSE
I consent to the terms of this Loan Agreement for purposes of any
community property interest that I may have in the rights and property subject
to this Loan Agreement.
__________________________________________
Name: ____________________________________
3
<PAGE>
EXHIBIT A TO LOAN AGREEMENT
---------------------------
PROMISSORY NOTE
$95,513.70 Palo Alto, California
July 14, 1999
1. For value received, the undersigned, Emerick Woods (the
"Employee"), promises to pay to Vicinity Corporation, a California corporation
("Vicinity"), the principal sum of NINETY FIVE THOUSAND FIVE HUNDRED THIRTEEN
DOLLARS AND SEVENTY CENTS ($95,513.70) (the "Principal"), together with any
accrued and unpaid interest on the Principal compounded annually at the rate
equal to EIGHT AND ONE QUARTER PERCENT (8.25%) per annum from the date hereof,
on the Maturity Date. Payments will be allocated first to accrued and unpaid
interest and then to principal.
2. This is the Promissory Note referred to in that certain Loan
Agreement (the "Loan Agreement") dated as of July 14, 1999 between Vicinity and
the Employee, as the same may be amended from time to time and is entitled to
the benefits thereof and is subject to all terms, provisions and conditions
thereof, including those with respect to recourse. Capitalized terms used herein
but not defined herein shall have the meaning given to such terms in the Loan
Agreement.
3. In the event (i) Employee defaults in the payment of Principal or
interest when due pursuant to the terms hereof, (ii) any representation or
warranty of Employee contained in this Promissory Note or any other agreement or
instrument executed in connection with the loan described herein proves to have
been false or misleading in any material respect, or (iii) Employee defaults in
Employee's obligation to pay any indebtedness evidenced by any other promissory
note executed by Employee and payable to Vicinity or there occurs any other
default under any deed of trust, mortgage or other document securing repayment
of such indebtedness, then unless otherwise prohibited by law, Vicinity shall
have the option, without demand or notice, to declare the entire Principal
balance of this Promissory Note, together with all accrued and unpaid interest,
to be immediately due and payable.
4. This Promissory Note is secured by certain shares of Vicinity's
Common Stock (the "Shares"), as more fully detailed in the Security Agreement by
and between Vicinity and Employee of even date herewith.
5. Employee hereby makes the following representations and warranties
to Vicinity and acknowledges that Vicinity is relying on such representations in
making the loan:
A. The consent of no person or entity other than Employee's spouse
is required to grant the security interest in the Shares to Vicinity.
<PAGE>
B. Other than as relates to Employee's position with Vicinity,
there are no actions, proceedings, claims or disputes pending or, to Employee's
knowledge, threatened against or affecting Employee or the Shares.
6. Upon the failure of Employee to pay the Principal when due,
interest on the Principal shall thereafter accrue at the rate of TWELVE AND
THREE QUARTER PERCENT (12.75%) per annum.
7. If an action is instituted for collection of this Promissory Note,
Employee agrees to pay court costs and reasonable attorneys' fees incurred by
the holder hereof.
8. This Promissory Note may be amended or modified, and provisions
hereof may be waived, only by the written agreement of Employee and Vicinity. No
delay or failure by Vicinity in exercising any right, power or remedy hereunder
shall operate as a waiver of such right, power or remedy, and a waiver of any
right, power or remedy on any one occasion shall not operate as a bar or waiver
of any such right, power or remedy on any other occasion. Without limiting the
generality of the foregoing, the delay or failure by Vicinity for any period of
time to enforce collection of any amounts due hereunder shall not be deemed to
be a waiver of any rights of Vicinity under contract or under law. The rights of
Vicinity under this Promissory Note and under the Security Agreement are in
addition to any other rights and remedies which Vicinity may have.
9. The Principal may be prepaid without penalty, in whole or in part,
at any time. All amounts payable hereunder shall be payable in lawful money of
the United States of America.
10. Employee hereby acknowledges that Vicinity has not made any
representation or warranty to Employee concerning the income tax consequences of
the loan to Employee, and Employee shall be solely responsible for ascertaining
and bearing such tax consequences. Employee further acknowledges that (i)
Vicinity may, in its sole discretion, determine that it is required under the
Internal Revenue Code of 1986, as amended (the "Code"), and the rules and
regulations promulgated by the Internal Revenue Service ("IRS") thereunder, to
impute interest on the Principal of this Promissory Note at the rate set by the
IRS, (ii) the amount of any such imputed interest would be deemed to be
compensation income to Employee which would be subject to tax withholding, and
(iii) if so determined by Vicinity, Vicinity would report and withhold the
required amount out of the current compensation paid to Employee in accordance
with the Code and the rules and regulations promulgated thereunder.
11. THIS NOTE AND ALL RELATED DOCUMENTATION ARE EXECUTED VOLUNTARILY
AND WITHOUT ANY DURESS OR UNDUE INFLUENCE ON THE PART OR BEHALF OF THE PARTIES
HERETO, WITH THE FULL INTENT OF CREATING THE OBLIGATIONS AND SECURITY INTERESTS
DESCRIBED HEREIN AND THEREIN. THE PARTIES ACKNOWLEDGE THAT: (a) THEY HAVE READ
SUCH DOCUMENTATION; (b) THEY HAVE BEEN REPRESENTED IN THE PREPARATION,
NEGOTIATION AND EXECUTION OF SUCH DOCUMENTATION BY LEGAL COUNSEL OF THEIR OWN
CHOICE OR THAT THEY HAVE VOLUNTARILY DECLINED TO SEEK
2
<PAGE>
SUCH COUNSEL; (c) THEY UNDERSTAND THE TERMS AND CONSEQUENCES OF THIS NOTE AND
ALL RELATED DOCUMENTATION AND THE OBLIGATIONS THEY CREATE; AND (d) THEY ARE
FULLY AWARE OF THE LEGAL AND BINDING EFFECT OF THIS NOTE AND THE OTHER DOCUMENTS
CONTEMPLATED BY THIS AGREEMENT.
12. This Promissory Note shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of the State
of California.
3
<PAGE>
IN WITNESS WHEREOF, the undersigned executes this Promissory Note as
of the date first written above.
EMPLOYEE:
______________________________________
Emerick Woods
CONSENT OF SPOUSE
I consent to the terms of this Promissory Note for purposes of any
community property interest that I may have in the rights and property subject
to this Promissory Note.
________________________________________
Name: __________________________________
4
<PAGE>
EXHIBIT B TO LOAN AGREEMENT
---------------------------
SECURITY AGREEMENT
This Security Agreement is made as the 14th day of July 1999 by and between
Vicinity Corporation, a California corporation ("Pledgee"), and Emerick Woods
("Pledgor").
Recitals
--------
Pursuant to Pledgee's extension of a loan to Pledgor (the "Loan") under
that certain Loan Agreement of even date herewith (the "Loan Agreement"),
Pledgee and Pledgor have agreed to enter into this Security Agreement to provide
for a security interest in certain shares of Pledgor's capital stock in order to
secure the Promissory Note evidencing the Loan (the "Promissory Note").
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of the
---------------------------------------------
Loan, Pledgor, pursuant to the Commercial Code of the State of California,
hereby pledges to Pledgee all of Pledgee's capital stock (or any proceeds
therefrom) now owned or hereafter acquired by Pledgor (herein sometimes referred
to as the "Shares"). Any Shares now owned are hereby delivered to Pledgee, duly
endorsed in blank or with executed stock powers. Any Shares hereafter acquired
shall be promptly delivered to Pledgee, duly endorsed in blank or with executed
stock powers. Pledgee or its agent shall hold the Shares subject to the terms
and conditions of this Security Agreement.
The pledged stock (together with an executed blank stock assignment in the
form attached hereto as Exhibit A for use in transferring all or a portion of
---------
the Shares to Pledgee if, as and when required pursuant to this Security
Agreement) shall be held by Pledgee as security for the repayment of the
Promissory Note, and any extensions or renewals thereof, to be executed by
Pledgor and Pledgee. Pledgee shall not encumber or dispose of such Shares
except in accordance with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
---------------------------------------
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
` (a) Payment of Indebtedness. Pledgor will pay the principal sum of
-----------------------
the Promissory Note(s) secured hereby, together with interest thereon, at the
time and in the manner provided in the Promissory Note.
(b) Encumbrances. The Shares are free of all other encumbrances,
------------
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
<PAGE>
3. Voting Rights. During the term of this pledge and so long as all
-------------
payments of principal and interest are made as they become due under the terms
of the Promissory Note, Pledgor shall have the right to vote all of the Shares.
4. Warrants and Rights. In the event that, during the term of this
-------------------
pledge, subscription warrants or other rights or options shall be issued in
connection with the pledged Shares, such rights, warrants and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgee shall be immediately delivered to Pledgee, to be held under the terms
of this Security Agreement in the same manner as the Shares pledged.
5. Withdrawal or Substitution of Collateral. Pledgee shall not sell,
----------------------------------------
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Shares without the prior written consent of Pledgor.
6. Term. The within pledge of Shares shall continue until the payment or
----
forgiveness of all indebtedness secured hereby, at which time the Shares shall
be promptly delivered to Pledgor.
7. Pledgee Liability. In the absence of willful or gross negligence,
-----------------
Pledgee shall not be liable to any party for any of his acts, or omissions to
act, as Pledgee.
8. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
-----------------------------------
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
9. Successors or Assigns. Pledgor and Pledgee agree that all of the
---------------------
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
10. Governing Law. This Security Agreement shall be interpreted and
-------------
governed under the laws of the State of California.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the day and year first above written.
PLEDGEE" VICINITY CORPORATION
a California corporation
By: _________________________________________
Name: _______________________________________
Title: ________________________________________
"PLEDGOR" ____________________________________________
Emerick Woods
Address: Palos Verdes Estates
2805 Via Barri
Palos Verdes Estates, CA 90274
CONSENT OF SPOUSE
I consent to the terms of this Security Agreement for purposes of any
community property interest that I may have in the rights and property subject
to this Security Agreement.
_______________________________________
Name: _________________________________
3
<PAGE>
EXHIBIT A TO THE SECURITY AGREEMENT
-----------------------------------
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, hereby sell, assign and transfer unto _______________
___________ ___________________________________ (________) shares of the Common
Stock of Vicinity Corporation standing in my name of the books of said
corporation represented by Certificate No. ______ herewith and do hereby
irrevocably constitute and appoint _____
__________________________________________________ to transfer said stock on the
books of the within-named corporation with full power of substitution in the
premises.
Dated: July 14, 1999.
Signature:
________________________________
This Assignment Separate from Certificate was executed in conjunction with the
terms of a Security Agreement between the above assignor and Vicinity
Corporation dated July 14, 1999.
<PAGE>
EXHIBIT 10.10
VICINITY CORPORATION
1996 INCENTIVE STOCK OPTION PLAN
STOCK OPTION AGREEMENT -- EARLY EXERCISE
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Stock Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
----------------------------
((F1))
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Stock Option Agreement,
as follows:
Date of Grant ((F2))
Vesting Commencement Date ((F3))
Exercise Price per Share
Total Number of Shares Granted ((F4))
Total Exercise Price $((F5))
Type of Option X Incentive Stock Option
---
___ Nonstatutory Stock Option
Term/Expiration Date ((F6))
Vesting Schedule:
- ----------------
This Option may be exercised immediately, in whole or in part, conditioned
upon Optionee entering into a Restricted Stock Purchase Agreement with respect
to any unvested Option Shares. The Shares subject to this Option shall vest
and/or be released from the Company's repurchase option, as set forth in the
Restricted Stock Purchase Agreement, in accordance with the following schedule:
Twenty-five percent (25%) of the Shares subject to the option shall vest
twelve months after the Vesting Commencement Date, and an additional one forty-
eighth (1/48th) of the Shares subject to the Option shall vest on the first day
of each month thereafter.
<PAGE>
Termination Period:
- ------------------
This Option may be exercised for 30 days after termination of Optionee's
employment or consulting relationship, or such longer period as may be
applicable upon death or disability of Optionee as provided in the Plan, but in
no event later than the Term/Expiration Date as provided above.
II. AGREEMENT
---------
1. Grant of Option. Vicinity Corporation, a California corporation (the
---------------
"Company"), hereby grants to the Optionee named in the Notice of Grant (the
- --------
"Optionee"), an option (the "Option") to purchase the total number of shares of
- --------- ------
Common Stock (the "Shares") set forth in the Notice of Grant, at the exercise
------
price per share set forth in the Notice of Grant (the "Exercise Price") subject
to the terms, definitions and provisions of the Vicinity Corporation 1996
Incentive Stock Option Plan (the "Plan") adopted by the Company, which is
----
incorporated herein by reference.
If designated in the Notice of Grant as an Incentive Stock Option, this
Option is intended to qualify as an Incentive Stock Option as defined in Section
422 of the Code. However, if this Option is intended to be an Incentive Stock
Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d)
it shall be treated as a Nonstatutory Stock Option.
2. Exercise of Option. This Option shall be exercisable during its
------------------
term and shall vest in accordance with the Vesting Schedule set out in the
Notice of Grant and with the provisions of Section 9 of the Plan as follows:
(i) Right to Exercise.
-----------------
(a) Subject to subsections 2(i)(b) through 2(i)(e) below, this
Option shall be exercisable cumulatively according to the vesting schedule set
out in the Notice of Grant. Alternatively, at the election of the Optionee, this
option may be exercised in whole or in part at any time as to Shares which have
not yet vested. For purposes of this Stock Option Agreement, Shares subject to
Option shall vest based on continued employment or consulting relationship of
Optionee with the Company. Vested Shares shall not be subject to the Company's
repurchase right (as set forth in the Restricted Stock Purchase Agreement,
attached hereto as Exhibit C-1).
-----------
(b) As a condition to exercising this Option for unvested
Shares, the Optionee shall execute the Restricted Stock Purchase Agreement
attached hereto as Exhibit C-1.
-----------
(c) This Option may not be exercised for a fraction of a Share.
(d) In the event of Optionee's death, disability or other
termination of the employment or consulting relationship, the exercisability of
the Option is governed by Sections 6, 7 and 8 below, subject to the limitation
contained in subsection 2(i)(c).
2
<PAGE>
(e) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Grant.
(ii) Method of Exercise. This Option shall be exercisable by written
------------------
notice (in the form attached as Exhibit A) which shall state the election to
---------
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by Optionee and together with an executed copy of the
Restricted Stock Purchase Agreement, if applicable, shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice and
Restricted Stock Purchase Agreement shall be accompanied by payment of the
Exercise Price. This Option shall be deemed to be exercised upon receipt by the
Company of such written notice and Restricted Stock Purchase Agreement
accompanied by the Exercise Price.
No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to Optionee on the date on which the Option is exercised with
respect to such Shares.
3. Optionee's Representations. In the event the Shares purchasable
--------------------------
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.
---------
4. Method of Payment. Payment of the Exercise Price shall be by any of
-----------------
the following, or a combination thereof, at the election of Optionee:
(i) cash or
(ii) check.
5. Restrictions on Exercise. This Option may not be exercised until such
------------------------
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
------------
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
6. Termination of Relationship. In the event an Optionee's Continuous
---------------------------
Status as an Employee or Consultant terminates, Optionee may, to the extent the
Option was vested at the date of such termination (the "Termination Date"),
----------------
exercise this Option during the Termination
3
<PAGE>
Period set out in the Notice of Grant. To the extent that Optionee was not
vested in this Option at the date of such termination, or if Optionee does not
exercise this Option within the time specified herein, the Option shall
terminate.
7. Disability of Optionee. Notwithstanding the provisions of Section 6
----------------------
above, in the event an Optionee's Continuous Status as an Employee or Consultant
terminates as a result of his or her disability, Optionee may, but only within
six (6) months from the date of such termination (and in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent the Option was vested at the date
of such termination; provided, however, that if such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option, such Incentive Stock Option shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option on the ninety-first (91st) day following such
termination. To the extent that Optionee was not vested in the Option at the
date of termination, or if Optionee does not exercise such Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
8. Death of Optionee. In the event of termination of Optionee's
-----------------
Continuous Status as an Employee or Consultant as a result of the death of
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the date of expiration
of the term of this Option as set forth in Section 12 below), by Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent Optionee could exercise the Option at the
date of death.
To the extent that Optionee is not vested in the Option at the date of
death, or if the Option is not exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
9. Non-Transferability of Option. This Option may not be transferred
-----------------------------
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.
10. Company Rights of First Refusal and Repurchase on Shares. The Shares
--------------------------------------------------------
issuable upon exercise of this Option are subject to certain rights of first
refusal and repurchase in favor of the Company as set out at Sections 4 and 5 of
the Exercise Notice and, in the event this Option is exercised for unvested
Shares, Section 1 of the Restricted Stock Purchase Agreement attached hereto as
Exhibit C-1.
- -----------
11. Lockup Agreement. In consideration of the granting of this Option to
----------------
Optionee and regardless of whether Optionee exercises this Option or not,
Optionee agrees, upon the request of the Company or the underwriters managing
the initial firmly underwritten public offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any of the Shares, any of the Common Stock or any
derivative security thereof (other than those included in the registration)
without the prior written
4
<PAGE>
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 180 days) from the effective date of such registration as
the Company or underwriters may specify.
12. Term of Option. This Option may be exercised only within the term
--------------
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to more than ten percent (10%) shareholders shall apply to
this Option.
13. Tax Consequences. Set forth below is a brief summary as of the date
----------------
of this Option of some of the federal and state tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
(i) Exercise of Incentive Stock Option. If this Option qualifies
----------------------------------
as an Incentive Stock Option, there will be no regular federal income tax
liability or state income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject Optionee to the
alternative minimum tax in the year of exercise.
(ii) Exercise of Incentive Stock Option Following Disability. If
-------------------------------------------------------
Optionee's Continuous Status as an Employee or Consultant terminates as a result
of disability that is not total and permanent disability as defined in Section
22(e)(3) of the Code, to the extent permitted on the date of termination,
Optionee must exercise an Incentive Stock Option within 90 days of such
termination for the Incentive Stock Option to be qualified as an Incentive Stock
Option.
(iii) Exercise of Nonstatutory Stock Option. There may be a regular
-------------------------------------
federal income tax liability and state income tax liability upon the exercise of
a Nonstatutory Stock Option. Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. If Optionee is an Employee or a former Employee, the Company
will be required to withhold from Optionee's compensation or collect from
Optionee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise. If the Optionee is subject to Section
16 of the Exchange Act, the date of income recognition may be deferred for up to
six months.
(iv) Disposition of Shares. In the case of an Nonstatutory Stock
---------------------
Option, if Shares are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
and state income tax purposes. In the case of an Incentive
5
<PAGE>
Stock Option, if Shares transferred pursuant to the Option are held for at least
one year after exercise and are disposed of at least two years after the Date of
Grant, any gain realized on disposition of the Shares will also be treated as
long-term capital gain for federal and California income tax purposes. If Shares
purchased under an Incentive Stock Option are disposed of within such one-year
period or within two years after the Date of Grant, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the difference between the Exercise Price and the lesser
of (1) the Fair Market Value of the Shares on the date of exercise, or (2) the
sale price of the Shares.
(v) Notice of Disqualifying Disposition of Incentive Stock Option
-------------------------------------------------------------
Shares. If the Option granted to Optionee herein is an Incentive Stock Option,
- ------
and if Optionee sells or otherwise disposes of any of the Shares acquired
pursuant to the Incentive Stock Option on or before the later of (1) the date
two years after the Date of Grant, or (2) the date one year after the date of
exercise, Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by Optionee.
(vi) Section 83(b) Election for Unvested Shares Purchased Pursuant to
----------------------------------------------------------------
Nonqualified Stock Options. With respect to the exercise of a nonqualified
- --------------------------
stock option for unvested Shares, an election may be filed by the Optionee with
the Internal Revenue Service and, if necessary, the proper state taxing
authorities, within 30 days of the purchase of the Shares, electing pursuant to
--------------
Section 83(b) of the Code (and similar state tax provisions if applicable) to be
taxed currently on any difference between the purchase price of the Shares and
their Fair Market Value on the date of purchase. This will result in a
recognition of taxable income to the Optionee on the date of exercise, measured
by the excess, if any, of the fair market value of the Shares, at the time the
Option is exercised over the purchase price for the Shares. Absent such an
election, taxable income will be measured and recognized by Optionee at the time
or times on which the Company's Repurchase Option lapses. Optionee is strongly
encouraged to seek the advice of his or her own tax consultants in connection
with the purchase of the Shares and the advisability of filing of the Election
under Section 83(b) and similar tax provisions. A form of Election under Section
83(b) is attached hereto as Exhibit C-5 for reference.
-----------
(vii) Section 83(b) Election for Unvested Shares Purchased Pursuant
-------------------------------------------------------------
to Incentive Stock Options. With respect to the exercise of an incentive stock
- --------------------------
option for unvested Shares, an election may be filed by the Optionee with the
Internal Revenue Service and, if necessary, the proper state taxing authorities,
within 30 days of the purchase of the Shares, electing pursuant to Section 83(b)
- --------------
of the Code (and similar state tax provisions if applicable) to be taxed
currently on any difference between the purchase price of the Shares and their
Fair Market Value on the date of purchase for alternative minimum tax purposes.
This will result in a recognition of income to the Optionee on the date of
exercise, for alternative minimum tax purposes, measured by the excess, if any,
of the fair market value of the Shares, at the time the option is exercised,
over the purchase price for the Shares. Absent such an election, alternative
minimum taxable income will be measured and recognized by Optionee at the time
or times on which the Company's Repurchase Option lapses. Optionee is strongly
encouraged to seek the advice of his or her tax consultants in connection with
the purchase of the Shares and the
6
<PAGE>
advisability of filing of the Election under Section 83(b) and similar tax
provisions. A form of Election under Section 83(b) for alternative minimum tax
purposes is attached hereto as Exhibit C-6 for reference.
-----------
OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY AND NOT THE
COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF OPTIONEE
REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON OPTIONEE'S
BEHALF.
14. Entire Agreement; Governing Law. The Plan is incorporated herein by
-------------------------------
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, including but not limited to the grant or
promise of any right or option to purchase shares of capital stock of the
Company to Optionee pursuant to any employment agreement or offer letter
delivered by the Company to Optionee or otherwise, and may not be modified
adversely to Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by California law except for
that body of law pertaining to conflict of laws.
VICINITY CORPORATION
a California corporation
By:____________________________________________
Title:_________________________________________
7
<PAGE>
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S 1996 INCENTIVE STOCK OPTION PLAN
WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT
WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE.
Optionee acknowledges receipt of a copy of the Plan and represents that he
is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.
Dated: ________________ _______________________________________________
((F1)), Optionee
Residence Address:
_______________________________________________
_______________________________________________
_______________________________________________
8
<PAGE>
CONSENT OF SPOUSE
-----------------
The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
Dated: ____________________
_______________________________________________
Spouse of Optionee
_______________________________________________
[Print Name]
9
<PAGE>
EXHIBIT A
---------
1996 INCENTIVE STOCK OPTION PLAN
EXERCISE NOTICE
Vicinity Corporation
1135A San Antonio Road
Palo Alto, CA 94303
Attention: Secretary
1. Exercise of Option. Effective as of today, ___________, 19__, the
------------------
undersigned (F1) ("Optionee") hereby elects to exercise Optionee's option to
--------
purchase _________ shares of the Common Stock (the "Shares") of Vicinity
------
Corporation (the "Company") under and pursuant to the Vicinity Corporation 1996
-------
Incentive Stock Option Plan, (the "Plan") and the [ ] Incentive [ ]
----
Nonstatutory Stock Option Agreement dated (F2) (the "Option Agreement").
----------------
2. Representations of Optionee. Optionee acknowledges that Optionee has
---------------------------
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
3. Rights as Shareholder. Until the stock certificate evidencing such
--------------------
Shares is issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a shareholder
shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued)
such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued,
except as provided in Section 11 of the Plan.
Optionee shall enjoy rights as a shareholder until such time as
Optionee disposes of the Shares or the Company and/or its assignee(s) exercises
the Right of First Refusal or Right of Repurchase hereunder. Upon such
exercise, Optionee shall have no further rights as a holder of the Shares so
purchased except the right to receive payment for the Shares so purchased in
accordance with the provisions of this Agreement, and Optionee shall forthwith
cause the certificate(s) evidencing the Shares so purchased to be surrendered to
the Company for transfer or cancellation.
4. Company's Right of First Refusal. Before any Shares held by Optionee or
--------------------------------
any transferee (either being sometimes referred to herein as the "Holder") may
------
be sold or otherwise transferred (including transfer by gift or operation of
law), the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section (the
"Right of First Refusal").
----------------------
<PAGE>
(a) Notice of Proposed Transfer. The Holder of the Shares shall
---------------------------
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
------
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
-------------------
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares
-------------
at the Offered Price to the Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty (30)
----------------------------------
days after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.
(c) Purchase Price. The purchase price ("Purchase Price") for the
-------------- --------------
Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the
-------
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty-five (35) days after receipt of the Notice or
in the manner and at the times set forth in the Notice.
(e) Holder's Right to Transfer. If all of the Shares proposed in the
--------------------------
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within sixty (60) days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall be
given to the Company, and the Company and/or its assignees shall again be
offered the Right of First Refusal before any Shares held by the Holder may be
sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Notwithstanding anything
--------------------------------------
to the contrary contained in this Section, the transfer of any or all of the
Shares during Optionee's lifetime or on Optionee's death by will or intestacy to
Optionee's immediate family or a trust for the benefit of Optionee's immediate
family shall be exempt from the provisions of this Section provided that the
Company is notified in writing of said transfer within thirty (30) days of said
transfer. "Immediate Family" as used herein shall mean spouse, lineal descendant
----------------
or antecedent, father, mother, brother or sister. In such case, the transferee
or other recipient shall receive and
2
<PAGE>
hold the Shares so transferred subject to the provisions of this Section and
Section 5 below, and there shall be no further transfer of such Shares except in
accordance with the terms of this Section or Section 5 below.
(g) Termination of Right of First Refusal. The Right of First Refusal
-------------------------------------
shall terminate as to any Shares upon the closing of: (i) the first sale of
Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended; (ii) the sale of all or
substantially all of the assets of the Company; or (iii) the merger,
consolidation or other reorganization of the Company with or into any other
corporation or corporations in which the holders of the capital stock of the
Company immediately prior to such transaction hold less than fifty percent (50%)
of the voting securities of the surviving corporation after such transaction.
5. Company's Right of Repurchase. Upon termination of Optionee's
-----------------------------
Continuous Status as an Employee or Consultant, the Company or its assignee(s)
shall have a right to repurchase all the Shares then owned by Optionee,
Optionee's Immediate Family pursuant to Section 4(f) above or a trust for the
benefit of Optionee's Immediate Family pursuant to Section 4(f) above (each of
which are sometimes referred to herein as the "Owner") on the terms and
-----
conditions set forth in this Section (the "Right of Repurchase").
-------------------
(a) Exercise of Right of Repurchase. At any time within the period
-------------------------------
from the of the termination of Optionee's Continuous Status as an Employee or
Consultant and up to and through the second business day following three (3)
months after such termination (unless Section 7 of the Stock Option Agreement
applies, in which case the period shall commence on the date of termination and
end on the second business day following six (6) months after such termination;
or unless Section 8 of the Stock Option Agreement applies, in which case the
period shall commence on the date of termination and end on the second business
day following twelve (12) months after such termination), the Company and/or its
assignee(s) may, by sending written notice to the Owner (the "Company Notice"),
---------------
elect to purchase all, but not less than all, of the Shares then
owned by the Owner, at the Repurchase Price determined in accordance with
subsection (b) below.
(b) Purchase Price. The purchase price ("Repurchase Price") for the
-------------- ----------------
Shares purchased by the Company or its assignee(s) under this Section shall be
equal to the Fair Market Value per share of the Common Stock multiplied by the
number of Shares then owned by the Owner that are subject to the Right of
Repurchase.
(c) Payment. Payment of the Repurchase Price shall be made, at the
-------
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Owner to the Company, or
by any combination thereof within thirty (30) days after the date of the Company
Notice.
3
<PAGE>
(d) Exception for Certain Changes in Status. Notwithstanding anything
---------------------------------------
to the contrary contained in this Section, in the event of Optionee's change in
status from Consultant to Employee or Employee to Consultant, the provisions of
this Section shall not apply.
(e) Termination of Right of Repurchase. The Right of Repurchase shall
----------------------------------
terminate as to any Shares upon the closing of: (i) the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended; (ii) the sale of all or
substantially all of the assets of the Company; or (iii) the merger,
consolidation or other reorganization of the Company with or into any other
corporation or corporations in which the holders of the capital stock of the
Company immediately prior to such transaction hold less than fifty percent (50%)
of the voting securities of the surviving corporation after such transaction.
6. Tax Consultation. Optionee understands that Optionee may suffer
----------------
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
7. Restrictive Legends and Stop-Transfer Orders.
--------------------------------------------
(a) Legends. Optionee understands and agrees that the Company shall
-------
cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the
Shares together with any other legends that may be required by the Company
or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND RIGHTS OF FIRST REFUSAL AND REPURCHASE
HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE
NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH TRANSFER RESTRICTIONS,
4
<PAGE>
RIGHTS OF FIRST REFUSAL AND REPURCHASE ARE
BINDING ON TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer Notices. Optionee agrees that, in order to ensure
---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
-------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
8. Successors and Assigns. The Company may assign any of its rights under
----------------------
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.
9. Interpretation. Any dispute regarding the interpretation of this
--------------
Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.
10. Governing Law; Severability. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of California excluding
that body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
11. Notices. Any notice required or permitted hereunder shall be given in
-------
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath
its signature, or to such other address as such party may designate in writing
from time to time to the other party.
12. Further Instruments. The parties agree to execute such further
-------------------
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
13. Delivery of Payment. Optionee herewith delivers to the Company the
-------------------
full Exercise Price for the Shares.
5
<PAGE>
14. Entire Agreement. The Plan and Notice of Grant/Option Agreement are
----------------
incorporated herein by reference. This Agreement, the Plan, the Option
Agreement, the Restricted Stock Purchase Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee.
Submitted by: Accepted by:
OPTIONEE: (F1) VICINITY CORPORATION
_______________________________ By:_________________________
(Signature) Its:________________________
SPOUSE OF OPTIONEE (if any)
- ---------------------------
_______________________________
(Signature)
Address Address
- ------- -------
_______________________________ 1135A San Antonio Road
_______________________________ Palo Alto, CA 94303
6
<PAGE>
EXHIBIT B
---------
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE : ((F1))
COMPANY : VICINITY CORPORATION
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
----------
Act").
- ---
(b) Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company, a legend prohibiting their
transfer without the consent of the Commissioner of Corporations of the State of
California and any other legend required under applicable state securities laws.
<PAGE>
(c) Optionee is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to Optionee, the
exercise will be exempt from registration under the Securities Act. In the event
the Company becomes subject to the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain of
the conditions specified by Rule 144, including: (1) the resale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of
certain public information about the Company, (3) the amount of Securities being
sold during any three month period not exceeding the limitations specified in
Rule 144(e), and (4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time
of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to occur not less than two years after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than three years, the satisfaction of the conditions set forth
in sections (1), (2), (3) and (4) of the paragraph immediately above.
(d) Optionee hereby agrees that if so requested by the Company or any
representative of the underwriters in connection with any registration of the
offering of any securities of the Company under the Securities Act, Optionee
shall not sell, make any short sale of, loan, grant any option for the purchase
of or otherwise dispose of any of the Shares, any of the Common Stock or any
derivative security thereof (other than those included in the registration)
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as the Company or underwriters may specify. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180-day period.
2
<PAGE>
(e) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
__________________________________________
((F1))
Date: ________________, 19__
3
<PAGE>
EXHIBIT C-1
-----------
1996 INCENTIVE STOCK OPTION PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made between ((F1)) (the "Purchaser") and VICINITY
---------
CORPORATION (the "Company") as of _____________, 199___.
-------
RECITALS
--------
(1) Pursuant to the exercise of the stock option granted to Purchaser
under the Company's 1996 Incentive Stock Option Plan and pursuant to the Stock
Option Agreement (the "Option Agreement") dated ((F1)) by and between the
----------------
Company and Purchaser with respect to such grant, which Option Agreement is
hereby incorporated by reference, Purchaser has elected to purchase
_____________________ of those shares which have not become vested under the
vesting schedule set forth in the Option Agreement ("Unvested Shares"). The
---------------
Unvested Shares and the shares subject to the Option Agreement which have become
vested are sometimes collectively referred to herein as the "Shares."
------
(2) As required by the Option Agreement, as a condition to Purchaser's
election to exercise the option, Purchaser must execute this Restricted Stock
Purchase Agreement, which sets forth the rights and obligations of the parties
with respect to Shares acquired upon exercise of the Option.
1. Repurchase Option.
-----------------
(a) If Purchaser's employment or consulting relationship with the
Company is terminated for any reason, including for cause, death, and
disability, the Company shall have the right and option to purchase from
Purchaser, or Purchaser's personal representative, as the case may be, all of
the Purchaser's Unvested Shares as of the date of such termination at the price
paid by the Purchaser for such Shares (the "Repurchase Option").
-----------------
(b) Upon the occurrence of a termination, the Company may exercise its
Repurchase Option by delivering personally or by registered mail, to Purchaser
(or his transferee or legal representative, as the case may be), within ninety
(90) days of the termination, a notice in writing indicating the Company's
intention to exercise the Repurchase Option and setting forth a date for closing
not later than thirty (30) days from the mailing of such notice. The closing
shall take place at the Company's office. At the closing, the holder of the
certificates for the Unvested Shares being transferred shall deliver the stock
certificate or certificates evidencing the Unvested Shares, and the Company
shall deliver the purchase price therefor.
(c) At its option, the Company may elect to make payment for the
Unvested Shares to a bank selected by the Company. The Company shall avail
itself of this option by a notice in writing to Purchaser stating the name and
address of the bank, date of closing, and waiving the closing at the Company's
office.
<PAGE>
(d) If the Company does not elect to exercise the Repurchase Option
conferred above by giving the requisite notice within ninety (90) days following
the termination, the Repurchase Option shall terminate.
2. Transferability of the Shares; Escrow.
-------------------------------------
(a) Purchaser hereby authorizes and directs the secretary of the
Company, or such other person designated by the Company, to transfer the
Unvested Shares as to which the Repurchase Option has been exercised from
Purchaser to the Company.
(b) To insure the availability for delivery of Purchaser's Unvested
Shares upon repurchase by the Company pursuant to the Repurchase Option under
Section 1, Purchaser hereby appoints the secretary, or any other person
designated by the Company as escrow agent, as its attorney-in-fact to sell,
assign and transfer unto the Company, such Unvested Shares, if any, repurchased
by the Company pursuant to the Repurchase Option and shall, upon execution of
this Agreement, deliver and deposit with the secretary of the Company, or such
other person designated by the Company, the share certificates representing the
Unvested Shares, together with the stock assignment duly endorsed in blank,
attached hereto as Exhibit C-2. The Unvested Shares and stock assignment shall
-----------
be held by the secretary in escrow, pursuant to the Joint Escrow Instructions of
the Company and Purchaser attached as Exhibit C-3 hereto, until the Company
-----------
exercises its purchase right as provided in Section 1, until such Unvested
Shares are vested, or until such, time as this Agreement no longer is in effect.
As a further condition to the Company's obligations under this Agreement, the
spouse of the Purchaser, if any, shall execute and deliver to the Company the
Consent of Spouse attached hereto as Exhibit C-4. Upon vesting of the Unvested
-----------
Shares, the escrow agent shall promptly deliver to the Purchaser the certificate
or certificates representing such Shares in the escrow agent's possession
belonging to the Purchaser, and the escrow agent shall be discharged of all
further obligations hereunder; provided, however, that the escrow agent shall
nevertheless retain such certificate or certificates as escrow agent if so
required pursuant to other restrictions imposed pursuant to this Agreement.
(c) The Company, or its designee, shall not be liable for any act it
may do or omit to do with respect to holding the Shares in escrow and while
acting in good faith and in the exercise of its judgment.
(d) Transfer or sale of the Shares is subject to restrictions on
transfer imposed by any applicable state and federal securities laws. Any
transferee shall hold such Shares subject to all the provisions hereof and the
Exercise Notice executed by the Purchaser with respect to any Unvested Shares
purchased by Purchaser and shall acknowledge the same by signing a copy of this
Agreement.
(e) The Repurchase Option shall terminate in accordance with the
Vesting Schedule in Optionee's Stock Option Agreement.
<PAGE>
3. Ownership, Voting Rights, Duties. This Agreement shall not affect
--------------------------------
in any way the ownership, voting rights or other rights or duties of Purchaser,
except as specifically provided herein.
4. Legends. The share certificate evidencing the Shares issued
-------
hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND RIGHTS OF FIRST REFUSAL
AND REPURCHASE HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
TRANSFER RESTRICTIONS, RIGHTS OF FIRST REFUSAL AND
REPURCHASE ARE BINDING ON TRANSFEREES OF THESE SHARES.
5. Adjustment for Stock Split. All references to the number of Shares
--------------------------
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
6. Notices. Notices required hereunder shall be given in person or by
-------
registered mail to the address of Purchaser shown on the records of the Company,
and to the Company at their respective principal executive offices.
7. Survival of Terms. This Agreement shall apply to and bind Purchaser
-----------------
and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.
8. Section 83(b) Elections.
-----------------------
(a) Election for Unvested Shares Purchased Pursuant to Nonqualified
---------------------------------------------------------------
Stock Options. Purchaser hereby acknowledges that he or she has been informed
- -------------
that, with respect to the exercise of a nonqualified stock option for Unvested
Shares, that unless an election is filed by the Purchaser with the Internal
Revenue Service and, if necessary, the proper state taxing authorities, within
------
30 days of the purchase of the Shares, electing pursuant to Section 83(b) of
- -------
the Code (and similar state tax provisions if applicable) to be taxed currently
on any difference between the purchase price of the Shares and their Fair Market
Value on the date of purchase, there will be a recognition of taxable income to
the Optionee, measured by the excess, if any, of the fair market value of the
Shares, at the time the Company's Repurchase Option lapses over the purchase
price for the Shares. Optionee represents that Optionee has consulted any tax
consultant(s) Optionee deems advisable in connection with the purchase of the
Shares or the
3
<PAGE>
filing of the Election under Section 83(b) and similar tax provisions. A form of
Election under Section 83(b) is attached hereto as Exhibit C-5 for reference.
-----------
(b) Election for Unvested Shares Purchased Pursuant to Incentive
------------------------------------------------------------
Stock Options. Purchaser hereby acknowledges that he or she has been informed
- -------------
that, with respect to the exercise of an incentive stock option for Unvested
Shares, that unless an election is filed by the Purchaser with the Internal
Revenue Service and, if necessary, the proper state taxing authorities, within
------
30 days of the purchase of the Shares, electing pursuant to Section 83(b) of
- -------
the Code (and similar state tax provisions if applicable) to be taxed currently
on any difference between the purchase price of the Shares and their Fair Market
Value on the date of purchase, there will be a recognition of income to the
Optionee, for alternative minimum tax purposes, measured by the excess, if any,
of the fair market value of the Shares, at the time the Company's Repurchase
Option lapses over the purchase price for the Shares. Optionee represents that
Optionee has consulted any tax consultant(s) Optionee deems advisable in
connection with the purchase of the Shares or the filing of the Election under
Section 83(b) and similar tax provisions. A form of Election under Section 83(b)
for alternative minimum tax purposes is attached hereto as Exhibit C-6 for
-----------
reference.
PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND NOT
THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER
REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER'S
BEHALF.
9. Representations. Purchaser has reviewed with his own tax advisors the
---------------
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. Purchaser is relying solely on such
advisors and not on any statements or representations of the Company or any of
its agents. Purchaser understands that he (and not the Company) shall be
responsible for his own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
10. Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with applicable state laws.
Purchaser represents that he has read this Agreement and is familiar with
its terms and provisions. Purchaser hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under this Agreement.
4
<PAGE>
IN WITNESS WHEREOF, this Agreement is deemed made as of the date first set
forth above.
"COMPANY"
VICINITY CORPORATION
By:______________________________________
Title:___________________________________
"PURCHASER"
_________________________________________
((F1))
Address:_________________________________
_________________________________
Soc. Sec. No.:___________________________
5
<PAGE>
EXHIBIT C-2
-----------
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, _________________________________, hereby sell,
assign and transfer unto _______________ (______) shares of the Common Stock of
Vicinity Corporation standing in my name of the books of said corporation
represented by Certificate No. _________________ herewith and do hereby
irrevocably constitute and appoint ___________________________________________
___________________________ to transfer the said stock on the books of the
within named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between Vicinity Corporation and the undersigned dated
_________, 19___.
Dated: ___________, 19___
Signature:___________________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option, "as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
<PAGE>
EXHIBIT C-3
-----------
JOINT ESCROW INSTRUCTIONS
____________, 19____
Vicinity Corporation
1135A San Antonio Road
Palo Alto, CA 94303
Attention: Secretary
Dear Secretary:
As Escrow Agent for both Vicinity Corporation (the "Company"), and the
-------
undersigned purchaser of stock of the Company (the "Purchaser"), you are hereby
---------
authorized and directed to hold the documents delivered to you pursuant to the
terms of that certain Restricted Stock Purchase Agreement ("Agreement") between
---------
the Company and the undersigned, in accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company (referred
to collectively for convenience herein as the "Company") exercises the Company's
-------
repurchase option set forth in the Agreement, the Company shall give to
Purchaser and you a written notice specifying the number of shares of stock to
be purchased, the purchase price, and the time for a closing hereunder at the
principal office of the Company. Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's repurchase option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a shareholder of the Company while the
stock is held by you.
<PAGE>
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option.
Within 120 days after cessation of Purchaser's continuous employment by or
consulting services to the Company, or any parent or subsidiary of the Company,
you will deliver to Purchaser a certificate or certificates representing the
aggregate number of shares held or issued pursuant to the Agreement and not
purchased by the Company or its assignees pursuant to exercise of the Company's
repurchase option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and are hereby expressly
authorized to comply with and obey orders, judgements or decrees of any court.
In case you obey or comply with any such order, judgement or decree, you shall
not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
2
<PAGE>
12. Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer or agent of the Company or if you shall resign by
written notice to each party. In the event of any such termination, the Company
shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties hereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.
COMPANY: Corporate Secretary
Vicinity Corporation
1135A San Antonio Road
Palo Alto, CA 94303
Attention: Secretary
PURCHASER: ((F1))
____________________
____________________
ESCROW AGENT: Vicinity Corporation
1135A San Antonio Road
Palo Alto, CA 94303
Attention: Secretary
16. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.
3
<PAGE>
18. These Joint Escrow Instructions shall be governed by, and construed and
enforced in accordance with, the laws of the State of California.
VICINITY CORPORATION
By:_________________________________
Title:______________________________
_____________________________________
((F1))
Escrow Agent:
VICINITY CORPORATION
By:__________________________________
Title: Secretary
4
<PAGE>
EXHIBIT C-4
-----------
CONSENT OF SPOUSE
I, _______________________________, spouse of ____________________________,
have read and approve the foregoing Agreement. In consideration of granting of
the right to my spouse to purchase shares of Vicinity Corporation, as set forth
in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect
to the exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws or
similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.
Dated: _______________, 19___
_______________________________________
_______________________________________
[Print Name]
<PAGE>
EXHIBIT C-5
-----------
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with taxpayer's receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described as
follows: _________ shares (the "Shares") of the Common Stock of VICINITY
CORPORATION (the "Company").
3. The date on which the property was transferred is: ______________, 19____.
4. The property is subject to the following restrictions:
The Shares may not be transferred and are subject to forfeiture under the
terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions contained in
such agreement.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is:
$______________________.
6. The amount (if any) paid for such property is:
$______________________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
- --------------------------------------------------------------------------
except with the consent of the Commissioner.
- -------------------------------------------
Dated:___________________, 19____ _________________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated:___________________, 19____ _________________________________________
Spouse of Taxpayer
<PAGE>
EXHIBIT C-6
-----------
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the provisions of Sections
55-56 and 83(b) of the Internal Revenue Code of 1986, as amended, to include in
taxpayer's alternative minimum taxable income for the current taxable year, as
compensation for services, the excess, if any, of the fair market value of the
property described below at the time of transfer over the amount paid for such
property.
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described as
follows: ___________ shares (the "Shares") of the Common Stock of VICINITY
CORPORATION (the "Company").
3. The date on which the property was transferred is: ___________________.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, at its
original purchase price, on certain events. This right lapses with regard
to a portion of the Shares over time.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is:
$______________________________
6. The amount paid for such property is:
$______________________________
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
- --------------------------------------------------------------------------
except with the consent of the Commissioner.
- -------------------------------------------
Dated:___________________, 19____ ________________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated:___________________, 19____ ________________________________________
Spouse of Taxpayer
<PAGE>
EXHIBIT 10.11
VICINITY CORPORATION
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
In connection with the grant to Scott Young ("Optionee") of an
Incentive Stock Option to purchase 240,000 shares of Common Stock (the "Shares")
of Vicinity Corporation, a California corporation (the "Company"), as evidenced
by those Incentive Stock Option Agreements dated August 1, 1996, November 25,
1996, October 15, 1997 and April 15, 1998 (the "Option Agreements"), the Company
and Optionee hereby agree to amend the Option Agreements as follows:
(i) The section entitled "Vesting Schedule", on page one of the Option
Agreements, is hereby amended to add the following new paragraph
at the end of this section:
"In the event the Company enters into a transaction or series of
related transactions in which (i) the Company consolidates or merges with any
other corporation or business entity, after which the holders of the Company's
outstanding shares immediately before such consolidation or merger do not,
immediately after such consolidation or merger, retain stock or other equity
interests representing a majority of the voting power of the surviving
corporation or business entity or (ii) all or substantially all of the assets or
capital stock of the Company are sold, then a number of Shares subject to this
Option shall immediately vest and/or be released from the Company's repurchase
option, as set forth in the Restricted Stock Purchase Agreement ("Accelerated
Vesting"), such that the total number of Shares vested and/or released from the
Company's repurchase option granted to Optionee under this Agreement or other
Stock Option Agreements in the past or future equals 125,000 shares (as adjusted
for any combinations, splits, and the like with respect to such shares). For
the purposes of such Accelerated Vesting, earlier granted Options shall be
subject to Accelerated Vesting before later granted Options. In the event such
Accelerated Vesting affects pooling or affects the Company's ability to enter
into a transaction described in (i) or (ii) above, then the Options subject to
Accelerated Vesting shall not vest and/or be released from the Company's
repurchase option; and in such event, Optionee shall receive a cash bonus equal
to the market price of a Share upon the closing of a transaction set forth in
(i) or (ii) above minus the exercise price of an Option multiplied by the number
of Shares that would have been subject to Accelerated Vesting (Bonus = (Market
Price - Exercise Price) * Number of Shares). In the event a cash bonus is paid
to Optionee, the number of Options granted to Optionee under all Stock Option
Agreements shall be reduced by a number equal the number of Shares used to
calculate the cash bonus. All remaining Options shall be subject to the terms
and conditions of the applicable Stock Option Plan. In the event the Company
enters into a transaction set forth in (i) or (ii) above, Optionee shall have
the right to elect either the Accelerated Vesting set forth in this paragraph or
accelerated vesting under any similar provisions set forth in the applicable
Stock Option Plan."
<PAGE>
(ii) All other terms, conditions and representations in the Option
Agreements shall remain unaltered by this Amendment.
IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment to Incentive Stock Option Agreements effective as of August 19, 1998.
VICINITY CORPORATION
a California corporation
By: /s/ Scott Young
___________________________
Title: ________________________
_______________________________
Scott Young
<PAGE>
EXHIBIT 10.12
VICINITY CORPORATION
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
In connection with the grant to David Seltzer ("Optionee") of an
Incentive Stock Option to purchase 130,000 shares of Common Stock (the "Shares")
of Vicinity Corporation, a California corporation (the "Company"), as evidenced
by those certain Incentive Stock Option Agreement dated June 16, 1998 (the
"Option Agreement"), the Company and Optionee hereby agree to amend the Option
Agreement as follows:
(i) The section entitled "Vesting Schedule", on page one of the
Option Agreement, is hereby amended to add the following new
paragraph at the end of this section:
"In the event the Company enters into a transaction or series of
related transactions in which (i) the Company consolidates or merges with any
other corporation or business entity, after which the holders of the Company's
outstanding shares immediately before such consolidation or merger do not,
immediately after such consolidation or merger, retain stock or other equity
interests representing a majority of the voting power of the surviving
corporation or business entity or (ii) all or substantially all of the assets or
capital stock of the Company are sold, then all of the Shares subject to the
Option Agreements that are subject to vesting during the twelve month period
following any such transaction shall immediately vest and/or be released from
the Company's repurchase option, as set forth in the Restricted Stock Purchase
Agreement ("Accelerated Vesting"), provided that Optionee remains an employee of
the entity that acquires the Company pursuant to (i) or (ii) above for a period
of six (6) months or is terminated without cause during such six (6) month
period. In the event such Accelerated Vesting affects pooling or affects the
Company's ability to enter into a transaction described in (i) or (ii) above,
then the Options subject to Accelerated Vesting above shall not vest and/or be
released from the Company's repurchase option on an accelerated basis. All
Options not subject to Accelerated Vesting shall be subject to the terms and
conditions of the applicable Stock Option Plan. In the event the Company enters
into a transaction set forth in (i) or (ii) above, Optionee shall have the right
to elect either the Accelerated Vesting set forth in this paragraph or
accelerated vesting under any similar provisions set forth in the applicable
Stock Option Plan."
<PAGE>
(ii) All other terms, conditions and representations in the
Option Agreement shall remain unaltered by this Amendment.
IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment to Incentive Stock Option Agreement effective as of August 19, 1998.
VICINITY CORPORATION
a California corporation
By: /s/ David Seltzer
___________________________
Title: ________________________
_______________________________
David Seltzer
<PAGE>
EXHIBIT 10.13
VICINITY CORPORATION
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENT
In connection with the grant to Mary Gavin ("Optionee") of an
Incentive Stock Option to purchase 50,000 shares of Common Stock (the "Shares")
of Vicinity Corporation, a California corporation (the "Company"), as evidenced
by that certain Incentive Stock Option Agreement dated October 15, 1997 (the
"Option Agreement"), the Company and Optionee hereby agree to amend the Option
Agreement as follows:
(i) The section entitled "Vesting Schedule", on page one of the
Option Agreement, is hereby amended to add the following new
paragraph at the end of this section:
"In the event the Company enters into a transaction or series of
related transactions in which (i) the Company consolidates or merges with any
other corporation or business entity, after which the holders of the Company's
outstanding shares immediately before such consolidation or merger do not,
immediately after such consolidation or merger, retain stock or other equity
interests representing a majority of the voting power of the surviving
corporation or business entity or (ii) all or substantially all of the assets or
capital stock of the Company are sold, then all of the Shares subject to the
Option Agreement that are subject to vesting during the twelve month period
following any such transaction shall immediately vest and/or be released from
the Company's repurchase option, as set forth in the Restricted Stock Purchase
Agreement ("Accelerated Vesting"), provided that Optionee remains an employee of
the entity that acquires the Company pursuant to (i) or (ii) above for a period
of six (6) months or is terminated without cause during such six (6) month
period. In the event such Accelerated Vesting affects pooling or affects the
Company's ability to enter into a transaction described in (i) or (ii) above,
then the Options subject to Accelerated Vesting above shall not vest and/or be
released from the Company's repurchase option on an accelerated basis. All
Options not subject to Accelerated Vesting shall be subject to the terms and
conditions of the applicable Stock Option Plan. In the event the Company enters
into a transaction set forth in (i) or (ii) above, Optionee shall have the right
to elect either the Accelerated Vesting set forth in this paragraph or
accelerated vesting under any similar provisions set forth in the applicable
Stock Option Plan."
<PAGE>
(ii) All other terms, conditions and representations in the Option
Agreement shall remain unaltered by this Amendment.
IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment to Incentive Stock Option Agreement effective as of August 19, 1998.
VICINITY CORPORATION
a California corporation
By: /s/ Mary Gavin
___________________________
Title: ________________________
_______________________________
Mary Gavin
<PAGE>
EXHIBIT 10.14
CONFIDENTIAL TREATMENT REDACTED FOR
----------------------
REQUESTED CONFIDENTIALITY
---------
The astericked portions of this document have
been omitted and are filed separately with
the Securities and Exchange Commission
MANAGEMENT SUPPORT AGREEMENT
This MANAGEMENT SUPPORT AGREEMENT ("Agreement") is entered into as of the
11th day of June 1999, by and between VICINITY CORPORATION ("Vicinity") and
--------
APERTO MULTIMEDIA GMBH ("Aperto").
------
RECITALS:
(A) Vicinity and Aperto are parties to that certain Channel Partner
Agreement, dated as of the date hereof, relating to the appointment by
Vicinity of Aperto as an "Integration Partner" of Vicinity pursuant to
Vicinity's Channel Partner Program (the "Channel Partner Agreement").
-------------------------
(B) In connection with the Channel Partner Agreement, each of Vicinity and
Aperto has agreed to provide services to the other in order to advance
the business interests of the other in Europe and in the United
States, respectively.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, the parties hereto agree as follows:
1. DEFINITIONS
Unless otherwise specified herein, capitalized terms used in this Agreement
shall have the same meaning as set forth in the Channel Partner Agreement. For
purposes of this Agreement, the following terms shall have the following
meanings.
(a) "Interim Service Period" shall mean the period commencing on the
----------------------
Effective Date and ending on the date six months following the
Effective Date, unless extended by mutual agreement of the parties.
(b) "Performance Milestones" shall mean the performance milestones set
----------------------
forth on Schedule I hereto.
----------
(c) "Qualified Revenues" shall mean the cumulative amount of Vicinity
------------------
Services ordered by Customers located in Europe that are not Reserved
Accounts due to a prior business relationship with Vicinity; provided
that Vicinity has been fully paid for providing such services.
(b) "Vicinity Business" shall mean the identification of Customers and the
-----------------
sale of Vicinity Services.
2. RESPONSIBILITIES OF APERTO
(a) Interim Services. During the Interim Service Period, Aperto shall
----------------
provide the following services to Vicinity:
<PAGE>
(1) Agent of Vicinity. Aperto shall serve as a non-exclusive business
-----------------
agent of Vicinity in Europe. In such capacity, Aperto shall use
commercially reasonable efforts to support and promote the
Vicinity Business. Aperto is hereby authorized to incur expenses
on behalf of Vicinity in support of the Vicinity Business;
provided, however, that prior to the parties' agreement on a
-------- -------
budget with respect to promotion of the Vicinity Business, Aperto
shall receive Vicinity's prior written approval for any
expenditure in excess of $500.
(2) Aperto Employees. Aperto shall appoint and direct a sufficient
----------------
number of its employees to work with Vicinity as shall from time
to time be necessary to successfully promote the Vicinity
Business and fulfill the Performance Milestones. Without
limiting the generality of the foregoing, within thirty (30) days
of the Effective Date, Aperto shall assign at least the
equivalent of three full-time Europe-based employees (the
"Interim Representatives") to the promotion of the Vicinity
-----------------------
Business and the fulfillment of the Performance Milestones.
(3) Office Space. Aperto shall provide the Interim Representatives
------------
with the office space, administrative support, telephone and
computer support as such individuals shall reasonably require to
accomplish the objectives set forth within the Performance
Milestones.
(4) Vicinity Access to Aperto Equipment and Premises. Aperto shall
------------------------------------------------
provide employees and representatives of Vicinity with access to
Aperto's premises for the purpose of training, supervising and
providing support services to the Interim Representatives and for
other purposes related to the Vicinity Business.
(b) Continuing Services. Commencing on the Effective Date and continuing
-------------------
until the Termination Date, Aperto shall provide the following
services to Vicinity:
(1) Performance Milestones. Aperto shall use its reasonable
----------------------
commercial efforts to cause the Performance Milestones to be met
within the time period set forth herein.
(2) Channel Partners. Aperto shall coordinate Vicinity's efforts to
----------------
identify, educate and train potential Channel Partners in Europe.
(3) Opportunities; Competition. Aperto shall consult with Vicinity
--------------------------
concerning new business opportunities and shall advice Vicinity
concerning any competitive threats to the Vicinity Business.
(4) Product Development; Promotion. Aperto shall provide input and
------------------------------
guidance to Vicinity with regard to product development and
product promotion.
(5) Web Development Services; Special Projects. At Vicinity's
------------------------------------------
request, Aperto shall provide web development services and
provide advice and resources for special projects, in each case
chargeable at Aperto's normal rates for such services.
-2-
<PAGE>
(6) Recruiting. Aperto shall, as requested, provide Vicinity with
----------
reasonable assistance in recruiting qualified individuals to
represent Vicinity in Europe.
(7) Vicinity Europe. Aperto shall, as requested, provide Vicinity
---------------
with reasonable assistance with respect to Vicinity's efforts to
locate and establish offices in Europe and shall advise Vicinity
on general human resource matters related to the establishment of
such offices.
3. RESPONSIBILITIES OF VICINITY
(a) Interim Services. Vicinity shall provide the following services to
----------------
Aperto:
(1) Office Space. For a period of six months commencing on October
------------
1, 1999, Vicinity shall provide Aperto with office space suitable
for use by up to six full-time representatives of Aperto. Such
office space shall be made available at Vicinity's Palo Alto
location and shall be comparable to the office space provided for
Vicinity's own employees.
(2) Aperto Access to Vicinity Equipment and Premises. Commencing on
------------------------------------------------
the Effective Date and continuing through the period referred to
in the immediately preceding paragraph, Vicinity shall provide
employees and representatives of Aperto with access to Vicinity's
premises for the purpose of supervising the performance of
Aperto's representatives located in the United States and for
other purposes specifically related to the Aperto's business
within the United States.
(b) Continuing Services. Commencing on the Effective Date and continuing
-------------------
until the Termination Date, Vicinity shall provide the following
services to Aperto:
(1) Opportunities. Vicinity shall consult with Aperto concerning new
-------------
business opportunities for Aperto in the United States,
including, without limitation, offering Aperto's services to
Vicinity customers who desire web development work that is
outside Vicinity's normal remit for internal work.
(2) Product Development. Vicinity shall provide input and guidance
-------------------
to Aperto with regard to product development.
(3) Recruiting. Vicinity shall, as requested, provide Aperto with
----------
reasonable assistance in recruiting qualified individuals to
represent Aperto in the United States.
(4) Aperto U.S. Vicinity shall, as requested, provide Aperto with
-----------
reasonable assistance with respect to Aperto's efforts to locate
and establish an office in the United States and shall, as
requested, advise Aperto on general human resource matters
related to the establishment of such office.
(c) Excluded Services. Vicinity shall not be obligated, at any time, (i)
-----------------
to provide Aperto with any human resources services, (ii) to purchase
computer hardware, software or services for Aperto or any of its
representatives, (iii) to provide any services not identified herein.
-3-
<PAGE>
4. COMPENSATION; COSTS
(a) General. Except as expressly set forth herein, each of the support
-------
services to be provided by Vicinity and Aperto shall be provided
without cost to the other party. Notwithstanding the foregoing, each
the parties shall work together to address and agree upon the
allocation of costs and expenses incurred from time to time for
special projects or work not otherwise contemplated by this Agreement.
(d) Incentive Payments. To provide an incentive to the performance of
------------------
Aperto hereunder, the parties agree as follows:
(1) Performance Milestones. Vicinity shall issue to Aperto options or
----------------------
warrants exercisable for up to 50,000 shares (the "Milestone
---------
Shares") of the Common Stock of Vicinity at an exercise price of
------
$0.50 per share based upon the attainment of the Performance
Milestones set forth on Schedule I hereto.
----------
(2) Revenue Targets. Vicinity shall make payments to Aperto equal to
---------------
(i) 2,000 multiplied by (ii) the then current fair market value
of Vicinity's Common Stock for each $1 million of revenue
recognized by Vicinity for Customer orders attributed to Aperto
(as provided in the Channel Partner Manual) after $10 million of
Qualified Revenues have been recorded. In lieu of the payment
described above, Vicinity may, at its option, issue to Aperto
shares of its Common Stock with a fair market value equal to the
required payment.
(3) Channel Partners. Vicinity shall make payments to Aperto equal to
----------------
(i) 700 multiplied by (ii) the then current fair market value of
Vicinity's Common Stock for each new person or entity that shall
enter into a Channel Partner Agreement with Vicinity as an
"Integration Partner" in Europe through the direct action of
Aperto hereunder. In lieu of the payment described above,
Vicinity may, at its option, issue to Aperto shares of its Common
Stock with a fair market value equal to the required payment.
(4) Incentive Payment Period. Except as otherwise provided herein,
------------------------
Aperto's right to earn Milestone Shares or payments under
paragraphs (2) and (3) above shall commence on the Effective date
and shall terminate upon the third anniversary of the Effective
Date (the "Milestone Period").
----------------
(5) Reports of Vicinity. Within thirty (30) days following the end of
-------------------
each fiscal quarter of Vicinity during the Milestone Period,
Vicinity shall deliver to Aperto a written report setting forth
the Milestone Shares earned during such fiscal quarter and the
payments due under paragraphs (2) and (3) above with respect to
such fiscal quarter. Vicinity shall be the sole arbiter of the
number of Milestone Shares earned and any payments due under this
Section with respect to any quarter and the decision of Vicinity
shall be final.
(6) Agreements. As a precondition to the issuance of any shares of
----------
Common Stock or other equity interests of Vicinity hereunder,
Aperto shall execute and deliver such documents and certificates
as Vicinity customarily requires with respect to the issuance of
similar securities.
-4-
<PAGE>
5. CONFIDENTIALITY
(a) Definition. As used herein, "Confidential Information" means any non-
---------- ------------------------
public information of either party, including but not limited to
information related to the Vicinity Business, technical or business
information relating to inventions, products, research and
development, costs, profit, margins, employee skills or salaries,
finances, customers, marketing, operations or business plans, and any
other information identified by either party as proprietary or
confidential. Each party shall retain sole and exclusive ownership,
right, title and interest in and to all of its Confidential
Information.
(b) Maintaining Confidentiality
---------------------------
(1) Obligations. Should either party disclose to the other any of
-----------
such party's Confidential Information (the "Disclosing Party"),
----------------
the party receiving the Confidential Information (the "Receiving
---------
Party") shall maintain the Confidential Information in
-----
confidence, shall use at least the same degree of care to
maintain the secrecy of the Confidential Information as it uses
in maintaining the secrecy of its own proprietary, confidential
and trade secret information, shall always use at least a
reasonable degree of care in maintaining the secrecy of the
Confidential Information, shall use the Confidential Information
only for the purpose of performing its obligations under this
Agreement and exercising its rights under this Agreement unless
otherwise agreed in writing by the Disclosing Party, and shall
deliver to the Disclosing Party, in accordance with any request
from the Disclosing Party, all copies, notes, packages, diagrams,
computer memory media and all other materials containing any
portion of the Disclosing Party's Confidential Information which
reasonably is not required by the Receiving Party to perform its
obligations under and/or to exercise its rights under this
Agreement. No Receiving Party shall disclose any Disclosing
Party's Confidential Information to any person except those of
the Receiving Party's employees and consultants having a need to
know in order to accomplish the purposes and intent of this
Agreement, and shall ensure that each such employee and
consultant has signed a confidentiality agreement covering the
Confidential Information of the Disclosing Party.
(2) Exceptions. A Receiving Party shall not have any obligation with
----------
respect to any portion of Confidential Information of the
Disclosing Party which (i) was known to the Receiving Party prior
to receipt from the Disclosing Party, (ii) is lawfully obtained
by the Receiving Party from a third party under no obligation of
confidentiality, (iii) is independently developed by the
Receiving Party without use of the Confidential Information of
the Disclosing Party, (iv) is or becomes publicly available other
than as a result of any act or failure to act of the Receiving
Party or (v) is disclosed pursuant to subpoena or other legal
process, provided that the Disclosing Party is given prior notice
of such disclosure.
(3) Injunctive Relief. The parties acknowledge that (i) the
-----------------
restrictions and obligations contained in this Section 5 are
reasonable and necessary to protect each party's legitimate
interests, (ii) in the event of a violation of these
restrictions, remedies at law may be inadequate and such
violation may cause irreparable damages to the Disclosing Party
within a short period of time, and
-5-
<PAGE>
(iii) the Disclosing Party will be entitled to seek injunctive
relief against each and every violation without the necessity of
posting a bond.
(4) Source Code Protections. Aperto shall not under any circumstance
-----------------------
attempt, or knowingly permit others to attempt, to decompile,
decipher, disassemble, reverse engineer or otherwise determine
any source code related to the Vicinity Services.
6. OTHER MATTERS
(a) Independent Contractors. The parties are independent contractors and
-----------------------
nothing contained in this Agreement shall be construed to (i) give
either party the power to direct and control the day-to-day activities
of the other, (ii) constitute the parties as partners, joint
venturers, co-owners or otherwise as participants in a joint or common
undertaking, or (iii) except as set forth herein, allow either party
to create or assume any obligation on behalf of the other for any
purpose whatsoever.
(b) Liability.
---------
(1) Liability for Negligence and Willful Misconduct. The obligation
-----------------------------------------------
for damages, losses and liabilities that arise in connection with
the negligence or willful misconduct of any employee of Vicinity
in connection with the provision of any services hereunder shall
be assumed by Vicinity and fully indemnified by Vicinity. The
obligation for damages, losses and liabilities that arise in
connection with the negligence or willful misconduct of any
employee of Aperto in connection with the provision of any
services hereunder shall be assumed by Aperto and fully
indemnified by Aperto.
(2) Matters Beyond Control. No party shall be liable for any failure
----------------------
of performance attributable to acts or events (including but not
limited to war, conditions or events of nature, industry wide
supply shortages, civil disturbances, work stoppage, power
failures, failure of telephone lines and equipment, fire and
earthquake, or any law, order, proclamation, regulation,
ordinance, demand or requirement of any governmental authority)
beyond its control which prevent in whole or in part performance
by such party hereunder.
(c) Cooperation. The parties agree to cooperate in good faith to realize
-------------
their intent. Each party shall act in good faith to achieve the
benefits expected and to resolve any problems that may occur in a
commercially reasonable way. As part of that cooperation, each agrees
as follows:
(1) Supervision. Each party shall, consistent with past practice,
-----------
supervise the activities of its officers, employees and
representatives with respect to the services to be provided
hereunder.
(2) Books and Records. Each party shall maintain books and records
-----------------
relevant to the provision of the services provided hereunder in a
manner consistent with the continuing needs of the parties and
shall make such books and records available to the other party.
-6-
<PAGE>
(3) Applicable Laws. The parties will ensure that all transactions
---------------
and activities contemplated hereunder are conducted in compliance
with all applicable laws.
(d) Non-solicitation of Employees. Each party agrees that during the term
-----------------------------
of this Agreement, neither party will, and will cause each of its
affiliates not to, directly or indirectly, solicit for employment or
hire any officer, director or employee of the other party, except that
neither party shall be precluded from hiring any such employee who (i)
initiates discussions regarding such employment without any direct or
indirect solicitation by such party (it being understood that a
general advertisement shall not be deemed a solicitation in violation
of this paragraph) or (ii) has been terminated by the other party
prior to commencement of employment discussions with such party.
7. TERM AND TERMINATION
(a) Term. This Agreement shall commence on the Effective Date, and shall
----
continue for a period of three (3) years from the Effective Date (the
"Termination Date").
----------------
(b) Termination for Cause. If either party defaults in the performance of
---------------------
any material provision of this Agreement (including, but not limited
to, misconduct in the discharge of its duties), then the non-
defaulting party may give notice to the defaulting party of such
default. If the default is not cured during the thirty-day (30)
period after such notice, then this Agreement automatically shall
terminate at the end of that period.
(c) Termination for Insolvency. This Agreement shall terminate
--------------------------
immediately, without notice, (i) upon the institution by or against
either party of insolvency, receivership or bankruptcy proceedings or
any other proceedings for the settlement of either party's debts, (ii)
upon either party making a general assignment for the benefit of
creditors, or (iii) upon the either party's dissolution.
(d) Return of Materials. Within thirty (30) days after the expiration or
-------------------
termination of this Agreement, each party shall return or destroy all
Confidential Material of the other remaining in such party's
possession. Effective upon the expiration or termination of this
Agreement, Aperto shall cease to indicate that it is a representative
or agent of Vicinity.
(e) Additional Remedies. Except as expressly limited by this Agreement,
-------------------
termination of this Agreement shall be without prejudice to any other
remedy which may be available to a party due to default of this
Agreement. The parties agree that violation of obligations under this
Agreement may cause irreparable harm and significant injury to the
extent that may be extremely difficult to ascertain. Accordingly, the
parties agree that each party will have, in addition to any other
rights or remedies available to it at law or in equity, the right to
seek injunctive relief to enjoin any breach or violation of this
Agreement.
(f) Limitation on Liability. IN THE EVENT OF TERMINATION BY EITHER PARTY
-----------------------
IN ACCORDANCE WITH ANY OF THE PROVISIONS OF THIS AGREEMENT, EXCEPT AS
SPECIFIED IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR COMPENSATION, REIMBURSEMENT OR DAMAGES ON ACCOUNT OF THE
LOSS OF PROSPECTIVE PROFITS OR ANTICIPATED SALES OR ON ACCOUNT OF
EXPENDITURES, INVESTMENTS,
-7-
<PAGE>
LEASES OR COMMITMENTS IN CONNECTION WITH THE BUSINESS OR GOODWILL OF
VICINITY OR REPRESENTATIVE BECAUSE OF SUCH TERMINATION.
(g) Survival of Certain Terms. The provisions of Sections 4, 5, 6, 7(d),
-------------------------
7(e), 7(f), and 8 shall survive the termination of this Agreement for
any reason. All other rights and obligations of the parties shall
cease upon termination of this Agreement.
-8-
<PAGE>
8. MISCELLANEOUS
(a) Governing Law. This Agreement shall be governed in all respects by the
-------------
substantive laws of the State of California, United States of America
(excluding conflict of laws rules) as applied to agreements entered
into and to be performed entirely within the State of California
between California residents.
(b) Attorneys' Fees. In the event of any litigation or arbitration by the
---------------
parties under this Agreement, the prevailing party shall be entitled
to its costs and reasonable attorneys' fees.
(c) Assignment: No Third-Party Beneficiaries. Neither this Agreement nor
----------------------------------------
any part hereof shall be assignable by operation of law or otherwise
by any party without the prior written consent of the other party;
provided, however, that Vicinity may assign this Agreement to a
-------- -------
wholly-owned subsidiary of Vicinity without the prior written consent
of Aperto. Nothing contained in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assignees, any
rights or remedies under or by reason of this Agreement unless
expressly so stated.
(d) Waiver. Failure by any party to enforce any of its rights under this
------
Agreement shall not be deemed a waiver of any right which that party
has under this Agreement.
(e) Notices. All notices, requests, consents and other communications
-------
hereunder shall be in writing and delivered personally, by recognized
international courier (such as DHL or Federal Express) or by facsimile
(with facsimiles to be promptly confirmed in writing). All such
written communications delivered by courier shall be delivered to the
parties hereto at their respective addresses, subject to the right of
either party to change its address by delivering written notice to the
other. Such notices shall be deemed to be effective upon three (3)
business days following the date of deposit of such written notice
with the courier or upon receipt if by facsimile or personal delivery.
(f) English Language. This Agreement was negotiated and executed in
----------------
English, and the original English language version shall be
controlling.
(g) Severability. Should any provisions of this Agreement contravene any
------------
law or valid regulation of any government jurisdiction over the
parties, then such provision shall be automatically terminated and
performance thereof by the parties waived, and all other provisions of
this Agreement shall continue in full force and effect.
(h) Dispute Resolution and Arbitration. Any and all disputes,
----------------------------------
controversies or differences arising from or in connection with this
Agreement shall be settled by mutual consultation between the parties
hereto in good faith as promptly as possible, but failing an amicable
settlement shall be resolved by arbitration in the English language
before a panel of three arbitrators (unless a single arbitrator can be
agreed upon by the parties) in San Francisco, California, United
States of America, in accordance with the International Arbitration
Rules of the American Arbitration Association ("AAA"). The panel shall
render a final opinion and award in writing stating the reasons
therefor, and the award shall be final and binding upon the parties
hereto. Judgment upon the award may be entered in any court of
applicable jurisdiction.
-9-
<PAGE>
(i) Entire Agreement. This Agreement (including the Schedules attached
----------------
hereto) reflects the entire agreement of the parties regarding the
subject matter hereof, and supersedes all prior and contemporaneous
agreements between the parties, whether written or oral. This
Agreement shall not be amended, altered or changed except by written
agreement signed by both parties.
(j) Counterparts. This Agreement may be executed in counterparts, each of
------------
which constitutes an original, and together which constitute the
Agreement.
* * * * *
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives, effective as of the date first set forth
above.
VICINITY CORPORATION APERTO MULTIMEDIA GMBH
By: ______________________________ By: ______________________________
Name: Name:
Title: Title:
<PAGE>
Schedule I
Performance Milestones
Milestone Shares Performance Milestone
- ---------------- ---------------------
2500 $2 million of Qualified Revenues
2500 $4 million of Qualified Revenues
2500 $6 million of Qualified Revenues
2500 $8 million of Qualified Revenues
2500 $10 million of Qualified Revenues
2500 $12 million of Qualified Revenues
2500 $14 million of Qualified Revenues
2500 $16 million of Qualified Revenues
2500 $18 million of Qualified Revenues
2500 $20 million of Qualified Revenues
1667 Office established in ***********
833 Key Account sales managers hired
500 Office established in ***********
1000 Product launch (with one sale) in ***********
250 Office established in ***********
500 Product launch (with one sale) in ***********
250 Office established in ***********
500 Product launch (with one sale) in ***********
250 Office established in ***********
500 Product launch (with one sale) in ***********
4167 Three high-quality channel partners signed by Vicinity Europe
mgmt team
2083 Three more high-quality channel partners signed
1667 Marketing plan approved by both US and Europe and $200,000
spent against such amount
833 Additional $200,000 spent against approved marketing plan
1667 CEO, Marketing, Sales permanent managers hired
833 Rest of management team hired
1667 25% of Vicinity's multinational customer base also in Europe
833 Cumulative 33% of Vicinity's multinational customer base also
in Europe
1667 MapBlast launched in local-language versions in 5 countries
833 Wireless Business Finder launched in 3 countries
1667 Promotional relationships in place with 2 major portals (i.e.
AOL)
833 Promotional relationships with 3 further major portals
<PAGE>
EXHIBIT 10.15
MANAGEMENT SUPPORT AGREEMENT
This MANAGEMENT SUPPORT AGREEMENT (this "Agreement") is entered into as of
---------
the 27th day of July 1999, by and between VICINITY CORPORATION ("Vicinity") and
--------
INVISION AG ("Invision").
--------
RECITALS:
(A) Vicinity and Invision are parties to that certain Series F Preferred
Stock, dated as of the date hereof, pursuant to which Invision is
purchasing equity securities of Vicinity.
(B) Invision is an affiliate of Metro AG (together with its affiliates
other than Invision, "Metro"), with Invision primarily engaged in
-----
investment activities and Metro involved in operations.
(C) It is anticipated that, among other things, Invision will intercede
with Metro in order to promote the sale of Vicinity's products and
services (the "Vicinity Business") in Europe.
-----------------
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, the parties hereto agree as follows:
1. RESPONSIBILITIES OF INVISION
(a) Promotion of the Vicinity Business. Invision shall use its
----------------------------------
commercially reasonable efforts to promote the Vicinity Business both
to Metro and within Europe generally.
(b) Opportunities; Competition. Invision shall consult with Vicinity
--------------------------
concerning new business opportunities and shall advise Vicinity
concerning any competitive threats to the Vicinity Business in Europe.
2. RESPONSIBILITIES OF VICINITY
(a) Training. Vicinity shall provide training to the employees of
--------
Invision and Metro in connection with Invision's performance hereunder
as reasonably requested by Invision.
(b) Assistance; Promotional Materials. Vicinity shall, upon Invision's
---------------------------------
reasonable request, (i) advise Invision in connection with Invision's
promotion of the Vicinity Business, and (ii) furnish to Invision
reasonable quantities of sales promotion materials and other documents
necessary or advisable for promotion of the Vicinity Business in
Europe.
(c) Expenses. Vicinity shall reimburse Invision for the direct costs
--------
incurred by Invision up to a limit of U.S$100,000; provided that such
costs are directly related to the promotion of the Vicinity Business
in Europe. Such amount shall be payable in two equal installments with
the first payment due on the three month anniversary of this Agreement
and the second payment due on the six month anniversary of this
Agreement. To receive such reimbursements, Invision shall on or before
such dates, provide Vicinity
-1-
Confidential
<PAGE>
with copies of the expense receipts related to all costs for which
Invision seeks such reimbursement.
-2-
Confidential
<PAGE>
3. INCENTIVE STOCK GRANTS
To provide an incentive to the performance of Invision hereunder, the
parties agree as follows:
(a) Project Scout. Vicinity shall issue to Invision options or warrants
-------------
exercisable for up to 75,000 shares of the Common Stock of Vicinity in
the following increments and based upon the attainment of the
following performance milestones related to the proposed business
directory to be made available to consumers containing a free listing
for all businesses holding a Metro customer card ("Project Scout"):
-------------
(1) 25,000 shares upon execution and delivery of an agreement between
and acceptable to Vicinity and Metro relating to Project Scout;
(2) 25,000 shares when the cumulative gross revenues collected
pursuant to Project Scout exceed 12 million DM; and
(3) 25,000 shares when the cumulative gross revenues collected
pursuant to Project Scout exceed 30 million DM.
(b) Project Telegate. Vicinity shall issue to Invision options or
----------------
warrants exercisable for up to 50,000 shares of the Common Stock of
Vicinity in the following increments and based upon the attainment of
the following performance milestones related to the proposed business
relationship between and acceptable to Vicinity and Telegate whereby
Vicinity's Telephone Business Finder service will be made available to
Telegate ("Project Telegate"):
----------------
(1) 20,000 shares upon (x) execution and delivery of an agreement
between Vicinity and Telegate and (y) public launch of Project
Telegate based upon such agreement;
(2) 20,000 shares upon sale by Telegate of the Vicinity Telephone
Business Finder service to ten or more customer brands in
Germany; and
(3) 10,000 shares upon sale by Project Telegate of the Vicinity
Telephone Business Finder service to five or more customers
brands in major European markets outside Germany.
(c) Additional Projects. Vicinity shall issue to Invision options or
-------------------
warrants exercisable for up to 150,000 shares of the Common Stock of
Vicinity in connection with up to three projects to be agreed between
the parties, each eligible for up to 50,000 shares subject to
performance milestone(s) to be agreed upon between the parties. The
general structure of each such equity grant shall be as follows:
(1) 20,000 shares upon execution and delivery of a mutually
acceptable agreement relating to each such project;
(2) 20,000 shares upon successful launch of each such project, the
criteria for a "successful launch" to be agreed between the
parties prior to each such launch; and
(3) 10,000 shares upon attainment of performance milestone(s) that
shall be agreed between the parties prior to the launch of each
such project to represent success for such project.
(d) Exercise Price. The exercise price per share for each block of
--------------
options or warrants issued under the terms of this Agreement shall be
determined as of the date that each such block is earned by Invision
and such exercise price shall be (i) the price per share received by
Vicinity in the most recent private equity financing round of Vicinity
(currently $5.00), or (ii) following Vicinity's initial public
offering, the average trading price of Vicinity's
-3-
<PAGE>
Common Stock over the five trading days immediately prior to the date
of issuance of such block of options or warrants.
(e) Publicity. Neither party shall, without the prior consent of the
---------
other party, issue any press release or make any public statement
relating to any specific transaction described in paragraphs (a), (b)
or (c) of this Section 3, which specific transaction may reasonably be
anticipated to result in the grant to Invision of the right to acquire
the shares of Common Stock referred to in such paragraphs, prior to
the date that the agreement(s) relating to such transaction has or
have been finalized and the exercise price of the options or warrants
relating thereto have been set pursuant to the terms hereof.
(f) Performance Period; Exercise Period. The right of Invision to earn
-----------------------------------
shares of incentive stock under this Section 3 shall terminate on July
1, 2002. No options or warrants shall be earned pursuant to this
Section 3 after July 1, 2002. Any option or warrant issued to Invision
pursuant to this Section 3 shall provide that such option or warrant
must be exercised within two years of the issue date and following
such two year period such option or warrant shall be terminated,
become unexercisable, and shall be null and void.
(g) Agreements. As a precondition to the issuance of any options or
----------
warrants hereunder or any shares of Common Stock or other equity
interests of Vicinity thereunder, Invision shall execute and deliver
such documents and certificates as Vicinity customarily requires with
respect to the issuance of similar securities, including, without
limitation, representations and warranties with respect to securities
laws and agreements with respect to rights of first offer.
4. OTHER MATTERS
(a) Independent Contractors. The parties are independent contractors and
-----------------------
nothing contained in this Agreement shall be construed to (i) give
either party the power to direct and control the day-to-day activities
of the other, (ii) constitute the parties as partners, joint
venturers, co-owners or otherwise as participants in a joint or common
undertaking, or (iii) except as set forth herein, allow either party
to create or assume any obligation on behalf of the other for any
purpose whatsoever.
(b) Cooperation. The parties agree to cooperate in good faith to realize
-----------
their intent. Each party shall act in good faith to achieve the
benefits expected and to resolve any problems that may occur in a
commercially reasonable way. As part of that cooperation, each agrees
as follows:
(1) Supervision. Each party shall, consistent with past practice,
-----------
supervise the activities of its officers, employees and
representatives with respect to the services to be provided
hereunder.
(2) Books and Records. Each party shall maintain books and records
-----------------
relevant to the provision of the services provided hereunder in a
manner consistent with the continuing needs of the parties and
shall make such books and records available to the other party.
(3) Applicable Laws. The parties will ensure that all transactions
---------------
and activities contemplated hereunder are conducted in compliance
with all applicable laws.
-4-
<PAGE>
5. MISCELLANEOUS
(a) Term. This Agreement shall commence on the date hereof and shall
----
terminate on July 1, 2002 unless extended by mutual agreement of the
parties.
(b) Governing Law. This Agreement shall be governed in all respects by
-------------
the substantive laws of the State of California, United States of
America (excluding conflict of laws rules) as applied to agreements
entered into and to be performed entirely within the State of
California between California residents.
(c) Attorneys' Fees. In the event of any litigation or arbitration by the
---------------
parties under this Agreement, the prevailing party shall be entitled
to its costs and reasonable attorneys' fees.
(d) Assignment: No Third-Party Beneficiaries. Neither this Agreement
----------------------------------------
nor any part hereof shall be assignable by operation of law or
otherwise by any party without the prior written consent of the other
party; provided, however, that Vicinity may assign this Agreement to a
-------- -------
wholly-owned subsidiary of Vicinity without the prior written consent
of Invision. Nothing contained in this Agreement, express or implied,
is intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assignees, any
rights or remedies under or by reason of this Agreement unless
expressly so stated.
(e) Notices. All notices, requests, consents and other communications
-------
hereunder shall be in writing and delivered personally, by recognized
international courier (such as DHL or Federal Express) or by facsimile
(with facsimiles to be promptly confirmed in writing). All such
written communications delivered by courier shall be delivered to the
parties hereto at their respective addresses, subject to the right of
either party to change its address by delivering written notice to the
other. Such notices shall be deemed to be effective upon three (3)
business days following the date of deposit of such written notice
with the courier or upon receipt if by facsimile or personal delivery.
(f) English Language. This Agreement was negotiated and executed in
----------------
English, and the original English language version shall be
controlling.
(g) Severability. Should any provisions of this Agreement contravene
------------
any law or valid regulation of any government jurisdiction over the
parties, then such provision shall be automatically terminated and
performance thereof by the parties waived, and all other provisions of
this Agreement shall continue in full force and effect.
(h) Dispute Resolution and Arbitration. Any and all disputes,
----------------------------------
controversies or differences arising from or in connection with this
Agreement shall be settled by mutual consultation between the parties
hereto in good faith as promptly as possible, but failing an amicable
settlement shall be resolved by arbitration in the English language
before a panel of three arbitrators (unless a single arbitrator can be
agreed upon by the parties) in San Francisco, California, United
States of America, in accordance with the International Arbitration
Rules of the American Arbitration Association ("AAA"). The panel shall
render a final opinion and award in writing stating the reasons
therefor, and the award shall be final and
-5-
<PAGE>
binding upon the parties hereto. Judgment upon the award may be
entered in any court of applicable jurisdiction.
(i) Entire Agreement. This Agreement reflects the entire agreement of the
----------------
parties regarding the subject matter hereof, and supersedes all prior
and contemporaneous agreements between the parties, whether written or
oral. This Agreement shall not be amended, altered or changed except
by written agreement signed by both parties.
(j) Counterparts. This Agreement may be executed in counterparts, each of
------------
which constitutes an original, and together which constitute the
Agreement.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives, effective as of the date first set forth
above.
VICINITY CORPORATION
By: ______________________________
Name:
Title:
INVISION AG
By: _______________________________
Name:
Title:
<PAGE>
EXHIBIT 10.18
CONFIDENTIAL TREATMENT REDACTED FOR
----------------------
REQUESTED CONFIDENTIALITY
---------
The astericked portions of this document have
been omitted and are filed separately with
the Securities and Exchange Commission
JOINT MARKETING AGREEMENT
This Joint Marketing Agreement (the "Agreement") is entered into by Prio,
Inc., a California corporation ("Prio") with offices at 501 Ellis Street,
Mountain View, California 94043 and Vicinity Corporation, a California
corporation ("Vicinity") with offices at 1135A San Antonio Road, Palo Alto,
California 94303, effective June 23, 1999 (the "Effective Date").
Recitals
A. Whereas, Prio provides services which enable merchants, Internet
portals and other website owners to offer personalized online/offline
promotions, loyalty and brokerage services, which consumers can redeem with
credit cards at the point of sale; and
B. Whereas, Vicinity provides private label solutions for customer
websites include multi-attribute and located-based search capabilities; and
C. Whereas, the parties want to cooperate to bundle their services to
create a new marketed customer acquisition service that allows merchants to
offer promotions and that can be redeemed by consumers in off-line (i.e. non-
web-based) storefronts ("Physical Stores"). National merchants and content site
owners would be the target market for the complete suite of offerings by both
parties' sales forces.
Now, Therefore, the parties agree as follows:
Agreement
1. Definitions.
1.1 "Intellectual Property Rights" means all existing and future patents
and other patent rights, trademarks, trade names, service marks, logos and other
corporate identifiers, copyrights, moral rights and trade secrets, including all
applications and registrations with respect thereto. .
1.2 "Prio Service" means the infrastructure, relationships with banks and
other capabilities provided by Prio (collectively, the "Prio Network") which
permit merchants to (a) offer Merchant Promotions through links from a
merchant's website or via push or other technology to an End User; (b) enable
the online selection of Merchant Promotions; (c) enable the redemption of
Merchant Promotions with a credit card either online or at Physical Stores; (d)
capture the credit card transaction from the merchant location, verify promotion
eligibility, debit the merchant's bank account and issue the appropriate rebate
or credit to the Subscriber's credit card account; (e) permit End Users to
register to receive information concerning promotions of products and services
and participating merchants and (f) confirm that a Subscriber makes a purchase
at a Physical Store based on an interaction on the Internet.
1.
<PAGE>
1.3 "Vicinity Service" means private label web-based solutions offered by
Vicinity featuring multi-attribute, location-based searching of content,
community and commerce information.
1.4 "Bundled Service Offering" means the combination of the Vicinity
Service and the Prio Service to create a customer acquisition service that,
among other things, would allow merchants to offer promotions to consumers over
the Internet that are redeemable in Physical Stores.
1.5 "Merchant Data" means information provided by merchants to enable
their participation in the Bundled Service Offering.
1.6 "Merchant Promotions" means local, regional and national promotions of
goods and services from merchants participating in the Bundled Service Offering.
1.7 "Prio Marks" means the Prio trademarks, service marks, logos and other
corporate identifiers designated in Exhibit A for use with the Bundled Service
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Offering.
1.8 "Subscribers" means End Users that register to use the Bundled Service
Offering on Participating Sites.
1.9 "Vicinity Marks" means the Vicinity trademarks, service marks, logos
and other corporate identifiers designated in Exhibit B for use with the
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Bundled Service Offering.
1.10 "Subscriber Data" means information entered by Subscribers in
connection with their use of the Bundled Service Offering, including, without
limitation, names, e-mail addresses, credit card numbers, shopping preferences
and demographic information.
1.11 "End Users" means individuals who use browser software to access the
Bundled Service Offering over the Internet.
1.12 "Participating Site" means a website which offers the Bundled Service
Offering.
1.13 "Referral Fees" shall mean commissions paid by one party (the
"Referred Party") which has been introduced to a customer (the "Referred
Customer") by the other party (the "Referring Party") on revenues received from
the sale of the Referred Party's services on a standalone basis to the Referred
Customer.
2. Bundled Service Offering.
2.1 Development of Bundled Service Offering. The parties will cooperate to
jointly specify, develop and integrate the Bundled Service Offering, including
its navigational structure, look and feel and specific functionality. Vicinity
will be responsible for (a) making the Vicinity Services capable of authoring
Merchant Promotions; and (b) displaying the Prio Marks on Participating Sites.
The parties will be jointly responsible for developing marketing collateral
suitable for the Bundled Service Offering (the "Marketing Materials"). The
parties will use reasonable commercial efforts and adequate resources to rollout
the first stage of the Bundled Service Offering implementation (as described
below) by July 31, 1999.
2.
<PAGE>
2.2 Implementation. The parties will implement the Bundled Service
Offering in three stages, as follows:
(a) First Stage: Prio Service integrated with Vicinity's
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Business Finder products; Prio and Vicinity to develop and deploy
technologies to enable Prio to publish glyphs (or promotions
button) to appear next to retailer locations on the merchant's
website;
(b) Second Stage: Prio Service integrated with Vicinity's Site
------------
Maker product; Prio and Vicinity will develop the operational and
technical interfaces to ensure that promotions can be created and
updated by the customer and displayed on the site using Site
Maker; and
(c) Third Stage: Fully integrated offering of Prio Service with
-----------
all Vicinity products including Site Maker, Business Finder and
Vicinity's wireless products.
2.3 Expenses. The parties will jointly size the development efforts in
each stage and each pay for their own development costs unless otherwise agreed
to in writing. The parties shall each pay 50% of the total cost of developing
the Marketing Materials.
3. Vicinity Marketing Obligations.
3.1 Enrollment of Participating Sites. Vicinity will use reasonable
commercial efforts to market the Bundled Service Offering to existing and future
Vicinity merchants and partners; provided that each such merchant or partner
which is not itself a merchant enters into an enrollment agreement containing
the minimum terms and conditions set forth in Exhibit C (Minimum Terms and
---------
Conditions for Participating Site Enrollment Agreements) and each merchant or
partner which maintains a merchant site enters into an agreement containing the
minimum terms and conditions set forth on Exhibit D.
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3.2 Service Operations. Vicinity shall provide service and support for the
Bundled Service Offering consistent with service and support levels it provides
for the Vicinity Services. Where Vicinity has resold the Bundled Service
Offering and is the point of contact for the Subscriber, Vicinity shall work
with Prio to obtain necessary banking information and permissions from such
Subscribers to enable Prio to enter the merchant and/or partner's locations into
the Prio network. In addition, Vicinity shall work with Prio to display Prio
branded glyphs as part of the Bundled Service Offering that enable Prio to
receive Subscriber registration information.
3.3 Merchant Marketing Collateral. Vicinity will include marketing
collateral for the Bundled Service Offering in the appropriate merchant sales
and marketing information and starter kits.
3.4 Vicinity Website. Unless otherwise requested by a merchant or a
Participating Site, Vicinity will include the Prio icon and "powered by Prio" on
all web pages under Prio's control where the Bundled Service Offering is invoked
or described, and will include Prio branding elements on its homepage or on a
mutually agreed to page on its website and include general
3.
<PAGE>
marketing and descriptive information about Prio and the Prio Service in the
appropriate areas of the Vicinity website at www.vicinity.com or its successor
----------------
URL.
3.5 Training. Vicinity will provide training at no charge to Prio's sales
and marketing personnel, on dates and at locations to be mutually agreed,
regarding the Vicinity Services.
4. Prio Marketing Obligations.
4.1 Enrollment of Participating Sites. Prio will use reasonable commercial
efforts to market the Bundled Service Offering to existing and future Prio
merchants and partners using Prio's then-standard terms and conditions for the
Prio Service and shall cause each merchant or partner to enter into an agreement
with Vicinity containing the minimum terms and conditions with respect to the
Vicinity Services set forth on Exhibit E.
---------
4.2 Service Operations. Prio shall provide service and support for the
Bundled Service Offering consistent with service and support levels it provides
for the Prio Service. Prio will support the Vicinity Services consistent with
the standard requirements set forth by Vicinity for resellers of Vicinity
Services.
4.3 Merchant Marketing Collateral. Prio will include marketing collateral
for the Bundled Service Offering in the appropriate Prio's merchant and sales
kits.
4.4 Prio Website. Prio will include Vicinity branding elements on its home
page or on a mutually agreed to page on its website and general marketing and
descriptive information about Vicinity and the Vicinity Service in the
appropriate areas of the Prio website at www.prio.net or its successor URL.
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4.5 Training. Prio will provide training at no charge to Vicinity's sales
and marketing personnel, on dates and at locations to be mutually agreed,
regarding the Prio Services.
5. Joint Marketing Obligations.
5.1 Partnership Obligations.
(a) Prio will exclusively utilize Vicinity Services for all Prio
projects or programs involving location-based search capabilities services;
(b) Vicinity will exclusively utilize Prio Services for all
Vicinity projects involving product or brand specific consumer discounts
linked to specific retail outlets where a transaction originates on a
website and is consummated at a Physical Store;
(c) Notwithstanding Sections 5.1(a) or (b), each party can use
the services of providers that compete with the other party so long as (i)
the customer requests use of a specific competing service and (ii) such
party has first introduced the other party's services to the customer and
used commercially reasonable efforts to cause the customer to use such
services; and
4.
<PAGE>
(d) Both parties will refer potential customers to each other
and actively cooperate on joint marketing activities.
5.2 Customer Origination by Prio. In the event that Prio introduces a Prio
customer to Vicinity and the customer subsequently subscribes to the Bundled
Service Offering, then (a) Prio will bill the customer for all fees for its use
of the Bundled Service Offering and (b) Prio will remit a portion of such fees
to Vicinity in accordance with Section 6.
5.3 Customer Origination by Vicinity. In the event that Vicinity
introduces a Vicinity customer to Prio and the customer subscribes to the
Bundled Service Offering, then (a) Vicinity will bill the customer for all fees
for its use of the Bundled Service Offering and (b) Vicinity will remit a
portion of such fees to Prio in accordance with Section 6.
5.4 Additional Services. Each party shall be entitled to contact any
merchant using the Bundled Service Offering about possible products/services
offered by such party and not connected with the Bundled Service Offering;
provided, however, that neither party shall introduce competitors of the other
party to such merchants. For the purpose of this Section 5.4, a "competitor" of
Prio or Vicinity shall mean a company that offers a service that would
reasonably be expected to compete with the Prio Service or the Vicinity Service,
respectively.
5.5 Marketing Efforts. Each party will integrate sales and marketing
material concerning the Bundled Service Offering into presentations made at
trade shows and industry conferences.
5.6 Press Releases. The parties will cooperate in issuing joint press
releases announcing their relationship and the commercial availability of the
Bundled Service Offering.
5.7 Internal Training. The parties will each train their respective sales
representatives on the benefits, functionality, implementation specifics and
other such issues as they relate to the sale and support of the Bundled Service
Offering.
5.8 Customer Support. The parties will each provide first line support to
their respective customers for the Bundled Offering Service regarding customer
sales and technical support. Prio and Vicinity will provide second line support
for their respective components of the Bundled Service Offering to merchants
participating in the Bundled Service Offering.
5.9 Channel Conflict. The parties will cooperate to develop a strategy for
eliminating sales channel conflict for the Bundled Offering Service.
6. Payments.
6.1 Bundled Service Offering Pricing. The parties shall mutually agree
upon special pricing for the Bundled Service Offering and mutually negotiate
pricing for merchants and participating sites. The parties shall negotiate in
good faith pricing for reseller partners who are not merchants and the
contribution amount of each party for such transactions.
6.2 Payments Collected for Prio Services and Vicinity Services. In the
event that Prio bills customers for Vicinity Services included within the
Bundled Service Offering as provided
5.
<PAGE>
by Section 5.2, Prio shall remit the full amount collected with respect to such
services to Vicinity. In the event that Vicinity bills customers for Prio
Services included within the Bundled Service Offering as provided by Section
5.3, Vicinity shall remit the full amount collected with respect to such
services to Prio.
6.3 Fee Sharing.
6.3.1 In the event that Vicinity resells Prio Services to any
merchant or partner as part of the sale of the Bundled Service Offering, Prio
will remit to Vicinity a payment on all fees collected from the Prio Service
attributable to such Bundled Service Offering in accordance with the following
schedule:
First ******* sites: **** of all Prio Service fees collected from those
storefronts
Additional sites: **** of all Prio Service fees collected from those
storefronts
After ********* cumulative sites the payment due for the first ********
sites shall be increased to ***** on a going-forward basis.
6.3.2 In the event that Prio resells Vicinity Services to any
merchant or partner as part of the sale of the Bundled Service Offering,
Vicinity will remit to Prio a payment on all fees collected from the Vicinity
Service attributable to such Bundled Service Offering in accordance with the
following schedule:
First ******* sites: **** of all Vicinity Service fees collected from
those storefronts
Additional sites: **** of all Vicinity Service fees collected from
those storefronts
After ******** cumulative sites the payment for the first ****** sites
shall be increased to **** on a going-forward basis.
6.3.3 The number of sites referenced in Section 6.3.1 and
Section 6.3.2 shall be determined on a cumulative basis for each party and shall
include only sites that actively utilize the Bundled Service Offering during any
given month. The fee sharing percentage attributable to each site (i.e. ****
versus **** for sites ********* through *********) shall be based upon the
chronological order in which each active site was contracted.
6.3.4 References to "Prio Service fees" in Section 6.3.1 and
"Vicinity Service fees" in Section 6.3.2 shall mean gross service fees
attributable to Prio Service or Vicinity Service, respectively, under the
Bundled Service Offering.
6.4 Referral Fees. A party will pay a Referral Fee to the other party when
the first party provides an introduction to a merchant/partner that results in
the second party entering into a signed contract for the second party's services
(other than the Bundled Service Offering) within ninety (90) days of such
referral as follows: The Referral Fee payable to Prio shall be **** of the gross
fees Vicinity collects from the referred merchant/partner during the first year
after such contract is signed; the Referral Fee payable to Vicinity shall be
********** for each merchant/partner referred by Vicinity.
6.
<PAGE>
6.5 Payment Terms. Each party will remit the payments pursuant to this
Section 6 owed to the other party quarterly, within thirty (30) days after the
end of each calendar quarter. All payments will be made in U.S. dollars. Each
party will provide statements itemizing the basis for its calculation of
payments due with its remittances.
6.6 Audit Rights. The parties will collect and retain clear and accurate
records regarding the net fees collected and commissions owned in connection
with this Agreement. Each party shall have the right to have an inspection and
audit of the other party's relevant books and records conducted by an
independent audit professional chosen and paid by the auditing party no more
often than once every twelve (12) months, during regular business hours at the
other party's offices and in a manner that doesn't interfere with regular
business operations. If an audit discloses that inaccurate information caused a
discrepancy of ten percent (10%) or more of the amount actually due to or paid
by the auditing party, then the audited party will bear the costs of the audit.
This provision will survive any termination or expiration of this Agreement for
two (2) years.
6.7 Taxes. Each party agrees to indemnify and hold the other harmless
from, any sales, use, value-added or similar tax or duty not based on their net
income, including any penalties and interest, as well as any costs associated
with the collection or withholding thereof, in each case to the extent levied on
the payments made by either party to each other or either party's performance of
its obligations under the Agreement.
7. Ownership and Use of Data.
7.1 Ownership of Data. Unless otherwise agreed to in writing by the
parties, the parties shall each own all Subscriber Data and Merchant Data that
such party independently receives through the Bundled Service Offering. Each
party shall comply with customer restrictions on use thereof.
7.2 Ownership of Prio Service. Prio is and shall remain the sole and
exclusive owner of all of the features and functionality of the Prio Service,
including all Intellectual Property Rights in the design, architecture and
software implementation thereof. No licenses or rights with respect to the Prio
Service are granted in this Agreement. Notwithstanding the foregoing, Vicinity
shall retain all rights to any design, authoring, and set-up services provided
by Vicinity as part of the development and implementation of the Bundled Service
Offering.
7.3 Ownership of Vicinity Services. Vicinity is and shall remain the sole
and exclusive owner of all of the features and functionality of the Vicinity
Services, including all Intellectual Property Rights in the design, architecture
and software implementation thereof. No licenses or rights with respect to the
Vicinity Services are granted in this Agreement.
8. Disclaimer of Warranties; Limited Warranties.
8.1 Disclaimer. EXCEPT AS SET FORTH IN THE REST OF THIS SECTION, EACH
PARTY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
ANY AND ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO THE OPERATION OF THE PRIO SERVICE, VICINITY SERVICES
7.
<PAGE>
AND BUNDLED SERVICE OFFERING AND ANY OTHER TECHNOLOGY OR SERVICES. IN
PARTICULAR, AND NOT BY WAY OF LIMITATION, NEITHER PARTY WARRANTS THAT ITS WEB
SITE(S) OR THE PRIO SERVICE, THE VICINITY SERVICES OR THE BUNDLED SERVICE
OFFERING WILL OPERATE ERROR-FREE OR WITHOUT INTERRUPTION.
8.2 Prio Warranties. Prio warrants that:
8.2.1 The Prio Service as bundled into the Bundled Service
Offering and any data, images, text or other content therein (excluding any
content provided by a Participating Site or a merchant hereunder not modified by
Prio) do not infringe any copyright, trade secret or trademark held by any third
party.
8.2.2 Prio will take reasonable steps to protect Prio-owned
Subscriber Data from unauthorized access, disclosure or use.
8.3 Vicinity Warranties. Vicinity warrants that:
8.3.1 The Vicinity Services as bundled into the Bundled
Service Offering and any data, images, text or other content therein (excluding
any content provided by a Participating Site or a merchant hereunder not
modified by Vicinity) do not infringe any copyright, trade secret or trademark
held by any third party.
9. Indemnities.
9.1 Indemnity by each party.
9.1.1 Each party (the "Indemnifying Party") hereby agrees to
defend, indemnify and hold the other party (the "Indemnified Party"), and its
successors, officers, directors and employees harmless from any and all claims,
demands, costs, liabilities, losses, expenses and damages (including attorneys'
fees, costs, and expert witnesses' fees) arising out of or in connection with
any claim that the Indemnifying Party's Service as bundled into the Bundled
Service Offering and any data, images, text or other content therein (excluding
any content or technology provided by the Indemnified Party, a Participating
Site or a merchant hereunder and not modified by the Indemnified Party) infringe
any copyright, trade secret or trademark held by any third party, provided that
(a) prompt notice shall be given to the Indemnifying Party of any claim to which
the foregoing indemnity relates, (b) the Indemnifying Party shall have sole
control of the defense and settlement of any such claim and (c) the Indemnified
Party shall give the Indemnifying Party all reasonable assistance at the
Indemnifying Party's request in the defense or settlement of such claim. If any
aspect of the Indemnifying Party's Service including any data, images, text or
other content therein becomes, or in the Indemnifying Party's opinion is likely
to become, the subject of a claim of infringement or misappropriation, the
Indemnifying Party may, at its option and expense, obtain the right to continue
using the aspect or content, replace or modify the affected aspect or content,
or instruct the Indemnified Party to cease use of such aspect or content and
refund any payments made by the Indemnified Party with respect to such aspect or
content. The foregoing shall be the Indemnified Party's sole remedy and the
Indemnifying Party's sole obligation with respect to any breach of the warranty
in Section 8 or any other claim of infringement or misappropriation of any
proprietary right.
8.
<PAGE>
9.1.2 The Indemnifying Party assumes no liability for, and
the Indemnified Party shall cause each Participating Merchant to acknowledge
that the Indemnifying Party assumes no liability for, any act or omission of the
Indemnified Party, a Participating Site, a Subscriber or any participating
merchant or for the quality, availability or value of any goods and services
offered in connection with Merchant Promotions available on Participating Sites.
The Indemnifying Party agrees to indemnify the Indemnified Party for any loss or
damage incurred by the Indemnified Party due to a documented failure by the
Indemnifying Party to properly implement the valid redemption of a valid
Merchant Promotion by a the Indemnifying Party Subscriber, provided that such
indemnification obligation shall not exceed, with respect to each such
documented failure, the value of the applicable Merchant Promotion.
10. Limitation of Liability. NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES, EVEN IF IT HAS
BEEN WARNED OF THE POSSIBILITY OF SUCH DAMAGES. A PARTY'S LIABILITY IN
CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION GIVING
RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT OR OTHERWISE), SHALL NOT
EXCEED AN AMOUNT EQUAL TO THE PAYMENTS MADE BY SUCH PARTY UNDER THIS
AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE CLAIM, WITH ALL
PAYMENTS FOR CLAIMS OR DAMAGES BY A PARTY UNDER THIS AGREEMENT BEING
AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT FOR SUCH PARTY. THE
EXISTENCE OF ONE OR MORE SUITS AT ANY TIME OR TIMES WILL NOT ENLARGE THE
LIMIT. THESE LIMITATIONS APPLY TO ALL CAUSES OF ACTION UNDER OR RELATING TO
THIS AGREEMENT.
11. Confidentiality.
11.1 Confidential Information. "Confidential Information" means any
confidential or proprietary information, source code, software tools, designs,
schematics, plans or any other information relating to any research project,
work in process, future development, scientific, engineering, manufacturing,
marketing or business plan or financial or personnel matter relating to either
party, its present or future products, sales, suppliers, customers, employees,
investors or business, disclosed by one party to the other party, whether in
oral, written, graphic or electronic form, and whose confidential or proprietary
nature is identified at the time of such disclosure.
11.2 Non-Disclosure. Each party agrees that it will not make use of,
disseminate, or in any way disclose the other party's Confidential Information
to any person, firm or business, except as authorized by this Agreement and to
the extent necessary for performance of this Agreement. Each party agrees that
it will disclose Confidential Information only to those of its employees and
contractors who need to know such information and who have previously agreed to
be bound by the terms and conditions of this Agreement. Each party agrees that
it will treat all Confidential Information of the other party with the same
degree of care as it accords its own confidential information; each party
represents that it exercises reasonable care to protect its own confidential
information.
9.
<PAGE>
11.3 Exceptions. The receiving party's obligations with respect to any
portion of Confidential Information will terminate when the receiving party can
demonstrate that (a) the Confidential Information was in the public domain at
the time it was communicated to the receiving party by the disclosing party; (b)
it entered the public domain subsequent to the time it was communicated to the
receiving party by the disclosing party through no fault of the receiving party;
(c) it was in the receiving party's possession free of any obligation of
confidence at the time it was communicated to the receiving party by the
disclosing party; (d) it was rightfully in the receiving party's possession free
of any obligation of confidence at or subsequent to the time it was communicated
to the receiving party by the disclosing party; (e) it was developed by
employees or agents of the receiving party independently of and without
reference to any information communicated to the receiving party by the
disclosing party; or (f) the disclosure was in response to a valid order by a
court or other governmental body, was otherwise required by law, or was
necessary to establish the rights of either party under this Agreement. Each
party agrees that the other party may disclose the existence and terms of the
Agreement to actual and prospective investors and their counsel and advisors in
connection with any private placement of such party's securities, in connection
with a merger, acquisition or sale of all or substantially all of such party's
assets, or in accordance with the provisions of any other contract requiring
such disclosure pursuant to a most favored customer or similar provision.
12. Term and Termination.
12.1 Term and Termination. Unless terminated earlier pursuant to the
termination provisions in this Section 12, this Agreement shall remain in effect
for one (1) year from the Effective Date. The Agreement will then automatically
renew for successive one-year periods unless either party notifies the other at
least sixty (60) days prior to the end of the initial or then-current renewal
term that it will not renew the Agreement. In the event that Vicinity elects not
to renew this Agreement or this Agreement is otherwise terminated through no
fault of Prio, then Vicinity agrees to use commercially reasonable effort to
cause each Participating Site attributable to Vicinity to enter into an
agreement with Prio providing for the Prio Service. In the event that Prio
elects not to renew this Agreement or this Agreement is otherwise terminated
through no fault of Vicinity, then Prio agrees to use commercially reasonable
effort to cause each Participating Site attributable to Prio to enter into an
agreement with Vicinity providing for the Vicinity Service.
12.2 Termination for Breach. Either party may terminate the Agreement
if the other party fails to perform any of its obligations and such failure
continues for a period of thirty (30) days after receipt by the breaching party
of written notice from the non-breaching party specifying such default.
12.3 Effects of Expiration or Termination. Upon the expiration or
termination of the Agreement, the parties will return or destroy all
Confidential Information of the other party in their possession. All accrued
payment obligations of Prio and Vicinity shall survive expiration or termination
of the Agreement. The provisions of Sections 1 ("Definitions"), 6 ("Payments"),
7 ("Ownership and Use of Data"); Section 8 ("Disclaimer of Warranties; Limited
Warranties"); Section 9 ("Indemnities"); Section 10 ("Limitation of Liability");
Section 11 ("Confidentiality"); Section 12 ("Termination") and Section 13
("General") shall survive any expiration or termination of this Agreement.
10.
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13. General.
13.1 Governing Law. This Agreement shall for all purposes be governed
by and interpreted in accordance with the laws of the State of California as
those laws are applied to contracts entered into and to be performed entirely in
California by California residents.
13.2 Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable for any reason, the
remaining provisions hereof shall be unaffected and remain in full force and
effect, unless the unenforceable provisions are of such essential importance to
this Agreement that it is to be reasonably assumed that the parties would not
have entered into this Agreement without such provisions.
13.3 Prio Trademark License. Prio hereby grants Vicinity a limited
license to use the Prio Marks in connection with the marketing, distribution,
provision of access to, and support of the Bundled Service Offering. Vicinity
agrees that the Prio Marks are the exclusive property of Prio and that all usage
of the Prio Marks and any goodwill established by such use of the Prio Marks
shall inure to the exclusive benefit of Prio and that this Agreement does not
confer any goodwill or other interests in the Prio Marks on Vicinity. Vicinity
will comply with Prio's standard trademark and service mark usage guidelines
including but not limited to those guidelines pertaining to the requisite
quality of the services with which a Prio Mark is used, in the form and manner
set forth in such guidelines. Vicinity shall provide to Prio, at no cost to Prio
and prior to any first use, examples of Vicinity's such use of the Prio Marks
and shall obtain Prio's approval in writing prior to such use. Vicinity shall
modify or discontinue such use if requested by Prio, except that Vicinity may
re-use approved uses without further approval provided that such use remains
accurate and not misleading. Vicinity shall not adopt any trademark, trade name,
or service mark which is confusingly similar to any Prio Marks.
13.4 Vicinity Trademark License. Vicinity hereby grants Prio a limited
license to use the Vicinity Marks in connection with the marketing,
distribution, provision of access to, and support of the Bundled Service
Offering. Prio agrees that the Vicinity Marks are the exclusive property of
Vicinity and that all usage of the Vicinity Marks and any goodwill established
by such use of the Vicinity Marks shall inure to the exclusive benefit of
Vicinity and that this Agreement does not confer any goodwill or other interests
in the Vicinity Marks on Prio. Prio will comply with Vicinity's standard
trademark and service mark usage guidelines including but not limited to those
guidelines pertaining to the requisite quality of the services with which a
Vicinity Mark is used, in the form and manner set forth in such guidelines. Prio
shall provide to Vicinity, at no cost to Vicinity and prior to any first use,
examples of Prio's such use of the Vicinity Marks and shall obtain Vicinity's
approval in writing prior to such use. Prio shall modify or discontinue such use
if requested by Vicinity, except that Prio may re-use approved uses without
further approval provided that such use remains accurate and not misleading.
Prio shall not adopt any trademark, trade name, or service mark which is
confusingly similar to any Vicinity Marks.
13.5 Modifications. Any modification, amendment, supplement, or other
change to this Agreement must be in writing and signed by duly authorized
representatives of the parties.
13.6 Assignments. No right or obligation of either party under this
Agreement shall be assigned, delegated or otherwise transferred, whether by
agreement, operation of law or
11.
<PAGE>
otherwise, without the express prior written consent of the other party,
provided that either party may assign the Agreement without the other's consent
in the context of a merger, acquisition or sale of all or substantially all of
its assets. Subject to the preceding sentence, this Agreement shall bind each
party and its permitted successors and assigns.
13.7 Waivers. All waivers must be in writing. The failure of either
party to insist upon strict performance of any provision of this Agreement, or
to exercise any right provided for herein, shall not be deemed to be a waiver
for the future of such provision or right, and no waiver of any provision or
right shall affect the right of the waiving party to enforce any other provision
or right herein.
13.8 Force Majeure. Neither party shall not be responsible for any
failure to fulfill its obligations hereunder due to causes beyond its reasonable
control, including without limitation, acts or omissions of government or
military authority, acts of God, shortages of materials, transportation delays,
fires, floods, labor disturbances, riots or wars.
13.9 Notices. Any notice or communication permitted or required
hereunder shall be in writing and shall be delivered in person or by courier or
mailed by certified or registered mail, postage prepaid, return receipt
requested, and addressed as set forth in the first paragraph of this Agreement
or to such other facsimile number or address as either party may from time to
time provide to the other. If notice is given in person, by courier or by fax,
it shall be effective upon receipt; and if notice is given by mail, it shall be
effective three (3) business days after deposit in the mail.
13.10 Relationship Between Parties. Vicinity and Prio shall at all
times and for all purposes be deemed to be an independent contractor and neither
party, nor either party's employees, subcontractors or agents, shall have the
right or power to bind the other party. This Agreement shall not create or be
deemed to create a joint venture, partnership or other similar association
between the parties or any of either party's employees, subcontractors or
agents.
13.11 Publicity. Each party hereto has the right to periodically
publicize the relationship set forth in this Agreement, provided such publicity
has been submitted to and approved by the other party prior to disclosure.
13.12 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all prior agreements between the parties, whether written or oral, relating to
the same subject matter.
12.
<PAGE>
In Witness Whereof, the parties have executed this Joint Marketing
Agreement as of the Effective Date.
Prio, Inc. Vicinity Corporation
By:___________________________ By:_____________________________
______________________________ ________________________________
Typed or Printed Name Typed or Printed Name
______________________________ ________________________________
Title Title
13.
<PAGE>
EXHIBIT A
PRIO MARKS
To be added by Prio in accordance with Section 1.7.
14.
<PAGE>
EXHIBIT B
VICINITY MARKS
To be added by Vicinity in accordance with Section 1.9.
15.
<PAGE>
EXHIBIT C
PARTICIPATING SITE ENROLLMENT AGREEMENT
MINIMUM TERMS AND CONDITIONS
Vicinity's agreements with Participating Sites shall include at least the
following provisions:
1. The Participating Site shall incorporate hyperlinks to the Prio servers
hosting the Prio Service. Each such hyperlink shall be branded with the Prio
Mark designated by Prio. Each website page on which the functionality of the
Prio Service may be invoked shall be co-branded with the designated Prio Mark
(such as "Powered by Prio") in a manner mutually agreeable to Vicinity and the
Participating Site. The Participating Site shall not modify any Prio Mark
without Vicinity's prior written consent.
2. The Participating Site shall use commercially reasonable efforts to solicit
merchants to provide Merchant Promotions for the Prio Service.
3. The Participating Site shall have sole responsibility for collecting all
fees and charges from Enrolled merchants for participation in the Prio Service.
4. All enrollment agreements that a Participating Site enters into with
merchants for the Prio Service shall contain the minimum terms and conditions
set forth in Exhibit D (Minimum Terms and Conditions for Merchant Agreements)
attached to this Agreement. Such terms and conditions shall remain in full force
and effect and are not subject to waiver by Vicinity.
5. The Participating Site grants Vicinity and its suppliers [including Prio] a
non-exclusive, perpetual, irrevocable, royalty-free, fully-paid up license under
all of the Participating Site's Intellectual Property Rights, to (a) use,
reproduce, display, modify and create derivative works of Viewer Data and
Merchant Data solely for the purpose of operating, maintaining and enhancing the
Prio Service as permitted hereunder; and (b) to distribute and sublicense
aggregate statistical and database compilations derived from Viewer Data and
Merchant Data, such as information concerning Prio Subscriber demographics, site
traffic, viewing and navigation patterns, redemption characteristics, etc.,
provided that such aggregate data does not identify individual Prio Subscribers
or merchants.
6. The Participating Site shall not display any hyperlinks, glyphs (e.g.,
branded "buttons" or other graphic representations) or intelligent coupons
served by the Prio Service on any website or location other than the
Participating Site. The Participating Site will not redistribute these
hyperlinks, glyphs or intelligent coupons or any other aspect of the Prio
Service's functionality on any website or location other than the Participating
Site. The Participating Site shall not use the name, trade names or trademarks
of Prio without first obtaining the consent of Vicinity.
7. The Participating Site will collect and retain clear and accurate records
regarding the merchants enrolled and services performed in connection with this
Agreement. Vicinity and its suppliers shall have the right to have an
inspection and audit of the Participating Site's relevant
16.
<PAGE>
books and records conducted by an independent audit professional chosen and paid
by the auditing party no more often than once every twelve (12) months, during
regular business hours at the other party's offices and in a manner that doesn't
interfere with regular business operations.
8. The Participating Site warrants that any data, images, text or other
content contributed by the Participating Site to the Prio Service do not
infringe any copyright, trade secret or trademark held by any third party.
9. The Participating Site agrees to defend, indemnify and hold Vicinity and
its suppliers, and its and their successors, officers, directors and employees
harmless from any and all actions, causes of action, claims, demands, costs,
liabilities, expenses and damages (including without limitation attorneys' fees)
to the extent arising out of or in connection with any claim that data, images,
text or other content contributed by the Participating Site to the Prio Service
infringe any copyright, trade secret or trademark held by any third party,
provided that (a) prompt notice shall be given to the Participating Site of any
claim to which the foregoing indemnity relates, (b) the Participating Site shall
have sole control of the defense and settlement of any such claim and (c)
Vicinity shall give the Participating Site all reasonable assistance at the
Participating Site's expense in the defense or settlement of such claim. If any
of the data, images, text or other content contributed by a Participating Site
to the Prio Service becomes, or in the Participating Site's opinion is likely to
become, the subject of a claim of infringement or misappropriation, the
Participating Site may, at its option and expense, obtain the right, or cause
the right to be obtained, to continue using the aspect or content, replace or
modify the affected aspect or content, or instruct Vicinity to cease use of such
aspect or content. The foregoing shall be the Participating Site's sole remedy
and Vicinity's sole obligation with respect to any claim of infringement or
misappropriation of any proprietary right.
10. The Participating Site hereby agrees to defend, indemnify and hold Vicinity
and its suppliers, and its and their successors, officers, directors and
employees harmless from any and all claims, demands, costs, liabilities, losses,
expenses and damages (including attorneys' fees, costs, and expert witnesses'
fees) arising out of or in connection with any breach of the Participating
Site's obligation to include the required minimum terms and conditions in
merchant Enrollment agreements with Merchants (as required above), or any
misrepresentation of the Prio Service by the Participating Site, or any act or
omission of the Participating Site that results in the unauthorized disclosure
of Prio Subscriber information (including but not limited to Viewer Data),
provided that (a) prompt notice shall be given to the Participating Site of any
claim to which the foregoing indemnity relates, (b) the Participating Site shall
have sole control of the defense and settlement of any such claim and (c)
Vicinity shall give the Participating Site all reasonable assistance at the
Participating Site's expense in the defense or settlement of such claim.
11. The Participating Site disclaims any representations or warranties, express
or implied, from Prio, and disclaims all liability of any kind on behalf of Prio
which may be greater than the warranties provided by Prio to Vicinity.
17.
<PAGE>
EXHIBIT D
MERCHANT AGREEMENT MINIMUM TERMS AND CONDITIONS
Vicinity's agreements with merchants enrolled in the Bundled Service Offering by
Vicinity shall include at least the following provisions:
1. The merchant shall be solely responsible for all promotions offered by the
merchant and for honoring all such promotions in accordance with their terms.
The merchant shall be solely responsible for the quality, availability and value
of all goods and services promoted by the merchant via the Prio Network.
2. The merchant shall comply with all applicable local, state and federal
regulations of promotions.
3. The merchant will indemnify and hold Prio harmless against any claim, loss
or damage arising from any act or omission by the merchant, including but not
limited to any claim by any third party arising from or concerning the goods and
services offered or sold by the merchant in connection with the promotions
offered via the Prio Network, or any failure by the merchant to honor a valid
redemption.
4. The merchant authorizes its acquiring bank and credit card processor to
provide Vicinity or Vicinity's designee with all of the information required to
match promotions on the Prio Network selected by End Users with transactions
conducted with the merchant and audit the matching process, including but not
limited to a record of all credit card transactions conducted with the merchant.
The merchant will give Vicinity and Prio sixty (60) days written advance notice
of any change in the merchant's acquiring bank and credit card processor. The
merchant agrees to bear all charges and fees imposed by the acquiring
bank/credit card processor and to indemnify and hold Prio harmless against any
such charges and fees.
5. The merchant authorizes the merchant's acquiring banks and credit card
processors to provide Prio a copy of the data relating to promotion redemptions
at all of the merchant's participating sites on Prio's request.
6. The merchant agrees that all transactions with respect to promotions
offered via the Prio Network will be subject to the merchant's agreement for the
acceptance of VISA, MasterCard, American Express, Discover and all other charge,
credit and debit cards the merchant accepts.
7. The merchant disclaims any representations or warranties, express or
implied, from Prio, and disclaims all liability of any kind on behalf of Prio.
8. The merchant authorizes Vicinity or Vicinity's designee to either debit the
merchant's designated bank accounts and credit merchant's customers' credit card
accounts, or to post a billing item on the merchant's account statement, with
respect to promotions redeemed. The merchant disclaims all responsibility of
Prio to collect or remit any funds due to the merchant's customers or third
parties.
18.
<PAGE>
9. Vicinity can terminate its agreement with merchant immediately for
nonpayment of any fees required for merchant's participation in the Prio
Network.
10. Prio may terminate any promotion without prior notice to the merchant for
fraud, illegality, willful misconduct or if any such promotion allegedly
infringes the proprietary or other rights of third parties.
11. Prio and/or Vicinity will own all data regarding individual consumers' use
of the Prio Network and redemption of promotions and all information gathered
from use of the Prio Network generally.
12. The provisions for merchants' cancellation of their enrollment in the Prio
Service shall be the same as for the merchants' cancellation of their
participation in the Participating Site in general.
19.
<PAGE>
EXHIBIT E
20.
<PAGE>
EXHIBIT 10.19
CONFIDENTIAL TREATMENT REDACTED FOR
----------------------
REQUESTED CONFIDENTIALITY
---------
The astericked portions of this document have
been omitted and are filed separately with the
Securities and Exchange Commission
SERVICE AND DISTRIBUTION AGREEMENT
This SERVICE AND DISTRIBUTION AGREEMENT is entered into as of this 14th day
of June, 1999 (the "Effective Date") by and between VICINITY CORPORATION, a
--------------
California corporation with its principal offices at 1135A San Antonio Road,
Palo Alto, California ("Vicinity"), and INKTOMI CORPORATION, a Delaware
--------
corporation with its principal offices at 1900 South Norfolk Street, San Mateo,
California ("Inktomi").
-------
RECITALS:
--------
WHEREAS, Vicinity provides e-retail location-specific database and
promotion services to corporate clients and world wide web sites, and Inktomi
provides database searching and shopping engine services to corporate clients
and world wide web sites; and
WHEREAS, the parties desire to integrate certain of Vicinity's proprietary
services with Inktomi's shopping engine services to enhance the Inktomi service.
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
SECTION 1
DEFINITIONS
-----------
For purposes of this Agreement the following terms shall have the meanings
set forth below:
1.1 "Premium Business Finder Service" means the service offered by
-------------------------------
Vicinity in which Business Finder Customers may pay Vicinity to receive premium
placement of its corporate name and/or products in result sets generated in
response to certain key words and/or synonyms.
1.2 "Business Finder Customers" means the customers of Vicinity that are
-------------------------
licensed under separate agreements to use Vicinity's "Business Finder" service.
1.3 "Inktomi Shopping Engine" means the service offered by Inktomi to its
-----------------------
customers that provides End Users the ability to search a comparative shopping
database that aggregates information on products and merchants.
1.4 "Vicinity Content Engine" means Vicinity's system of hardware,
-----------------------
software and connectivity that delivers content, including the Vicinity Shopping
Content in response to requests and/or queries.
1.5 "Vicinity Shopping Content" means the data to be provided to the
-------------------------
Inktomi Shopping Engine by Vicinity through operation of the Vicinity Content
Engine as described in Schedule A hereto.
----------
<PAGE>
1.6 "Vicinity Services" means the service operated by Vicinity in which
-----------------
Vicinity uses the Vicinity Content Engine to deliver, among other information,
Vicinity Shopping Content to its customers.
1.7 "End User" means users who access the Inktomi Shopping Engine for
--------
their own use, and not for resale or retransmission.
1.8 "Premium Yellow Pages Listings Service" means the service provided by
-------------------------------------
Vicinity in which one or more RBOCs pay Vicinity to receive premium placement
for certain corporate name and/or products in result sets generated in response
to certain key words and/or synonyms.
1.9 "RBOC" means a Regional Bell Operating Company or similar telephone
----
company that maintains a file of directory listings in a specific region,
portions of, or all of the United States.
1.10 "Inktomi Customers" means a customer of Inktomi which is licensed to
-----------------
use the Inktomi Shopping Engine.
1.11 "Inktomi Customer Web Sites" means Internet world wide web sites
--------------------------
that Inktomi Customers have developed and operate which incorporate the Inktomi
Shopping Engine.
1.12 "Intellectual Property Rights" means any patent, copyright,
----------------------------
trademark, trade secret, trade dress, mask work, moral right, right of
attribution or integrity or other intellectual or industrial property rights or
proprietary rights arising under the laws of any jurisdiction (including,
without limitation, all claims and causes of action for infringement,
misappropriation or violation thereof and all rights in any registrations and
renewals).
1.13 "Prio" means Prio, Inc., a California corporation that provides
----
services that enables its customers to offer and track promotions offered to
consumers on-line that can be exercised in off-line transactions.
SECTION 2
PROVISION OF SERVICES, LICENSE GRANT AND DELIVERABLES
-----------------------------------------------------
2.1 Provision of Services, Performance and Support. Vicinity shall, in the
----------------------------------------------
manner set forth on Schedule B operate the Vicinity Content Engine to deliver
----------
the Vicinity Shopping Content in response to requests from the Inktomi Shopping
Engine. Vicinity shall operate the Vicinity Content Engine and provide the
Vicinity Shopping Content in a professional manner and otherwise in accordance
with the performance criteria set forth on Schedule B. Vicinity, at its sole
----------
cost and expense, shall provide all hardware, software, server capacity and
connectivity necessary to operate the Vicinity Content Engine and provide the
Vicinity Shopping Content as required under this Agreement.
2.2 License to Vicinity Shopping Content. Subject to the terms and
------------------------------------
conditions of this Agreement, Vicinity hereby grants to Inktomi, a worldwide,
non-exclusive, non-transferable license to access the Vicinity Content Engine to
retrieve Vicinity Shopping Content, to be integrated with the Inktomi Shopping
Engine and provided to Inktomi Customers for display on Inktomi Customer Web
Sites only over the Internet or Intranet applications, to End Users. Inktomi
shall only be authorized to provide the Vicinity Shopping Content to Inktomi
Customers for display on Inktomi Customer Web Sites as described in the
preceding sentence, and shall not use the Vicinity Shopping Content provided by
Vicinity to provide any other services or for any other purpose. Except as
necessary to exercise its
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rights under this Agreement, Inktomi shall have no right to sublicense the
rights granted by Vicinity under this Section 2.2.
2.3 Proprietary Notices. Inktomi agrees that all Vicinity Shopping
-------------------
Content distributed by Inktomi and/or Inktomi Customers shall include the
copyright notices and other proprietary legends of Vicinity and any third party
suppliers in the manner required by Vicinity as described in Schedule C, as such
----------
Schedule may be reasonably amended from time to time by Vicinity to conform to
the notice requirements of its third party content supplier and licensor
agreements. Inktomi shall not, and shall use its commercially reasonable efforts
to cause Inktomi Customers not to, remove, efface or obscure any copyright
notices or other proprietary notices or legends from any content or materials
provided hereunder.
2.4 Vicinity Ownership. Vicinity and its licensors shall retain all right,
------------------
title and interest, including all Intellectual Property Rights, in and to the
Vicinity Content Engine, Vicinity Shopping Content, and any Vicinity materials
or software provided hereunder. Except as expressly granted in this Section 2,
Inktomi receives no right, title or interest to the Vicinity Content Engine,
Vicinity Shopping Content, or any Vicinity materials or software.
2.5 Inktomi Ownership. Inktomi shall retain all right, title and interest,
------------------
including all Intellectual Property Rights, in and to the Inktomi Shopping
Engine and any Inktomi materials or software provided hereunder. Except as
expressly granted in this Section 2, Vicinity receives no right, title or
interest to the Inktomi Shopping Engine or any Inktomi materials or software.
2.6 Feedback and Statistics. Each party shall retain full rights to any
-----------------------
information collected by such party concerning usage of the services and content
provided by such party hereunder. In addition, each party shall provide to the
other party such feedback, information, and data regarding the Inktomi Shopping
Engine, and Vicinity Shopping Content including, without limitation, all
corrections, updates and new information regarding the Vicinity Shopping
Content, as reasonably requested from time to time.
2.7 User Interface. Subject to the provisions of Section 2.3 and
---------------
Schedule A, Vicinity hereby agrees to allow Inktomi and Inktomi Customers to
- ----------
design and maintain control over the look and feel of any page displaying the
Vicinity Shopping Content.
2.8 Support and Maintenance. Vicinity shall provide second level
-----------------------
technical support services to Inktomi regarding the operation of the Vicinity
Content Engine and the retrieval of the Vicinity Shopping Content. Such support
services will be provided in accordance with the support specifications
specified on Schedule B.
----------
SECTION 3
LICENSE FEES; REVENUE SPLITS
----------------------------
3.1 Payment Upon Execution. On the Effective Date, Vicinity shall invoice
----------------------
Inktomi in the amount of ************* representing a non-refundable data
loading and set-up fee to be paid by Inktomi, which amount shall be credited
against amounts otherwise payable from Inktomi to Vicinity hereunder.
3.2 Revenue Splits - Web Hits. On at least a monthly basis during the
-------------------------
term of this Agreement, Vicinity shall prepare and deliver to Inktomi a report
in electronic form detailing the number of times that data from the Premium
Yellow Pages Listing Service and/or Premium Business Finder
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Service have been displayed in connection with a Inktomi Shopping Engine query.
On at least a monthly basis during the term of this Agreement, Vicinity will
invoice its RBOC and Business Finder Customers for such exposures as
appropriate, and within thirty (30) days of receipt of such payments will remit
the appropriate revenue shares to Inktomi as set forth in Schedule A.
----------
3.3 Revenue Splits - Participation Fees. On at least a monthly basis
-----------------------------------
during the term of this Agreement, Vicinity will prepare and deliver to Inktomi
a report in electronic form setting forth (i) the number of Business Finder
Customers that have paid for Premium Business Finder Service within the Inktomi
Shopping Engine and the amounts payable to Inktomi by Vicinity with respect to
such premiums, (ii) the type and amount of fees payable to Inktomi by Vicinity
for offline transactions tracked by Prio which result from End User utilization
of the Inktomi Shopping Engine, and (iii) the number of new Business Finder
Customers signed by Vicinity which result from a referral from Inktomi and the
amounts payable to Inktomi by Vicinity with respect to such customers. On at
least a monthly basis during the term of this Agreement, Vicinity will invoice
the appropriate persons for such services, and within thirty (30) days of
receipt of such payments will remit the appropriate revenue shares to Inktomi as
set forth in Schedule A. On at least a monthly basis during the term of this
----------
Agreement, Inktomi will prepare and deliver to Vicinity a report in electronic
form indicating the number and identity of Inktomi Customers that have agreed to
obtain the Vicinity Shopping Content with the Inktomi Shopping Engine (provided
however that Vicinity may not disclose to any third party that Inktomi has
entered into a business arrangement with any particular Inktomi Customer unless
such business arrangement has been previously publicly announced). In addition,
Inktomi shall, as provided on Schedule A: (a) prepare and deliver to Vicinity
----------
in electronic form including the amounts payable to Vicinity by Inktomi from
Inktomi Customers choosing to display Vicinity Shopping Content and (b) invoice
such Inktomi Customers for such services, as appropriate, and within thirty (30)
days of receipt of such payments will remit the appropriate revenue shares to
Vicinity as set forth in Schedule A.
----------
3.4 Audit. The parties shall maintain complete and accurate accounting
-----
records, in accordance with sound accounting practices, to support and document
usage fees and revenue splits payable in connection with this Agreement. Such
records shall be retained for a period of at least two (2) years after the
amounts which relate to such records have been accrued. Each party shall, upon
written request from the other party, provide access to such records to an
independent auditor chosen by the auditing party for the purposes of audit,
provided that a party may not request an audit more than two (2) times during
any twelve (12) month period. If any such audit discloses a shortfall in
payment of more than five percent (5%) for any month, the audited party agrees
to pay or reimburse the auditing party for the expenses of such audit, and pay
such shortfall.
3.5 Taxes. Each party acknowledges and agrees that it shall be the
-----
obligation of such party to report income and commissions received by such party
hereunder to all appropriate taxing entities, and each party hereby agrees to
reimburse, indemnify and hold the other party free and harmless from any
obligation imposed by law on such party to withhold taxes or related charges
from such payments.
3.6 Expenses. Except as expressly provided herein, each party shall
--------
bear its own expenses with respect to the fulfillment of its obligations set
forth under this Agreement.
SECTION 4
WARRANTIES
----------
4.1 Vicinity Limited Warranty. Vicinity represents, warrants and
-------------------------
covenants to Inktomi that, during the term of this Agreement: (i) Vicinity has
the power and authority to enter into this Agreement; (ii) the Vicinity Shopping
Content and Vicinity Content Engine will perform in accordance with
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Vicinity's specifications as set forth in this Agreement, and (iii) the Vicinity
Content Engine and Vicinity Shopping Content does now or will in the future
infringe upon or violate any: (a) third party patent in the United States, or
any other Intellectual Property Right including without limitation copyright or
trademark or other proprietary right of any third party; or (b) applicable law,
regulation, or non-proprietary third-party right. Vicinity does not warrant that
the Vicinity Content Engine or the Vicinity Shopping Content will be error-free
or will operate without interruption. Notwithstanding any other provision of
this Agreement to the contrary, in the event Vicinity is at any time is not in
compliance with any of the warranties specified above, Vicinity shall use its
best commercial efforts to correct the problem and comply with the warranty as
promptly as possible, and in any event no later than thirty (30) days following
receipt of written notice of default from Inktomi. If Vicinity fails to come
into compliance within this thirty (30) time period, then Vicinity shall be
considered to be in material breach of the warranty and this Agreement. In such
event, in additional to all other rights and remedies available to Inktomi at
law or in equity, Inktomi shall have the right to terminate this Agreement.
4.2 Vicinity Warranty Disclaimer. VICINITY HEREBY DISCLAIMS ALL OTHER
----------------------------
WARRANTIES TO INKTOMI OR ITS CUSTOMERS, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, WITH RESPECT TO THE VICINITY SERVICES AND/OR CONTENT, INCLUDING BUT
NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT.
4.3 Inktomi Limited Warranty. Inktomi represents, warrants and
------------------------
covenants to Vicinity that Inktomi has the power and authority to enter into
this Agreement.
4.4 Inktomi Warranty Disclaimer. INKTOMI HEREBY DISCLAIMS ALL OTHER
---------------------------
WARRANTIES TO VICINITY OR ITS CUSTOMERS, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, WITH RESPECT TO THE INKTOMI SERVICES AND/OR ANY CONTENT THEREOF,
INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
SECTION 5
VICINITY TRADEMARKS AND MARKETING
---------------------------------
5.1 Vicinity Trademarks. Inktomi acknowledges that the symbols,
-------------------
trademarks and service marks adopted by Vicinity or its suppliers to identify
the Vicinity Shopping Content, as set forth in Schedule C (the "Trademarks"),
---------- ----------
belong to Vicinity and its suppliers and licensors and that Inktomi shall have
no rights in the Trademarks except as expressly set forth herein. Vicinity
confirms that it has sufficient ownership and/or rights to use the Trademarks
and to authorize Inktomi and Inktomi Customers to display the Trademarks as
required under Section 2.3.
SECTION 6
INDEMNITY
---------
6.1 Vicinity Indemnity. Vicinity shall defend and indemnify Inktomi and
------------------
its affiliates (including their respective employees, directors, and
representatives) and the successors and assigns of any of the foregoing
(collectively, the "Inktomi Parties") against any third party claims (actual and
---------------
alleged), actions, or suits and any resulting settlements, damages awarded and
costs (including reasonable attorney's fees and other reasonable litigation
expenses) incurred by any Inktomi Party arising out of (i) any breach of any
representation, warranty or covenant of this Agreement, or (ii) any infringement
of any third party patent in the United States, or the violation of any other
third party Intellectual Property Right including without limitation copyright
or trademark infringement, dilution,
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trade secrets and unfair competition which results from Inktomi's or Inktomi
Customers' use, within the scope of this Agreement, of the Vicinity Content
Engine and/or Vicinity Shopping Content. Vicinity shall not be obligated to pay
any damages relating to any such claim until such claim has been finally
adjudicated or settled without right of further appeal. Vicinity's obligations
under this Section 6.1 shall be subject to Inktomi: (a) promptly notifying
Vicinity of the claim or action giving rise to the indemnity; (b) providing
Vicinity with sole control and authority over the defense of such action or
claim and all related settlement negotiations; and (c) providing Vicinity with
reasonable cooperation and assistance to defend and/or settle any such claim or
action. Vicinity shall not be responsible for indemnifying Inktomi with respect
to costs incurred, or amounts paid in any settlement, unless Vicinity approved
such costs or settlements in advance. An Inktomi Party shall have the right to
fully participate, at its own expense, with counsel of its own choosing, in the
defense and/or settlement of the claim or action.
(a) Limitation. Notwithstanding the foregoing, Vicinity assumes no
----------
liability arising from or related to (i) the combination of the Vicinity Content
Engine and/or Vicinity Shopping Content with other products not provided by
Vicinity except as authorized in this Agreement, if such infringement would have
been avoided without such combination, (ii) the modification of the Vicinity
Shopping Content (excluding reordering of such content), or (iii) failure by
Inktomi or its employees or agents to take all reasonable actions to prevent or
mitigate losses, damages, costs and expenses.
(b) Remedies. In the event that the Vicinity Content Engine or
--------
Vicinity Shopping Content infringe, or if Vicinity believes are likely to
infringe, any Intellectual Property of a third party, Inktomi agrees to permit
Vicinity or a third party at Vicinity's expense and option, to (i) procure for
Inktomi the right to continue using the Vicinity Shopping Content; (ii) replace
or modify the Vicinity Content Engine and/or Vicinity Shopping Content in such a
way that it is non-infringing; or if (i) and (ii) are not commercially
reasonable (iii) terminate this Agreement, with such termination considered a
termination for breach by Vicinity pursuant to Section 7.2(a).
6.2 Inktomi Indemnity. Inktomi shall defend and indemnify Vicinity and
-----------------
its affiliates (including their respective employees, directors, and
representatives) and the successors and assigns of any of the foregoing
(collectively, the "Vicinity Parties") against any third party claims (actual
----------------
and alleged), actions, or suits and any resulting settlements, damages awarded
and costs (including reasonable attorney's fees and other reasonable litigation
expenses) incurred by any Vicinity Party arising out of (i) any breach of any
representation, warranty or covenant of this Agreement, or (ii) relating to the
shopping services provided by Inktomi to Inktomi Customers through the Inktomi
Shopping Engine (other than claims based upon the Vicinity Shopping Content).
Inktomi shall not be obligated to pay any damages relating to any such claim
until such claim has been finally adjudicated or settled without right of
further appeal. Inktomi's obligations under this Section 6.2 shall be subject
to Vicinity: (a) promptly notifying Inktomi of the claim or action giving rise
to the indemnity; (b) providing Inktomi with sole control and authority over the
defense of such action or claim and all related settlement negotiations; and (c)
providing Inktomi with reasonable cooperation and assistance to defend and/or
settle any such claim or action. Inktomi shall not be responsible for
indemnifying Vicinity with respect to costs incurred, or amounts paid in any
settlement, unless Inktomi approved such costs or settlements in advance. A
Vicinity Party shall have the right to fully participate, at its own expense,
with counsel of its own choosing, in the defense and/or settlement of the claim
or action.
(a) Limitation. Notwithstanding the foregoing, Inktomi assumes no
----------
liability arising from or related to (i) the combination of the Inktomi Shopping
Engine with other products not provided by Inktomi except as authorized in this
Agreement, if such infringement would have been avoided without such
combination, (ii) the modification of the Inktomi's proprietary services, or
(iii) failure by
Page 6
<PAGE>
Vicinity or its employees or agents to take all reasonable actions to prevent or
mitigate losses, damages, costs and expenses.
SECTION 7
TERM AND TERMINATION
--------------------
7.1 Term. This Agreement shall commence on the Effective Date and shall
-----
continue for a period of one (1) year following the date of the first commercial
display by an Inktomi Customer of the Vicinity Shopping Content. The Agreement
shall automatically renew for successive one year terms unless either party
gives notice of its intent not to renew at least ninety (90) days prior to the
expiration of the then current term.
7.2 Termination
-----------
(a) Breach. If: (i) subject to Section 7.4 (which Section 7.4 shall
------
take precedence over this Section 7.2(a) if they are inconsistent), Inktomi
breaches one or more of its material obligations under this Agreement; or (ii)
Vicinity breaches one or more of its material obligations under this Agreement;
which in either case is not cured for a period of thirty (30) days after written
notice of default is given to it by the defaulting party, the other party may
terminate this Agreement upon written notice of termination given to the
defaulting party.
(b) Insolvency. Either party may terminate and cancel this Agreement
----------
immediately by notice to the other if:
(1) the other ceases to carry on its business;
(2) a receiver or similar officer is appointed for the other and
is not discharged within thirty (30) days;
(3) the other becomes insolvent, admits in writing its inability
to pay debts as they mature, is adjudicated bankrupt, or
makes an assignment for the benefit or its creditors or
another arrangement of similar import; or
(4) proceedings under bankruptcy or insolvency laws are
commenced by or against the other and are not dismissed
within (30) days.
(c) By Inktomi. Inktomi may terminate this Agreement upon ninety (90)
----------
days prior written notice if Vicinity merges or consolidates with a third party
in a transaction (i) in which Vicinity is not the surviving party and/or all or
substantially all the assets relating to the services provided under this
Agreement are sold to a third party and (ii) at the time of such transaction,
---
the surviving party or third party to whom such assets are sold offers services
to third parties that Inktomi reasonably considers to be directly competitive
with the Inktomi Shopping Engine.
7.3 Effect of Termination. Upon expiration or termination of this
---------------------
Agreement, and on or prior to the end of any transition period for the services
provided for in this Section 7.3 below: (i) the rights and licenses granted to
the parties pursuant to this Agreement shall automatically terminate; (ii) each
party shall ship to the other, within thirty (30) days, all tangible items in
its possession which are proprietary to the other; and (iii) each party shall
cease to use all Intellectual Property of the other party. All amounts accrued
under this Agreement shall immediately become due and payable. Upon termination
of this Agreement for any reason, Vicinity will continue to provide the services
hereunder to
Page 7
<PAGE>
Inktomi for up to a 90-day transition period to allow Inktomi to secure
alternative services, and the terms and conditions existing at the time of such
termination (other than the payment provisions contained in Section 3.2 and
Section 3.3) shall continue in full force and effect for such transition period.
Inktomi shall pay Vicinity a fee of $100,000 for each 30-day period in which
Inktomi utilizes the transition services, unless Inktomi has terminated this
Agreement pursuant to Section 7.2(a) due to breach by Vicinity in which case
there shall be no fee payable.
7.4 Remedies. The parties acknowledge and agree that Inktomi will
--------
contract with the Inktomi Customers with respect to the provision and
availability of the Vicinity Content Engine and the Vicinity Shopping Content
and that it would be injurious to Inktomi for Vicinity to interrupt the
provision and availability of the Vicinity Content Engine and the Vicinity
Shopping Content hereunder. Accordingly, except as provided below, no breach of
this Agreement by Inktomi shall entitle Vicinity to terminate or rescind this
Agreement prior to the end of the then current term of this Agreement, it being
agreed that Vicinity's sole remedy in the event of such a breach shall be an
action for damages; provided, however, that the provisions of this Section shall
not (i) prohibit Vicinity from seeking an injunction with respect to any
violation of Vicinity's Intellectual Property Rights so long as such injunctive
relief shall not result in any termination of the provision and availability of
the Vicinity Content Engine and the Vicinity Shopping Content hereunder or
prevent the provision of an Inktomi service, including the Inktomi Shopping
Engine, in compliance with the terms of this Agreement by Inktomi or any Inktomi
Customer or (ii) apply to a breach by Inktomi under Sections 3.1 or 10.7 hereof.
Notwithstanding the foregoing, Vicinity shall have the right to suspend its
provision of services under this Agreement if (a) Inktomi or any Inktomi
Customer shall be in violation of Section 2.3 hereof; provided, that in the case
of an Inktomi Customer in violation of Section 2.3, Vicinity shall be entitled
to suspend its services only with respect to such Inktomi Customer or (b)
Inktomi fails to pay any amounts due under Section 3.3 for a period in excess of
thirty (30) days after receiving notice from Vicinity that such payment is past
due; provided, however, that upon correction of the violation referred to in
clause (a) above reasonably satisfactory to Vicinity or of payment by Inktomi of
such amounts owed under clause (b) above, Vicinity shall immediately resume
providing services under this Agreement.
7.5 Survival. The provisions of Sections 2.4 (Vicinity Ownership), 2.5
--------
(Inktomi Ownership), 3.4 (Audit); 6 (Indemnity), 8 (Confidentiality), 9
(Limitation of Liability) and 10 (Miscellaneous) shall survive the termination
or cancellation of this Agreement for any reason.
SECTION 8
CONFIDENTIALITY
---------------
8.1 Definition. As used herein, "Confidential Information" means any
---------- ------------------------
non-public information of either party, including but not limited to information
related to the Vicinity Content Engine, Vicinity Shopping Content, the Inktomi
Shopping Engine, technical or business information relating to inventions,
products, research and development, costs, profit, margins, employee skills or
salaries, finances, customers, marketing, operations or business plans, and any
other information identified by either party as proprietary or confidential.
Each party shall retain sole and exclusive ownership, right, title and interest
in and to all of its Confidential Information.
8.2 Maintaining Confidentiality.
---------------------------
(a) Obligations. Should either party disclose to the other any of
-----------
such party's Confidential Information (the "Disclosing Party"), the party
----------------
receiving the Confidential Information (the "Receiving Party") shall maintain
---------------
the Confidential Information in confidence, shall use at least the same degree
of care to maintain the secrecy of the Confidential Information as it uses in
maintaining the secrecy of its own proprietary, confidential and trade secret
information, shall always use at least a reasonable degree of care in
maintaining the
Page 8
<PAGE>
secrecy of the Confidential Information, shall use the Confidential Information
only for the purpose of performing its obligations under this Agreement and
exercising its rights under this Agreement unless otherwise agreed in writing by
the Disclosing Party, and shall deliver to the Disclosing Party, in accordance
with any request from the Disclosing Party, all copies, notes, packages,
diagrams, computer memory media and all other materials containing any portion
of the Disclosing Party's Confidential Information which reasonably is not
required by the Receiving Party to perform its obligations under and/or to
exercise its rights under this Agreement. No Receiving Party shall disclose any
Disclosing Party's Confidential Information to any person except those of the
Receiving Party's employees and consultants having a need to know in order to
accomplish the purposes and intent of this Agreement, and shall ensure that each
such employee and consultant has signed a confidentiality agreement covering the
Confidential Information of the Disclosing Party.
(b) Exceptions. A Receiving Party shall not have any obligation with
----------
respect to any portion of Confidential Information of the Disclosing Party which
(i) was known to the Receiving Party prior to receipt from the Disclosing Party,
(ii) is lawfully obtained by the Receiving Party from a third party under no
obligation of confidentiality, (iii) is independently developed by the Receiving
Party without use of the Confidential Information of the Disclosing Party, (iv)
is or becomes publicly available other than as a result of any act or failure to
act of the Receiving Party or (v) is disclosed pursuant to subpoena, as a matter
of law or other legal process, provided that the Disclosing Party is given prior
notice of such disclosure.
8.3 Injunctive Relief. The parties acknowledge that: (i) the
-----------------
restrictions and obligations contained in this Section 8 are reasonable and
necessary to protect each party's legitimate interests; (ii) in the event of a
violation of these restrictions, remedies at law may be inadequate and such
violation may cause irreparable damages to the Disclosing Party within a short
period of time; and (iii) the Disclosing Party will be entitled to seek
injunctive relief against each and every violation without the necessity of
posting a bond.
8.4 Source Code Protections. Neither party shall not under any
-----------------------
circumstance attempt, or knowingly permit others to attempt, to decompile,
decipher, disassemble, reverse engineer or otherwise determine any source code
related of each other's services.
SECTION 9
LIMITATION OF LIABILITY
-----------------------
IN NO EVENT SHALL EITHER PARTY'S LIABILITY ARISING OUT OF THIS AGREEMENT OR
THE TERMINATION OF THIS AGREEMENT EXCEED THE NET REVENUE RECORDED BY EACH PARTY,
RESPECTIVELY, PURSUANT TO AND DURING THE PREVIOUS 12 MONTHS OF THIS AGREEMENT.
IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY,
ARISING OUT OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOSS OF ANTICIPATED
PROFITS, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY.
SECTION 10
MISCELLANEOUS
-------------
Page 9
<PAGE>
2.1 Confidentiality of Agreement. Both Vicinity and Inktomi agree that
----------------------------
the terms and conditions of this Agreement shall be treated as confidential
information and that no reference to the terms and conditions of this Agreement
or to activities pertaining thereto can be made in any form without the prior
written consent of the other party; provided, however, that the general
-------- -------
existence of this Agreement shall not be treated as confidential information
and that either party may disclose the terms and conditions of this Agreement:
(A) as required by any court or other governmental body;
(B) as otherwise required by law;
(C) to legal counsel of the parties;
(D) in confidence, to accountants, banks, proposed investors,
and financing sources and their advisors;
(E) in confidence, in connection with the enforcement of this
Agreement or rights under this Agreement; or
(F) in confidence, in connection with a merger or acquisition or
proposed merger or acquisition, or the like.
10.2 GeoSearch. Inktomi hereby agrees to work with Vicinity to implement
---------
Vicinity's proprietary GeoSearch services for existing customers of Inktomi that
request such Vicinity services. In addition, the parties agree to continue to
discuss in good faith the potential integration of Vicinity's GeoSearch services
with Inktomi's proprietary searching technology.
10.3 Assignment. Neither party may assign its rights or delegate its
----------
obligations under this Agreement without the other party's written consent,
except to the surviving entity in a merger or consolidation in which it
participates or to a purchaser of all or substantially all of its assets, so
long as such surviving entity or purchaser shall expressly assume in writing the
performance of all of the terms of this Agreement.
10.4 Force Majeure. Except for the payment of any monies due under this
-------------
Agreement, nonperformance of either party shall be excused, and any performance
date shall be extended, to the extent that performance is rendered impossible by
strike, fire, flood, governmental acts or orders or restrictions, failure of
suppliers, or any other reason where failure to perform is beyond the reasonable
control and not caused by the negligence of the non-performing party (each a
"Force Majeure Event").
-------------------
10.5 Notices. All notices, requests, consents and other communications
-------
hereunder shall be in writing and delivered personally, by recognized
international courier (such as DHL or Federal Express) or by facsimile (with
facsimiles to be promptly confirmed in writing). All such written
communications delivered by courier shall be delivered to the parties hereto at
their respective addresses as set forth on the first page of this Agreement,
subject to the right of either party to change its address by delivering written
notice to the other. Such notices shall be deemed to be effective upon three
(3) business days following the date of deposit of such written notice with the
courier or upon receipt if by facsimile or personal delivery.
Page 10
<PAGE>
10.6 Governing Law. This Agreement shall be governed in all respects by
-------------
the substantive laws of the State of California (excluding conflict of laws
rules) as applied to agreements entered into and to be performed entirely within
the State of California between California residents.
10.7 Dispute Resolution. The parties will act in good faith and use
------------------
commercially reasonable efforts to promptly resolve any claim, dispute, claim,
controversy or disagreement (each a "Dispute") between the parties or any of
-------
their respective subsidiaries, affiliates, successors and assigns under or
related to this Agreement or any document executed pursuant to this Agreement or
any of the transactions contemplated hereby. All Disputes except for those
relating to Intellectual Property Rights shall be settled by the following
procedures: Either party may send the other written notice identifying the
matter in dispute and involving the procedures of this Section. Within ten (10)
days after such written notice is given, one or more principals of each party
shall meet at the offices of Latham & Watkins, 135 Commonwealth Drive, Menlo
Park, CA 94010 (or at such other location as shall be mutually agreed), for the
purpose of determining whether they can resolve the dispute themselves by
written agreement, and, if not, whether they can agree upon a third-party
impartial arbitrator (the "Arbitrator") to whom to submit the matter in dispute
----------
for final and binding arbitration. If the parties fail to resolve the dispute
by written agreement or agree on the Arbitrator within twenty (20) days after
such written notice is given, either party may make written application to the
Judicial Arbitration and Mediation Services ("JAMS"), Two Embarcadero Center,
----
Suite 1100, San Francisco, California 94111 for the appointment of a single
Arbitrator to resolve the dispute by arbitration and at the request of JAMS, the
parties shall meet with JAMS at its offices or confer with JAMS by telephone
within three (3) calendar days of such request to discuss the dispute and the
qualifications and experience which each party respectively believes the
Arbitrator should have; provided, however, that the selection of the Arbitrator
shall be the exclusive decision of JAMS and shall be made within ten (10) days
of the written application to JAMS provided, further, that the Arbitrator may
not have any preexisting, direct or indirect relationship with any party to the
dispute. Each party hereto expressly consents to, and waives any future
objection to, such forum and arbitration procedures. Within thirty (30) days of
the selection of the Arbitrator, the parties shall meet in San Francisco,
California with such Arbitrator at a place and time designated by the Arbitrator
after consultation with the parties and present their respective positions on
the dispute. Each party shall have no longer than one day to present its
position, the entire proceedings before the Arbitrator shall be on no more than
three consecutive days, and the award shall be made in writing no more than
thirty (30) days following the end of the proceeding. Such award shall be a
final and binding determination of the dispute and shall be fully enforceable as
an arbitration award in any court having jurisdiction and venue over the
parties. The prevailing party (as determined by the Arbitrator) shall in
addition be awarded by the Arbitrator such party's own attorneys' fees and
expenses in connection with such proceeding. The non-prevailing party (as
determined by the Arbitrator) shall pay the Arbitrator's fees and expenses. The
Arbitrator shall not have the authority to award punitive damages. Adherence to
this dispute resolution process shall not limit the right of the parties hereto
to obtain any provisional remedy, including, without limitation, injunctive or
similar relief, from any court of competent jurisdiction as may be necessary to
protect their respective rights and interests pending arbitration. The Federal
Arbitration Act, 9 U.S.C. Secs. 1-16, and not state law, will govern the
arbitration of all Disputes. The parties agree that the existence, conduct and
content of any arbitration will be kept confidential and no party will disclose
to any person any information about such arbitration, except as may be required
by law or by any governmental authority or for financial reporting purposes in
each party's financial statements.
10.8 Severability. Any term or provision of this Agreement held to be
------------
illegal or unenforceable shall, if possible, be interpreted so as to be
construed as valid, but in any event the validity or enforceability of the
remainder hereof shall not be affected.
Page 11
<PAGE>
10.9 Export Regulations. Inktomi understands that Vicinity is subject to
------------------
regulation by agencies of the U.S. government, including the U.S. Department of
Commerce, which prohibit export or diversion of certain technical products to
certain countries. Inktomi warrants that it will comply in all respects with
the export and re-export restrictions applicable to the technology and
documentation licensed hereunder.
10.10 Waiver. The waiver of, or failure to enforce, any breach or default
------
hereunder shall not constitute the waiver of any other or subsequent breach or
default.
10.11 Entire Agreement. This Agreement, along with the Schedules attached
----------------
hereto which are incorporated herein by reference, sets forth the entire
Agreement between the parties and supersedes any and all prior proposals,
agreements, and representations between them, whether written or oral. This
Agreement may be changed only by mutual agreement of the parties in writing.
Page 12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by duly authorized officers or representatives as of the Effective Date.
VICINITY CORPORATION INKTOMI CORPORATION
By: ______________________________ By: ______________________________
Name: Name:
Title Title:
<PAGE>
SCHEDULE A
VICINITY SHOPPING CONTENT; REVENUE SPLITS; EXCLUSIVITY
Vicinity Shopping Content
- -------------------------
Subject to the terms and conditions of this Agreement, Vicinity will
provide the following Vicinity Shopping Content to Inktomi to be integrated as
part of Inktomi's Shopping Engine:
1. Standard Yellow Pages Business Information. Vicinity will provide its
------------------------------------------
Standard Yellow Pages business information which information will be
delivered by Vicinity to Inktomi for integration into the Inktomi
Shopping Engine. Vicinity will host, geocode and serve Standard Yellow
Pages business information from Vicinity servers, to be used only
within the Inktomi Shopping Engine and not as a standalone yellow
pages offering.
2. Premium Yellow Pages Listings. Vicinity may integrate this data
-----------------------------
provided by participating RBOC's into the consumer information display
on the Inktomi Shopping Engine. If RBOC data is integrated with the
Inktomi Shopping Engine, Vicinity will load, geocode and index the
RBOC data which shall reside solely on servers owned and controlled by
Vicinity and/or the associated RBOC. The logo associated with each
RBOC shall be provided in association with the display of such RBOC's
data on each Inktomi Shopping Engine results page that displays one or
more listings.
3. Corporate Brand and Product Information. Vicinity may integrate data
---------------------------------------
provided by Business Finder Customers to Vicinity, including any Prio
services associated with a particular Business Finder Customer such as
targeted discount and promotional programs, into the consumer
information display on the Inktomi Shopping Engine. Vicinity may sell
premium placement and synonym matches to Corporate Brands for display
in the Inktomi Shopping Engine.
Vicinity will integrate maps and driving directions with the Vicinity Shopping
Content hosted by Vicinity and returned to an End User as results to an Inktomi
Shopping Engine request.
Vicinity will deliver the Vicinity Shopping Content and Inktomi shall present
the Vicinity Shopping Content in a manner that corresponds with any premium paid
by any party for placement or priority within the Inktomi Shopping Engine.
<PAGE>
Revenue Splits
- --------------
Revenue splits associated with the Inktomi Shopping Engine are as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Source of Revenue % Split of Usage Revenue to Vicinity % Split of Usage Revenue to Inktomi
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Display of data from Premium N/A ******** for serving Premium Yellow
Yellow Pages Services on Pages listings (from participating
Inktomi Customer's Web Site. RBOC's) where available in addition
to Standard Yellow Pages Listings
- ----------------------------------------------------------------------------------------------------------
Display of data from Premium **** of the fees and/or revenue **** of the fees and/or revenue
Business Finder Services on collected by Vicinity collected by Vicinity
Inktomi Customer's Web Site.
- ----------------------------------------------------------------------------------------------------------
Offline transactions tracked **** of revenue collected for **** of revenue collected for
by Prio (or other similar offline transactions tracked by offline transactions tracked by Prio
service providing for the Prio (or other similar service (or other similar service providing
monetization of offline providing for the monetization of for the monetization of offline
transactions) that offline transactions) transactions)
originate within Inktomi
Shopping Engine
- ----------------------------------------------------------------------------------------------------------
Ad revenue share from the **** of ad revenue collected from **** of ad revenue collected from
display of ads on Web Pages Inktomi Customers associated with Inktomi Customers associated with
that display data from their participation in the Inktomi their participation in the Inktomi
Vicinity Services* Shopping Engine program* Shopping Engine program*
- ----------------------------------------------------------------------------------------------------------
Referral fees for new N/A **** of first year license fees and
Business Finder Customers revenue associated with the referral
of new Business Finder Customers
which results in sale of Business
Finder Services
- ----------------------------------------------------------------------------------------------------------
</TABLE>
___________________________
* With respect to ad revenue collected from Inktomi Customers associated with
the display of ads on Web Pages that display data from Vicinity Services,
the parties acknowledge that there currently exists no cost effective
methodology for tracking such revenue. Accordingly, the parties hereby
agree to work together in good faith at regular six month intervals
(beginning on the six month anniversary of the Effective Date) to (i)
review estimates prepared by Vicinity of the amount of ad revenue that
would be payable to Vicinity as provided in the above table, (ii) if such
estimates can reasonably be demonstrated to be in excess of $10,000 per
month, then the parties will work together in good faith to develop a
reasonable and cost effective manner of tracking or estimating such ad
revenue and (iii) provided that such tracking or estimating procedure is
established and reasonably agreed to by the parties, Inktomi shall
thereafter make such payments to Vicinity as required under Section 3.3.
Inktomi shall use commercially reasonable efforts but shall not be obligated to
cause each of the Inktomi Customers to accept all of the Vicinity Shopping
Content made available hereunder. Inktomi shall not be obligated to compel
Inktomi Customers to display the Vicinity Shopping Content in any particular
<PAGE>
manner. Inktomi acknowledges that fees will be paid hereunder only for that
Vicinity Shopping Content that is provided to End Users.
Exclusivity
- -----------
Vicinity agrees that for a period of twelve (12) months following the date of
the first commercial display by an Inktomi Customer of the Vicinity Shopping
Content, it will not provide data obtained by Vicinity directly from Vicinity's
Business Finder Customers to ***************** for the purpose of utilizing such
data for use with an e-retail shopping engine that would compete with the
Inktomi Shopping Engine
<PAGE>
SCHEDULE B
PERFORMANCE SPECIFICATIONS
System Architecture
- -------------------
The fundamental architectural model for Vicinity services is that of a general
purpose template processor which handles user events, controls program flow, and
which calls component sub-servers (e.g. the Yellow Pages Server) to handle all
content-specific transactions. The sub-servers handle service requests as
socket-based stateless transaction processors. Since the engine and the various
sub-servers are all continuously running as daemon processes, it is not
necessary to start-up any processes in order to handle a request. The Connection
Server allows the number of processes to be adjusted dynamically in response to
system load as well as graceful recovery from the occasional system error. This
socket architecture allows maximum flexibility of resource deployment across
multiple networked machines.
Location of Data; Updates
- -------------------------
Standard Yellow Pages Business Information resides on Vicinity hosted servers at
Vicinity's Santa Clara data facility. Standard Yellow Pages Business Information
will be updated as soon as commercially reasonable upon receipt of updates from
Vicinity's content partners. Updates are scheduled to occur on a quarterly
basis.
Data from participating RBOC's are located on a server as specified by the
participating RBOC. Upon receiving a query from an end user of the Inktomi
Shopping Engine, a Vicinity server shall access and retrieve the applicable RBOC
data via an API call or directly from a dedicated server hosting the RBOC data,
and integrate the RBOC data with the Shopping Channel results. Premium Yellow
Page Listing information will be updated as soon as commercially reasonable upon
receipt of updates by Vicinity from the participating RBOC. Updates are
scheduled to be updated whenever the participating RBOCs determine in their sole
discretion that such updates are necessary.
Business Finder Customer data resides on Vicinity hosted servers at Vicinity's
Santa Clara data facility. Business Finder Customer information will be updated
as soon as commercially reasonable (usually within one hour) upon receipt of
updates, if any, from Business Finder Customers.
Performance
- -----------
Where Vicinity Shopping Content is to be provided from Vicinity servers, (i)
Vicinity will provide at its sole expense all necessary hardware, software, and
network capacity to allow for a 7 day a week, 24 hour a day, on-line, redundant
service for access to the Vicinity Content Engine and Vicinity Shopping Content;
and (ii) when averaged over any 30 day period against a typical mix of user
traffic the Vicinity Web servers will fulfill search and data requests as
follows:
. Map/Routing Requests: within ************
. Complex, multi-step or multi-database searches: within *************
. All other searches: within **************;
<PAGE>
and; (iii) when averaged over any thirty (30) minute period against a typical
mix of user traffic, the Vicinity Web servers will fulfill search and data
requests as follows:
. Map/Routing Requests: within ************
. Complex, multi-step or multi-database searches: within *************
. All other searches: within *************;
provided, however, that Vicinity shall be considered to be out of compliance
with the query response time performance standard set forth in clause (iii)
above only if Vicinity fails to achieve the standard ten or more times during
any consecutive seven (7) day period.
Promptly following the Effective Date, Inktomi and Vicinity will meet in good
faith to establish an additional query response time performance standard based
on the complete transmission of all data which is responsive to a particular
search query.
The Vicinity Content Engine and Vicinity Shopping Content will be available
****** of the time measured on a monthly basis. Such availability rate shall be
measured at the Vicinity network/web interface and shall exclude interruptions
caused by Force Majeure Events. This time is measured at the Inktomi front end,
provided a suitable direct link is maintained between the Inktomi and Vicinity
servers, such link to be at Inktomi's expense.
There is no specific level of traffic or maximum number of connections
contemplated in this Agreement; however, Inktomi will use reasonable commercial
efforts to inform Vicinity of expected data traffic over successive 6-month
periods to assist Vicinity's capacity planning.
Vicinity agrees to map its brand/product/company database entities and Yellow
Pages categories to Inktomi's taxonomy and to provide written input periodically
to Inktomi so that Inktomi may adjust its own taxonomy to make best use of this
data. Vicinity will provide a working draft of its mapping to Inktomi within 2
weeks following the Effective Date and will produce a final version within 4
weeks following the Effective Date. Inktomi expects to alter its taxonomy
approximately every 45 days, and Vicinity agrees to reflect such changes in its
taxonomy mapping promptly. Further, as Vicinity adds new relevant Business
Finder Customers, Vicinity agrees to include them appropriately in its taxonomy
and mapping.
Vicinity will provide occasional "Product Roadmap" information relating to
Vicinity planned developments that Vicinity deems relevant to this project, to
assist Inktomi in its planning.
Vicinity will provide all necessary documentation, phone, fax and email support
for the implementation referenced herein.
Support and Maintenance
- -----------------------
For any service level issues or problems arising with the Vicinity Services
during the term of the Agreement, the parties shall refer to the Severity Levels
as set forth below. Note: Level II response only applies to calls that require
more information provided by Level II prior to a call back from Level I.
<PAGE>
SEVERITY LEVELS
SEVERITIY LEVEL 1
A major product-related issue, which severely impacts the customer's business.
<TABLE>
<CAPTION>
<S> <C>
Examples Response/Resolution maximums
. System down . Initial call back to client is 1 hour (Level I)
. Network down . Level II response is 1/2 hour
. System password expired . Resolution goal is 2 hours
SEVERITY LEVEL 2
A major system module or function inaccessible or inoperable with no known work
around
Examples Response/Resolution maximums
. On-line system down . Initial call back to client is 3 hours (Level I)
. Table problems . Level II response is 1.5 hours
. Module not working . Resolution goal is 1 day
. Financial reports
. Immediate research request
. Corrupt or inaccurate data
SEVERITY LEVEL 3
A major function for which a known work around exists or a known software
problem
Examples Response/Resolution maximums
. Report problems . Initial call back to client is 5 hours (Level I)
. Program problem scheduled to be fixed . Level II response is 2.5 hours
in a future release
. Resolution goal is 2 business days
. Program problem for which a known
work around exists
SEVERITY LEVEL 4
Informational Request
Examples Response/Resolution maximums
. Questions . Initial response is 2 days (Level I)
. Training issues (operational) . Level II response is 1 day
. Advice seeking/configuration questions . Resolution goal is 5 business days
. Maintenance/Contract issues
. Cosmetic program problems
. Research requests
. Open windows
SEVERITY LEVEL 5
Informational Request
Examples Response/Resolution maximums
. Schedule training . Initial call back to client is 3 days (Level I)
. Documentation issues . Level II response is 1.5 days
</TABLE>
<PAGE>
<TABLE>
<S> <C>
. Sakes/new product issues . Resolution goal is 5 business days
. Request for credit
. Install/implementation
. Research requests
. Enhancement requests
</TABLE>
For emergency assistance (Severity Level 1 or 2), the procedure is as follows:
If access to the Vicinity Services has failed partially or completely, Inktomi
should access the following url: spyder.vicinity.com/vicpage, enter username:
vicpage, and enter password: problem. Inktomi is prompted to enter a telephone
number and will receive a return call promptly. If Inktomi receives no response
within ten minutes, Inktomi shall refer to the Operations Pager Schedule
Rotation list and contact a Vicinity contact via pager in the order presented in
the table below. If a number is left on that person's pager and he/she doesn't
acknowledge the page within ten minutes, the next person on the list may be
contacted. Keep moving down the list until you do reach someone who
acknowledges that they are taking care of the problem. If no response is
received, Inktomi should call a Vicinity contact in the order presented in the
table below.
<TABLE>
<CAPTION>
Name/Email Phone/Fax Pager Cell Phone Home Phone
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ali Daniell 603-448-7040
[email protected] 603-448-2360
- ----------------------------
- -----------------------------------------------------------------------------------------------------------------
Bernie duBreuil 603-448-7040
[email protected] 603-448-2360
- ----------------------------
- -----------------------------------------------------------------------------------------------------------------
Susanna Silvas 650-237-0311
[email protected] 650-237-0305
- -----------------------------------------------------------------------------------------------------------------
Aaron Turner 650-237-0311
[email protected] 650-237-0305 *alpha pager
- ----------------------------
- -----------------------------------------------------------------------------------------------------------------
Scott Young 650-237-0311
[email protected] 650-237-0305
- ----------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*alpha pager is [email protected]
If Vicinity determines that the failed access is due to Inktomi or a third
party, Vicinity's obligation to meet the deadlines as set forth in the detailed
description of Severity Levels shall be contingent upon the responsiveness of
Inktomi or the third party.
<PAGE>
SCHEDULE C
TRADEMARKS AND PROPRIETARY NOTICES
The bottom of each web page that displays any Vicinity content must have the
following hyper-linked copyright notice: "Powered by Vicinity Corporation." The
notice must hyperlink to a web page that displays the Vicinity URL
`www.vicinity.com'. The bottom of each web page that displays any business
listing data must have the following hyper-linked copyright notice: "Data
provided by Metromail Corporation". Each map rendering which contains data from
or derived from Geographic Data Technology supplied data will display the
following copyright notice: "Map Data, GDT, Inc. (C) 1999." Each driving
directions display that uses Navigation Technologies data shall include the
following notice conspicuously displayed within the image: "(C) 1999 NavTech"
and "NAVTECH ON BOARD" trademark and logo. The bottom of each web page that
displays a Canadian map image shall include the following notice: "(C) 1999
Desktop Mapping Technologies Inc." The bottom of each web page that displays a
Vicinity Services shall include the following notice: "Contents copyright (C)
1999 Vicinity Corporation. All rights reserved. Use subject to license." The
word `license' shall be hyperlink to a web page that displays the current public
end user internet license. This end user license is subject to change at any
time. Customer may choose to link to a Vicinity URL which will display the
required, current Vicinity end user license. The Vicinity end user license URL
will be provided upon request. Alternatively, Customer may set the Vicinity end
user license URL to a URL of their own choosing, provided that Customer displays
the current public end user internet license. In the event that the end user
license is changed, Vicinity will notify Customer immediately of such change and
provide Customer with the most current end user license. Customer is required to
update the end user license within one working day (24 hours) of notification of
change by Vicinity.
<PAGE>
EXHIBIT 10.20
NAVISITE
SITEHARBOR
CO-LOCATION
SERVICES AGREEMENT
This Agreement is entered into on this 30th day of June 1998 (the "Effective
Date"), by and between NaviSite Internet Services Corporation ("NaviSite"), with
an address of 300 Federal Street, Andover, Massachusetts 01810 and Vicinity
("Client"), with an address of 1035-a SAN Antonio Road, Palo Alto, CA 94303.
1. DEFINITIONS
The following capitalized terms shall have the meanings set forth below for
purposes of this Agreement:
1.1 "Client Equipment" means the servers and any other equipment provided
by the Client and installed by the Client or at the direction of the Client
within the Client Space.
1.2 "Client Materials" means all Client Equipment, Content and any other
materials provided by Client or acquired on behalf of Client in connection with
the SITEHARBOR.CL Services.
1.3 "Client Space" means the server racks, cabinets and the space
contained therein to be provided by NaviSite for the installation of the Client
Equipment, as described on Schedule A.
----------
1.4 "Confidential Information" means, subject to the exceptions set forth
in Section 11.2 below, any information and data, regardless of whether it is in
tangible form, of either party that such party has either marked as confidential
or proprietary, or has identified in writing as confidential or proprietary
within ten (10) days of diSiteHarbor.CLosure to the other party. Confidential
Information shall include, without limitation, information regarding business
plans, strategies, technology, customers and products, each party's proprietary
software and the terms of this Agreement.
1.5 "Content" means any information, data, software, programs, operating
systems and any other materials installed by Client or at the direction of the
Client on the Client Equipment.
1.6 "Designated NaviCenter" means NaviSite's Internet data center where
the Client Equipment will be installed, as designated on Schedule A.
----------
1.7 "SITEHARBOR.CL Services" has the meaning set forth in Section 2.1.
2. SERVICES
2.1 Services. NaviSite will provide Client the SITEHARBOR.CL Services as
--------
described in Schedule A attached hereto in accordance with the terms and
----------
conditions of this Agreement.
The information contained in this document is confidential and
proprietary.
<PAGE>
2.2 Access to Client Space. NaviSite will provide Client access to the
----------------------
Client Space within the Designated NaviCenter seven (7) days per week,
twenty-four (24) hours per day for the term of this agreement; provided,
--------
however, that such access shall be (i) limited solely to the individuals
- -------
identified and authorized by Client to have access to the Client Space and the
Designated NaviCenter, as named on Schedule C ("Representatives"), and (ii)
----------
subject to such Representatives compliance with the terms of this Agreement.
2.3 Consulting Services. Client may request that NaviSite provide
-------------------
additional services outside the scope of SITEHARBOR.CL Services which will
described in Schedule D attached hereto ("Statement of Work"). Such Consulting
----------
Services, if any, will be subject to the terms and conditions contained this
Agreement and any additional terms and conditions described in the Statement of
Work.
3. FEES, PAYMENTS AND TAXES
3.1 Fees. The fees and charges for SITEHARBOR.CL Services and Consulting
----
Services will be as set forth in Schedule B.
----------
3.2. Billing and Payment. Payment of fees and charges are due within
-------------------
thirty (30) calendar days after the date of each NaviSite invoice. All payments
shall be made in U.S. dollars. Amounts past due shall be subject to an
interest charge equal to one and one-half percent (1.5%) per month, or, if less,
the highest rate allowed by applicable law.
3.3 Taxes. Client will be responsible for and agrees to pay in full any
-----
and all taxes resulting from this Agreement or any activities under this
Agreement except for taxes based upon NaviSite's net income.
4. CLIENT CONTENT
Client shall retain title to and all rights in the Content; provided,
--------
however, NaviSite shall retain title to and all rights in materials owned,
- -------
licensed or developed by NaviSite and installed on the Client Equipment by
NaviSite or at the direction of NaviSite including any hardware, software, or
know-how, related to NaviSite's products or network services, owned, licensed or
developed by NaviSite.
5. CLIENT OBLIGATIONS
As a condition to NaviSite's performance of the SITEHARBOR.CL Services and
Consulting Services, Client agrees to the following:
5.1 Provide Content and Client Equipment. Client shall be responsible for
------------------------------------
providing at its own expense all Client Materials and any other materials
necessary for the installation of the Client Materials within the Client Space
and necessary to NaviSite's offering of the SITEHARBOR.CL Services and
Consulting Services.
5.2 Cooperation. Client shall reasonably cooperate with NaviSite in
-----------
performing the SITEHARBOR.CL Services and Consulting Services, including
providing NaviSite with timely access to Client Equipment, personnel (executive
and staff), utilities and information reasonably necessary to the performance of
the SITEHARBOR.CL Services and Consulting Services, at no charge to NaviSite.
Client is responsible for the accuracy and completeness of the information and
data Client supplies to NaviSite for use hereunder.
2
<PAGE>
5.3 Access and Security. Client agrees that Client's access to and use of
-------------------
the Client Space and the Designated NaviCenter shall comply with the then
current security measures that NaviSite has imposed for the protection of the
Client, Client Space, Designated NaviCenter and other clients. Client will be
fully responsible for any damages, losses, charges, costs, expenses, and any
third party claims resulting from its access to, or, use of, the Client Space
and the Designated NaviCenters.
5.5 No Competitive Services. Client may not at any time permit any
-----------------------
SITEHARBOR.CL Services or Consulting Services to be utilized for the provision
of any services that compete with any NaviSite services, without NaviSite's
prior written consent.
5.6 Insurance. Client shall keep in full force and effect during the term
---------
of this Agreement, comprehensive general liability for bodily injury and
property damage insurance in an amount not less than $1 million per occurrence.
Client also agrees that it will, and will be solely responsible for ensuring
that its agents (including contractors and subcontractors) maintain, other
insurance at levels no less than those required by applicable law and customary
in Client's and its agents' industries. Client will furnish NaviSite with
certificates of insurance which evidence the minimum levels of insurance set
forth above. Client will cause its insurance providers to name NaviSite as an
additional insured and notify NaviSite in writing of the effective date thereof.
6. CLIENT REPRESENTATIONS AND WARRANTIES
6.1 Client Equipment. Client represents and warrants that it owns or has
----------------
the legal right and authority, and will continue to own or maintain the legal
right and authority during the term of this Agreement, to place and use the
Client Materials as contemplated by this Agreement. Client further represents
and warrants that its placement, arrangement, and use of the Client Materials in
the Designated NaviCenters complies with the Client Material manufacturers'
environmental and other technical specifications.
6.2 Content. Client warrants and represents that the Content: (i) does
-------
not infringe or violate the rights of any third party including, but not limited
to, intellectual property rights; (ii) will not result in any harm to NaviSite
or NaviSite's business, as determined in NaviSite's good faith reasonable
discretion; (iii) is not defamatory or obscene and does not violate any right of
privacy or publicity; and (iv) does not violate any applicable law or
regulation.
6.3 Compliance with Law. Client warrants and represents that Client's use
-------------------
of the SITEHARBOR.CL Services will comply with U.S. law and any other applicable
law and regulations, including laws and regulations regarding the transmission
of technical data which is exported from the United States. Client further
represents and warrants that it will not to use the SITEHARBOR.CL Services or
Consulting Services for any illegal purposes.
6.4 Non-interference. Client warrants and represents that Client will not
----------------
use the SITEHARBOR.CL Services or Consulting Services to interfere with or
disrupt other NaviSite clients, network users, network services or network
equipment. Interference or disruptions include, but are not limited, to
distribution of unsolicited advertising or chain letters, propagation of
computer worms and viruses, and use of the SITEHARBOR.CL Services or Consulting
Services to make unauthorized entry to any other computer or machine accessible
via the Internet.
3
<PAGE>
6.5 Breach of Warranties. In the event of any breach, or reasonably
--------------------
anticipated breach, of any of the foregoing warranties and representations, in
addition to any other remedies available at law or in equity, NaviSite will have
the right to immediately, in NaviSite's sole discretion, to suspend the
SITEHARBOR.CL Services or Consulting Services if deemed reasonably necessary by
NaviSite to prevent any harm to NaviSite and its business. NaviSite also
reserves the right (but shall have no obligation) to delete any Content
installed on a server at a Designated NaviCenter which it believes in good faith
breaches any of the foregoing warranties.
7. WEB LINK AND MARKETING
7.1 Banner Link. Client will display a banner indicating that Client's
-----------
web site is being hosted by NaviSite and permit users of the Client's web site
to access NaviSite's web site by a direct link from the banner, provided the
appearance of the banner is mutually agreeable to both parties.
7.2 Marketing. Client consents to NaviSite's reference to Client by trade
---------
name and trademark in NaviSite's marketing materials and on NaviSite's web site.
8. NAVISITE WARRANTIES AND DISITEHARBOR.CLAIMERS
8.1 Service Warranty. NaviSite warrants that the SITEHARBOR.CL Services
----------------
and Consulting Services, if any, provided hereunder will be performed in a
workmanlike manner in accordance with reasonable commercial standards.
8.2 No Other Warranty. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH IN
-----------------
SECTION 8.1 ABOVE, NAVISITE MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, AND
HEREBY DISITEHARBOR.CLAIMS THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT. NAVISITE DOES NOT WARRANT THAT THE
SITEHARBOR.CL SERVICES AND CONSULTING SERVICES WILL BE UNINTERRUPTED, ERROR-FREE
OR COMPLETELY SECURE.
9. LIMITATION OF LIABILITY
NAVISITE SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS, LOST SAVINGS OR DAMAGES
RESULTING FROM LOSS OF USE OR LOSS OF CONTENT. NAVISITE SHALL HAVE NO LIABILITY
FOR ANY DAMAGES RESULTING FROM CLIENT'S FAILURE TO PERFORM CLIENT'S OBLIGATIONS
HEREUNDER. IN NO EVENT SHALL NAVISITE'S LIABILITY FOR DAMAGES HEREUNDER EXCEED
THE CHARGES PAID BY THE CLIENT HEREUNDER FOR THE PRIOR TWELVE (12) MONTH PERIOD.
10. INDEMNIFICATION
10.1 NaviSite's Indemnification of Client. NaviSite will indemnify,
------------------------------------
defend and hold Client harmless from and against any and all costs, liabilities,
losses, damages and expenses, including reasonable attorney's fees, and amounts
paid in settlement, resulting from or arising out of any claim, suit, action or
proceeding brought against Client as a consequence of (i) NaviSite's
infringement of any third party copyright, trademark or trade secret, or (ii)
personal injury to Client's Representatives due to NaviSite's gross negligence
or willful misconduct.
4
<PAGE>
10.2 Client's Indemnification of NaviSite. Client will indemnify, defend
------------------------------------
and hold NaviSite, its affiliates and its clients harmless from and against any
and all costs, liabilities, losses, damages and expenses, including reasonable
attorney's fees, and amounts paid in settlement resulting from or arising out of
any claim, suit, action or proceeding brought against NaviSite, its affiliates
or other clients as a consequence of (i) infringement of any third party
copyright, trademark or trade secret, (ii) breach or alleged breach of Client's
obligations, representations and warranties set forth herein, or (iii) the
Client Materials or any Client action or inaction related to the Client
Materials.
11. CONFIDENTIALITY AND PROPRIETARY INFORMATION
11.1 Confidential Information. Each party acknowledges that it will have
------------------------
access to Confidential Information. Each party agrees that it will not use in
any way, for its own account or the account of any third party, except for the
performance of this Agreement, nor diSiteHarbor.CLose to any third party (except
as required by law or to that party's attorneys, accountants and other advisors
as reasonably necessary), any of the other party's Confidential Information and
will take reasonable precautions to protect the confidentiality of such
information.
11.2 Exceptions. Information will not be deemed Confidential Information
----------
hereunder if such information: (i) is known to the receiving party prior to
receipt from the diSiteHarbor.CLosing party directly or indirectly from a source
other than one having an obligation of confidentiality to the
diSiteHarbor.CLosing party; (ii) becomes known (independently of
diSiteHarbor.CLosure by the diSiteHarbor.CLosing party) to the receiving party
directly or indirectly from a source other than one having an obligation of
confidentiality to the diSiteHarbor.CLosing party; (iii) becomes publicly known
or otherwise ceases to be secret or confidential, except through a breach of
this Agreement by the receiving party; or (iv) is independently developed by the
receiving party.
12. TERM AND TERMINATION
12.1 Term. The initial term of this Agreement shall be one (1) year from
----
the Effective Date, unless terminated sooner as provided herein. On the first
anniversary of the Effective Date, this Agreement shall be automatically renewed
for additional one (1) year terms, unless either party gives written notice to
terminate ninety (90) days prior to the expiration of the initial term or any
renewal term.
12.2 Termination for Cause. Either party shall have the right to
---------------------
terminate this Agreement if: (i) the other party breaches any material term or
condition of this Agreement and fails to cure such breach within thirty (30)
days after receipt of written notice of the same, except in the case of failure
to pay fees, which must be cured within ten (10) days after receipt of written
notice from NaviSite; (ii) the other party becomes the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors; or (iii)
the other party becomes the subject of an involuntary petition in bankruptcy or
any involuntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing.
5
<PAGE>
12.3 Effect of Termination. Upon the effective date of expiration or
---------------------
termination of this Agreement: (a) NaviSite will immediately cease providing
SITEHARBOR.CL Services and Consulting Services; (b) any and all payment
obligations of Client under this Agreement will become due immediately; (c)
within thirty (30) days after such expiration or termination, each party will
return all Confidential Information of the other party in its possession at the
time of expiration or termination and will not make or retain any copies of such
Confidential Information; and (d) Client will remove from the Designated
NaviCenters all Client Equipment and any of its other property within the
Designated NaviCenters within ten (10) days of such expiration or termination
and return the Client Space to NaviSite in the same condition as it was prior to
installation of the Client Equipment, normal wear and tear excepted. If Client
does not remove such property within such ten-day period, NaviSite will have the
option to (i) move any and all such property to secure storage and charge Client
for the cost of such removal and storage, and/or (ii) liquidate the property in
any reasonable manner. Neither party will be liable to the other for any
termination or expiration of this Agreement in accordance with its terms;
provided, however, the Client shall remain liable for all applicable fees
accrued prior to any termination provided hereunder.
12.4 Survival. Sections 9, 10, 11, 12.3, 12.4, 13.1, 13.5 and 13.6 shall
--------
survive any termination of this Agreement.
13. GENERAL
13.1 Relationship of the Parties. Nothing in this Agreement shall be
---------------------------
construed to imply a joint venture, partnership, or agency relationship between
the parties, and NaviSite shall be considered an independent contractor when
performing services under this Agreement.
13.2 No Lease. This Agreement is a services agreement and is not intended
--------
to and will not constitute a lease of any real or personal property.
13.3 Assignment. Neither party may assign this Agreement, in whole or in
----------
part, without the prior written consent of the other party. Notwithstanding the
previous sentence, NaviSite may transfer or assign its rights and obligations
under this Agreement to a subsidiary or entity controlling, controlled by or
under common control with NaviSite or to an entity that acquires NaviSite by
merger or purchase of all or substantially all of NaviSite's assets.
13.4 Force Majeure. Either party shall not be in default of its
-------------
obligations to the extent its performance is delayed or prevented by causes
beyond its control, including but not limited to acts of God, earthquake, flood,
embargo, riots, sabotage, utility or transmission failures, fire or labor
disturbances.
13.5 Non-Solicitation. During the term of this Agreement and for a period
----------------
of one year after termination of this Agreement, Client agrees it will not, and
will ensure that its affiliates do not, directly or indirectly, solicit or
attempt to solicit for employment any persons employed by NaviSite.
13.6 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the Commonwealth of Massachusetts, excluding its
conflict of law rules. Any action, suit or other legal proceeding which the
parties commence to resolve any matter arising under or relating to any
provision of this Agreement shall be commenced only in a court of the
Commonwealth of Massachusetts (or if appropriate, the federal district court
located in Boston, Massachusetts), and the parties hereby consent to the
jurisdiction of such court with respect to any action, suit or proceeding
commenced in such court by the either party.
6
<PAGE>
13.7 Severability. In the event any provision of this Agreement is held
------------
by a tribunal of competent jurisdiction to be contrary to the law, the remaining
provisions of this Agreement will remain in full force and effect.
13.8 Entire Agreement. This Agreement and Schedules A, B, C and D
----------------
constitutes the entire agreement between the parties as of the Effective Date
and may only be modified by an instrument in writing signed by both parties.
This Agreement cancels and supersedes any and all prior proposals (oral or
written), understandings, representations, conditions, warranties, covenants and
other communications between the parties which relate to the subject matter of
this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement by their authorized
representatives.
NAVISITE INTERNET SERVICES ("CLIENT")
By:________________________________ By:_____________________________
Name: Howard S. Brown Name:___________________________
------------------------------
Title: Director of Sales Title:__________________________
-----------------------------
Date: June 30, 1998 Date:___________________________
------------------------------
7
<PAGE>
SCHEDULE A
SITEHARBOR.CL SERVICES
Installation:
- ------------
Installation of Client Equipment including: Network cabling, electrical wiring,
data center preparation and permanent racking/shelving. In addition, NaviSite
will provide initial DNS domains (up to 10 domains), DNS and IP addresses, IP
and routing, network topology documentation, and project management during
implementation.
Description of Service:
- -----------------------
The basic SiteHarbor.CL service includes:
. Burstable bandwidth (up to 90Mbps) from multiple backbone providers
. Dedicated 100mbps Ethernet segment
. Monitoring of bandwidth services, routers and switches (7x24)
. Network connectivity monitoring and notification (7x24)
. Monthly bandwidth utilization reporting
. 7x24 physical access
. Placement in a secure cabinet
. UPS power with diesel generator back-up
Designated NaviCenter (Type in the appropriate NaviCenters):
- ------------------------------------------------------------
NaviCenter West (Scotts Valley, CA)
SERVER FARM (Indicate Number and Type of Servers below):
- --------------------------------------------------------
Server(s): 2 Sun Enterprise 5000 and 6 NT servers
Specifications:
Power Requirements:
Environmental Requirements:
The information contained in this document is confidential and proprietary.
<PAGE>
SCHEDULE B
FEES
Installation and Service Fees:
- ------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Service Description Fees
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Installation Network cabling, electrical $2000
(one time fee) wiring, data center and
location preparation.
-----------------------------------------------------------------------------------------------------
Server management Burstable bandwidth from $ 2340/ per month
(SiteHarbor.CL) multiple backbone providers,
dedicated 100mbps Ethernet
segment, monitoring of
bandwidth services, routers
and switches (7x24), network
connectivity monitoring and
notification (7x24), monthly
bandwidth utilization
reporting,7x24 physical
access, placement in a
secure cabinet, and UPS
power with diesel generator
back-up
-----------------------------------------------------------------------------------------------------
</TABLE>
Bandwidth:
- ----------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Bandwidth Tier Cost/Month
-----------------------------------------------------------------------------------------------------
<S> <C>
0 to 10 Mbps $750/Mbps
-----------------------------------------------------------------------------------------------------
Each Mbps above 10Mbps $700
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
(3) 100/Mbps Ethernet port $750each / one time set-up
-----------------------------------------------------------------------------------------------------
</TABLE>
Additional Services:
- --------------------
Tape Back-up Weekly, full and 6 daily incremental - $200/month
One time set-up - $500
ISP Backend connection - $300 / month
One time set-up $1000
9
<PAGE>
SCHEDULE C
CLIENT REPRESENTATIVES
Name Phone
---- -----
1) Scott Young 650-237-0300 (x208)
2) Aaron Turner 650-237-0300
3)
4)
5)
6)
7)
8)
9)
10)
The information contained in this document is confidential and proprietary.
<PAGE>
SCHEDULE D
CONSULTING SERVICES/STATEMENT OF WORK
Remote Hands consulting is available to Vicinity at $100/hour. The minimum
charge is 1/2 hour. Remote hands consulting can include, but is not limited to
the following activities:
. Configuration changes
. Operating system management
. Problem resolution, and
. System architectural consulting.
The information contained in this document is confidential and proprietary.
<PAGE>
EXHIBIT 10.21
SUBLEASE AGREEMENT
1. PARTIES:
This Sublease is entered by and between Attachmate Corporation, a
Washington corporation (hereinafter called "Sublessor"), and Vicinity
Corporation, a California corporation (hereinafter called "Sublessee"), as a
Sublease under the Lease, dated July 16, 1993 as amended by First Amendment to
Lease dated May 13, 1994 and Second Amendment to Lease dated November 4, 1994,
(hereinafter called the "Lease"), entered into by, LincolnWhitehall Pacific,
LLC, a Delaware limited liability company, (hereinafter called "Lessor"), the
successor in interest to the original "Landlord" under the Lease, San Bernardino
County Employees Retirement System, a California Public Agency, as "Landlord",
and Attachmate Corporation (Sublessor under this sublease, and as successor in
interest to The Wollongong Group Inc.) as "Tenant", a copy of the Lease and
amendments thereto is attached and designated Exhibit A and made a part hereof.
2. PROVISIONS CONSTITUTING SUBLEASE:
(a) This Sublease is subject to all of the terms and conditions of the
Lease attached as Exhibit A and Sublessee shall by the execution of this
Sublease assume and perform the obligations of Sublessor and Lessee in said
lease, to the extent said terms and conditions are applicable to the premises
subleased pursuant to this Sublease. Sublessee shall not commit or permit to be
committed on the subleased premises any act or omission which shall violate any
terms or conditions of the Lease. In the event of the termination of Sublessor's
interest as Lessee under the Lease, then this Sublease shall terminate
coincidentally therewith without any liability of Sublessor or Lessor to
Sublessee.
(b) All of the terms and conditions contained in the Lease attached as
Exhibit A, are incorporated herein except for paragraph 4.1 as terms and
conditions of this Sublease (with each reference therein to Lessor and Lessee to
be deemed to refer to Sublessor and Sublessee) and along with all of the
following paragraph set out in the Sublease, shall he the complete terms and
conditions of this Sublease.
3. PREMISES:
Sublessor leases to Sublessee and Sublessee hires from said Sublessor the
following described pretenses together with the appurtenances, situated in the
City of Palo Alto, County of Santa Clara, State of California: a one (1) story
industrial/office building having the street address of 1135 San Antonio Road,
Budding C, Palo Alto, California, those certain Premises containing 10,370
rentable square feet, (hereinafter called the "Premises"), outlined on the floor
plan attached to the Lease designated as Exhibit A.
4. TERM:
(a) The term of this Sublease shall be for a period of forty five (45)
months commencing on October 1, 1996, (hereinafter called the "Commencement
Date" and ending on June 30, 2000, (hereinafter called the "Termination Date").
Sublessee shall have the right to occupy the Premises prior to the Commencement
Date, for the purposes of installing its equipment, furniture, fixtures and all
related cabling.
<PAGE>
(b) In the event Sublessor is unable to deliver possession of the Premises
at the commencement of the term, Sublessor shall not be liable for any damage
caused thereby, nor shall this Sublease be void or avoidable but Sublessee not
shall be liable for rent until such time as Sublessor offers to deliver
possession of the Premises to Sublessee. The term hereof shall not be extended
by such delay. If Sublessee with Sublessor's consent, takes possession prior to
the Commencement Date, Sublessee shall do so subject to all of the covenants and
conditions hereof and shall pay rent for the period ending with the commencement
of the term at the same rental as that prescribed for the first month of the
term, prorated at the rate of 1/30th thereof per day.
5. RENTAL:
(a) Sublessee shall pay to Sublessor without deduction, setoff, prior to
notice or demand as base rental and expenses the sum of $15,555.00 per month
in advance on the first day of each month in lawful money of the United States
of America, commencing on the Commencement Date and continuing throughout the
balance of the term, subject to the rent credit as described in Section 6 below.
(b) Sublessee shall pay to Sublessor "Additional Rent" for the Premises
according to the terms and conditions set forth in Paragraph 4.2 of the Lease.
"Tenant's Percentage Share" of Operating Expenses and Real Property Taxes as
defined in the Lease shall be 15.17% calculated by dividing the approximate
number of square feet contained within the Premises by the number of approximate
number of square feet contained within the Industrial Center. Sublessee's
obligation to pay the "Tenant's Percentage Share" of Operating Expenses shall be
equitably pro-rated to reflect the Commencement Date and Termination Date of the
Sublease.
(c) Monthly rent for any partial month shall be prorated at the rate of
1/30th of monthly rental per day. Rent shall be paid to Sublessor at 3617
131/st/ Ave. S.E., Bellevue, WA 98006, Attention: Controller, Finance
Department, or at such other place or places as Sublessor may from time to time
direct.
(d) Receipt of $15,555.00 or a pro rata portion thereof is hereby
acknowledged by Sublessor as rental for the first month, and the additional
amount of $46,665.00 is deposited as security for the faithful execution of this
Sublease. If Sublessee has performed all the terms and conditions of this
Sublease throughout the term, then upon Sublessee vacating the Premises, and
subject to the surrender of the Premises to Sublessor in the same condition as
received, broom-clean and in good order, condition and repair, ordinary wear and
tear excepted, and subject to the Sublessee not being in a holdover position as
defined in Section 32 of the Lease, the security deposit shall be returned to
Sublessee by Sublessor after deduction of any sums owing to Sublessor.
6. TENANT IMPROVEMENTS:
Sublessor and Sublessee agree the Premises are leased to Sublessee "as is"
with no additional improvements except as hereinafter provided. Sublessor agrees
to leave the Premises in broom clean condition prior to Sublessee's occupancy.
Sublessee will directly pay the cost of additional improvements to the Premises.
These additional improvements will consist of repairing holes in walls, painting
of all offices, cleaning of existing carpets, waxing of the tile floor, and any
other minor repair which Sublessor and Sublessee shall `agree to during a visual
inspection prior to Sublease execution. The cost to Sublessee for the
improvements will not exceed the contract price negotiated between Sublessor and
the contractor of Sublessor's choice, but in no event will exceed $8,500.00.
Sublessor, upon receipt of valid
<PAGE>
invoices will credit Sublessee's rent to cover the cost of these improvements
over the first three month's of the Term.
7. SIGNAGE:
Sublessee will have the right to install, subject to Lessor's approval.,
and at its own expense on the Premises, signs conforming to all laws and
regulations, subject to any existing restrictions outlined in the Lease and
suitable for its purpose in the conduct of its business and which shall remain
the property of Sublessee. Sublessee shall be responsible for proper
maintenance and upkeep of its signage and for any damage to the Premises caused
by the signage. In addition, Sublessee will be obligated to remove all such
signage at the end of the term hereof, and to repair any damage resulting from
such removal. Lessor by its consent to this Sublease, hereby consents to the
Sublessee's right to install signs on the Premises provided Sublessee complies
with the requirements of Paragraph 43 of the Lease. Lessor by its consent to
this Sublease, hereby also agrees to list Sublessee's full name and location
within the Building in the Building directory, at Sublessee's sole cost.
8. USE:
Sublessee shall use the Premises for office, marketing and other legally
related uses as permitted in the Lease and for no other purpose without the
prior written consent of Sublessor, Sublessee's business shall be established
and conducted through out the term hereof in a first-class manner. Sublessee
shall not use the Premises for, or carry on, or permit to be carried on, any
offensive, noisy or dangerous trade, business, manufacture or occupation, nor
permit any auction sale to be held or conducted on or about the Premises.
Sublessee shall not do or suffer anything to be done upon the Premises which
cause structural injury to the premises or the building of which the same for a
part. The Premises shall not be overloaded and no machinery, apparatus or other
appliance shall be used or operated in or upon the Premises which will in any
manner injure, vibrate or shake the Premises or the budding of which they are a
part. No use shall be made of the Premises which will in any way impair the
efficient operation of the sprinkler system (if any) within the building
containing the Premises. Sublessee shall not leave the Premises unoccupied or
vacant during the term. No musical instrument of any sort or any noise-making
device will be operated or allowed upon the Premises for the purpose of
attracting trade or otherwise. Sublessee shall not use or permit the use of the
Premises or any part thereof for any purpose which will increase the existing
rate of insurance upon the budding or any part thereof. If any act on the part
of Sublessee or use of the Premises by Sublessee shall cause, directly or
indirectly, any increase of Sublessor's insurance expense, said additional
expense shall be paid by Sublessee to Sublessor upon demand. No such payment by
Sublessee shall limit Sublessor in the exercise of any other right or remedies,
or constitute a waiver of Sublessor's right to require Sublessee to discontinue
such art or use.
9. NOTICES:
All bills statements, notices or communications which either Sublessor or
Sublessee may desire or be required to give to the other pursuant to this
Sublease will be in writing and either delivered to the other party personally
or sent by registered or certified mail return receipt requested addressed as
set. forth below, all such notices being effective within three business days
following mailing, if mailed by registered or certified mail, addressed to
Sublessor or Sublessee at the addresses designated as follows:
<PAGE>
To Attachmate: Attachmate Corporation To Vicinity Corporation: at the Premises
3617 131/st/ Avenue S.E.
Bellevue, WA 98006
Attn: Legal Department
Fax No. (206) 649-6390
10. SUBLESSOR'S OPTION TO CANCEL:
Sublessor shall have the option to cancel this Sublease upon ninety (90)
days written notice to Sublessee if by December 31, 1996, Sublessee has not
received at least five million ($5,000,000) in new funding. If Sublessor
exercises its option to cancel, it shall have the right to retain a portion of
the security deposit paid by Sublessee under Section 5(d) of this Sublease equal
to two month's rent as liquidated damages to Sublessor to cover the costs
incurred in subleasing the Premises to Sublessor. If Sublessor does not exercise
its option to cancel in the event the new funding is not received, Sublessor
shall have the right to retain the three month security deposit until such time
that Sublessee does receive its new Raiding. When and if Sublessee receives its
new funding, Sublessor will refund an amount equal to two month's security
deposit to Sublessee. The remaining one month's security deposit will remain
with Sublessor and shall be refunded to Sublessee at the end of this Sublease
term in accordance with Section 5(d) of this Sublease. Sublessee will provide
prompt written notice to Sublessor of receipt of Sublessee's new funding.
11. SUBLEASE INCONSISTENCIES WITH MASTER LEASE
Should any inconsistencies exist between any term or provision of the Lease
attached as Exhibit A and any term or provision of this Sublease, the terms and
provisions of the Lease shall prevail as between Sublessor and Sublessee.
12. COUNTERPARTS
This agreement may be signed in counterparts, each of which shall be an
original, and all of which constitute one and the same agreement
SUBLESSEE: SUBLESSOR:
Vicinity Corporation Attachmate Corporation
a California corporation a Washington corporation
By:__________________________ By:____________________________
Its:_________________________ Its:___________________________
Date:________________________ Date:__________________________
The undersigned Lessor hereby consents to the foregoing Sublease on the express
condition that the Sublessor shall remain liable for the prompt payment of the
rent and performance of the terms, conditions and covenants of the lease between
Lessor and Sublessor as Lessee and that no further subletting of the premises
thereby demised, or any part thereof shall be made without the written consent
of the undersigned.
<PAGE>
LESSOR:
Lincoln - Whitehall Pacific, LLC, a Delaware limited liability company
By: Lincoln Property Company Management Services, Inc., as Manager and Agent for
Owner
By:__________________________________________
Its:_________________________________________
Date:________________________________________
<PAGE>
EXHIBIT 10.22
FIRST SUBLEASE AGREEMENT AMENDMENT
THIS AGREEMENT, dated August 6, 1997 is made by and between Attachmate
Corporation, a Washington Corporation, ("Sublessor"), and Vicinity Corporation,
a California corporation, ("Sublessee"), (hereinafter "First Sublease Agreement
Amendment").
THIS AGREEMENT relates to the Sublease Agreement dated the 2nd day of
October, 1996 between Sublessor and Sublessee, ("Sublease").
RECITALS
A. It is the desire of the Sublessor and Sublessee to amend the terms of said
Sublease.
IN CONSIDERATION OF THE MUTUAL COVENANTS contained herein, Sublessor and
Sublessee agree the Sublease is amended as follows:
1. PREMISES:
Effective August 6, 1997, the Premises hired from Sublessor by Sublessee
shall be reduced from 10,370 rentable square feet and now shall be described as
the one (1) story industrial/office building having the street address of 1135
San Antonio Road, Building C, Palo Alto, California, more particularly described
as 7,598 rentable square feet, outlined on the floor plan attached to this First
Sublease Agreement Amendment as Exhibit A.
2. RENTAL:
Section 5, subsection (a) is revised to read as follows:
Effective August 6, 1997, Sublessee shall pay to Sublessor without
deduction, setoff, prior notice or demand, as base rental ("Base Rent") the sum
of $11,397.00 per month in advance on the first day of each month in lawful
money of the United States of America, commencing on August 6, 1997, and
continuing throughout the balance of the term.
The second sentence of Section 5, subsection (b) shall be deleted and
replaced with the following:
Effective August 6, 1997, "Tenant's Percentage Share" of Operating Expenses
and Real Property Taxes as defined in the Lease shall be 15.45%, calculated by
dividing the approximate number of square feet contained within the Premises by
the approximate number of rentable square feet contained within the Industrial
Center as leased by Sublessor.
3. BROKER'S FEES:
Sublessee shall at its sole cost and expense pay broker's, finder's or
other similar fees or commissions required in connection with this First
Amendment to Sublease Agreement to Colliers Parrish International, Inc. and
Grubb and Ellis Commercial Real Estate Services, and Sublessee knows of no other
broker's, finder's or other similar fees or commissions required
1
<PAGE>
in connection with this Agreement, and shall indemnify, defend, protect and hold
Sublessor harmless from all damages, liabilities, claims, costs and expenses in
any way related thereto.
4. COUNTERPARTS:
This Agreement may be signed in counterparts, each of which shall be an
original, and all of which constitute one and the same agreement.
Except as herein amended, the Sublease is hereby ratified and confirmed and
all other terms of the Sublease shall remain in full force and effect, unaltered
and unchanged by this subsequent agreement.
Sublessee: Sublessor:
Vicinity Corporation Attachmate Corporation
a California corporation a Washington corporation
By:______________________ By:_______________________
Its:_____________________ Its:______________________
Date:____________________ Date:_____________________
The undersigned Lessor hereby consents to the foregoing First Sublease Amendment
Agreement on the express condition that the Sublessor shall remain liable for
the prompt payment of the rent and performance of the terms, conditions and
covenants of the Lease between Lessor and Sublessor as Lessee and that no
further subletting of the Premises thereby demised, or any part thereof shall be
made without the written consent of the undersigned.
LESSOR:
Lincoln-Whitehall Pacific, LLC, a Delaware limited liability company.
By: Lincoln Property Company, Management Services, Inc., As Manager and Agent
for Landlord
By:________________________
Its:_______________________
Date:______________________
2
<PAGE>
EXHIBIT 10.23
SECOND SUBLEASE AGREEMENT AMENDMENT
THIS AGREEMENT, dated September 22, 1998 is made by and between Attachmate
Corporation, a Washington Corporation, ("Sublessor"), and Vicinity Corporation,
a California corporation, ("Sublessee"), (hereinafter "Second Sublease Agreement
Amendment).
THIS AGREEMENT relates to the Sublease Agreement dated the 2nd day of
October, 1996 between Sublessor and Sublessee, ("Sublease") and the First
Sublease Agreement dated August 6, 1997 between Sublessor and Sublessee ("First
Sublease Agreement Amendment").
RECITALS
A. It is the desire of the Sublessor and Sublessee to amend the terms of said
Sublease.
IN CONSIDERATION OF THE MUTUAL COVENANTS contained herein, Sublessor and
Sublessee agree the Sublease is amended as follows:
1. PREMISES.
Effective October 1, 1998, the Premises hired from Sublessor by Sublessee
shall be increased from 7,598 rentable square feet and now shall be described as
the one (1) story industrial/office building having the street address of 1135
San Antonio Road, Building C, Palo Alto, California, more particularly described
as 10,370 rentable square feet, outlined on the floor plan attached to this
Second Sublease Agreement Amendment as Exhibit A.
2. RENTAL:
Section 5, subsection (a) is revised to read as follows:
Effective October 1, Sublessee shall pay to Sublessor without deduction,
setoff, prior notice or demand, as base rental ("Base Rent") the sum of
$16,525.00 per month in advance on the first day of each month in lawful money
of the United States of America, commencing on October 1, 1998, and continuing
throughout the balance of the term.
The second sentence of Section 5, subsection (b) shall be deleted and
replaced with the following:
Effective October 1, 1998, "Tenant's Percentage Share" of Operating
Expenses and Real Property Taxes as defined in the Lease shall be 21.086%,
calculated by dividing the approximate number of square feet contained within
the Premises by the approximate number of rentable square feet contained within
the Industrial Center as leased by Sublessor.
3. TENANT IMPROVEMENTS:
Sublessor and Sublessee agree that Sublessee shall occupy the Premises in
its existing condition, "as is". Sublessor will arrange for minor repairs prior
to Sublessee's occupancy. These repairs will consist of cleaning of existing
carpets and touch-up painting on interior wall surfaces.
<PAGE>
4. COUNTERPARTS:
This Agreement may be signed in counterparts, each of which shall be an
original, and all of which constitute one and the same agreement.
Except as herein amended, the Sublease is hereby ratified and confirmed and
all other terms of the Sublease shall remain in full force and effect, unaltered
and unchanged by this subsequent agreement.
Sublessee: Sublessor:
Vicinity Corporation Attachmate Corporation
a California corporation a Washington corporation
By:_______________________ By:________________________
Its:______________________ Its:_______________________
Date:_____________________ Date:______________________
The undersigned Lessor hereby consents to the foregoing Second Sublease
Amendment Agreement on the express condition that the Sublessor shall remain
liable for the prompt payment of the rent and performance of the terms,
conditions and covenants of the Lease between Lessor and Sublessor as Lessee and
that no further subletting of the Premises thereby demised, or any part thereof
shall be made without the written consent of the undersigned.
LESSOR:
Lincoln-Whitehall Pacific, LLC, a Delaware limited liability company.
By: Lincoln Property Company, Management Services, Inc., as Manager and Agent
for Landlord
By:_________________________
Its:________________________
Date:_______________________
<PAGE>
EXHIBIT 10.24
SUB-SUBLEASE AGREEMENT
This Sub-sublease Agreement ("Sub-sublease") is made effective as of the
first day of August, 1999, (the "Effective Date") by and between E*TRADE Group,
Inc., a Delaware corporation ("Sub-sublessor"), and Vicinity Corporation, a
California corporation ("Sub-sublessee"). Sub-sublessor agrees to sub-sublease
to Sub-sublessee, and Sub-sublessee agrees to sub-sublease from Sub-sublessor,
those certain premises situated in the City of Palo Alto, County of Santa Clara,
State of California, consisting of approximately 15,199 square feet of space
known as 1133 San Antonio Road, more particularly set forth on Exhibit "A"
hereto (the "Sublease Premises").
ARTICLE 1
MASTER SUBLEASE AND OTHER AGREEMENTS
1.1 Applicable Provisions. Except as specifically set forth herein, this
---------------------
Sub-sublease is subject and subordinate to all of the terms and conditions of
the Sublease (the "Master Sublease") dated March 7, 1997, between Attachmate
Corporation, a Washington Corporation ("Master Sublessor") and E*TRADE Group,
Inc., a California Corporation ("Sublessee" and now "Sub-sublessor" under this
Sub-sublease) and the Lease dated July 16, 1993 ("Master Lease") between Master
Sublessor as successor in interest to Tenant and as the Tenant, and Lincoln-
Whitehall Pacific, LLC, a Delaware limited liability company, as successor in
interest to and as Landlord ("Master Landlord") as amended on May 13, 1994 and
November 4, 1994. Sub-sublessee hereby assumes and agrees to perform the
obligations of Sublessee under the Master Sublease and Master Lease as more
particularly set forth hereafter. Unless otherwise defined, all capitalized
terms used herein shall have the same meanings as given them in the Master
Sublease. A copy of the Master Sublease is attached hereto as Exhibit "B" and a
copy of the Master Lease as amended is attached hereto as Exhibit "C", and both
are incorporated herein by this reference. Sub-sublessee shall not commit or
permit to be committed any act or omission which would violate any term or
condition of the Master Sublease or Master Lease. Sub-sublessee shall neither do
nor permit anything to be done which would cause the Master Sublease to be
terminated or forfeited by reason of any right of termination or forfeiture
reserved or vested in Master Sublessor under the Master Sublease, and Sub-
sublessee shall indemnify and hold Sub-sublessor harmless from and against all
liability, judgments, costs, demands, claims, and damages of any kind whatsoever
(including, without limitation, attorneys' fees and court costs) by reason of
any failure on the part of Sub-sublessee to perform any of the obligations of
Sublessee under the Master Sublease which Sub-sublessee has become obligated
hereunder to perform. In the event of the termination of Sub-sublessor's
interest as Sublessee under the Master Sublease for any reason other than for
Sub-sublessor's breach, then this Sub-sublease shall terminate automatically
upon such termination without any liability of Master Sublessor or Sub-sublessor
to Sub-sublessee. Sub-sublessee represents and warrants to Sub-sublessor that it
has read and is familiar with the Master Sublease and the Master Lease.
1.2 Applicable Provisions. All of the terms and conditions contained in
---------------------
the Master Sublease as they may apply to the Sub-subleased Premises, except
those directly contradicted by the terms and conditions contained in this
document, and specifically except for Paragraphs 1, 4, 5(a), (c), (d), 6, 9, 10,
12, 13, 14, and 15 are incorporated herein and shall be terms and
1
<PAGE>
conditions of this Sub-sublease (with each reference therein to "Sublessor,"
"Sublessee," and "Sublease" to be deemed to refer to Sub-sublessor, Sub-
sublessee, and Sub-sublease, respectively, as appropriate) and along with all of
the following terms and conditions set forth in this document, shall constitute
the complete terms and conditions of this Sub-sublease.
1.3 Obligations of Sub-sublessor. Notwithstanding anything herein
----------------------------
contained, the only services or rights to which Sub-sublessee is entitled
hereunder are those to which Sub-sublessor is entitled under the Master
Sublease, and for all such services and rights Sub-sublessee shall look solely
to the Master Sublessor under the Master Sublease or where as set forth in the
Sublease, to the Landlord under the Master Lease, and the obligations of Sub-
sublessor hereunder shall be limited to using its reasonable good faith efforts
to obtain the performance by Master Sublessor or Landlord of their obligations.
Sub-sublessor shall have no liability to Sub-sublessee or any other person for
damage of any nature whatsoever as a result of the failure of Master Sublessor
or Landlord to perform said obligations except for Master Sublessor's
termination of the Sub-sublessor's interest as Sublessee under the Master
Sublease in the event of Sub-sublessor's breach of the Master Sublease, and Sub-
sublessee shall indemnify and hold Sub-sublessor harmless from any and all
claims and liability whatsoever for any such damage including, without
limitation, all costs and attorneys' fees incurred in defending against same.
ARTICLE 2
TERM
2.1 Term. The term of this Sub-sublease shall commence on the earlier of
----
(i) August 1, 1999, or (ii) the date the Sub-sublessee takes possession of the
Premises. This shall be referred to as the "Commencement Date." The term of this
Sub-sublease shall end on June 30, 2000, unless sooner terminated pursuant to
any provision of the Master Sublease or Master Lease (the "Expiration Date").
2.2 Option to Extend. Sub-sublessee shall have no option to extend this
----------------
Sub-sublease.
2.3 Sub-sublessor's Inability to Deliver Premises. In the event Sub-
---------------------------------------------
sublessor is unable to deliver possession of the Subleased Premises on or before
the August 1, 1999, Sub-sublessor shall not be liable for any damage caused
thereby, nor shall this Sub-sublease be void or voidable, but Sub-sublessee
shall not be liable for Rent until such time as Sub-sublessor offers to deliver
possession of the Subleased Premises to Sub-sublessee, but the term hereof shall
not be extended by such delay. If Sub-sublessee, with Sub-sublessor's consent,
takes possession prior to commencement of the term, Sub-sublessee shall do so
subject to all the covenants and conditions hereof and shall pay pro rated Base
Rent for each day at the same rate as that prescribed for the first month of the
term. In the event Sub-sublessor has been unable to deliver possession of the
Subleased Premises within thirty (30) days after August 1, 1999, Sub-sublessee,
at Sub-sublessee's sole option, may terminate this Sub-sublease.
2
<PAGE>
ARTICLE 3
RENT
3.1 Rent. Sub-sublessee shall pay to Sub-sublessor each month during the
----
term of this Sub-sublease, rent in the amount of Thirty Thousand Three Hundred
Ninety Eight Dollars ($30,398.00), in advance, on Sub-sublease execution for the
first month and on or before the first of each month thereafter ("Base Rent").
Rent for partial months at the commencement or termination of this Sub-sublease
shall be prorated. Rent shall be paid to the Sub-sublessor at its business
address noted herein, or at any other place Sub-sublessor may from time to time
designate by written notice mailed or delivered to Sub-sublessee.
3.2 Additional Rent. Sub-sublessee shall be liable for and pay all
---------------
additional rent or sums owed by Sub-sublessor under the Master Sublease. If Sub-
sublessee shall procure any additional services from Master Sublessor or
Landlord, Sub-sublessee shall make such payment to Sub-sublessor or Master
Sublessor or Landlord, as Sub-sublessor shall direct. Any rent or other sums
payable by Sub-sublessee under this Section 3 shall constitute and be due as
additional rent. Base Rent, and additional rent shall herein be referred to as
"Rent".
3.3 Late Charge. Paragraph 26.2 of the Master Lease with Landlord being
-----------
Subsublessor and Tenant being Sub-sublessee and Base Rent or monthly Base Rent
meaning Rent, being incorporated herein as the late charge term in this Sub-
sublease.
ARTICLE 4
SECURITY DEPOSIT
4.1 Security Deposit. Upon execution hereof, Sub-sublessee shall deposit
----------------
with Sub-sublessor the sum of Thirty Thousand Three Hundred Ninety Eight Dollars
($30,398.00) as and for a Security Deposit to secure Sub-sublessee's full and
timely performance of all of its obligations hereunder. If Sub-sublessee fails
to pay Rent or any other sums as and when due hereunder, or otherwise defaults
with respect to any provision of this Sub-sublease, Subsublessor may (but shall
not be obligated to) use, apply, or retain all or any portion of said deposit
for payment of any sum for which Sub-sublessee is obligated or which will
compensate Sub-sublessor for any loss or damage which Sub-sublessor may suffer
thereby. Any such use, application, or retention shall not constitute a waiver
by Sub-sublessor-of its right to enforce its other remedies hereunder, at law,
or in equity. If any portion of said deposit is so used, applied, or retained,
Sub-sublessee shall, within 10 days after delivery of written demand from
Sublessor, restore said deposit to its original amount. Sub-sublessee's failure
to do so shall constitute a material breach of this Sub-sublease, and in such
event Subsublessor may elect, among or in addition to other remedies, to
terminate this Sub-sublease. Sub-sublessor shall not be a trustee of such
deposit, and shall not be required to keep this deposit separate from its
accounts. Sub-sublessor alone shall be entitled to any interest or earnings
thereon and Sub-sublessor shall have the free use of same. If Sub-sublessee
fully and faithfully performs all of its obligations hereunder, then so much of
the deposit as remains shall be returned to Sub-sublessee (without payment of
interest or earnings thereon) within 30 days after the later of (i) expiration
or sooner
3
<PAGE>
termination of the term hereof, or (ii) Sub-sublessee's surrender of possession
of the Premises to Sub-sublessor.
ARTICLE 5
CONDITION OF PREMISES
5.1 Condition of the Premises. Sub-sublessee acknowledges that as of the
-------------------------
Commencement Date, the Sublease Premises, and every part thereof, are in good
condition and without need of repair, and Sub-sublessee accepts the Sublease
Premises "as is", Sub-sublessee having made all investigations and tests it has
deemed necessary or desirable in order to establish to its own complete
satisfaction the condition of the Sublease Premises. Sub-sublessee accepts the
Sublease Premises in their condition existing as of the Commencement Date,
subject to all applicable zoning, municipal, county and state laws, ordinances,
and regulations governing and regulating the use of the Sublease Premises and
any covenants or restrictions of record. Sub-sublessee acknowledges that Sub-
sublessor has not made any representations or warranties as to the condition of
the Sublease Premises or its present or future suitability for Sub-sublessee's
purposes.
ARTICLE 6
INSURANCE AND INDEMNITY
6.1 Sublessee's Insurance. With respect to the Tenant's insurance under
---------------------
the Master Lease, the same is to be provided by Sub-sublessee as described in
the Master Lease, and such policies of insurance shall include as additional
insureds Landlord, Master Sublessor, Sub-sublessor and any lender as required by
the Master Lease except the amount of liability insurance required of Sub-
sublessee shall be Three Million Dollars ($3,000,000.00) in the aggregate.
6.2 Waiver of Subrogation. With respect to the waiver of subrogation
---------------------
contained in the Master Lease, such waiver shall be deemed to be modified to
constitute an agreement by and among Landlord, Master Sublessor, Sub-sublessor
and Sub-sublessee (and Landlord's and Master Sublessor's consent to this Sub-
sublease shall be deemed to constitute their approval of this modification).
6.3 Indemnity. The indemnity and waiver given by Master Sublessor
---------
pursuant to paragraphs 12.1 and 12.2 of the Master Lease are hereby given by
Sub-sublessee to Subsublessor as if Tenant means Sub-sublessee and Landlord
means Sub-sublessor.
ARTICLE 7
USE OF PREMISES; PARKING; IMPROVEMENTS
7.1 Use of Premises. Sub-sublessee shall use the Subleased Premises only
---------------
for those purposes permitted in the Master Sublease.
4
<PAGE>
7.2 Parking. Sub-sublessee will have the non-exclusive right to its pro
-------
rata share of parking granted in the Master Lease.
7.3 Alterations; Improvements. Sub-sublessee shall not make any
-------------------------
alterations, improvements, or modifications to the Subleased Premises without
the express prior written consent of Sub-sublessor, Master Sublessor and of
Master Lessor, which consent by Subsublessor shall be at its sole discretion. On
termination of this Sub-sublease, Sub-sublessee shall remove any or all of such
improvements and restore the Subleased Premises (or any part thereof) to the
same condition as of the Commencement Date of this Sub-sublease, reasonable wear
and tear excepted or as otherwise instructed in writing by either Subsublessor,
Master Sublessor or Master Lessor. Should Sub-sublessee fail to remove such
improvements and restore the Subleased Premises on termination of this Sub-
sublease unless instruction otherwise in writing as set forth above, Sub-
sublessor shall have the right to do so, and charge Sub-sublessee therefor.
ARTICLE 8
ASSIGNMENT, SUBLETTING & ENCUMBRANCE
8.1 Consent Required. Sub-sublessee shall not assign this Sub-sublease or
----------------
any interest therein nor shall Sub-sublessee sublet, license, encumber or permit
the Sublease Premises or any part thereof to be used or occupied by others,
without Sub-sublessor's, Master Sublessor's and Landlord's prior written consent
per the terms of the Master Sublease and Master Lease. The consent by Sub-
sublessor, Master Sublessor and Landlord to any assignment or subletting shall
not waive the need for Sub-sublessee (and Sub-sublessee's assignee or subtenant)
to obtain the consent of Sub-sublessor, Master Sublessor and Landlord to any
different or further assignment or subletting. All conditions and standards set
forth in the Master Sublease and Master Lease regarding assignments and
subletting shall apply, and to the extent there is any bonus rents, (Rent paid
by such Assignee or Sub-sub-sublessee in excess of Rent paid by Sub-sublessee
hereunder) the bonus rent shall first be split per the Master Sublease and
Master Lease and any bonus rent to go to Sub-sublessee shall be split 50/50 with
Sub-sublessor to be paid to Sub-sublessor within five (5) days of receipt by
Sub-sublessee.
8.2 No Release of Sub-sublessee. Regardless of Sub-sublessor's consent,
---------------------------
no subletting or assignment shall release Sub-sublessee of Sub-sublessee's
obligation or alter the primary liability of Sub-sublessee to pay the Rent and
to perform all other obligations to be performed by Sub-sublessee hereunder. The
acceptance of Rent by Sub-sublessor from any other person shall not be deemed to
be a waiver by Sub-sublessor of any provision hereof. In the event of default by
any assignee, subtenant or any other successor of Sub-sublessee, in the
performance of any of the terms hereof, Sub-sublessor may proceed directly
against Sub-sublessee without the necessity of exhausting remedies against such
assignee, subtenant or successor.
ARTICLE 9
DEFAULT
9.1 Default Described. The occurrence of any of the following shall
-----------------
constitute a material breach of this Sub-sublease and a default by Sub-
sublessee: (i) failure to pay Rent or
5
<PAGE>
any other amount within three (3) days after becoming due; (ii) all other
occurrences set forth in the Master Lease Article 16; or (iii) Sub-sublessee's
failure to perform timely any other provision of this Sub-sublease, the Master
Sublease or the Master Lease as incorporated herein.
9.2 Sub-sublessor's Remedies. Sub-sublessor shall have the remedies set
------------------------
forth in the Master Lease with Sub-sublessor being Landlord. These remedies are
not exclusive; they are cumulative and in addition to any remedies now or later
allowed by law.
9.3 All Sums Due and Payable as Rent. Sub-sublessee shall pay without
--------------------------------
notice, or where notice is required under this Sub-sublease, immediately upon
demand without any abatement, deduction, or setoff, Rent, and, in case of any
nonpayment thereof, Sub-sublessor shall have, in addition to all other rights
and remedies, all the rights and remedies provided for in this Sub-sublease or
by law in the case of nonpayment of rent.
9.4 Sub-sublessor Default. For purposes of this Sub-sublease, Sub-
---------------------
sublessor shall not be deemed in default hereunder unless and until Sub-
sublessee shall first deliver to Sub-sublessor thirty (30) days' prior written
notice, and Sub-sublessor shall fail to cure said default within said thirty
(30) day period, or in the event Sub-sublessor shall reasonably require in
excess of thirty (30) days to cure said default, shall fail to commence said
cure with said thirty (30) day period, and thereafter diligently to prosecute
the same to completion.
9.5 Notice of Event of Default under Master Sublease. Sub-sublessor shall
------------------------------------------------
notify Sub-sublessee of any Event of Default under the Master Sublease, or of
any other event of which Sub-sublessor has actual knowledge which will impair
Sub-sublessee's ability to conduct its normal business at the Sub-subleased
Premises, as soon as reasonably practicable following Sub-sublessor's receipt of
notice from Master Sublessor or Landlord of an Event of Default or Sub-
sublessor's actual knowledge of such impairment.
ARTICLE 10
CONSENT OF MASTER SUBLESSOR AND MASTER LESSOR
10.1 Precondition. The Master Lease and Master Sublease require that
------------
Subsublessor obtain the consent of Landlord and Master Sublessor to any
subletting by Sub-sublessor. This Sub-sublease shall not be effective unless
Master Sublessor and Landlord sign a consent to this subletting satisfactory to
Sub-sublessor and Sub-sublessee.
ARTICLE 11
MISCELLANEOUS
11.1 Conflict with Master Sublease; Interpretation. In the event of any
---------------------------------------------
conflict between the provisions of the Master Sublease and Master Lease and this
Sub-sublease, the Master Lease and Master Sublease shall govern and control
except to the extent directly contradicted by the terms of this Sub-sublease. No
presumption shall apply in the interpretation or construction of this Sub-
sublease as a result of Sub-sublessor having drafted the whole or any part
hereof.
6
<PAGE>
11.2 Remedies Cumulative. The rights, privileges, elections, and remedies
-------------------
of Subsublessor in this Sub-sublease, at law, and in equity are cumulative and
not alternative.
11.3 Waiver of Redemption. Sub-sublessee hereby expressly waives any and
--------------------
all rights of redemption to which it may be entitled by or under any present or
future laws in the event Sub-sublessor shall obtain a judgment for possession of
the Sublease Premises.
11.4 Holding Over. Any holding over by Sub-sublessee after expiration of
------------
this Sub-sublease shall be deemed a tenancy from month-to-month at a monthly
rate of 200% of the Rent and other amounts due for the last month of the Sub-
sublease term and shall otherwise be on the same terms and conditions set forth
herein. Said monthly rent shall be due and payable monthly in advance on the
first day of the month and otherwise as provided for in Article 3 hereof and
Sub-sublessor reserves all rights to seek immediate possession for such holdover
as allowed at law except the parties hereto agree that the Rent for such
holdover shall be as set forth herein.
ARTICLE 12
BROKER'S COMMISSIONS
12.1 Commission. Sub-sublessor and Sub-sublessee represent and warrant to
----------
each other that each has dealt with the following brokers The Staubach Company
(Sub-sublessor's Broker) and Colliers Parrish International (Sub-sublessee's
Broker) and with no other agent, finder, or other such person with respect to
this Sub-sublease and each agrees to indemnify and hold the other harmless from
any claim asserted against the other by any broker, agent, finder, or other such
person not identified above as Sub-sublessor's Broker or Sub-sublessee's Broker.
Sub-sublessor agrees to pay real estate commission to The Staubach Company
pursuant to a separate listing agreement to apply to the Sublease term. The fee
will be split 50/50 between Colliers Parrish International and The Staubach
Company.
ARTICLE 13
NOTICES AND PAYMENTS
13.1 Certified Mail. Any notice, demand, request, consent, approval,
--------------
submittal or communication that either party desires or is required to give to
the other party or any other person shall be in writing and either served
personally or sent by prepaid, first-class certified mail or commercial
overnight delivery service. Such Notice shall be effective on the date of actual
receipt (in the case of personal service or commercial overnight delivery
service) or two days after deposit in the United States mail, to the following
addresses:
Sub-sublessor at:
E*TRADE Group, Inc.
Attn: Corporate Facilities
4500 Bohannon Drive
Menlo Park, CA 94025
7
<PAGE>
Sub-sublessee at the Sublease Premises, whether or not Sub-sublessee has
abandoned or vacated the Sublease Premises or notified the Sub-sublessor of
any other address.
ARTICLE 14
ATTORNEYS'FEES
14.1 Sub-sublessor Made Party to Litigation. If Sub-sublessor becomes a
--------------------------------------
party to any litigation brought by someone other than Sub-sublessee and
concerning this Sub-sublease, the Premises, or Sub-sublessee's use of occupancy
of the Premises, based upon any real or alleged act or omission of Sub-sublessee
or its authorized representatives, Sub-sublessee shall be liable to Sub-
sublessor for reasonable attorneys' fees and court costs incurred by Sub-
sublessor in the litigation. If Sub-sublessee becomes a party to any litigation
brought by someone other than Sub-sublessor and concerning this Sub-sublease,
the Premises, or Sub-sublessor's continuing liability with respect to the
Premises, based upon any real or alleged act or omission of Sub-sublessor or its
authorized representatives, Subsublessor shall be liable to Sub-sublessee for
reasonable attorneys' fees and court costs incurred by Sub-sublessee in the
litigation if Sub-sublessor is found to be liable to the Plaintiff.
14.2 Certain Litigation Between the Parties. In the event any action or
--------------------------------------
proceeding at law or in equity or any arbitration proceeding be instituted by
either Sub-sublessor or Sub-sublessee for damages or possession of the Premises
or both, for an alleged breach of any obligation of the other party under this
Sub-sublease, to recover rent, to terminate the tenancy of Sub-sublessee at the
Sublease Premises, or to enforce, protect, or establish any other right or
remedy of such party, the prevailing party (by judgment or settlement) in such
action or proceeding shall be entitled to recover as part of such action or
proceeding such reasonable attorneys' fees, expert witness fees, and court costs
as may be fixed by the court or jury, but this provision shall not apply to any
cross-complaint filed by anyone other than Sub-sublessor or Sub-sublessee in
such action or proceeding.
ARTICLE 15
EXHIBITS AND COUNTERPARTS
15.1 Exhibits and Attachments. All exhibits and attachments to this Sub-
------------------------
sublease are a part hereof.
15.2 Counterparts. This Agreement may be signed in counterparts, each of
------------
which shall be an original, and all of which constitute one and the same
agreement.
IN WITNESS WHEREOF, Sub-sublessor and Sub-sublessee have executed and
delivered this Sub-sublease on the date first set forth above.
8
<PAGE>
SUB-SUBLESSOR SUBLESSEE
E*TRADE Group, Inc., Vicinity Corporation.
a Delaware corporation a California corporation
By:_____________________________ By:_____________________________
Its:____________________________ Its:____________________________
By:_____________________________ By:_____________________________
Its:____________________________ Its:____________________________
9
<PAGE>
Page 1
EXHIBIT 10.25
LEASE AGREEMENT
AGREEMENT made this 10th of August, 1999 by and between GORDON E. BAGLEY, JR.
and BLANCHE M. BAGLEY, husband and wife, of the City of Lebanon, Grafton County,
New Hampshire (hereinafter referred to as "Landlord") and VICINITY CORPORATION,
a California corporation with a place of business in the City of Lebanon,
Grafton County, New Hampshire (hereinafter referred to as "Tenant");
In consideration of the rents, covenants, and agreements to be paid and
performed on the part of the Tenant, the Landlord does hereby demise, lease, and
let to the Tenant a portion of certain premises located in the City of Lebanon,
Grafton County, New Hampshire, known as "Chiron Springs" situated on Etna Road
in the City of Lebanon, New Hampshire, consisting of space known as Suites 10,
11, 12, 13, 18, 19 and the so-called offices attached to the bridge. The total
demised space consists of 11,469 square feet and is shown on Exhibit "A"
(multiple segments) attached hereto and incorporated herein by reference. Also
demised herewith is the right of ingress and egress to said space in common with
others. It is understood that the space leased hereby is a portion of the
building known as Chiron Springs, which building has been developed as an office
complex.
TO HAVE AND TO HOLD to the Tenant for the initial term of three (3) years from
September 1, 1999 through August 31, 2002, upon the terms, conditions, and
covenants herein set forth.
1. Amount of Rent
--------------
A. Base Rent. The Tenant agrees that it shall pay rent to the Landlord
---------
during the first year of the term at the annual rate of $10.35 per
square foot, payable in ,monthly installments of $9,892.00 per month
on the first day of each month. At the end of the first year of the
term, the rent shall be increased or decreased by an amount equal to
the percentage change in the cost of living as set forth in the CPI-U
for the last month of the previous lease year as published by the U.S.
government Department of Labor or by any replacement for the CPI-U
established for the U.S. Government, using the previous year as the
base year (currently the CPI Hotline is 617-565-2325). If the Tenant
shall hold over after the expiration of the initial term hereof until
the Tenant shall actually vacate the premises, the Tenant shall become
a month-to-month tenant and shall pay, as a monthly rental, an amount
equal to one hundred ten (I 10%) percent of the monthly rental payment
(the "holdover rent") for the last month of the term immediately
preceding the end of the initial term. Such holdover rent shall be
payable for each month or portion thereof during the actual occupancy
of the premises by the Tenant after termination of this lease.
<PAGE>
Page 2
SPECIAL TERMS
2. Security Deposit. There shall be no additional security deposit in
----------------
connection with this lease; provided, however, that in the event that the
Tenant shall not surrender the premises to the Landlord in the same
condition in which the premises are delivered to the tenant, reasonable
wear and tear excepted, the Tenant shall forthwith pay to Landlord the
amount necessary to restore the premises to their former condition. It is
acknowledged that the Landlord currently holds a security deposit in the
amount of $625.00 for the Tenant based on a prior lease dated in 1996.
3. Renewal. Omitted intentionally.
-------
4. A. Landlord's Repairs. The Landlord shall provide and/or bear the expense
------------------
of maintenance and repair of the heating system, plumbing system,
roof, passageways and other common areas and the outside of the
building, and any other mechanical system or equipment installed by
Landlord on the premises at the time the lease began.
B. Tenant's Repairs. The Tenant shall provide and/or bear the expense of
----------------
loss to the Tenant from damage to the premises, cleaning of the leased
premises, window washing in accordance with Tenant's needs, window
repairs, interior decorating, special lighting fixtures, maintenance
and operation of any alarm system which may be installed by the Tenant
on the lease premises; and all substantial repairs, alterations,
renovations and exterior lighting, subject to approval in writing by
the Landlord.
C. In the event that any repairs shall be required under the provisions
of the foregoing paragraphs 4(A) or 4(B), the party bearing the
responsibility therefore shall make such repairs expeditiously. Either
party may give the other party written notice of the necessary for
such repairs. If the party giving notice shall not have received any
response within fifteen (15) days of the delivery of such notice, the
party giving notice may proceed to make such repairs and bill the
other party therefore. Any such bill shall be due and payable upon
receipt.
5. Utilities, Services and Common Expenses. This lease is intended to be a
---------------------------------------
"net" lease.
A. Gas and Electric. Tenant shall be responsible for the payment of all
----------------
charges for electricity, gas and air conditioning for the premises.
Gas is supplied to a central tank and is metered to all of the tenants
at Chiron Springs. Landlord shall make arrangements with a gas
supplier who shall bill Tenant for the gas used in the premises.
Electricity is provided by a separate meter supplied by Granite State
Electric.
B. Real Estate Taxes and other Common Expenses. Tenant shall pay to
-------------------------------------------
Landlord an amount equal to Tenant's proportional share of the common
expenses incurred in connection with the Chiron Springs Complex.
Reference is made to Exhibit "B",
<PAGE>
Page 3
entitled "1999 Estimated Operating Costs for Chiron Springs Office
Building", which Exhibit B is hereby incorporated by reference and
made a part hereof Such proportional share of the common expenses
shall be calculated by dividing the number of square feet of the
premises by the total number of square feet of leaseable space in
Chiron Springs. For the purposes of this Lease Agreement, the Tenant's
proportional share shall be deemed to be 46.62% of the common
expenses. It is estimated that the total of such common expenses shall
be $2.45 per square foot for the first lease year. Tenant's share of
such common expenses shall be payable in monthly installments of Two
Thousand Three Hundred Forty-one Dollars and Fifty-eight Cents
($2,341.58) each. Within sixty (60) days of the end of each calendar
year, Landlord shall furnish to Tenant an accounting in reasonable
detail of such expenses, which accounting shall also include an
estimate of the expenses for the following year. Upon receipt of the
estimate for the following year, the parties shall adjust the payment
for the ensuing year and the monthly pro rata payment by the Tenant
shall be increased or decreased by an amount equal to 46.62% of one-
twelfth of the estimated increase or decrease. Any change in such
payments shall be due commencing with the next due date for the
payment of rent. Tenant's payments under the terms hereof shall be
deemed to be `additional rent' and shall be due and payable
simultaneously with other monthly payments due from Tenant to Landlord
under the terms of this lease.
6. Parking. The Tenant, together with Tenant's employees and guests, shall
-------
have the right, in common with the other tenants and patrons in the Chiron
Springs Office Complex, to use the parking areas provided at Chiron
Springs, provided, however, that the Tenant will insure that it and its
employees, guests, and customers shall cooperate in all snow removal
efforts, and provided, further, that such parking areas shall not be used
for external storage, permanent or temporary, for any motor vehicle,
trailer, storage bin, or other equipment or property; provided, however,
that Landlord shall provide a dumpster or other similar convenient method
of storage of trash. Landlord reserves the right to designate "special
needs" parking spaces. The Landlord represents that the existing parking is
ample for employees of the Tenant and visitors to the Tenant's office.
7. Liability Insurance. The Tenant shall carry public liability insurance with
-------------------
limits of not less than $1,000,0001,000,000, and shall furnish evidence
thereof to the Landlord upon request. (The Tenant shall be solely
responsible for the purchase of insurance, if any, for business
interruption as well as insurance upon its tangible personal property
located on the premises against loss by fire and such other casualties as
are covered by a Standard New Hampshire Fire Insurance Policy with Extended
Coverage.) Insofar as is permitted under their respective policies of
insurance under standard waiver of subrogation clauses, the Landlord and
Tenant waive all rights against each other respectively for damages caused
by fire and other perils which are covered by insurance.
8. Common Areas. The Tenant shall have the right to use in conjunction with
------------
others all common areas and walkways inside and outside of the building;
provided, however, that all uses of such facilities shall be at the sole
risk and responsibility of the Tenant and the Tenant agrees to and hold the
Landlord harmless with regard to any and all damages,
<PAGE>
Page 4
claims, assessments, or other charges arising in connection with the use of
such common areas by the Tenant other than damage or injury caused by the
negligence of the Landlord, its agents or employees.
9. Quiet Enjoyment. On complying with the terms of this lease, the Tenant
---------------
shall and may peaceably and quietly have, hold and enjoy the leased
premises for the term of this lease.
10. Entry by Landlord. The Landlord may enter the leased premises for the
-----------------
purpose of maintaining and making repairs to the leased premises or the
building, provided that such repairs do not unreasonably interfere with the
Tenant's use of the leased premises, for the purposes of observing whether
the Tenant is complying with the terms, conditions and provisions of this
lease, and for any other reasonable purpose. Except in the case of
emergency, Landlord shall give reasonable notice (24 hours) to Tenant prior
to such entry.
11. Condition of the Premises. The Tenant acknowledges that it knows the
-------------------------
condition of the premises and that no representation as to the condition or
the repairs thereof has been made by the Landlord and that no repairs,
alterations or renovations are to be made by the Landlord except as herein
set forth. The premises shall be delivered to the Tenant "broom clean." The
Landlord warrants that there are no latent defects of which it has
knowledge. Landlord shall maintain the premises in good and safe condition,
including maintaining the premises in compliance with applicable
regulations by municipal, state and federal authorities from time to time.
12. Liens. The Tenant shall not suffer or permit any lien arising out of
-----
alterations, renovations or repairs made by it to be filed or perfected
against the leased premises of the building or the land on which they
stand.
13. Ownership of Fixtures and Improvements. Any trade fixtures and signs
--------------------------------------
erected or installed on the leased premises by the Tenant shall remain the
property of the Tenant and may be removed by the Tenant at the termination
of the Lease, if such removal can be effected without substantial damage to
the leased premises of the building. Tenant shall restore the premises to
their condition prior to the installation of such trade fixtures. All
improvements, renovations, and alterations to the leased premises and the
building shall be approved by the Landlord in writing prior to the
commencement of any work thereon, and such improvements, renovations and
alterations shall become the property of the Landlord when made.
All plans for signs shall be submitted in writing, drawn to scale, to the
Landlord, and all signs shall be made in a style to be approved by the
Landlord. It is the purpose of this paragraph to provide uniformity,
insofar as possible, in the decor and quality of the signs used at Chiron
Springs.
14. Waste Materials. The Tenant shall not permit any ashes or combustible waste
---------------
material to remain on the leased premises or in the building. The foregoing
notwithstanding, the Tenant shall not be permitted to maintain a wood stove
of any type on the premises.
<PAGE>
Page 5
15. Conduct of Business. The Tenant intends to use the premises for the conduct
-------------------
of a professional office. The Tenant shall not conduct on the leased
premises during the term of this lease or any extension or renewal thereof
any business substantially different from the proposed use set forth above,
without the written consent of the Landlord. The Tenant shall not use the
premises for the storage for sale of beer or wine or liquor or cooked or
uncooked food without the written consent of the Landlord. The Tenant shall
not make or allow any unlawful, improper or offensive use of the premises,
shall not do or permit anything to be done thereon contrary to the laws of
the United States of America, the laws of the State, or municipal rules or
ordinances. The Tenant shall not do any act or transact any business on the
leased premises by which the insurance thereon or on the building will be
restricted, canceled or adversely affected.
16. Damage by Other Tenants. The Tenant shall make no claim against the
-----------------------
Landlord for water or any other damage arising from the negligence of other
tenants of the Landlord. The Tenant shall indemnify and save the Landlord
harmless from any loss, cost or damage, including expenses of litigation
resulting from the negligence of the Tenant and its agents or servants; but
shall have no liability for damages resulting from negligence by the
Landlord or its agents.
17. Subletting and Assigning. The Tenant shall not lease, sublease, underlet or
------------------------
assign the leased premises or any part thereof, assign or transfer this
lease; or permit any other person, firm or corporation to occupy the leased
premises or any part thereof during the term hereof, without the written
permission of the Landlord which permission shall not be unreasonably
withheld. The foregoing notwithstanding, it is understood that, in the
event of a sublease with the approval of the Landlord, the Landlord shall
have no obligation to release the Tenant from its obligations under the
provisions of this lease prior to the end of the term hereof Further, the
Tenant shall have no right to assign its rights to extend this lease
without the prior written permission of the Landlord.
18. Fire or Other Casualty.
----------------------
A. If any part of the building suffers substantial damage by fire or
other casualty (that is, damage resulting in loss of in excess of 25%
of the value of the property) so that the leased premises become
untenable, and the Landlord in the exercise of reasonable judgment
determines that it is uneconomical to restore or repair the same,
either Landlord or Tenant may terminate this Lease by giving notice to
the other in writing.
B. If any part of the building otherwise suffers damage by fire or other
casualty, the Landlord shall expeditiously repair the damage and the
rent shall be proportionately abated during such time as all or a part
of the leased premises are untenable, provided, however, the Landlord
shall not be obligated to incur expenses for repairs beyond the amount
of the insurance proceeds payable on account of the loss.
<PAGE>
Page 6
C. Rent shall be abated proportionately according to the floor area of
the demised premises which is unable to be used by the Tenant after
such casualty. However, the Tenant reserves the option to terminate
this Lease by giving written notice to the Landlord if such damage
renders the leased premises unsuitable for Tenant's business.
19. Condemnation. If all or a substantial part of the premises are taken by
------------
condemnation or other process of law by the United States of America, the
State, or a political subdivision or agency thereof, this Lease and the
Tenant's obligation to pay rent shall terminate as of the day following the
date of taking without notice or other act of either party, and the
Landlord shall return any rent paid beyond the day following the date of
such taking. Nothing contained herein shall limit the right of the Landlord
or the Tenant to recover damages for such taking.
20. Surrender on Termination. The Tenant shall not make or suffer any waste
------------------------
upon the leased premises, and it shall peaceably quit and deliver up the
leased premises when required to do so under the terms of this Lease, in as
good order and condition, reasonable wear and tear and unavoidable
casualties excepted, as the same are now in or may be put into during the
term of this lease by the Landlord or the Tenant.
21. Holding Over. If the Tenant shall hold over after the expiration of the
------------
term hereof or any renewal or extension thereof, such holding over shall
not be deemed to be a renewal of this Lease, but the Tenant shall be
responsible for the payment of an amount equal to I 10% of all rents and
other charges in accordance with the terms of Paragraph I of this Lease.
22. Remedies for Breach or Default.
-------------------------------
A. Failure to Pay Rent. If the Tenant shall fail to pay the rent (which
-------------------
then shall include, without limitation thereto, all amounts termed
`additional rent') as it falls due and such failure be added a late
payment penalty of ten (10) percent of the amount due. Further, if
such failure shall continue for a period of fifteen (15) days, the
Tenant shall be deemed to have breached the Lease, and the Landlord
shall be entitled, upon ten (10) days notice of such breach and
failure to cure by the Tenant within such ten (10) day period, to its
remedies as hereinafter set forth.
B. Remedies. In case of the breach of this Lease by the Tenant, the
--------
Landlord may terminate this Lease by giving notice of termination in
writing to the Tenant, and upon delivery of such notice of termination
to the Tenant, the Landlord may enter upon the leased premises or any
part thereof in the name of the whole, and repossess the same as the
Landlord's former estate, and expel the Tenant and those claiming
through or under the Tenant and remove the effects of either or both
(forcibly if necessary) without being deemed guilty of any manner of
trespass and without prejudice to any remedies for arrears of rent or
preceding breach of condition or agreement, and without prejudice to
any remedies the Landlord may have to repossess itself of the leased
premises by process of law or to recover
<PAGE>
Page 7
damages of such breach or default, including the loss of future rents
and profits. The Tenant shall pay to the Landlord all of the
Landlord's cost, damages and expenses, including reasonable attorneys'
fees, occasioned by the Tenant's default or by the Tenant's failure to
surrender possession of the leased premises at such time as the
Landlord may lawfully demand possession thereof together with interest
at the rate of 13% per annum.
23. Waiver of Default. Any assent, express or implied, by the Landlord to any
-----------------
breach or default of any obligation or condition herein contained, or any
waiver, express or implied, by the Landlord of any such obligation or
condition, shall operate as such only in the specific instance and shall
not be construed as an assent or waiver of any such obligation or condition
generally or of any subsequent default thereof.
24. Lease Binding on Heirs, Etc. All of the obligations, conditions and
---------------------------
undertakings herein contained shall extend to and shall be binding upon the
legal representative, heirs, executors, administrators, successors and
assigns of the Landlord and Tenant and any other parties hereof.
25. Notices. All notices required or permitted to be given under this Lease
-------
shall be in writing and shall become effective when deposited in the United
States Mail, postage prepaid, certified mail, return receipt requested,
addressed to the Landlord or Tenant, as the case may be, at the following
addresses:
Landlord: Gordon E. Bagley, Jr.
Box 1157
Lebanon, New Hampshire 03766
Tenant: Vicinity Corporation
Attn: David Seltzer
1135A San Antonio Road
Palo Alto, CA 94303
In the alternative, such notices may be hand-delivered if the receipt of a
specified officer or agent of the party is obtained upon such hand
delivery. Until notification by the Tenant of a change therein, the
specified officer of the Tenant authorized to accept such notices shall be
David Seltzer. Until notification by the Landlord of a change therein, the
specified officer or agent of the Landlord shall be Gordon E, Bagley, Jr.
26. Governing Law. This Lease shall at all times be governed by the laws of
-------------
the State of New Hampshire.
27. Tenant's Remedies. Nothing contained herein shall be deemed to limit the
-----------------
Tenant's rights to all remedies available to the Tenant pursuant to the
law.
28. TIME SHALL BE DEEMED TO BE OF THE ESSENCE IN THIS AGREEMENT.
<PAGE>
Page 8
29. Improvement Rent Credit. As an inducement to enter into this lease,
-----------------------
Landlord has agreed to provide a $ 1,000 rent offset from the base rent for
the first twelve (12) months of the initial term. This offset is specific
to the installation of carpet and the re-painting of Suites 18 and 19.
Tenant shall provide Landlord with samples of both carpet and paint to be
used in Suites 18 and 19. Landlord's approval shall be required, but not
unreasonably withheld. In the event Tenant elects not to re-carpet or
re-paint within sixty (60) days of the execution of this lease, said offset
shall be deleted and Tenant shall commence payment of the full base rent
plus any offset taken.
We, the parties hereto, severally declare that this instrument contains the
entire agreement between the parties and that it is subject to no
understandings, conditions, or representations other than those expressly
stated.
WITNESS the hands and seals of the parties the day and year first above
written.
_____________________________ ________________________________________
Witness Gordon E. Bagley, Jr., LANDLORD (Date)
_____________________________ ________________________________________
Witness Blanche M. Bagley, LANDLORD (Date)
_____________________________ ________________________________________
Witness Vicinity Corporation, TENANT (Date)
By its duly authorized officer
<PAGE>
EXHIBIT A
<PAGE>
EXHIBIT B
1999 ESTIMATED OPERATING EXPENSE
FOR
CHIRON SPRINGS
Property Taxes $1.50/SF
Property Insurance .25/SF
Snow/Lawn/Parking Lot .50/SF
Common Area Electricity .10/SF
Miscellaneous Supplies .10/SF
Total* $2.45/SF
*Does not include any pro-rata share of utilities in applicable office suites.
<PAGE>
Exhibit 23.1
The Board of Directors
Vicinity Corporation:
We consent to the use of our report dated September 22, 1999 except as to Note
11 for which the date is November 2, 1999, relating to the balance sheets of
Vicinity Corporation as of July 31, 1998 and 1999, and the related statements
of operations, redeemable convertible preferred stock and stockholders'
deficit, and cash flows for each of the years in the three-year period ended
July 31, 1999 and our report dated September 22, 1999 on the related financial
statement schedule which reports are included herein, and to the reference to
our firm under the heading "Experts" in the prospectus.
KPMG LLP
Mountain View, California
November 3, 1999
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<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> JUL-31-1999
<CASH> 9,060,393
<SECURITIES> 0
<RECEIVABLES> 2,927,372
<ALLOWANCES> 80,000
<INVENTORY> 0
<CURRENT-ASSETS> 12,290,760
<PP&E> 1,115,421
<DEPRECIATION> 202,932
<TOTAL-ASSETS> 13,203,249
<CURRENT-LIABILITIES> 8,070,947
<BONDS> 0
21,403,089
0
<COMMON> 5,289
<OTHER-SE> (16,574,085)
<TOTAL-LIABILITY-AND-EQUITY> 13,203,249
<SALES> 0
<TOTAL-REVENUES> 6,423,651
<CGS> 3,949,081
<TOTAL-COSTS> 3,949,081
<OTHER-EXPENSES> 7,858,808
<LOSS-PROVISION> 80,000
<INTEREST-EXPENSE> 50,425
<INCOME-PRETAX> (5,514,663)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,514,663)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,552,893)
<EPS-BASIC> (1.61)
<EPS-DILUTED> (1.61)
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