<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1998
REGISTRATION NO. 333-56659
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
GEOCITIES
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
DELAWARE 7310 95-4515867
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
INCORPORATION OR CODE NUMBER)
ORGANIZATION)
---------------
1918 MAIN STREET, SUITE 300
SANTA MONICA, CALIFORNIA 90405
(310) 664-6500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
STEPHEN L. HANSEN
CHIEF OPERATING OFFICER AND CHIEF FINANCIAL OFFICER
GEOCITIES
1918 MAIN STREET, SUITE 300
SANTA MONICA, CALIFORNIA 90405
(310) 664-6500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
RICHARD A. FINK, ESQ. DONALD M. KELLER, JR., ESQ.
GREG T. WILLIAMS, ESQ. JEFFREY Y. SUTO, ESQ.
NEEL A. GROVER, ESQ. DAVID R. YOUNG, ESQ.
BROBECK, PHLEGER & HARRISON LLP DAVID T. SOBOTA, ESQ.
38 TECHNOLOGY DRIVE VENTURE LAW GROUP
IRVINE, CALIFORNIA 92618 A PROFESSIONAL CORPORATION
(949) 790-6300 2775 SAND HILL ROAD
MENLO PARK, CALIFORNIA 94025
(650) 854-4488
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes 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 delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
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.
===============================================================================
<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
underwriting discounts and commissions, payable in connection with the sale
and distribution of the securities being registered. All amounts are estimated
except the Securities and Exchange Commission and NASD fees. All of the
expenses below will be paid by the Company.
<TABLE>
<CAPTION>
ITEM
----
<S> <C>
Registration fee................................................. $21,373
NASD filing fee.................................................. 7,745
Nasdaq National Market listing fee............................... *
Blue sky fees and expenses....................................... *
Printing and engraving expenses.................................. *
Legal fees and expenses.......................................... *
Accounting fees and expenses..................................... *
Transfer Agent and Registrar fees................................ *
Miscellaneous.................................................... *
-------
Total........................................................ $ *
=======
</TABLE>
--------
* To be filed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation (the "Certificate") provides
that, except to the extent prohibited by the Delaware General Corporation Law
(the "DGCL"), the Company's directors shall not be personally liable to the
Company or its stockholders for monetary damages for any breach of fiduciary
duty as directors of the Company. Under the DGCL, the directors have a
fiduciary duty to the Company 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 Company, 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 DGCL. This provision also does not affect the directors'
responsibilities under any other laws, such as the Federal securities laws or
state or Federal environmental laws. The Company has obtained 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 personal liability of directors to the fullest
extent permitted by Section 102(b)(7) of the DGCL and provides that the
Company shall 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,
II-1
<PAGE>
criminal, administrative or investigative) by reason of the fact that such
person is or was a director or officer of the Company, or is or was serving at
the request of the Company 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.
The Company, with the approval of the Board of Directors, intends to obtain
directors' and officers' liability insurance prior to the effectiveness of
this offering.
There is no pending litigation or proceeding involving any director,
officer, employee or agent of the Company in which indemnification will be
required or permitted. Moreover, the Company is not aware of any threatened
litigation or proceeding that might result in a claim for such
indemnification. The Company believes that the foregoing indemnification
provisions and agreements are necessary to attract and retain qualified
persons as directors and executive officers.
The Underwriting Agreement (the form of which is filed as Exhibit 1.1
hereto) provides for indemnification by the Underwriters of the Company and
its officers and directors, and by the Company of the Underwriters, for
certain liabilities arising under the Securities Act or otherwise.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The following is a summary of transactions by the Company since January 1,
1995 involving sales of the Company's securities that were not registered
under the Securities Act:
(1) In January 1995, the Company issued and sold an aggregate of
3,679,650 shares of Common Stock to David C. Bohnett at a price per share
of $0.0134.
(2) In December 1995, the Company issued for services rendered an
aggregate of 39,000 shares of Common Stock to certain individuals at a
price per share of $0.214.
(3) In January 1996, the Company issued and sold an aggregate of
2,331,000 shares of Series A Preferred Stock to CMG@Ventures at a price per
share of $0.429. Each share of Series A Preferred Stock will convert into
one share of Common Stock upon consummation of the offering.
(4) In December 1995, the Company issued 900,000 shares of Series C
Preferred Stock in consideration for $0.8567 per share in the form of the
cancellation of shares of Common Stock and a note payable. Each share of
Series C Preferred Stock will convert into one share of Common Stock upon
consummation of the offering.
(5) In July 1996, the Company issued and sold an aggregate of 2,175,000
shares of Series B Preferred Stock to CMG@Ventures at a price per share of
$0.5057. Each share of Series B Preferred Stock will convert into one share
of Common Stock upon consummation of the offering.
(6) In January 1997, the Company issued a warrant to purchase 48,729
shares of Series D Preferred Stock at a price per share of $1.18 to
Cupertino Bank, of which 42,919 shares of Series D Preferred Stock were
subsequently issued. Each share of Series D Preferred Stock will convert
into one share of Common Stock upon consummation of the offering.
(7) In January 1997 and February 1997, the Company issued and sold an
aggregate of 7,627,119 shares of Series D Preferred Stock to CMG@Ventures,
SOFTBANK Holdings Inc., Chase Venture Capital Associates, L.P., the
Flatiron Fund LLC, InnoCal, L.P. and Intel Corporation at a price per share
of $1.18. Each share of Series D Preferred Stock will convert into one
share of Common Stock upon consummation of the offering.
(8) In September 1997, the Company issued a warrant to purchase 15,228
shares of Common Stock at a price per share of $6.57 (subsequently adjusted
to $6.17) to Comerica Bank-California.
II-2
<PAGE>
(9) In October 1997, the Company issued and sold an aggregate of
1,071,423 shares of Series E Preferred Stock to CMG@Ventures II, LLC,
SOFTBANK Holdings Inc., Chase Venture Capital Associates, L.P., the
Flatiron Fund LLC, InnoCal, L.P. and Intel Corporation at a price per share
of $4.67. Each share of Series E Preferred Stock will convert into one
share of Common Stock upon consummation of the offering.
(10) In December 1997, the Company issued and sold an aggregate of
610,702 shares of Series E Preferred Stock to SOFTBANK Holdings Inc. at a
price per share of $9.90. Each share of Series E Preferred Stock will
convert into one share of Common Stock upon consummation of the offering.
(11) Effective December 1997, the Company sold an aggregate of 1,914,432
shares of Series F Preferred Stock to Yahoo! Inc. and SOFTBANK Holdings
Inc. at a price per share of $9.90. Each share of Series F Preferred Stock
will convert into one share of Common Stock upon consummation of the
offering.
(12) Since January 1, 1995, the Company has issued incentive stock
options and nonqualified stock options to purchase Common Stock under
individual stock option agreements, the Predecessor Plan and its 1998
Incentive Plan to eligible officers, directors, consultants and employees
of the Company as described in the Prospectus. During the period referred
to above, the Company issued 620,437 shares of Common Stock pursuant to the
exercise of options, including options under each Plan.
(13) In connection with the reincorporation of the Company from
California to Delaware in June 1998, the Company intends to issue
shares of its Common Stock and , , , , , and
shares of its Series A, B, C, D, E and F Preferred Stock, respectively, in
exchange for the issued and outstanding capital stock of its predecessor
corporation. In addition, in connection with such reincorporation, all
options and warrants to purchase shares of Common Stock of the Company's
California predecessor will be converted into options or warrants to
purchase shares of Common Stock of the Company.
None of the foregoing transactions involved any public offering, and the
Company believes that each transaction was exempt from the registration
requirements of the Securities Act by virtue of Section 4(2) thereof,
Regulation D promulgated thereunder or Rule 701 pursuant to compensatory
benefit plans and contracts relating to compensation as provided under such
Rule 701, or with respect to paragraph (13) above, in reliance on Rule
145(a)(2) under the Securities Act. The recipients in each such transaction
represented their intention 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 share certificates and instruments
issued in such transactions. All recipients had adequate access, through their
relationships with the Company, to information about the Company.
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
The following Exhibits are attached hereto and incorporated herein by
reference:
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation.*
3.2 Amended and Restated Certificate of Incorporation of the Company.*
3.3 Amended and Restated Certificate of Incorporation of the Company to be
adopted as of the consummation of the offering.*
3.4 Bylaws of the Company.*
3.5 Amended and Restated Bylaws of the Company.*
4.1 Specimen certificate representing shares of Common Stock of the
Company.*
4.2 Warrant to purchase Common Stock of the Company dated September 22,
1997.*
5.1 Opinion of Brobeck, Phleger & Harrison LLP.*
10.1 Employment Agreement dated January 1, 1996, as amended, by and between
the Company and David C. Bohnett.*
10.2 Employment Agreement dated as of November 3, 1997, between the Company
and Stephen L. Hansen.*
10.3 Employment Offer Letter dated as of April 9, 1998, between the Company
and Thomas R. Evans.*
10.4 Employment Offer letter dated as of September 5, 1997, between the
Company and Michael G. Barrett.*
10.5 Advertising Agreement dated November 5, 1997, between the Company and
Amazon.com.+
10.6 Advertising Agreement dated January 5, 1998, between the Company and
CDnow.+
10.7 Advertising Agreement dated December 15, 1997, between the Company and
Egghead, Inc.+
10.8 Advertising Agreement dated February 13, 1998, between the Company and
First Credit Card Services USA L.L.C.+
10.9 Codistribution Agreement effective as of December 31, 1997, between
the Company and Yahoo! Inc.+
10.10 Master Services Agreement dated November 7, 1997, between the Company
and Exodus Communications, Inc.+
10.11 Joint Venture Agreement dated as of November 6, 1997, by and between
the Company and SOFTBANK Corporation.+
10.12 Third Amended and Restated Rights Agreement dated December 31, 1997,
among the Company and certain of its stockholders, as amended.*
10.13 Form of Indemnification Agreement for Officers and Directors of the
Company.*
10.14 1997 Stock Incentive Plan, together with Form of Stock Option
Agreement (and related Notice of Grant of Option) and Stock Purchase
Agreement.*
10.15 1998 Stock Option Plan, together with Form of Stock Option Agreement
(and related Notice of Grant of Option) and Stock Purchase Agreement.*
10.16 1998 Employee Stock Purchase Plan.*
10.17 Stock Option Agreement dated January 13, 1997 by and between the
Company and CMG@Ventures.*
10.18 Form of non-plan Stock Option Agreement.*
10.19 Revolving Credit Loan & Security Agreement dated August 6, 1997, as
modified.*
10.20 License Agreement with GeoCities Japan dated November 6, 1997.*
10.21 Promissory Note dated April 9, 1998.*
10.22 Preferred Stock Purchase Agreement dated as of January 10, 1997.*
10.23 Preferred Stock Purchase Agreement dated as of October 6, 1997.*
10.24 Stock Purchase Agreement dated as of December 31, 1997.*
10.25 Standard Office lease dated May 13, 1996 by and between the Company
and Maury Herman, as trustee of the Maury Herman Family Trust #1.*
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C>
11.1 Statement Regarding Computation of Earnings per Share.*
16.1 Letter from Arthur Andersen LLP dated June 5, 1998.**
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.*
23.2 Consent of Brobeck, Phleger & Harrison LLP (contained in Exhibit 5.1).*
24.1 Power of Attorney (contained on signature page on page II-6).**
27.1 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
(B) FINANCIAL STATEMENT SCHEDULES
All such Schedules have been omitted because the information required to
be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
The Company hereby undertakes to provide to the Underwriters at the closing
specified in the Underwriting Agreements certificates in such denominations
and registered in such names as required by the Underwriters 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
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company will, unless in
the opinion of its 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
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus as filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act 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 the 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 Company has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Santa
Monica, State of California, on the 30th day of June, 1998.
GeoCities
/s/ Stephen L. Hansen
By: _________________________________
STEPHEN L. HANSEN CHIEF OPERATING
OFFICER AND CHIEF FINANCIAL
OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT ON FORM S-1 HAS BEEN SIGNED BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE
Chairman of the
* Board and Secretary June 30, 1998
- -------------------------------------
DAVID C. BOHNETT
Chief Executive
* Officer, President June 30, 1998
- ------------------------------------- and Director
THOMAS R. EVANS (principal
executive officer)
/s/ Stephen L. Hansen Chief Operating
- ------------------------------------- Officer and Chief June 30, 1998
STEPHEN L. HANSEN Financial Officer
(principal
financial and
accounting officer)
Director
* June 30, 1998
- -------------------------------------
JERRY D. COLONNA
Director
* June 30, 1998
- -------------------------------------
ERIC C. HIPPEAU
Director
* June 30, 1998
- -------------------------------------
HARRY D. LAMBERT
Director
* June 30, 1998
- -------------------------------------
PETER H. MILLS
Director
* June 30, 1998
- -------------------------------------
DAVID S. WETHERELL
/s/ Stephen L. Hansen
*By: _____________________
Stephen L. Hansen
(Attorney-in-fact)
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
------- -------------------- ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation.*
3.2 Amended and Restated Certificate of Incorporation of
the Company.*
3.3 Amended and Restated Certificate of Incorporation of
the Company to be adopted as of the consummation of the
offering.*
3.4 Bylaws of the Company.*
3.5 Amended and Restated Bylaws of the Company.*
4.1 Specimen certificate representing shares of Common
Stock of the Company.*
4.2 Warrant to purchase Common Stock of the Company dated
September 22, 1997.*
5.1 Opinion of Brobeck, Phleger & Harrison LLP.*
10.1 Employment Agreement dated January 1, 1996, as amended,
by and between the Company and David C. Bohnett.*
10.2 Employment Agreement dated as of November 3, 1997,
between the Company and Stephen L. Hansen.*
10.3 Employment Offer Letter dated as of April 9, 1998,
between the Company and Thomas R. Evans.*
10.4 Employment Offer letter dated as of September 5, 1997,
between the Company and Michael G. Barrett.*
10.5 Advertising Agreement dated November 5, 1997, between
the Company and Amazon.com.+
10.6 Advertising Agreement dated January 5, 1998, between
the Company and CDnow.+
10.7 Advertising Agreement dated December 15, 1997, between
the Company and Egghead, Inc.+
10.8 Advertising Agreement dated February 13, 1998, between
the Company and First Credit Card Services USA L.L.C.+
10.9 Codistribution Agreement effective as of December 31,
1997, between the Company and Yahoo! Inc.+
10.10 Master Services Agreement dated November 7, 1997,
between the Company and Exodus Communications, Inc.+
10.11 Joint Venture Agreement dated as of November 6, 1997,
by and between the Company and SOFTBANK Corporation.+
10.12 Third Amended and Restated Rights Agreement dated
December 31, 1997, among the Company and certain of its
stockholders, as amended.*
10.13 Form of Indemnification Agreement for Officers and
Directors of the Company.*
10.14 1997 Stock Incentive Plan, together with Form of Stock
Option Agreement (and related Notice of Grant of
Option) and Stock Purchase Agreement.*
10.15 1998 Stock Option Plan, together with Form of Stock
Option Agreement (and related Notice of Grant of
Option) and Stock Purchase Agreement.*
10.16 1998 Employee Stock Purchase Plan.*
10.17 Stock Option Agreement dated January 13, 1997 by and
between the Company and CMG@Ventures.*
10.18 Form of non-plan Stock Option Agreement.*
10.19 Revolving Credit Loan & Security Agreement dated August
6, 1997, as modified.*
10.20 License Agreement with GeoCities Japan dated November
6, 1997.*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
------- -------------------- ------------
<C> <S> <C>
10.21 Promissory Note dated April 9, 1998.*
10.22 Preferred Stock Purchase Agreement dated as of January
10, 1997.*
10.23 Preferred Stock Purchase Agreement dated as of October
6, 1997.*
10.24 Stock Purchase Agreement dated as of December 31,
1997.*
10.25 Standard Office lease dated May 13, 1996 by and between
the Company and Maury Herman, as trustee of the Maury
Herman Family Trust #1.*
11.1 Statement Regarding Computation of Earnings per Share.*
16.1 Letter from Arthur Andersen LLP dated June 5, 1998.**
23.1 Consent of Coopers & Lybrand L.L.P., Independent
Accountants.*
23.2 Consent of Brobeck, Phleger & Harrison LLP (contained
in Exhibit 5.1).*
24.1 Power of Attorney (contained on signature page on page
II-6).**
27.1 Financial Data Schedule.
</TABLE>
- --------
*To be filed by amendment.
** Previously filed.
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
<PAGE>
Exhibit 10.5
ADVERTISING AGREEMENT
This Advertising Agreement (this "Agreement"), dated as of November 5,
1997, is made between Amazon.com, Inc., a Delaware corporation ("Amazon.com"),
and GeoCities, a California corporation ("GeoCities"). Amazon.com and
GeoCities sometimes are referred to collectively as the "Parties" and
individually as a "Party". In consideration of the mutual promises contained
in this Agreement, Amazon.com and GeoCities hereby agree as follows:
SECTION 1. DEFINITIONS
The following terms (and all conjugations and declensions thereof) are used
in this Agreement with the respective meanings set forth below:
1.1. "ABOVE-THE-FOLD" means situated within the portion of a page that is
designed to be visible on a standard computer screen with a resolution of 640
pixels by 480 pixels without requiring the user to scroll horizontally or
vertically through the page.
1.2. "AFFILIATE" means, with respect to either Party, any individual or
entity that directly or indirectly controls, is controlled by or is under common
control with that Party. As used in this definition, "control" means either (a)
the ownership of greater than 50% of an entity's voting securities, or (b) the
ability, through contract or otherwise, to determine an entity's operating
activities. For the purposes of clarification, the parties acknowledge that
GeoCities Japan is not an Affiliate of GeoCities.
1.3. "AMAZON.COM SITE" means, collectively, all points of presence and/or
services maintained by Amazon.com or its Affiliates on the Internet or on any
other public data network.
1.4. "ASSOCIATE" means any World Wide Web site that registers and is
accepted as a participant in Amazon.com's Associates Program.
1.5. "COMMENCEMENT DATE" means the date GeoCities first provides
Amazon.com with all links, advertisements and other promotional placements
contained in "Phase 1 ," as more particularly described in Exhibit B to this
Agreement.
1.6. "COMPETITOR" means (a) any of the entities listed on Exhibit A, or
(b) any individual, corporation, corporate division, World Wide Web site or
other entity that either derives more than [***] of its annual gross revenues
from the sale of books or magazines, or is primarily known as a seller of books
or magazines.
1.7. "EXCLUSIVE AREAS" means the portions of the GeoCities Site that will
subject to the exclusivity provisions of Section 7, as more particularly
described in Exhibit C to this Agreement.
1.8. "GEOCITIES SITE" means, collectively, (a) the World Wide Web site
currently located at the URL www.geocities.com (and all successors or
replacements thereto, regardless of network or URL), and (b) all other points of
presence and/or services maintained by or on behalf
[***] Confidential treatment requested for redacted portion.
<PAGE>
of GeoCities or its Affiliates on the Internet or on any other public data
network; provided, however, that "GeoCities Site" does not include any
Homesteader Page or GeoShop Page. Clauses (a) and (b) above will not include any
personal home page community that is co-branded or jointly developed by
GeoCities (or its Affiliates) and any third party to the extent that the
characterization of such community as part of the GeoCities Site would conflict
with or would violate either (i) any agreement between GeoCities and the
relevant third party dated prior to or concurrent with the establishment of the
community, or (ii) any agreement between the third party and any other person or
entity dated prior to or concurrent with the establishment of the community.
GeoCities will provide Amazon.com with reasonable documentary evidence
supporting the exclusion of any personal home page community from the GeoCities
Site pursuant to the preceding sentence.
1.9. "GEOSHOP PAGE" means any commercial home page established by an
individual or entity (other than GeoCities or its Affiliates) pursuant to
GeoCities GeoShop program that resides within a "member neighborhood" on the
GeoCities Site.
1.10. "HOMESTEADER PAGE" means any personal home page established by an
individual or entity (other than GeoCities or its Affiliates) pursuant to the
GeoCities Homesteader program that resides within a "member neighborhood" on the
GeoCities Site.
1.11. "INTERNATIONAL SERVICE" means any Internet or network-based service
that (a) is operated by an individual or entity other than a GeoCities
Affiliate, (b) is hosted on computer servers located outside of the United
States, (c) is substantially similar to all or any services offered via the
GeoCities Site, and (d) is operated either in conjunction with a GeoCities trade
name, trademark, service mark or other proprietary mark, or with material
assistance from GeoCities or its Affiliates.
1.12. "PAGE VIEW" means each instance in which (a) an individual user
requests that a discrete Web page contained within the GeoCities Site be
transmitted to the user's computer, and (b) a GeoCities Site server actually
transmits the page to the user's computer.
1.13. "QUALIFYING REVENUES" means, with respect to any payment period, (a)
the aggregate gross revenues (excluding taxes, gift-wrapping and shipping and
handling charges) derived by Amazon.com from product sales that occur during
Sessions, less (b) any revenues attributable to returned products, if such
revenues previously were included in "Qualifying Revenues."
1.14. "SESSION" means each instance in which a user accesses the Amazon.com
Site via a hypertext link embedded in any link, advertisement or other
promotional placement provided by GeoCities under this Agreement, and then views
one or more consecutive Amazon.com Site pages. A Session terminates when the
user exits the Amazon.com Site by any means.
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SECTION 2. PROMOTIONAL PLACEMENTS
GeoCities will provide the advertisements and promotions specified in
Exhibit 8, in accordance with the provisions contained in that Exhibit.
SECTION 3. PROMOTION OF ASSOCIATES PROGRAM
GeoCities will implement a program through which GeoCities will encourage
its members with Homesteader Pages to become active members of Amazon.com's
Associates Program. The Parties will cooperate in the development of such
promotional program, with the goal of launching the program during first
quarter, 1998.
SECTION 4. COMPENSATION
4.1. As full consideration for GeoCities' performance under this
Agreement (including, without limitation, GeoCities' provision of all links,
advertisements and promotions specified in Sections 2 and 3), Amazon.com will
pay GeoCities the fixed placement fees, variable incentive payments and new
Associate bounties specified in this Section 4.
4.2. During the initial term of this Agreement, Amazon.com will pay
GeoCities (a) a fixed development fee of $[***], and (b) fixed placement fees of
$[***]for each [***] that occurs subsequent to the Commencement Date.
4.3. During the term of this Agreement (including any renewal term), for
each [***] that occurs subsequent to the Commencement Date, Amazon.com will pay
GeoCities the applicable percentage(s) of Qualifying Revenues set forth below:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
CUMULATIVE QUALIFIED REVENUES [***] REVENUE SHARE
PERCENTAGE
- -------------------------------------------------------------------------------
<S> <C>
[***] [***]
- -------------------------------------------------------------------------------
[***] [***]
- -------------------------------------------------------------------------------
[***] [***]
- -------------------------------------------------------------------------------
[***] [***]
- -------------------------------------------------------------------------------
</TABLE>
4.4. For each Homesteader Page that becomes an Associate during the term
of this Agreement and, during the [***] following the Homesteader Page's
becoming an Associate is responsible for at least $[***] in referred product
sales (as calculated pursuant to the rules of the Associates Program),
Amazon.com will pay GeoCities a bounty of $[***]. Notwithstanding the foregoing,
Amazon.com will not be obligated to pay any bounties with respect to Homesteader
Pages that joined the Associates Program prior to the Commencement Date. This
provision will
[***] Confidential treatment requested for redacted portion.
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survive the expiration or termination of this Agreement with respect to those
Homesteader Pages that became Associates within twelve (12) months prior to such
expiration or termination.
4.5. Amazon.com will pay the fixed development fee promptly following the
execution of this Agreement. Amazon.com will make all other payments under this
Section 4 on a [***] basis, in arrears. Specifically, within 30 days following
the end of each [***] occurring subsequent to the Commencement Date, Amazon.com
will pay GeoCities an amount equal to the fixed placement fee payable under
Section 4.2, plus the revenue share that accrued during the period under Section
4.3, plus any new Associate bounties that accrued during the period under
Section 4.4. At GeoCities' option, GeoCities may submit invoices for the fees
specified in Section 4.2(b) at the beginning of each three-month payment period.
4.6. Amazon.com will deliver, together with each payment made pursuant to
Section 4.5, a written report signed by an authorized representative of
Amazon.com that describes (in reasonable detail) Amazon.com's calculation of the
payment amount.
4.7. GeoCities acknowledges that Amazon.com must implement certain
improvements to its accounting software to accurately track Qualified Revenues.
Amazon.com will use commercially reasonable efforts to implement such
improvements, with the goal of completing the implementation within ninety (90)
days following the date of this Agreement. Until such implementation is
complete, Amazon.com will estimate Qualifying Revenues in good faith, in
accordance with a written methodology to be provided to GeoCities.
SECTION 5. IMPLEMENTATION
5.1. GeoCities and Amazon.com acknowledge that time is of the essence in
the design, development and commencement of the links, advertisements and
promotional placements specified in this Agreement. Accordingly, the Parties
will devote all commercially reasonable efforts to launch each link,
advertisement and promotional placement as soon as reasonably possible, in
accordance with a written development plan to be negotiated by the Parties in
good faith.
5.2. GeoCities, in cooperation with Amazon.com, will test the links,
advertisements and promotional placements required under the Agreement prior to
time that they "go live" on the GeoCities Site (e.g., prior to the time that
they are implemented and enabled on a production version of the GeoCities Site).
5.3. GeoCities will not cause any link, advertisement or promotional
placement under the Agreement to go live on the GeoCities Site prior to the
applicable date agreed by the Parties. Further, at Amazon.com's discretion,
traffic from promotional links and advertising placements will be enabled in
stages; provided, however, that such staging will not delay the Commencement
Date.
[***] Confidential treatment requested for redacted portion.
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SECTION 6. TRAFFIC DATA
On a monthly basis, GeoCities will provide Amazon.com with mutually agreed
data concerning search and browsing behavior on the GeoCities Site, to the
extent such behavior reasonably could relate to the online promotion or sale of
books, magazines or other products that Amazon.com may sell from time to time.
Amazon.com will hold such data in confidence and will use it only in accordance
with reasonable guidelines to- be agreed by the Parties. Notwithstanding
anything contained in this Section, GeoCities will not be required to deliver to
Amazon.com any user data in violation of its then-existing policies regarding
the protection of user information.
SECTION 7. EXCLUSIVITY AND OTHER RIGHTS
7.1. [***]
7.2. Nothing in Section 7.1 will prevent GeoCities from directly selling
a limited number of books through its own store on the GeoCities Site, provided
that GeoCities does not offer to sell more than [***] book titles at any time.
Further, nothing in Section 7.1 will prevent the owner or operator of any
GeoShop Page from selling or promoting books or magazines on its GeoShop Page,
provided that (a) GeoCities first makes a commercially reasonable attempt to
persuade the owner or operator to become an Amazon.com Associate, and (b) the
owner's or operator's gross revenues attributable to the sale or distribution of
books and magazines during the twelve-month period prior to the launch of its
GeoShop Page did not exceed $250,000. At Amazon.com's request, GeoCities will
provide Amazon.com with reasonable documentation demonstrating its continuing
compliance with the preceding sentence.
7.3. If Amazon.com enters into any other product category other than the
sale of books or magazines, GeoCities will offer Amazon.com the opportunity to
participate in good-faith negotiations regarding extending the scope of this
Agreement to include the new category (subject to GeoCities' then-existing
contractual commitments).
7.4. GeoCities will introduce Amazon.com's principal executives to the
principal executives of each International Service. At Amazon.com's request,
GeoCities will use commercially reasonable efforts to facilitate discussions
between such principal executives regarding transactions involving any links,
advertisements, promotional placements or promotional activities that are
similar in nature to those provided under this Agreement.
[***] Confidential treatment requested for redacted portion.
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SECTION 8. INDEMNIFICATION
8.1. Amazon.com will defend and indemnify GeoCities and its Affiliates
(and their respective employees, directors and representatives) against any
claim or action brought by a third party, to the extent relating to (a) the
operation of the Amazon.com Site, or (b) the violation of third-party
intellectual property rights by any editorial content or other materials
provided by Amazon.com for display on the GeoCities Site. Subject to GeoCities'
compliance with the procedures described in Section 8.3, Amazon.com will pay any
award against GeoCities or its Affiliates (or their respective employees,
directors or representatives) and any costs and attorneys' fees reasonably
incurred by GeoCities and its Affiliates resulting from any such claim or
action.
8.2. GeoCities will defend and indemnify Amazon.com and its Affiliates
(and their respective employees, directors and representatives) against any
claim or action brought by a third party, to the extent relating to (a) the
operation of the GeoCities, or (b) the violation of third-party intellectual
property rights by any materials provided by GeoCities for display on the
Amazon.com Site. Subject to Amazon.com's compliance with the procedures
described in Section 8.3, GeoCities will pay any award against Amazon.com or its
Affiliates (or their respective employees, directors or representatives) and any
costs and attorneys' fees reasonably incurred by Amazon.com and its Affiliates
resulting from any such claim or action.
8.3. In connection with any claim or action described in this Section, the
Party seeking indemnification (a) will give the indemnifying Party prompt
written notice of the claim, (b) will cooperate with the indemnifying Party (at
the indemnifying party's expense) in connection with the defense and settlement
of the claim, and (c) will permit the indemnifying Party to control the defense
and settlement of the claim, provided that the indemnifying Party may not settle
the claim without the indemnified Party's prior written consent (which will not
be unreasonably withheld). Further, the indemnified party (at its cost) may
participate in the defense and settlement of the claim.
SECTION 9. INTELLECTUAL PROPERTY RIGHTS
9.1. Subject to the limited license granted to GeoCities under section
9.2, Amazon.com reserves all of its right, title and interest in its
intellectual property rights (e.g., patents, copyrights, trade secrets,
trademarks and other intellectual property rights). Subject to the limited
license granted to Amazon.com under Section 9.3, GeoCities reserves all of its
right, title and interest in intellectual property rights. Neither Party grants
any license to the other except as specifically set forth in this Section 9.
9.2. Amazon.com hereby grants to GeoCities, during the term of this
Agreement, a non-exclusive, non-transferable license to use Amazon.com's trade
names, trademarks, service names and similar proprietary marks as is reasonably
necessary to perform its obligations under this Agreement; provided, however,
that any promotional materials containing Amazon.com's proprietary marks will be
subject to Amazon.com's prior written approval.
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9.3. GeoCities hereby grants to Amazon.com, during the term of this
Agreement, a non-exclusive, non-transferable license to use GeoCities' trade
names, trademarks, service names and similar proprietary marks as is reasonably
necessary to perform its obligations under this Agreement; provided, however,
that any promotional materials containing GeoCities' proprietary marks will be
subject to GeoCities' prior written approval.
9.4. Neither GeoCities nor Amazon.com will use the other Party's
proprietary marks in a manner that disparages the other Party or its products or
services, or portrays the other Party or its products or services in a false,
competitively adverse or poor light. Each of GeoCities and Amazon.com will
comply with the other Party's requests as to the use of the other Party's
proprietary marks and will avoid any action that diminishes the value of such
marks. Either Party's unauthorized use of the other's proprietary marks is
strictly prohibited.
SECTION 10.TERM AND TERMINATION
10.1. The term of this Agreement will begin on the date of this Agreement
and, unless terminated or renewed in accordance with this Section 10, will end
[***] following the Commencement Date.
10.2. Either GeoCities or Amazon.com may terminate this Agreement if the
other party (a) materially breaches this Agreement and does not cure the breach
within thirty (30) days following its receipt of written notice from the non-
breaching party, or (b) ceases to carry on the portion of its business that
relates to this Agreement.
10.3. Prior to consummating or concurrently with the consummation of any
merger, acquisition, transfer of control, sale of substantial assets or similar
transaction with any third party, GeoCities will obtain the third party's
written agreement to be bound by all terms and conditions of this Agreement. At
any time following the closing of any such transaction, Amazon.com may terminate
this Agreement without liability by giving written notice to GeoCities if (a)
the third party is a non-Competitor, and Amazon.com reasonably determines that
such transaction has resulted in a material reduction of the benefits of this
Agreement to Amazon.com, or (b) the third party is a Competitor.
10.4. Sections 4.4 (to the extent specified therein), 8, 11, 12, and 13
(together with all other provisions that reasonably may be interpreted as
surviving termination or expiration of this Agreement) will survive the
termination or expiration of this Agreement.
10.5. Amazon.com will have an option to renew the term of this Agreement
for a single [***] renewal term by giving GeoCities written notice, at least
thirty (30) days prior to the expiration of the initial term, indicating
Amazon.com's exercise of its option to renew the term of this Agreement. During
any such renewal term, all terms and conditions of this Agreement will remain in
full force and effect, except that the fixed development and placement fees
payable pursuant to Section 4.2 will be increased by a multiple equal to [***].
[***] the Parties will equitability adjust the fixed fees payable during the
renewal period to reflect such reduction in [***] traffic.
[***] Confidential treatment requested for redacted portion.
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SECTION 11. DISPUTE RESOLUTION
11.1. In all discussions and activities relating to tiffs Agreement,
Amazon.com and GeoCities will cooperate in good faith to accomplish the
objectives specified in this Agreement. If any dispute arises relating to either
Party's rights or obligations under this Agreement, and the Parties are unable
to resolve the dispute in the ordinary course of business, Amazon.com and
GeoCities will use good-faith efforts to resolve the matter in accordance with
this Section 11.
11.2. Within five (5) days following the written request of either Party
(which will describe the nature of the dispute and other relevant information),
the Parties' managers who are responsible for the Amazon.com. GeoCities
relationship will meet to resolve the dispute at a mutually convenient time and
place. If the relationship managers are unable to resolve the dispute within two
(2) days following their initial meeting, they will refer the matter to the
Parties' divisional executives who are responsible for the administration of
this Agreement, along with a written statement (or statements) describing the
nature of the dispute and other relevant information.
11.3. Within five (5) days following the referral of the matter to the
Parties' divisional executives, the divisional executives will meet to resolve
the dispute at a mutually convenient time and place. Additional representatives
of the parties may be present at the meeting. If the divisional executives are
unable to resolve the dispute within two (2) days following their initial
meeting, they will refer the matter to the Parties' Chief Executive Officers,
along with a written statement (or statements) describing the nature of the
dispute and other relevant information.
11.4. Within five (5) days following the referral of the matter to the
Parties' CEOs, the CEOs will meet to resolve the dispute at a mutually
convenient time and place. Additional representatives of the parties may be
present at the meeting. If the CEOs are unable to resolve the dispute within two
(2) days following their initial meeting (or such later date as they may agree),
the Parties will be free to pursue whatever remedies may be available at law or
in equity.
11.5. All negotiations pursuant to this Section 11 will be confidential
and treated as compromise and settlement negotiations for purposes of applicable
rules of evidence. Any resolution reached under this Section will be reduced to
writing and signed by the Parties. During any dispute resolution procedure
conducted under this Section, the Parties will diligently perform all
obligations hereunder that are not directly related to the dispute.
SECTION 12. DISCLAIMERS, LIMITATIONS AND RESERVATIONS
12.1. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, GEOCITIES DOES NOT
MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE
GEOCITIES SITE, GEOCITIES' SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT
LIMITATION) IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, GEOCITIES
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT
OF SALES REVENUE THAT AMAZON.COM MAY RECEIVE DURING THE
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TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT THAT AMAZON.COM MIGHT OBTAIN THROUGH
ITS PARTICIPATION IN THIS AGREEMENT.
12.2. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, AMAZON.COM DOES NOT
MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE
AAZON.COM SITE, AMAZON.COM'S SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT
LIMITATION) IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AMAZON.COM
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT
OF SALES REVENUES THAT MAY OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR OTHER
BENEFIT THAT GEOCITIES MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.
12.3. NEITHER AMAZON.COM NOR GEOCITIES WILL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR LOST DATA)
ARISING OUT OF THIS AGREEMENT. EACH PARTY'S ENTIRE LIABILITY ARISING FROM THIS
AGREEMENT (EXCEPT FOR LIABILITIES ARISING UNDER SECTION 8 OR RESULTING FROM THE
PARTY'S WILLFUL MISCONDUCT), WHETHER IN CONTRACT OR TORT, WILL NOT EXCEED AN
AMOUNT EQUAL TO THE AMOUNTS TO BE PAID BY AMAZON. COM UNDER SECTION 4.
12.4. Amazon.com will remain solely responsible for the operation of the
Amazon.com Site, and GeoCities will remain solely responsible for the operation
of the GeoCities Site. Each Party (a) acknowledges that the Amazon.com Site and
the GeoCities Site may be subject to temporary shutdowns due to causes beyond
the operating Party's reasonable control, and (b) subject to the specific terms
of this Agreement, retains sole right and control over the programming, content
and conduct of transactions over its respective site.
SECTION 13. MISCELLANEOUS
13.1. The Parties are entering this Agreement as independent contractors,
and this Agreement will not be construed to create a partnership, joint venture,
franchise or employment relationship between them. Neither Party will represent
itself to be an employee or agent of the other or enter into any agreement on
the other's behalf of or in the other's name.
13.2. With respect to information received by either party as a result of
this Agreement, the Parties will abide by the terms and conditions of their
Nondisclosure Agreement dated as of August 25, 1997 (but only to the extent that
the information constitutes "Confidential Information," as defined in the
Nondisclosure Agreement). The Parties agree that the terms and conditions of
this Agreement will constitute Confidential Information under their
Nondisclosure Agreement.
13.3. Following the execution of this Agreement, Amazon.com and GeoCities
will prepare and distribute a joint press release (or coordinated press
releases) announcing the
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transaction. The contents and timing of the release (or releases) shall be as
mutually agreed by the Parties. Neither Party will issue any further press
releases or make any other disclosures regarding this Agreement or its terms
without the other Party's prior written consent.
13.4. In its performance of this Agreement, each Party will comply with
all applicable laws, regulations, orders and other requirements, now or
hereafter in effect, of governmental authorities having jurisdiction. Without
limiting the generality of the foregoing, each Party will pay, collect and remit
such taxes as may be imposed upon it with respect to any compensation, royalties
or transactions under this Agreement. Except as expressly provided herein, each
Party will be responsible for all costs and expenses incurred by it in
connection with the negotiation, execution and performance of this Agreement.
13.5. Each Party will keep detailed records of all activities reasonably
relating to its performance under this Agreement ("Records"). Either Party (the
"Auditing Party"), upon thirty (30) days' prior written notice to the other
Party (the "Audited Party"), may conduct an audit of the Audited Party's Records
for the purpose of verifying the accuracy and completeness of any report or
other information provided by the Audited Party under this Agreement. Any such
audit will be conducted (a) in a manner that will not unreasonably interfere
with the Audited Party's operations, and (b) by an independent certified public
accounting firm that is reasonably acceptable to the Audited Party and that has
agreed in writing to protect the confidentiality of the Audited Party's Records
and other information. A Party may conduct an audit under this Section no more
than once during any twelve-month period. The costs of any such audit will be
borne by Auditing Party; provided, however, that if any audit determines that
the report or other information subject to the audit is inaccurate or incomplete
by greater than ten percent (10%) (as measured by an appropriate measure
reasonably determined by the auditor), the Audited Party will promptly reimburse
the Auditing Party for all reasonable expenses incurred to conduct the audit.
13.6. Neither Amazon.com nor GeoCities will be liable for, or will be
considered to be in breach of or default under this Agreement on account of, any
delay or failure to perform as required by this Agreement as a result of any
causes or conditions that are beyond such Party's reasonable control and that
such Party is unable to overcome through the exercise of commercially reasonable
diligence. If any force majeure event occurs, the affected Party will give
prompt written notice to the other Party and will use commercially reasonable
efforts to minimize the impact of the event.
13.7. Any notice or other communication under this Agreement given by any
Party to any other Party will be in writing and will be deemed properly given
when sent to the intended recipient by registered letter, receipted commercial
courier, or electronically receipted facsimile transmission (acknowledged in
like manner by the intended recipient) at its address and to the attention of
the individual specified below its signature at the end of this Agreement. Any
Party may from time to time change such address or individual by giving the
other Party notice of such change in accordance with this Section 13.7.
13.8. Neither Amazon.com nor GeoCities may assign this Agreement, in whole
or in part, without the other Party's prior written consent (which will not be
withheld unreasonably),
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except to (a) any corporation resulting from any merger, consolidation or other
reorganization involving the assigning Party, (b) any of its Affiliates, or (c)
any individual or entity to which the assigning Party may transfer substantially
all of its assets; provided that the assignee agrees in writing to be bound by
all the terms and conditions of this Agreement. Subject to the foregoing, this
Agreement will be binding on and enforceable by the Parties and their respective
successors and permitted assigns. Nothing in this Section will limit
Amazon.com's rights under Section 10.3.
13.9. The failure of either party to enforce any provision of this
Agreement will not constitute a waiver of the party's rights to subsequently
enforce the provision. The remedies specified in this Agreement are in addition
to any other remedies that may be available at law or in equity.
13.10. This Agreement (together with the parties' Nondisclosure Agreement)
(a) represents the entire agreement between the parties with respect to the
subject matter hereof and supersedes any previous or contemporaneous oral or
written agreements regarding such subject matter, (b) may be amended or modified
only by a written instrument signed by a duly authorized agent of each party,
and (c) will be interpreted, construed and enforced in all respects in
accordance with the laws of the State of Washington, without reference to its
choice of law rules. If any provision of this Agreement is held to be invalid,
such invalidity will not effect the remaining provisions.
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The parties have executed this Agreement on the date first written above.
AMAZON.COM, INC.
By: /s/Amazon.com
Its: Vice President, Business Development
1516 Second Avenue
Seattle, WA 98101
Facsimile: 206-346-2082
Attn: General Counsel
GEOCITIES
By: /s/James A. Rea
Its: Vice President, Business Development
1918 Main Street. 3rd Floor
Santa Monica, CA 90405-1031
Facsimile: 310-664-6520
Attn: James A. Rea
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EXHIBIT A
COMPETITORS
As used in this Agreement, "Competitors" includes (without limitation) the
following entities:
[***]
[***] Confidential treatment requested for redacted portion.
<PAGE>
EXHIBIT B
PLACEMENTS AND PROMOTIONS
GeoCities will provide to Amazon.com the placements and promotions
specified in this Exhibit.
1. GENERAL
1.1. GeoCities and Amazon.com will use commercially reasonable efforts to
implement the placements and promotions provided in this Exhibit in a manner
that maximizes click through to, and product sales on, the Amazon.com Site. On
approximately a quarterly basis, the Parties will conduct program reviews to
assess the performance of the placements and promotions. If any placement or
promotion proves ineffective, the Parties will conduct good-faith negotiations
to modify such placement or promotion to improve its performance. As used in
this Exhibit, "strategic sponsor" means one of up to four (including Amazon.com)
premium GeoCities sponsors that, pursuant to agreements similar in nature to
this Agreement, are provided with promotional placements affording the highest
level of visibility offered to any other GeoCities sponsor.
2. PHASE 1 (TARGET START DATE 12/1/97)
2.1. FIXED MEDIA PLACEMENTS. GeoCities will provide Amazon.com with
advertising buttons and banners that yield a minimum of [***]. On a monthly
basis, the Parties will develop a media plan designating such placements from
among GeoCities' available inventory of premium placements. Amazon.com will
reasonably determine the content and appearance of such buttons and banners in
accordance with GeoCities' generally applicable technical specifications.
2.2. POP-UP AND INTERSTITIAL ADVERTISEMENTS. GeoCities will include
Amazon.com in its trials of pop-up and interstitial advertisements. If
following such trials, GeoCities elects to implement pop-ups and/or interstitial
on a commercial basis, GeoCities will provide Amazon.com with a quantity of such
advertisements to be negotiated in good faith (provided that such quantity will
be no less than the quantity provided to any other strategic sponsor).
2.3. GEOCITIES HOMEPAGE. GeoCities continuously will provide Amazon.com
with a prominent promotional button on the GeoCities Homepage. The button (a)
will be presented with the buttons of up to [***], (b) will be no smaller than
[***], and (c) will be no smaller than the button of [***]. The size of all
[***] buttons, taken together, will be at least twice the size of the "Selected
Highlights" bar depicted on Attachment 1 to this Exhibit. Amazon.com will
reasonably determine the content and appearance of its button in accordance with
GeoCities' generally applicable technical specifications.
[***] Confidential treatment requested for redacted portion.
<PAGE>
2.4. NEIGHBORHOOD HOMEPAGES. GeoCities continuously will provide
Amazon.com with a prominent promotional button or other placement on each
GeoCities Neighborhood Homepage. The button or placement (a) will be presented
with the buttons or placements of up to [***], and (b) will be no smaller than
the button or placement of [***]. In addition, GeoCities continuously will
provide a "commerce special" area for the use of its [***], who will be entitled
to post advertisements in such area on a rotating basis. Amazon.com will
reasonably determine the content and appearance of its buttons, placements and
advertisements in accordance with GeoCities' generally applicable technical
specifications.
2.5. NEIGHBORHOOD TOPIC PAGES. GeoCities continuously will provide
Amazon.com with a prominent promotional button on each GeoCities Neighborhood
Topic Page. The button or placement (a) will be presented with the buttons or
placements of up to [***], and (b) will be no smaller than the button or
placement of [***]. In addition, GeoCities will permit Amazon.com to place
targeted advertisements on each Topic Page (or on a Product Page linked to the
Topic Page). Such advertising placements will be no less favorable than those
provided to [***]. Amazon.com will reasonably determine the content and
appearance of its buttons, placements and advertisements in accordance with
GeoCities' generally applicable technical specifications.
3. PHASE 2 (TARGET START DATE 1/1/98)
3.1. MARKETPLACE PAGE. GeoCities continuously will provide Amazon.com with
a prominent advertising placement on the GeoCities Marketplace Page. The
placement (a) will be above-the-fold, (b) will be no smaller than the placement
of [***], and (c) will be larger than the placements of all [***]. Further, the
placement will be no less favorable than the placement depicted on Attachment 2
to this Exhibit. Amazon.com will reasonably determine the content and appearance
of its placement in accordance with GeoCities' generally applicable technical
specifications.
3.2. BOOK GUIDES PROGRAM. At Amazon.com's option, GeoCities will develop
and implement an incentive program for GeoCities homesteaders to host book-
related chat and discussion board sessions on their Homesteader Pages.
3.3. CHAT PROGRAM INTEGRATION. At Amazon.com's option, GeoCities will list
book-related chat sessions in a directory of active chat sessions and will
experiment with placing direct buy buttons on book-related, member-hosted chat
pages. Further, GeoCities will include targeted product offers in chat areas
(e.g., fishing-related books or magazines offered to participants in fishing
chats).
3.4. BOOK PAVILION. At Amazon.com's option, GeoCities will create and host
a "book pavilion" book resource, the specifics of which will be cooperatively
determined by the Parties.
3.5. KEY WORDS. If GeoCities implements a key-word based navigation
system, GeoCities will provide Amazon.com with banners or other placements on
all pages that result when a user enters any key-word that reasonably relates to
Amazon.com, books or magazines.
[***] Confidential treatment requested for redacted portion.
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Amazon.com will reasonably determine the content and appearance of its
placements in accordance with GeoCities' generally applicable technical
specifications.
3.6. WELCOME WAGON. GeoCities will provide a prominent Amazon.com
promotional link or message in each "welcome" message or similar communication
that it sends to new Homesteader or GeoShop members. Amazon.com will reasonably
determine the content and appearance of its link or message in accordance with
GeoCities' generally applicable technical specifications.
4. PHASE 3 (TARGET START DATE 7/1/98)
GeoCities and Amazon.com will experiment with new promotional concepts and
will implement those that appear to provide successful results (subject in each
case to the agreement of both Parties). Areas that may be investigated include
product offers on search result pages, product offers on interest pages, product
offers on neighborhood script pages, product offers within instant messaging,
customized GeoGuides, buyers' clubs, first-time buyers' specials, limited-time
discounts, greeting card/gift certificates and special offers for GeoCities Site
visitors.
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EXHIBIT C
EXCLUSIVITY
1. EXCLUSIVE AREAS. The [***] include the following pages (and any successors
thereof):
[***]
2. ADDITIONAL PROVISIONS. In addition to the restrictions contained in Section
7.1 of the Agreement, if GeoCities implements a key-word based navigation
system, GeoCities will not permit any Competitor to [***].
[***] Confidential treatment requested for redacted portion.
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EXHIBIT 10.6
ADVERTISING AGREEMENT
This Advertising Agreement ("AGREEMENT"), dated as of January 5, 1998 is
made by and between CDnow, a Pennsylvania corporation, and GeoCities, a
California corporation ("GEOCITIES"). CDnow and GeoCities sometimes are referred
to collectively as the "PARTIES" and individually as a "PARTY."
In consideration of the mutual promises contained in this Agreement and
intending to be legally bound, CDnow and GeoCities hereby agree as follows:
SECTION 1. DEFINITIONS.
The following terms (and all declensions thereof) are used in this
Agreement with the respective meanings set forth below:
1.1 "ABOVE-THE-FOLD" means situated within the portion of a page that is
designed to be visible on a standard computer screen with a resolution of 640
pixels by 480 pixels without requiring the user to scroll horizontally or
vertically through the page.
1.2 "Affiliate" means, with respect to either Party, any individual or
entity that, by virtue of a majority ownership interest, directly controls, is
controlled by or is under common control with that Party.
1.3 "BEYOND THE BANNER" means, any type of promotion which involves
promotional techniques other than the placement of standard advertising banners
or standard advertising buttons.
1.4 "CDNOW ICONS" is defined in Section 2.1 of this Agreement.
1.5 "CDNOW SITE" means, collectively, all points of presence and/or
services maintained by CDnow or its Affiliates on the Internet or on any other
public data network.
1.6 "COMMENCEMENT DATE" means the date GeoCities first provides CDnow with
all links, advertisements and other promotional placements required under Stage
I described in the attached Exhibit B to this Agreement.
1.7 "COMPETITOR" means (a) any of the Entities listed on Exhibit C, (b)
any Entity that either derives more than [***] of its annual gross revenues from
the retail sale of Music or Video Products, or is primarily known as [***] or
(c) any Entity with more than U.S. [***] in annual revenues from the sale of
Music or Video Products, though such entities shall only be construed to be a
Competitor in the event that the advertising or promotion to be placed by such
entity on the GeoCities Site is related to the category of Music or Video
Products. For purposes of this Section 1.7, any commercial homepage
participating in GeoCities' GeoShops Program
[***] Confidential treatment requested for redacted portion.
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and any Entity who exclusively manufactures or distributes, or any Entity that
manufactures or distributes exclusively on behalf of a manufacturer or
distributor of Music or Video Products and also engages in direct selling of
Music or Video Products shall not be construed to be a Competitor. Any Entity
that sells exclusively used media which contain Music or Video Products shall
not be considered a Competitor hereunder.
1.8 "CONFIDENTIAL INFORMATION" is defined in Section 13.2 of this
Agreement.
1.9 "COSMIC CREDIT PROGRAM" means a syndicated selling program of CDnow
that sells Music or Video Products.
1.10 "ENTITY" means any individual, partnership, corporation, or division,
subsidiary or business unit thereof, retail site, World Wide Web site or other
entity
1.11 "EXCLUSIVE AREAS" means the GeoCities neighborhood homepages and the
GeoCities neighborhood topic pages and any materially similar pages or any pages
that supersede or replace these pages.
1.12 "GEOCITIES BASIC COMMERCE PLATFORM" means the collection of links,
advertisements and promotional placements (as specified in Exhibit A to this
Agreement) associated with the GeoCities' neighborhood home pages and
neighborhood topic pages.
1.13 "GEOCITIES GEOSHOPS PROGRAM" means the marketing program operated by
GeoCities which offers its homesteaders the opportunity to create a commercially
oriented homepage within the GeoCities Site. Participants in the GeoCities
GeoShops Program must confirm that their annual revenues are Two Hundred Fifty
Thousand Dollars ($250,000.00) or less upon application to the program..
1.14 "GEOCITIES SITE" means, collectively, and subject to the limitations
set forth in the following sentences of this Section 1.13, all points of
presence and/or services maintained by GeoCities on the Internet as
www.geocities.com or on any other public data network; provided, however, that
"GeoCities Site" does not include any Homesteader Page or GeoShop Page with
revenues annually of Two Hundred Fifty Thousand Dollars ($250,000) or less. To
the extent that GeoCities enters into agreements with third parties relating to
the joint development and/or hosting of co-branded or outsourced personal home
page communities, such co-branded and outsourced communities shall not
constitute part of the GeoCities Site, unless GeoCities determines, in its
reasonable business judgment, that the inclusion of any such co-branded or
outsourced communities does not in any way conflict with or violate any such
agreement with a third party, or any agreements or other arrangements that such
third party may have with any other party, and provided such co-branding or
outsourced communities do not reduce the prominence of the GeoCities Site. If
GeoCities makes such a determination, it shall notify CDnow of such
determination, and the co-branded or outsourced community in question shall
thereupon become part of the "GeoCities Site."
1.15 "GEOSHOP PAGE" means any homepage created by a participant in
GeoCities GeoShops program.
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1.16 "HOMESTEADER PAGE" means any personal homepage, or commercial
homepage participating in GeoCities' GeoShop program (other than a GeoCities
Affiliate) which resides in a "member neighborhood" on the GeoCities Site.
1.17 "IMPRESSIONS" is defined in Section 8.5 of this Agreement.
1.18 "INTELLECTUAL PROPERTY RIGHTS" is defined in Section 10.1 of this
Agreement.
1.19 "KEY COMMERCE PARTNERS" means up to any four (4) primary commerce
partners of the GeoCities Site.
1.20 "MAKE GOOD AMOUNT" is defined in Section 8.6 of this Agreement.
1.21 "MARKS" means a Party's trademarks, tradenames, service marks,
symbols, logos, brand names and other proprietary indicia of a Party under
common law, state law, federal law and laws of foreign countries.
1.22 "MUSIC OR VIDEO PRODUCTS" means all forms and formats of pre-recorded
consumer audio and video products available for retail sale directly to
consumers, excluding used media which contain Music or Video Products.
1.23 "QUALIFYING REVENUES" means, with respect to any monthly period, the
aggregate gross revenues resulting from Sessions less: (a) any shipping and
handling charges associated with the sale, (b) any sales taxes associated with
the sale, (c) any rebates associated with the sale and (d) any Qualifying
Revenues which are attributable to returned products and which have previously
been included in Qualifying Revenues.
1.24 "RETURN ICON" is defined in Section 2.2 of this Agreement.
1.25 "SESSION" means each instance in which a user accesses the CDnow Site
via a hypertext link embedded in any link, advertisement or other promotional
placement provided by GeoCities under this Agreement, and then views one or more
consecutive CDnow Site pages. A Session terminates when the user exits the CDnow
Site by any means.
1.26 "URL" means Uniform Resource Locator.
1.27 "VIEWER" means any user of the GeoCities Site who executes a link and
is connected to the CDnow Site.
SECTION 2. LINKAGE
2.1 (A) The CDnow graphic or other visual cues depicted on the attached
Exhibit A and associated with one or more URLs, which may include CDnow's Marks
and/or other indicia of origin (the "CDnow Icons") shall be included among the
GeoCities Basic Commerce Platform hyperlink icons during the Term. When clicked
upon by a Viewer, the
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CDnow Icon will directly link the Viewer with the CDnow Site. GeoCities shall
implement the link between the CDnow Icon and the CDnow Site.
(B) CDnow shall furnish GeoCities with full color representations of
the CDnow Icons at least ten (10) business days prior to the Commencement Date
for GeoCities' use under this Agreement. If CDnow subsequently modifies one or
more of the CDnow Icons or the URLs associated with the CDnow Icons, it shall
furnish a representation of same to GeoCities which GeoCities shall substitute
for the prior version within twenty (20) business days after receipt.
(C) During the initial term of this Agreement, GeoCities agrees that
CDnow is one of the Key Commerce Partners for the GeoCities Basic Commerce
Platform that will occupy premier positions on such platform, and CDnow will be
displayed and promoted in a manner no less commensurate with the display and
promotion of the other Key Commerce Partners on the GeoCities Basic Commerce
Platform.
(D) GeoCities further agrees that it will display the CDnow Icons in
a manner no less commensurate with its display of other vendor hyperlink icons
within the GeoCities Basic Commerce Platform.
2.2 The GeoCities graphic or other visual cue depicted on the attached
Exhibit A and associated with a single URL, which may include GeoCities' Marks
and/or other indicia of origin (the "Return Icon") shall be displayed by CDnow
on each page of the CDnow Site viewed by a Viewer during the Term (starting when
CDnow provides this capability) in the position within the page layout as shown
on Exhibit A. When clicked upon by a Viewer, the Return Icon will directly link
the Viewer with a specific URL in the GeoCities Basic Commerce Platform. CDnow
shall create the link on the CDnow Site between the Return Icon and the
GeoCities Basic Commerce Platform. GeoCities shall furnish CDnow with full color
representations of the Return Icon at least ten (10) business days prior to the
Commencement Date for CDnow's use under this Agreement. If GeoCities
subsequently modifies the Return Icon, it shall furnish a representation of same
to CDnow which CDnow shall substitute for the prior version within twenty (20)
business days after receipt. The Return Icon shall be visible at the CDnow Site
only to Viewers who link to the CDnow Site via the GeoCities Basic Commerce
Platform and to no other visitors at the CDnow Site.
2.3 CDnow shall ensure that the version of the CDnow Site viewed by
Viewers who link to the CDnow Site through the GeoCities Basic Commerce Platform
shall be substantially similar to the CDnow Site viewed by non-Viewers except
for CDnow co-branded sites with third parties, the Return Icon and as elsewhere
provided for in this Agreement.
SECTION 3. PROMOTIONAL PLACEMENTS
The promotional placements are specified in Exhibit B to this Agreement.
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SECTION 4. PARTICIPATION IN STRATEGIC PROGRAMS
The terms of participation in strategic programs are specified in Exhibit B
to this Agreement.
SECTION 5. COMPENSATION
5.1 As full consideration for GeoCities' performance under this Agreement
(including, without limitation, GeoCities' provision of all links,
advertisements and promotions specified in Sections 2, 3 and 4), CDnow will pay
GeoCities the fixed placement fees and variable incentive payments specified in
this Section 5.
5.2 During the initial term of this Agreement (as specified in Section
11.1 below), CDnow will pay GeoCities a fixed placement fee of [***] Dollars
($[***]) on the Commencement Date and [***] of the Commencement Date.
5.3 For each [***] that occurs subsequent to the Commencement Date during
the term of this Agreement (including any renewal term), CDnow will pay
GeoCities the applicable percentage(s) of Qualifying Revenues set forth opposite
from the range of Qualifying Revenues occurring in the first column of the table
below.
CUMULATIVE REVENUES REVENUE SHARE
[***] PERCENTAGE
$ [***] [***]%
5.4 For each Homesteader Page that (a) participates in the Cosmic Credit
Program during the term of this Agreement and (b) within the [***] following the
Homesteader Page's entering the Cosmic Credit Program, is responsible for at
least $[***] in Qualifying Gross Revenue to CDnow as a result of its
participation in the Cosmic Credit Program, CDnow will pay GeoCities a one-time
bounty of $[***]. This provision will survive the expiration or termination of
this Agreement with respect to those Homesteader Pages that join the Cosmic
Credit Program within twelve (12) months prior to such expiration or
termination.
5.5 With the exception of the fixed placement fee set forth in Section
5.2, CDnow will make payments under this Section 5 on a [***] basis, in arrears.
Specifically, within thirty (30) days following the end of each [***] occurring
subsequent to the Commencement Date, CDnow will pay GeoCities an amount equal to
the revenue share that accrued during such [***] pursuant to Section 5.3 and any
bounties payable pursuant to Section 5.4.
[***] Confidential treatment requested for redacted portion.
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5.6 CDnow will deliver, together with each payment made pursuant to
Section 5.5, a written report signed by an authorized representative of CDnow
that describes (in reasonable detail) CDnow's calculation of the payment amount.
5.7 (A) GeoCities shall have the right, no more frequently than once
during the initial term and each renewal term, at its expense, upon thirty (30)
days advance written notice to CDnow and during CDnow's normal business hours,
to have an independent certified public accountant inspect and audit the books
and records of CDnow directly associated with CDnow's obligations to make
payments under this Agreement, for the purpose of verifying any payments due to
GeoCities under this Agreement. Any information obtained as a result of such
audit shall be the Confidential Information of CDnow, and GeoCities may use such
information only for the purpose of and only in such way as necessary for
collecting any amounts due it under this Agreement. In the event any shortfall
in payment to GeoCities is found which exceeds ten percent (10%) of the total
due GeoCities for the reporting period audited, then CDnow shall promptly pay
GeoCities the shortfall amount and reimburse GeoCities for all reasonable costs
of the audit.
(B) CDnow shall have the right, no more frequently than once during
the initial term and each renewal term, at its expense, upon thirty (30) days
advance written notice to GeoCities and during GeoCities' normal business hours,
to have an independent certified public accountant inspect and audit the books
and records of GeoCities directly associated with GeoCities' obligations under
this Agreement, for the purpose of verifying GeoCities' satisfaction of such
obligations. Any information obtained as a result of such audit shall be the
Confidential Information of GeoCities, and CDnow may use such information only
for the purpose of and only in such way as necessary for CDnow to enforce its
rights under this Agreement. In the event GeoCities' fails to meet any
obligations by more than ten percent (10%) of the total requirement of such
obligations as set forth in this Agreement, then Geo Cities shall promptly pay
CDnow all reasonable costs of the audit.
SECTION 6. IMPLEMENTATION
6.1 GeoCities and CDnow acknowledge that time is of the essence in the
design, development and commencement of the links, advertisements and
promotional placements specified in this Agreement. Accordingly, the Parties
will devote all commercially reasonable efforts to launch each link,
advertisement and promotional placement as soon as reasonably possible, in
accordance with a written development plan to be negotiated by the Parties in
good faith.
6.2 GeoCities, in cooperation with CDnow, will test the links,
advertisements and promotional placements required under this Agreement prior to
the time that they "go live" on the GeoCities Site (e.g., prior to the time that
they are implemented and enabled on a production version of the GeoCities Site)
and will continue to test such links, advertisements and promotional placements
as is reasonable and necessary during the term of this Agreement to ensure that
they function properly and as specified under this Agreement. The Parties will
mutually agree when the program of links, advertisements and promotional
placements will go live on the GeoCities Site.
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6.3 GeoCities will not cause any link, advertisement or promotional
placement under this Agreement to go live on the GeoCities Site prior to the
applicable date agreed by the Parties. Further, at CDnow's discretion, traffic
from promotional links and advertising placements will be enabled in stages;
provided, however, that such staging will not delay the Commencement Date.
SECTION 7. TRAFFIC DATA
7.1 On a monthly basis, GeoCities will provide CDnow with a report in a
form and via a distribution method mutually agreeable to the Parties concerning
search and browsing behavior on the GeoCities Site, to the extent such behavior
reasonably could relate to the online promotion or sale of Music or Video
Products, or other products that CDnow may sell from time to time. CDnow will
hold such data in confidence and will use it only in accordance with reasonable
guidelines to be mutually agreed upon by the Parties. Notwithstanding anything
to the contrary contained in this Section 7.1, GeoCities will not be required to
deliver to CDnow any user data in violation of its then-existing policies
regarding the protection of user information.
7.2 CDnow will provide GeoCities with a report at least once per month of
orders for CDnow's products submitted by GeoCities' users in a form and via a
distribution method mutually agreeable to the Parties. Such report is to be used
by GeoCities to actively track performance of various promotional tools that it
has in service. GeoCities will hold such data in confidence and will use it only
in accordance with reasonable guidelines to be agreed by the Parties.
Notwithstanding anything to the contrary contained in this Section, CDnow will
not be required to deliver to GeoCities any data in violation of its then-
existing privacy policies or policies regarding the protection of actual sales
information.
7.3 GeoCities will provide CDnow with a weekly report of Impressions
delivered to users of the GeoCities Site during the immediately preceding week
in a form and via a distribution method media mutually agreeable to the Parties.
Such report is to be used for CDnow to actively track whether GeoCities is
fulfilling its obligations under this Agreement.
SECTION 8. EXCLUSIVITY AND MEDIA GUARANTEE
8.1 [***]
8.2 GeoCities shall be allowed to sell limited quantities of Music or
Video Products through its GeoStore, though the GeoStore shall not offer more
than [***] separate Music or Video Products at any point in time and such Music
or Video Products shall not be sold through a Competitor. Participants in the
GeoCities GeoShops Program shall be allowed to sell products in the category of
Music or Video Products on the GeoCities Site.
8.3 To preserve the benefits provided to CDnow under this Agreement in
the event that GeoCities enters into any merger, acquisition, transfer of
control, sale of substantial assets or similar transaction with any Competitor,
CDnow shall have the right to terminate this Agreement upon thirty (30) days'
written notice.
[***] Confidential treatment requested for redacted portion.
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8.4 GeoCities represents and warrants that (a) it will continue to expend
at least the same amount of resources (e.g., budget, staff) as it is currently
committing as of the time of execution of this Agreement for both the pages in
which the Impressions appear, the GeoCities Site and the GeoCities Basic
Commerce Platform generally; and (b) it will not develop or promote any space on
and/or linked from the GeoCities Site which functions in a substantially similar
manner to or provides the user with a substantially similar experience as the
GeoCities Basic Commerce Platform and which provides a substantially similar
level of integration throughout the GeoCities Site as the GeoCities Basic
Commerce Platform and which would contain any Competitor's advertising or
promotions for the category of Music or Video Products. If Geo Cities fails or
determines not to meet the representations and warranties set forth in this
Section 8.4, then CDnow shall have the right to terminate this Agreement upon
thirty (30) days' written notice.
8.5 As a result of the deployment of the CDnow Icons on the GeoCities
Site, GeoCities will deliver a guaranteed minimum number of Impressions of at
least [***]. For purposes of this Agreement, "IMPRESSIONS" means a user's
viewing of the CDnow ICON on a page on the GeoCities Site.
8.6 If GeoCities fails to deliver the required minimum number of
Impressions in any given month during the initial term or the then current
renewal term, then GeoCities shall, within ten (10) days of the month following
the month in which GeoCities failed to deliver such minimum, make good the
shortfall from the prior month by using its best efforts to deliver additional
Impressions equal to the number of the prior month's shortfall (the "MAKE GOOD
AMOUNT") by providing CDnow with additional advertising and promotional
opportunities at [***] to CDnow, with such additional advertising and
promotional opportunities to be promptly, mutually agreed upon in good faith by
the Parties.
SECTION 9. INDEMNIFICATION
9.1 CDnow will defend and indemnify GeoCities and its Affiliates (and
their respective employees, directors and representatives) against any claim or
action brought by a third party, to the extent relating to (a) the operation of
the CDnow Site, or (b) the violation of third-party intellectual property rights
by any editorial content or other materials provided by CDnow for display on the
GeoCities Site. Subject to GeoCities' compliance with the procedures described
in Section 9.3, CDnow will pay any award against GeoCities or its Affiliates (or
their respective employees, directors or representatives) and any costs and
attorneys' fees reasonably incurred by GeoCities and its Affiliates resulting
from any such claim or action.
9.2 GeoCities will defend and indemnify CDnow and its Affiliates (and
their respective employees, directors and representatives) against any claim or
action brought by a third party, to the extent relating to (a) the operation of
the GeoCities Site, or (b) the violation of any third-party intellectual
property rights by any editorial content or other materials provided by
GeoCities for display on the CDnow Site. Subject to CDnow's compliance with the
procedures described in Section 9.3, GeoCities will pay any award against CDnow
or its Affiliates (or their respective employees, directors or representatives)
and any costs and attorneys' fees reasonably incurred by CDnow and its
Affiliates resulting from any such claim or action.
[***] Confidential treatment requested for redacted portion.
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9.3 In connection with any claim or action described in this Section,
the Party seeking indemnification (a) will give the indemnifying Party prompt
written notice of the claim, (b) will cooperate with the indemnifying Party (at
the indemnifying Party's expense) in connection with the defense and settlement
of the claim, and (c) will permit the indemnifying Party to control the defense
and settlement of the claim, provided that the indemnifying Party may not settle
the claim without the indemnified Party's prior written consent (which will not
be unreasonably withheld). Further, the indemnified Party (at its cost) may
participate in the defense and settlement of the claim.
SECTION 10. INTELLECTUAL PROPERTY RIGHTS
10.1 Subject to the limited license granted to GeoCities under Section
10.2, CDnow reserves all of its ownership rights, title and interest in its
Intellectual Property Rights. Subject to the limited license granted to CDnow
under Section 10.3, GeoCities reserves all of its ownership rights, title and
interest in its Intellectual Property Rights. Neither Party grants any license
to any of the Party's Intellectual Property Rights to the other Party except as
specifically set forth in this Section 10. For purposes of this Agreement,
"Intellectual Property Rights" means all forms of intellectual property rights
and protections) including, without limitation, all right, title and interest in
and to all: (a) letters patent and all filed, pending or potential applications
for letters patent, including any reissue, reexamination, division, continuation
or continuation-in-part applications throughout the world now or hereafter filed
or issued; (b) trade secrets, and all trade secret rights and equivalent rights
arising under the common law, state law, federal law and laws of foreign
countries; (c) mask works, copyrights, other literary property or authors'
rights, whether or not protected by copyright or as a mask work, under common
law, state law, federal law and laws of foreign countries; and (d) Marks.
10.2 CDnow hereby grants to GeoCities, during the term of this Agreement,
a non-exclusive, non-transferable license to use CDnow's Marks as reasonably
necessary to perform its obligations under this Agreement; provided, however,
that any promotional materials containing CDnow's Marks will be subject to
CDnow's prior written approval.
10.3 GeoCities hereby grants to CDnow, during the term of this Agreement,
a non-exclusive, non-transferable license to use GeoCities' Marks as reasonably
necessary to perform its obligations under this Agreement; provided, however,
that any promotional materials containing GeoCities' Marks will be subject to
GeoCities' prior written approval.
10.4 Neither GeoCities nor CDnow will use the other Party's Marks in a
manner that disparages the other Party, its Marks or its products or services,
or portrays the other Party, its Marks or its products or services in a false,
competitively adverse or poor light. Each of GeoCities and CDnow will comply
with the other Party's requests as to the use of the other Party's Marks and
will avoid any action that diminishes the value of such Marks. Either Party's
unauthorized use of the other's Marks is strictly prohibited. Each Party's use
of the other Party's Marks and any and all goodwill associated therewith or that
may accrue as a result of such use will inure solely to the benefit of the other
Party (the owning Party).
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SECTION 11. TERM AND TERMINATION
11.1 The initial term of this Agreement will begin on the date of this
Agreement and will end [***] following the Commencement Date.
11.2 (A) CDnow will have the option to renew the term of this Agreement
for a single [***] renewal term beginning on the expiration of the initial term
by giving GeoCities written notice (indicating CDnow's exercise of its option to
renew the term of this Agreement) at least thirty (30) days prior to the
expiration of the initial term.
(B) During such renewal term, all terms and conditions of this
Agreement, except Section 11.2(a), will remain in full force and effect;
provided, however, that the fixed placement fees payable pursuant to Section 5.2
will be increased (or decreased as the case may be) in the renewal term [***].
11.3 Either Party may terminate this Agreement if the other Party (a)
materially breaches this Agreement and does not cure the breach within thirty
(30) days following its receipt of written notice from the non-breaching Party,
or (b) ceases to carry on the portion of its business that relates to this
Agreement. In the event that CDnow terminates this Agreement pursuant to the
terms of this Section 11.3, CDnow's obligation to make any further payments not
yet accrued under this Agreement will be eliminated.
11.4 Sections 1, 9, 10.1, 12 and 13 (together with all other provisions
that reasonably may be interpreted as surviving termination or expiration of
this Agreement) will survive the termination or expiration of this Agreement.
SECTION 12. DISCLAIMERS, LIMITATIONS AND RESERVATIONS
12.1 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, GEOCITIES DOES NOT
MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE
GEOCITIES SITE, GEOCITIES' SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT
LIMITATION) IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, GEOCITIES
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT
OF SALES REVENUE THAT CDNOW MAY RECEIVE DURING THE TERM, AND (B) ANY ECONOMIC OR
OTHER BENEFIT THAT CDNOW MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS
AGREEMENT.
[***] Confidential treatment requested for redacted portion.
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12.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, CDNOW DOES NOT MAKE,
AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE CDNOW
SITE, CDNOW'S SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT LIMITATION)
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, CDNOW SPECIFICALLY DISCLAIMS
ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT OF SALES REVENUES THAT
MAY OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT THAT GEOCITIES
MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.
12.3 NEITHER CDNOW NOR GEOCITIES WILL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR LOST DATA)
ARISING OUT OF THIS AGREEMENT. EACH PARTY'S ENTIRE LIABILITY ARISING FROM THIS
AGREEMENT (EXCEPT FOR LIABILITIES ARISING UNDER SECTION 9 OR RESULTING FROM THE
PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), WHETHER IN CONTRACT OR TORT,
WILL NOT EXCEED THE AMOUNTS TO BE PAID BY CDNOW UNDER SECTION 5.
12.4 CDnow will remain solely responsible for the operation of the CDnow
Site, and GeoCities will remain solely responsible for the operation of the
GeoCities Site. Each Party: acknowledges that the CDnow Site and the GeoCities
Site may be subject to temporary shutdowns due to causes beyond the operating
Party's reasonable control; and (b) subject to the specific terms of this
Agreement, retains sole right and control over the programming, content and
conduct of transactions over its respective site.
SECTION 13. MISCELLANEOUS
13.1 The Parties are entering this Agreement as independent contractors,
and this Agreement will not be construed to create a partnership, joint venture,
franchise or employment relationship between them. Neither Party will represent
itself to be an employee or agent of the other or enter into any agreement on
the other's behalf or in the other's name.
13.2 Each Party agrees that the Confidential Information of the other
Party will be held in confidence to the same extent and the same manner as each
Party protects its own Confidential Information, but each Party agrees that in
no event will less than reasonable care be used. Each Party shall, however, be
permitted to disclose relevant aspects of such Confidential Information to its
officers, employees and consultants on a need-to-know basis for the purpose of
such Party's performance of its obligations under this Agreement, provided such
persons agree to protect the other party's Confidential Information to the same
extent as required under this Agreement. Each Party agrees to use all reasonable
steps to ensure that the other Party's Confidential Information received under
this Agreement is not disclosed in violation of this paragraph. For purposes of
this Agreement, "CONFIDENTIAL INFORMATION" means the terms of this Agreement,
except as otherwise specifically provided in this Agreement; each Party's trade
secrets, financial information, processes, formulas, specifications, programs,
instructions, source code, technical know-how, methods and procedures for
operation, benchmark test results, information about employees, customers,
marketing strategies, services, business or technical plans and proposals,
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in any form; and any other information relating to either Party that is not
generally known to the public at large.
GeoCities agrees that it shall not be deemed a breach of this Agreement for
CDnow to disclose the terms and conditions of this Agreement in any regulatory
filing with the Securities & Exchange Commission, which CDnow in good faith
determines is required, provided CDnow seeks confidential treatment of the
material financial terms and conditions of this Agreement.
Confidential Information shall not include information that (a) is or
becomes generally known or available to the public at large through no negligent
act or omission of either Party; (b) can be demonstrated to have been available
lawfully to either Party prior to the disclosure or had thereafter been
furnished to either Party without restrictions to disclosure or use; or (c) can
be demonstrated to be independently developed by the recipient of Confidential
Information without use of such Confidential Information and such independent
development is proven on the basis of either Party's records related to such
development.
13.3 Following the execution of this Agreement, CDnow and GeoCities will
prepare and distribute a joint press release (or coordinated press releases)
announcing the transaction. The contents and timing of the release (or
releases) shall be as mutually agreed by the Parties. Neither Party will issue
any further press releases or make any other disclosures regarding this
Agreement or its terms without the other Party's prior written consent or except
as may be required by law in the opinion of the Party's counsel.
13.4 In its performance of this Agreement, each Party will comply with all
applicable laws, regulations, orders and other requirements, now or hereafter in
effect, of governmental authorities having jurisdiction. Without limiting the
generality of the foregoing, each Party will pay, collect and remit such taxes
as may be imposed upon it with respect to any compensation, royalties or
transactions under this Agreement. Except as expressly provided herein, each
Party will be responsible for all costs and expenses incurred by it in
connection with the negotiation, execution and performance of this Agreement.
13.5 Neither CDnow nor GeoCities will be liable for, or will be considered
to be in breach of or default under this Agreement on account of, any delay or
failure to perform as required by this Agreement as a result of any causes or
conditions that are beyond such Party's reasonable control and that such Party
is unable to overcome through the exercise of commercially reasonable diligence.
If any force majeure event occurs, the affected party will give prompt written
notice to the other Party and will use commercially reasonable efforts to
minimize the impact of the event.
13.6 Notices deliverable under this Agreement shall be given in writing,
addressed to the Parties set forth below and shall be deemed to have been given
either one (1) day after being given to an express overnight carrier with a
reliable system for tracking delivery; or when sent by a confirmed facsimile
with another copy sent by any other means specified in this paragraph; or three
(3) business days after having been mailed postage prepaid by United States
registered or certified mail, return receipt requested:
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For notices to CDnow: For notices to GeoCities:
Name: Rod Parker James A. Rea
Title: Senior Vice President, Marketing Vice President Business Development
Address: Jenkins Court, Suite 310 1918 Main Street, 3rd Floor
610 Old York Road
City: Jenkintown PA 19046 Santa Monica, CA 90405-1030
Facsimile: (215) 517-4499 Facsimile: (310) 664-6520
with a copy to the CDnow General Counsel
13.7 If any litigation is commenced to enforce any provision of this
Agreement or to seek a declaration of rights of the Parties hereunder or as a
result of any breach of any provision of this Agreement, the prevailing Party
will be entitled to recover from the non-prevailing Party all of its costs and
expenses incurred in connection with such litigation, including without
limitation reasonable attorneys' fees.
13.8 Neither CDnow nor GeoCities may assign this Agreement, in whole or in
part, without the other Party's prior written consent (which will not be
withheld unreasonably), except to (a) any corporation resulting from any merger,
consolidation or other reorganization involving the assigning Party, (b) any of
its Affiliates, or (c) any individual or entity to which the assigning Party may
transfer substantially all of its assets; provided that the assignee agrees in
writing to be bound by all the terms and conditions of this Agreement. Subject
to the foregoing, this Agreement will be binding on and enforceable by the
Parties and their respective successors and permitted assigns.
13.9 If any provision of this Agreement is declared null, void or
otherwise unenforceable, such provision will be deemed to have been severed from
this Agreement to the minimal extent if necessary, which Agreement will
otherwise be and remain in full force and effect to its remaining provisions.
13.10 This Agreement (a) represents the entire agreement between the
Parties with respect to the subject matter hereof and supersedes any previous or
contemporaneous oral or written agreements regarding such subject matter and (b)
may be amended or modified only by a written instrument signed by a duly
authorized agent of each Party. If any provision of this Agreement is held to be
invalid, such invalidity will not effect the remaining provisions.
13.11 This Agreement may be executed in any number of counterparts, each of
which shall be an original and all of which shall constitute together one and
the same document.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date
first written above by their duly authorized representatives.
CDnow
By: /s/ Jason Olim
---------------------------------------
Jason Olim
Its: President and Chief Executive Officer
Jenkins Court, Suite 310
610 Old York Road
Jenkintown, PA 19046
Facsimile: (215) 517-4399
Attention: Jason Olim
GEOCITIES
By: /s/ James A. Rea
---------------------------------------
James A. Rea
Its: Vice President Business Development
1918 Main Street, 3rd Floor
Santa Monica, California 90405
Facsimile: (310) 664-6520
Attention: James A. Rea
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EXHIBIT A
CDnow ICON
Home page image:
A Graphic depicting a CDnow logo plus tag line (World's Largest Music Store) to
be no less than [***]. CDnow's presence shall be no less than the presentation
of any other key commerce partner.
Example of a CDnow Logo:
Neighborhood Home Page
A Graphic with CDnow Icon (promotional message Product shot or other CDnow
graphical element) with a text message above the graphic promoting CDnow and two
individually hyperlinked text messages below the graphic that can be linked to
unique CDnow pages. CDnow's presence shall be no less than the presentation of
any other key commerce partner.
Image to be no less than [***] or [***]
For example:
[Picture of Logos]
[***] Confidential treatment requested for redacted portion.
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Topic Pages:
CDnow branded text message plus CDnow logo with at least two hyperlinked text
messages that can be linked to unique CDnow pages. CDnow's presence shall be no
less than the presentation of any other key commerce partner.
For Example:
RETURN ICON SPECIFlCATIONS
Size
Total Carry-through Bar Size: [***] as of April 1, 1997 all Carry-through Bar
sizes must be [***] to comply with the Internet Advertising Bureau's (IAB)
banner standards.
Live area for Partner Logo: [***]
Timing
CDnow requires a minimum of five business days from when we receive the Carry-
through bar to implement it on our site.
Carry-through Bar Samples
[***] Confidential treatment requested for redacted portion.
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Color
Bar is black at all times.
Only partner logos/icons can be as many colors as desired with a black
background
"Return to..." copy is mandatory and must be set up as white Helvetica Neue
Black 10pt type, centered and 5 pixels in from the left-hand side of the first
black bar
We recommend all copy to be white
To pick up a template go to http://cdnow.com/cobrand template
Format
Must be saved in a GIF file format
Placement
Carry-through bar is placed on the top and bottom of each CDnow page. Only
those people who visit CDnow from your site will see the Carry-through bar
URL/Address
Partners have the option of 1 to 3 links on their Carry-through bar The URLs
will be provided by the partner
If more than one link is desired, the bar must consist of multiple gif images
that reference previous Carry-through bar specifications. When using multiple
gif images keep two pixels between each bar. No image maps are permitted.
Please see the following page for more examples of possible banner solutions.
Source Code
CDnow will provide the partner with a from equals(from=) tag. This tag allows
us to identify customers coming from the Partners site to CDnow.
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EXHIBIT B
Promotion Placements and Participation in Strategic Programs
Staged Deployment of CDNOW Promotion on GeoCities
STATE I
Target Start Date top bed Implemented as Soon as Possible After Signing
Agreement:
1) Main GeoCities Home Page;
2) Each GeoCities Neighborhood Homepage (currently 39 and growing);
3) Each Neighborhood Topic Page (currently between 500 and 600);
4) Experimentation with Popups and/or Interstitials;
5) Announcement of Relationship in World Report (using a reasonable
announcement that is editorially appropriate);
6) Experimentation with Inclusion in New Member Welcome Package (Welcome
Wagon); and
7) Banners.
STAGE II
GeoCities will make best efforts to implement within two months of the
Commencement Date.
1) Offer Cosmic Credit Program for Homesteaders;
2) Incentive Program for Homesteaders to Host CDnow Sponsored Chat on their
Homepages;
3) Experimentation with Targeted Product Offerings within GeoCities Chat
Sessions; and
4) Senior Positioning in GeoCities Marketplace.
STAGE III
GeoCities to make best efforts to implement within three months of the
Commencement Date. Experimentation with various concepts and deploying those
which appear to provide successful results including:
1) Product Offers on Search Result Pages;
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2) Product Offers on Interest Pages;
3) Product offers within Instant Messaging; and
4) Greeting Card/Gift Certificate Offers.
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EXHIBIT C
Competitors in Music and/or Video Categories
Pursuant to Section 1.7(a) of the Agreement, Competitor includes (i) [***] and
any other online music retail sites sponsored or promoted by [***]; (ii) [***],
including, without limitation, [***]; (iii) any online music store sponsored or
promoted buy a record label; (iv) [***]; and (v) any online music store
sponsored or promoted by [***], [***] or [***].
[***] Confidential treatment requested for redacted portion.
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EXHIBIT 10.7
ADVERTISING AGREEMENT
This Advertising Agreement (this "Agreement"), dated as of December 15,
1997, is made by and between Egghead, Inc., a Washington corporation ("SDE");
and GeoCities, a California corporation ("GeoCities"). SDE and GeoCities
sometimes are referred to collectively as the "Parties" and individually as a
"Party". In consideration of the mutual promises contained in this Agreement,
SDE and GeoCities hereby agree as follows:
SECTION 1. DEFINITIONS
The following terms (and all declensions thereof) are used in this
Agreement with the respective meanings set forth below:
1.1 "ABOVE-THE-FOLD" means situated within the portion of a page that
is designed to be visible on a standard computer screen with a resolution of 640
pixels by 480 pixels without requiring the user to scroll horizontally or
vertically through the page.
1.2 "AFFILIATE" means, with respect to either Party, any individual or
entity that, by virtue of a majority ownership interest, directly controls, is
controlled by or is under common control with that Party.
1.3 "SDE SITE" means, collectively, all points of presence and/or
services maintained by SDE or its Affiliates on the Internet or on any other
public data network.
1.4 "GEOCITIES SITE" means, collectively, and subject to the
limitations set forth in the following sentences of this Section 1.4, all points
of presence and/or services maintained by GeoCities on the Internet as www.
geocities.com or on any other public data network; provided, however, that
"GeoCities Site" does not include any Homesteader Page or GeoShop Page with
revenues annually of Two Hundred Fifty Thousand Dollars ($250,000) or less. To
the extent that GeoCities enters into agreements with third parties relating to
the joint development and/or hosting of co-branded or outsourced personal home
page communities, such co-branded and outsourced communities shall not
constitute part of the "GeoCities Site," unless GeoCities determines, in its
sole discretion, that the inclusion of any such co-branded or outsourced
communities does not in any way conflict with or violate any such agreement with
a third party, or any agreements or other arrangements that such third party may
have with any other party. If GeoCities makes such a determination, it shall
notify SDE of such determination, and the co-branded or outsourced community in
question shall thereupon become part of the "GeoCities Site."
1.5 "GEOCITIES BASIC COMMERCE PLATFORM" means the collection of links,
advertisements and promotional placements associated with the GeoCities' Site.
1.6 "VIEWER" means any user of the GeoCities Site who executes a link
and is connected to the SDE Site.
<PAGE>
1.7 "COMMENCEMENT DATE" means the date GeoCities first provides SDE
with all links, advertisements and other promotional placements required under
Stage IA described in the attached Exhibit B to this Agreement.
1.8 "COMPETITOR" means (a) any of the entities listed on Exhibit C, or
(b) any individual, corporation, corporate division, retail site, World Wide Web
site or other entity that either derives more than [***] of its annual gross
revenues from the retail sale of computer hardware or software, or is primarily
known as a retailer of computer hardware or software. For purposes of this
Section 1.8, any commercial homepage participating in GeoCities' GeoShops
program and any company who manufactures and also engages in direct selling of
computer hardware or software programs shall not be construed to be a
Competitor. For purposes of this Agreement, the term computer hardware and
software shall be construed to include computer peripherals and accessories.
1.9 "HOMESTEADER PAGE" means any personal homepage, or commercial
homepage participating in GeoCities' GeoShop program (other than a GeoCities
Affiliate) which resides in a "member neighborhood" on the GeoCities Site.
1.10 "SESSION" means each instance in which a user accesses the SDE Site
via a hypertext link embedded in any link, advertisement or other promotional
placement provided by GeoCities under this Agreement, and then views one or more
consecutive SDE Site pages. A Session terminates when the user exits the SDE
Site by any means.
1.11 "QUALIFYING GROSS MARGIN REVENUES" means, with respect to any
monthly period, the aggregate gross revenues resulting from Sessions less (a)
any direct costs of goods sold, and less (b) any shipping costs associated with
the sale, and less (c) any credit card service charges associated with the sale
and less (d) any sales taxes associated with the sale, and less (e) any Gross
Margin Revenues which are attributable to returned products which have
previously been included in Gross Margin Revenues.
1.12 "EXCLUSIVE AREAS" means the GeoCities neighborhood homepages and
the GeoCities neighborhood topic pages.
SECTION 2. LINKAGE
2.1 The graphic or other visual cue depicted on the attached Exhibit A,
which may include names, trademarks, servicemarks, designmarks, symbols and/or
other indicia of origin (the "SDE Icon") shall be included among the GeoCities
Basic Commerce Platform hyperlink icons during the Term. When clicked upon by a
Viewer, the SDE Icon will link the Viewer with the SDE Site. GeoCities shall
create and maintain the link between the SDE Icon and the SDE Site. SDE shall
furnish GeoCities with full color representations of the SDE Icon at least ten
(10) business days prior to the Deployment Date for GeoCities' use under this
Agreement. GeoCities agrees that it will display the SDE Icon in a manner agreed
to by the Parties and commensurate with its display of other vendor hyperlink
icons within the GeoCities Basic Commerce Platform. If SDE subsequently modifies
the SDE Icon, it shall furnish a
[***] Confidential treatment requested for redacted portion.
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representation of same to GeoCities which GeoCities shall substitute for the
prior version within twenty (20) business days after receipt.
2.2 The graphic or other visual cue depicted on the attached Exhibit A,
which may include names, trademarks, servicemarks, designmarks, symbols and/or
other indicia of origin as agreed to by the Parties, (the "Return Icon") shall
be displayed by SDE on each page of the SDE Site viewed by a Viewer during the
Term in the position within the page layout as shown on Exhibit A. When clicked
upon by a Viewer, the Return Icon will link the Viewer with the GeoCities Basic
Commerce Platform which was the point of departure prior to linkage with the SDE
Site. SDE shall create the link between the Return Icon and the GeoCities Basic
Commerce Platform. GeoCities shall furnish SDE with full color representations
of the Return Icon at least ten (10) business days prior to the Deployment Date
for SDE use under this Agreement. If GeoCities subsequently modifies the Return
Icon, it shall furnish a representation of same to SDE which SDE shall
substitute for the prior version within twenty (20) business days after receipt.
The Return Icon shall be visible at the SDE Site only to Viewers who link to the
SDE Site via the GeoCities Basic Commerce Platform and to no other visitors at
the SDE Site.
2.3 SDE shall ensure that the version of the SDE Site viewed by Viewers
who link to the SDE Site through the GeoCities Basic Commerce Platform shall be
substantially similar to the SDE Site viewed by non-Viewers except for SDE co-
branded sites with other companies, the Return Icon and as elsewhere provided
for in this Agreement.
SECTION 3. PROMOTIONAL PLACEMENTS
See Exhibit B.
SECTION 4. PARTICIPATION IN STRATEGIC PROGRAMS
See Exhibit B.
SECTION 5. COMPENSATION
5.1 As full consideration for GeoCities' performance under this
Agreement (including, without limitation, GeoCities' provision of all links,
advertisements and promotions specified in Sections 2, 3 and 4), SDE will pay
GeoCities the fixed placement fees and variable incentive payments specified in
this Section 5, and under certain circumstances, a Site Production Fee, as
described in Section 11.5.
5.2 During the initial term of this Agreement, SDE will pay GeoCities a
fixed placement fee of [***] Dollars ($[***]) on the Commencement Date and at
the beginning of each [***] that occurs subsequent to the Commencement Date
until the initial term ends in association with Section 11.1 hereof.
[***] Confidential treatment requested for redacted portion.
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5.3 During the term of this Agreement (including any renewal term),
for each [***] that occurs subsequent to the Commencement Date, SDE will pay
GeoCities the applicable percentage(s) of Qualifying Gross Margin Revenues set
forth opposite from the range of Qualifying Gross Margin Revenues occurring in
the first column.
QUALIFYING GROSS
QUALIFYING GROSS MARGIN REVENUES MARGIN REVENUE
[***] SHARE PERCENTAGE
[***] [***]
For example, if Qualifying Gross Margin Revenues equals $[***] in a given
[***], then GeoCities' share of the Qualifying Gross Margin Revenues earned as a
result of this Section 5.3 would be computed as follows:
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
Total share earned by GeoCities [***] [***]
[***] Confidential treatment requested for redacted portion.
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5.4 SDE will make payments under this Section 5 on a [***] basis, in
arrears within thirty (30) days following the end of each [***] occurring
subsequent to the Commencement Date.
5.5 SDE organizes their accounting periods around 4 week and 5 week
periods that approximate monthly reporting periods. SDE will provide GeoCities
with a schedule of the [***] periods, which shall be used for purposes of
determining [***] reporting periods for this Agreement.
5.6 SDE will deliver, together with each payment made pursuant to
Section 5.4, a written report signed by an authorized representative of SDE that
describes (in reasonable detail) SDE's calculation of the payment amount.
5.7 GeoCities shall have the right, no more frequently than once during
each term, at its expense, upon thirty (30) days advance written notice to SDE
and during SDE's normal business hours, to inspect and audit the books and
records of SDE, by an independent certified public account, for the limited
purpose of verifying any payments due to GeoCities under this Agreement. In the
event any shortfall in payment to GeoCities is found which exceeds ten percent
(10%) of the total due GeoCities for the reporting period audited, then SDE
shall promptly pay GeoCities the shortfall amount and reimburse GeoCities for
all reasonable costs of the audit. The audit shall be limited to verification of
over-payment or under-payment by SDE. In the event of SDE over-payment,
GeoCities shall promptly remit any over-payment of fees to SDE.
SECTION 6. IMPLEMENTATION
6.1 GeoCities and SDE acknowledge that time is of the essence in the
design, development and commencement of the links, advertisements and
promotional placements specified in this Agreement. Accordingly, the Parties
will devote all commercially reasonable efforts to launch each link,
advertisement and promotional placement as soon as reasonably possible, in
accordance with a written development plan to be negotiated by the Parties in
good faith.
6.2 GeoCities, in cooperation with SDE, will test the links,
advertisements and promotional placements required under this Agreement prior to
the time that they "go live" on the GeoCities Site (e.g., prior to the time that
they are implemented and enabled on a production version of the GeoCities Site).
6.3 GeoCities will not cause any link, advertisement or promotional
placement under this Agreement to go live on the GeoCities Site prior to the
applicable date agreed by the Parties. Further, at SDE's discretion, traffic
from promotional links and advertising placements will be enabled in stages;
provided, however, that such staging will not delay the Commencement Date.
[***] Confidential treatment requested for redacted portion.
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SECTION 7. TRAFFIC DATA
7.1 On a monthly basis, GeoCities will provide SDE with mutually agreed
data, in a form acceptable to SDE, concerning search and browsing behavior on
the GeoCities Site, to the extent such behavior reasonably could relate to the
online promotion or sale of computer hardware and software, or other products
that SDE may sell from time to time. SDE will hold such data in confidence and
will use it only in accordance with reasonable guidelines to be agreed by the
Parties.
7.2 SDE will use its best efforts to provide GeoCities with an online
report, produced on a daily basis, of orders for SDE's products submitted by
GeoCities' users. Such report is to be used by GeoCities to actively track
performance of various promotional tools that it has in service. GeoCities will
hold such data in confidence and will use it only in accordance with reasonable
guidelines to be agreed by the Parties. Notwithstanding anything to the contrary
contained in this Section, SDE will not be required to deliver to GeoCities any
data in violation of its then-existing policies regarding the protection of
actual sales information.
SECTION 8. EXCLUSIVITY AND MEDIA GUARANTEE
8.1 [***]
8.2 GeoCities shall be allowed to sell limited quantities of computer
hardware or software through its GeoStore, though the GeoStore shall not offer
more than a combination of twenty five (25) separate computer hardware or
software products at any point in time. GeoCities has an existing agreement with
the Internet Shopping Network, also doing business as First Auction, which
grants them the right to sell computer hardware and software within the
GeoCities Marketplace until the expiration of the agreement on [***]. The
Internet Shopping Network shall continue to be allowed to sell computer hardware
and software within the GeoCities Marketplace until the expiration of the
aforementioned agreement, which agreement shall not be renewed by GeoCities.
8.3 To preserve the benefits provided to SDE under this Agreement, in
the event that GeoCities enters into any merger, acquisition, transfer of
control, sale of substantial assets or similar transaction with any Competitor,
SDE may have the right to terminate this Agreement upon thirty (30) days'
notice.
8.4 As a result of the deployment of SDE's promotion on the GeoCities
website as described in Exhibit B of this Agreement, GeoCities will provide a
guaranteed number of impressions of at least [***].
[***] Confidential treatment requested for redacted portion.
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SECTION 9. INDEMNIFICATION
9.1 SDE shall at all times indemnify and hold harmless GeoCities,
including any director, officer, employee, agent or representative thereof (the
"Indemnified Parties") from and against any and all claims, suits, losses,
damages, costs, expenses and liabilities of whatsoever nature or kind
(including, but not limited to, attorneys' fees, litigation and court costs,
amounts paid in settlement, amounts paid to discharge judgment(s)) directly or
indirectly resulting from, arising out of, or related to (a) the operation of
the SDE Site, or (b) the violation of third-party intellectual property rights
by any editorial content or other materials provided by SDE for display on the
GeoCities Site. Subject to GeoCities' compliance with the procedures described
in Section 9.3, SDE will pay any award against GeoCities or its Affiliates (or
their respective employees, directors or representatives) and any costs and
attorneys' fees reasonably incurred by GeoCities and its Affiliates resulting
from any such claim or action.
9.2 GeoCities shall at all times indemnify and hold harmless SDE,
including any director, officer, employee, agent or representative thereof (the
"Indemnified Parties") from and against any and all claims, suits, losses,
damages, costs, expenses and liabilities of whatsoever nature or kind
(including, but not limited to, attorneys' fees, litigation and court costs,
amounts paid in settlement, amounts paid to discharge judgment(s)) directly or
indirectly resulting from, arising out of, or related to (a) the operation of
the GeoCities Site, or (b) the violation of any third-party intellectual
property rights by any editorial content or other materials provided by
GeoCities for display on the SDE Site. Subject to SDE's compliance with the
procedures described in Section 9.3, GeoCities will pay any award against SDE or
its Affiliates (or their respective employees, directors or representatives) and
any costs and attorneys' fees reasonably incurred by SDE and its Affiliates
resulting from any such claim or action.
9.3 In connection with any claim or action described in this Section,
the Party seeking indemnification (a) will give the indemnifying Party prompt
written notice of the claim, (b) will cooperate with the indemnifying Party (at
the indemnifying party's expense) in connection with the defense and settlement
of the claim, and (c) will permit the indemnifying Party to control the defense
and settlement of the claim, provided that the indemnifying Party may not settle
the claim without the indemnified Party's prior written consent (which will not
be unreasonably withheld). Further, the indemnified Party (at its cost) may
participate in the defense and settlement of the claim.
SECTION 10. INTELLECTUAL PROPERTY RIGHTS
10.1 Subject to the limited license granted to GeoCities under Section
10.2, SDE reserves all of its right, title and interest in its intellectual
property rights (e.g., patents, copyrights, trade secrets, trademarks and other
intellectual property rights). Subject to the limited license granted to SDE
under Section 10.3, GeoCities reserves all of its right, title and interest in
its intellectual property rights. Neither Party grants any license to the other
except as specifically set forth in this Section 10.
<PAGE>
10.2 SDE hereby grants to GeoCities, during the term of this Agreement,
a non-exclusive, non-transferable license to use SDE's trade names, trademarks,
service names and similar proprietary marks as is reasonably necessary to
perform its obligations under this Agreement; provided, however, that any
promotional materials containing SDE's proprietary marks will be subject to
SDE's prior written approval.
10.3 GeoCities hereby grants to SDE, during the term of this Agreement,
a non-exclusive, non-transferable license to use GeoCities' trade names,
trademarks, service names and similar proprietary marks as is reasonably
necessary to perform its obligations under this Agreement; provided, however,
that any promotional materials containing GeoCities' proprietary marks will be
subject to GeoCities' prior written approval.
10.4 Neither GeoCities nor SDE will use the other Party's proprietary
marks in a manner that disparages the other Party or its products or services,
or portrays the other Party or its products or services in a false,
competitively adverse or poor light. Each of GeoCities and SDE will comply with
the other Party's requests as to the use of the other Party's proprietary marks
and will avoid any action that diminishes the value of such marks. Either
Party's unauthorized use of the other's proprietary marks is strictly
prohibited.
SECTION 11. TERM AND TERMINATION
11.1 The term of this Agreement will begin on the date of this Agreement
and will end [***] following the Commencement Date.
11.2 Within [***] prior to expiration of the term of this Agreement,
GeoCities will provide to SDE written notification of the terms and conditions
under which GeoCities will renew this Agreement with SDE. GeoCities shall at
that time grant to SDE the exclusive option to accept the aforementioned terms
and conditions within [***] of receipt of GeoCities' written notice
communicating such terms and conditions to SDE and thereby renew this Agreement
at its expiration under such new terms and conditions.
11.3 Either GeoCities or SDE may terminate this Agreement if the other
party (a) materially breaches this Agreement and does not cure the breach within
thirty (30) days following its receipt of written notice from the non-breaching
party, or (b) ceases to carry on the portion of its business that relates to
this Agreement. In the event that SDE terminates this Agreement pursuant to the
terms of this Section 11.3, SDE's obligation to make any other payments under
this Agreement will be eliminated.
11.4 Sections 9, 12 and 13 (together with all other provisions that
reasonably may be interpreted as surviving termination or expiration of this
Agreement) will survive the termination or expiration of this Agreement.
11.5 At any time [***] or more after the Commencement Date, SDE shall
have the right to terminate this Agreement prior to its expiration upon
providing GeoCities with thirty (30) days prior written notice. In the event
that SDE elects to terminate this Agreement prior to its expiration, SDE will
pay a Site Production Fee as set forth below and after payment of such Site
Production Fee, SDE's obligation to make any other payments under this Agreement
[***] Confidential treatment requested for redacted portion.
<PAGE>
will be eliminated:
CUMULATIVE FIXED PLACEMENT
FEES PAID PRIOR TO OR AT
TIME OF TERMINATION SITE PRODUCTION FEE PAYABLE
[***] [***]
[***] [***]
[***] [***]
[***] [***]
SECTION 12. DISCLAIMERS, LIMITATIONS AND RESERVATIONS
12.1 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, GEOCITIES DOES
NOT MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE
GEOCITIES SITE, GEOCITIES' SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT
LIMITATION) IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, GEOCITIES
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT
OF SALES REVENUE THAT SDE MAY RECEIVE DURING THE TERM, AND (B) ANY ECONOMIC OR
OTHER BENEFIT THAT SDE MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.
12.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SDE DOES NOT
MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE SDE
SITE, SDE'S SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT LIMITATION)
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SDE SPECIFICALLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT OF SALES REVENUES THAT MAY
OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT THAT GEOCITIES
MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.
12.3 NEITHER SDE NOR GEOCITIES WILL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR LOST DATA)
ARISING OUT OF THIS AGREEMENT. EACH PARTY'S ENTIRE LIABILITY ARISING FROM THIS
AGREEMENT (EXCEPT FOR LIABILITIES ARISING UNDER SECTION 9 OR RESULTING FROM THE
PARTY'S WILLFUL MISCONDUCT), WHETHER IN CONTRACT OR TORT, WILL NOT EXCEED THE
AMOUNTS TO BE PAID BY SDE UNDER SECTION 5.
[***] Confidential treatment requested for redacted portion.
<PAGE>
12.4 SDE will remain solely responsible for the operation of the SDE
Site, and GeoCities will remain solely responsible for the operation of the
GeoCities Site. Each Party (a) acknowledges that the SDE Site and the GeoCities
Site may be subject to temporary shutdowns due to causes beyond the operating
Party's reasonable control, and (b) subject to the specific terms of this
Agreement, retains sole right and control over the programming, content and
conduct of transactions over its respective site.
SECTION 13. MISCELLANEOUS
13.1 The Parties are entering this Agreement as independent contractors,
and this Agreement will not be construed to create a partnership, joint venture,
franchise or employment relationship between them. Neither Party will represent
itself to be an employee or agent of the other or enter into any agreement on
the other's behalf of or in the other's name.
13.2 Each party agrees that the Confidential Information of the other
party will be held in confidence to the same extent and the same manner as each
party protects its own Confidential Information, but each party agrees that in
no event will less than reasonable care be used. Each party shall, however, be
permitted to disclose relevant aspects of such Confidential Information to its
officers, employees and consultants on a need-to-know basis, provided that they
have undertaken to protect the Confidential Information to the same extent as
required under this Agreement. Each party agrees to use all reasonable steps to
ensure that the other party's Confidential Information received under this
Agreement is not disclosed in violation of this paragraph. "Confidential
Information" means the terms of this Agreement, except as otherwise specifically
provided in the Agreement; each party's trade secrets, including but not limited
to, financial information, processes, formulas, specifications, programs,
instructions, source code, technical know-how, methods and procedures for
operation, benchmark test results, information about employees, customers,
marketing strategies, services, business or technical plans and proposals, in
any form; and any other information relating to either party that is not
generally known to the public at large.
Confidential Information shall not include information that (1) is or
becomes generally known or available to the public at large through no negligent
act or omission of either party; (2) can be demonstrated to have been available
lawfully to either party prior to the disclosure or had thereafter been
furnished to either party without restrictions to disclosure or use; or (3) can
be demonstrated to be independently developed by the recipient of Confidential
Information without use of such Confidential Information and such independent
development is proven on the basis of either party's records related to such
development.
13.3 Following the execution of this Agreement, SDE and GeoCities will
prepare and distribute a joint press release (or coordinated press releases)
announcing the transaction. The contents and timing of the release (or releases)
shall be as mutually agreed by the Parties. Neither Party will issue any further
press releases or make any other disclosures regarding this Agreement or its
terms without the other Party's prior written consent.
13.4 In its performance of this Agreement, each Party will comply with
all applicable laws, regulations, orders and other requirements, now or
hereafter in effect, of governmental authorities having jurisdiction. Without
limiting the generality of the foregoing, each Party will
<PAGE>
pay, collect and remit such taxes as may be imposed upon it with respect to any
compensation, royalties or transactions under this Agreement. Except as
expressly provided herein, each Party will be responsible for all costs and
expenses incurred by it in connection with the negotiation, execution and
performance of this Agreement.
13.5 Neither SDE nor GeoCities will be liable for, or will be
considered to be in breach of or default under this Agreement on account of, any
delay or failure to perform as required by this Agreement as a result of any
causes or conditions that are beyond such Party's reasonable control and that
such Party is unable to overcome through the exercise of commercially reasonable
diligence. If any force majeure event occurs, the affected Party will give
prompt written notice to the other Party and will use commercially reasonable
efforts to minimize the impact of the event and all fixed placement fees shall
be suspended until such events are cured.
13.6 Notices deliverable under this Agreement shall be given in
writing, addressed to the parties set forth below and shall be deemed to have
been given either one (1) day after being given to an express overnight carrier
with a reliable system for tracking delivery; or when sent by a confirmed
facsimile with another copy sent by any other means specified in this paragraph;
or three (3) business days after having been mailed postage prepaid by United
States registered or certified mail:
FOR NOTICES TO SDE: FOR NOTICES TO GEOCITIES:
Name: Jeffrey M. Swan James A. Rea
Title: Executive Vice President V.P. - Business Development
Address: 489 North 8/th/ Street 1918 Main Street, 3/rd/ Floor
City: Hood River, Oregon 97031 Santa Monica, CA 90405-1030
Facsimile: (541) 386-5384 (310) 664-6520
13.7 If any litigation is commenced to enforce any provision of this
Agreement or to seek a declaration of rights of the parties hereunder or as a
result of any breach of any provision of this Agreement, the prevailing party
will be entitled to recover from the non-prevailing party all of its costs and
expenses incurred in connection with such litigation, including without
limitation reasonable attorneys' fees.
13.8 Neither SDE nor GeoCities may assign this Agreement, in whole or
in part, without the other Party's prior written consent (which will not be
withheld unreasonably), except to (a) any corporation resulting from any merger,
consolidation or other reorganization involving the assigning Party, (b) any of
its Affiliates, or (c) any individual or entity to which the assigning Party may
transfer substantially all of its assets; provided that the assignee agrees in
writing to be bound by all the terms and conditions of this Agreement. Subject
to the foregoing, this Agreement will be binding on and enforceable by the
Parties and their respective successors and permitted assigns.
<PAGE>
13.9 If any provision of this Agreement is declared null, void or
otherwise unenforceable, such provision will be deemed to have been severed from
this Agreement to the minimal extent if necessary, which Agreement will
otherwise be and remain in full force and effect to its remaining provisions.
13.10 This Agreement (a) represents the entire agreement between the
parties with respect to the subject matter hereof and supersedes any previous or
contemporaneous oral or written agreements regarding such subject matter, (b)
may be amended or modified only by a written instrument signed by a duly
authorized agent of each party, and (c) will be interpreted, construed and
enforced in all respects in accordance with the laws of the State of California,
without reference to its choice of law rules. If any provision of this Agreement
is held to be invalid, such invalidity will not effect the remaining provisions.
The parties have executed this Agreement on the date first written above.
EGGHEAD, INC.
By: /s/George Orban
---------------------------------
George Orban
Its:Chief Executive Officer
489 North 8/th/ Street
Hood River, Oregon 97031
Facsimile: (541)386-5384
Attention: Jeffrey M. Swan
Executive Vice President
With copies to:
12403 Northeast Marx Street
Portland, Oregan 97230
Facsimile: (503) 408-7359
Attention: Jeffrey M. Swan
Executive Vice President
GEOCITIES
By: /s/James A. Rea
---------------------------------
James A. Rea
Its:Vice President - Business Development
1918 Main Street, 3/rd/ Floor
Santa Monica, California 90405
Facsimile: (310) 664-6520
<PAGE>
EXHIBIT A
LINKAGE
SDE Icon
Return Icon
A-1
<PAGE>
EXHIBIT B
STAGED DEPLOYMENT OF SDE PROMOTION ON GEOCITIES
STAGE IA
Target Start Date 11/1/97
1) Fixed Media Placement
[***] exposures/month (buttons/banners)
Plus E-Mail collection from member registration page
This may be modified upon the mutual agreement of the parties
2) Experimentation with Popups and/or Interstitials
3) Placement on GeoCities Homepage
Logo placement, aggregated with other strategic partners situated on main
homepage.
4) Placement on GeoCities Neighborhood Homepage
Logo placement, aggregated with other strategic partners situated on each
neighborhood homepage
5) Placement on GeoCities Neighborhood Topic Pages
Logo placement, aggregated with other strategic partners on each
neighborhood topic page
Specific targeted product placement either on each neighborhood topic page or on
a topic product page associated with each neighborhood topic page.
STAGE IB
Target Start Date 12/1/97
1) Placement on GeoCities Marketplace
Above the fold placement, more prominent in size than non-strategic marketplace
vendors.
[***] Confidential treatment requested for redacted portion.
B-1
<PAGE>
STAGE II
Target Start Date 1/1/98
1) Implement Computer Guides Program
Incentive program for GeoCities homesteaders to host for computer related
chat and discussion board sessions on their personal homepages
2) Integrate with GeoCities Chat Programs
Vendor's Chat - include all computer related chat sessions in directory of
active chat sessions and experiment with placing direct buy buttons on
computer related member hosted chat pages.
Products Within/Under Chat - deliver targeted product offers (fishing
software offers to fishing chat participants) to chat users.
B-2
<PAGE>
STAGE III
Target Start Date 2/1/98
Stage III involves an ongoing process of experimenting with new concepts
and implementing those concepts which appear to provide successful results. Some
of the areas we intend to explore are:
Product Offers on Search Result Pages
Product Offers on Interest Pages
Product Offers within Instant Messaging
Customized GeoGuides
Buyer's Clubs
First Time Buyer's Specials
Special Limited Time Offer Discounts
Greeting Card/Gift Certificate Combinations
GeoCities Site Values (available only to GeoCities Visitors)
B-3
<PAGE>
EXHIBIT C
COMPETITORS IN COMPUTER HARDWARE AND SOFTWARE CATEGORY
[***]
The following companies shall be construed as Competitors only when their
advertising creative materials to be run by GeoCities directly address the
Computer Hardware and Software category.
[***]
[***] Confidential treatment requested for redacted portion.
C-1
<PAGE>
EXHIBIT 10.8
BANKCARD ADVERTISING AGREEMENT
This Advertising Agreement (this "Agreement"), dated as of February 13, 1998, is
made by and between FIRST CREDIT CARD SERVICES USA L.L.C., a Delaware limited
liability company ("FCCSU-LLC"), and GeoCities, a California corporation
("GeoCities" or "the Company"). FCCSU-LLC and GeoCities sometimes are referred
to collectively as the "Parties" and individually as a "Party." This Agreement
is made together with the BankCard Issuance and Servicing Agreement by and
between FIRST USA BANK ("FUSA") and the Company of even date herewith (the
"Issuance and Servicing Agreement").
RECITALS:
WHEREAS, FCCSU-LLC assists FUSA in connection with the ongoing efforts of
FUSA to acquire its MasterCard and/or Visa consumer products and related
services (hereinafter referred to as "Credit Card(s)");
WHEREAS, this Agreement has been negotiated and executed by FCCSU-LLC and
the Company in order to document the terms of their agreement concerning the
marketing of Credit Cards to the Company's on-line service members and/or users
(collectively "Company Users" or "Users");
WHEREAS, FCCSU-LLC has agreed, subject to the terms and conditions
hereinafter contained, to market Credit Cards to Company Users on behalf of FUSA
in the manner and to the extent set forth in this Agreement;
WHEREAS, immediately upon the successful completion of the marketing
acquisition efforts of FCCSU-LLC as determined by FUSA and FCCSU-LLC in their
sole and absolute discretion, the underlying Credit Card accounts will be
immediately sold by FCCSU-LLC on an ongoing basis as such Credit Card accounts
are acquired, to FUSA so that the Credit Cards in question may then be issued by
FUSA to the Users in accordance with its then current business practices and
serviced by FUSA in the manner contemplated by the Issuance and Servicing
Agreement and in a manner consistent with the then current business practices of
FUSA;
WHEREAS, the Company is willing to endorse and facilitate the offering of
FUSA's Credit Card(s) to and among the Company Users subject to the terms and
conditions contained in this Agreement and in the Issuance and Servicing
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the Parties herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
1
<PAGE>
Section 1. Definitions
The following terms (and all declensions thereof) are used in this Agreement
with the respective meanings set forth below:
1.1 "Above Fold" means situated within the portion of a page that is designed
to be visible on a standard computer screen with a resolution of [***] without
requiring the User to scroll horizontally or vertically through the page.
1.2 "Affiliate" means, with respect to either Party, any entity that, by virtue
of a majority ownership interest, directly controls, is controlled by or is
under common control with that Party.
1.3 "FUSA Site" means, collectively, all points of presence and/or services
maintained by FCCSU-LLC or its Affiliates on the Internet or on any other public
data network.
1.4 "GeoCities Site" means, collectively, and subject to the limitations set
forth in the following sentences of this Section 1.4, all points of presence
and/or services maintained by GeoCities on the Internet as www.geocities.com or
on any other public data network; provided, however, that "GeoCities Site" does
not include any Homesteader Page or GeoShop Page. To the extent that GeoCities
enters into agreements with third parties relating to the joint development
and/or hosting of co-branded or outsourced personal home page communities, such
co-branded and outsourced communities shall not constitute part of the
"GeoCities Site," unless GeoCities determines, in its sole and absolute
discretion, that the inclusion of any such co-branded or outsourced communities
does not in any way conflict with or violate any such agreement with a third
party, or any agreements or other arrangements that such third party may have
with any other party. If GeoCities makes such a determination, it shall notify
FCCSU-LLC of such determination, and the co-branded or outsourced community in
question shall thereupon become part of the "GeoCities Site."
1.5 "GeoCities Basic Commerce Platform" means the collection of links,
advertisements and promotional placements associated with the GeoCities'
neighborhood home pages and neighborhood topic pages. The parties understand and
agree that FCCSU-LLC is one of four companies included in the GeoCities Basic
Commerce Platform.
1.6 "Viewer" means any User of the GeoCities Site who executes a link and is
connected to the FUSA Site.
1.7 "Commencement Date" means the date GeoCities first provides FCCSU-LLC with
all links, advertisements and other promotional placements which have been
indicated on Exhibit B to be implemented on or before the Commencement Date.
[***] Confidential treatment requested for redacted portion.
2
<PAGE>
1.8 "Consumer Card Products" means all forms of credit card and charge card
financial product issued by any bank to any individual consumer, including
Credit Cards as defined above and Co-Branded Credit Card Products as defined
below.
1.9 "Competitor" means (a) any entity (other than FUSA or FCCSU-LLC) which
advertises, markets, issues or otherwise provides access to Consumer Card
Products, including but not limited to the entities now known as [***], or (b)
any individual, corporation, corporate division, retail site, World Wide Web
site or other entity that either derives more than [***] percent ([***%]) of its
annual gross revenues from the issuance of Consumer Card Products, or is
primarily known as an issuer of Consumer Card Products. For purposes of this
Section 1.9, the Visa and MasterCard sponsoring organizations shall not be
construed to be Competitors [***] shall not be construed to be a Competitor so
long as the marketing services provided to [***] by GeoCities do not include
either (i) the ability to complete an application for Consumer Card Products
with [***] by any GeoCities User or (ii) an endorsement by the Company. The term
"endorsement" as used in the previous sentence is intended to portray a
situation where the Company states a preference toward a Competitor over FUSA or
FCCSU-LLC.
1.10 "Homesteader Page" means any personal homepage, or any commercial homepage
participating in GeoCities' GeoShop program (other than a GeoCities Affiliate)
which resides in a "member neighborhood" on the GeoCities Site.
1.11 "Session" means each instance in which a User accesses the FUSA Site via a
hypertext link embedded in any link, advertisement or other promotional
placement provided by GeoCities under this Agreement, and then views one or more
consecutive FUSA Site pages. A Session terminates when the User exits the FUSA
Site by any means.
1.12 "Marketing Acquisition Cost" is agreed to be [***] dollars ($[***]) per
application approved for Credit Cards.
1.13 "Exclusive Areas" means the GeoCities neighborhood homepages and the
GeoCities neighborhood topic pages.
1.14 "Co-branded Credit Card Product" means credit card financial products
which bear the name and logo of the Company and which include a Company funded,
Company-specific value for the consumer.
1.15 "GeoCities GeoShops Program" means the marketing program operated by
GeoCities which offers its homesteaders the opportunity to create a commercially
oriented homepage within the GeoCities Site. Participants in the GeoCities
GeoShops Program must confirm that their annual revenues are Two Hundred Fifty
Thousand Dollars ($250,000.00) or less upon application to the program.
[***] Confidential treatment requested for redacted portion.
3
<PAGE>
1.16 "Impression" means the successful loading of a FUSA icon onto a page being
viewed by a User on the GeoCities Site.
1.17 "Pageview" means the successful loading of a complete Web page being
viewed by a User on the GeoCities Site.
Section 2. Linkage
2.1 The graphic or other visual cue depicted on the attached Exhibit A, which
may include names, trademarks, servicemarks, designmarks, symbols and/or other
indicia of origin (the "FUSA Icon") shall be included among the GeoCities Basic
Commerce Platform hyperlink icons during the term. When clicked upon by a
Viewer, the FUSA Icon will link the Viewer with the FUSA Site. GeoCities shall
create the link between the FUSA Icon and the FUSA Site. FCCSU-LLC shall
furnish GeoCities with full color representations of the FUSA Icon at least ten
(10) business days prior to the date of intended use. GeoCities agrees that it
will display the FUSA Icon in a manner commensurate with its display of other
vendor hyperlink icons within the GeoCities Basic Commerce Platform. If FCCSU-
LLC subsequently modifies the FUSA Icon, it shall furnish a representation of
same to GeoCities which GeoCities shall substitute for the prior version within
twenty (20) business days after receipt.
2.2 The graphic or other visual cue depicted on the attached Exhibit A, which
may include names, trademarks, servicemarks, designmarks, symbols and/or other
indicia of origin (the "Return Icon") shall be displayed by FCCSU-LLC on each
page of the FUSA Site viewed by a Viewer during the term in the position within
the page layout as shown on Exhibit A. When clicked upon by a Viewer, the Return
Icon will link the Viewer with the GeoCities Basic Commerce Platform which was
the point of departure prior to linkage with the FUSA Site. FCCSU-LLC shall
create the link between the Return Icon and the GeoCities Basic Commerce
Platform. GeoCities shall furnish FCCSU-LLC with full color representations of
the Return Icon at least ten (10) business days prior to the date of intended
use. If GeoCities subsequently modifies the Return Icon, it shall furnish a
representation of same to FCCSU-LLC which FCCSU-LLC shall substitute for the
prior version within twenty (20) business days after receipt. The Return Icon
shall be visible at the FUSA Site only to Viewers who link to the FUSA Site via
the GeoCities Basic Commerce Platform and to no other visitors at the FUSA Site.
2.3 FCCSU-LLC shall ensure that the version of the FUSA Site viewed by Viewers
who link to the FUSA Site through the GeoCities Basic Commerce Platform shall be
substantially similar to the FUSA Site viewed by non-Viewers except for FCCSU-
LLC co-branded sites with other companies, the Return Icon and as elsewhere
provided for in this Agreement.
Section 3. Minimum Advertising Placements
[***] Confidential treatment requested for redacted portion.
4
<PAGE>
The Company guarantees to provide a minimum of [***] and guarantees that such
Impressions shall include [***] banner advertisements served Above Fold, [***]
popup banner advertisements served Above Fold and at least [***] Impressions
delivered Above Fold on the combined neighborhood homepages and neighborhood
topic pages. In no event shall placements for FCCSU-LLC within the GeoCities
Basic Commerce Platform be less than that for the Company's other GeoCities
Basic Commerce Platform partners. In order to test the optimal usage of the
aforementioned Impressions and/or to take advantage of information garnered
through FCCSU-LLC's use of each, FCCSU-LLC shall have the right to exchange the
allotment of banner advertisements and popup banner advertisements so long as
the combined number to be provided by the Company pursuant to this Section is
[***].
Section 4. Deployment
See Exhibit B.
Section 5. Issuance of Credit Cards
FCCSU-LLC shall have no obligation to issue Credit Cards to interested Company
Users in connection with the transactions described in this Agreement. Both
FCCSU-LLC and the Company hereby agree that FUSA shall issue Credit Cards to
interested Company Users in accordance with FUSA's standard Credit Card issuing
policies and credit practices, and in accordance with the applicable provisions
of the Issuance and Servicing Agreement. Any decisions concerning the
creditworthiness of any Company User shall be by FCCSU-LLC if made in accordance
with the credit criteria and policies supplied to FCCSU-LLC by FUSA.
Section 6.
Compensation
6.1 As full consideration for GeoCities' performance under this Agreement
(including, without limitation, GeoCities' provision of all links,
advertisements and promotions specified in Sections 2, 3 and 4), FCCSU-LLC will
pay GeoCities the fixed placement fees and variable incentive payments specified
in this Section 6.
6.2 During the initial term of this Agreement, FCCSU-LLC will pay GeoCities a
fixed placement fee of [***] Dollars ($[***]) on the Commencement Date and at
the beginning of each [***] that occurs subsequent to the Commencement Date
during the term.
6.3 During the term of this Agreement (including any renewal term), for each
[***] that occurs beginning with the [***] in which the Commencement Date falls,
and then for each [***] (whether whole or partial) during the term, FCCSU-LLC
wilt pay GeoCities a commission based on the number of applications approved for
Credit Cards from which applications were submitted during Sessions during the
respective [***] and calculated on a cumulative basis. The commission amount
shall be computed by selecting the appropriate
[***] Confidential treatment requested for redacted portion.
5
<PAGE>
Marketing Acquisition Cost Percentage found opposite the aggregate number of
applications approved opened and multiplying such Marketing Acquisition Cost
Percentage by the Marketing Acquisition Cost set forth in Section 1.12 times the
number of applications approved during the period.
Cumulative Applications Approved Marketing Acquisition Cost Percentage
- -------------------------------- -------------------------------------
(Computed from [***])
[***] [***]
For example, if [***] applications were accepted for Credit Cards in the [***],
respectively, the commission amount would be computed as follows:
Credit Card AppLications Approved [***]
Cume Applications Approved
Calculation of Commission
Commission calculated by multiplying approved applications times
commission percentage times $[***] per approved application
Approved Applications under tier [***]
Commission Rate for tier [***]
Commission Amount for tier [***]
Approved Applications under tier [***]
Commission Rate for tier [***]
Commission Amount for tier [***]
Approved Applications under tier [***]
Commission Rate for tier [***]
Commission Amount for tier [***]
Total Commission per [***]
6.3.1 As of each anniversary date of the Commencement Date during any renewal
terms of this Agreement, the Cumulative Applications Approved shall be deemed to
be [***] as of such anniversary date and shall thereafter accumulate in the same
manner as during the initial term of this Agreement, and the table set forth in
Section 6.3 shall be used each such successive year to compute the Marketing
Acquisition Cost Percentage as set forth in the example presented in Section
6.3.
[***] Confidential treatment requested for redacted portion.
6
<PAGE>
6.4 With the exception of the fixed placement fee set forth in Section 6.2
which shall be paid on a [***] basis at the beginning of each [***], FCCSU-LLC
will make payments under this Section 6 on a [***] basis, in arrears.
Specifically, within thirty (30) days following the end of each [***] occurring
subsequent to the Commencement Date, FCCSU-LLC will pay GeoCities an amount
equal to the commissions that accrued during the period under Section 6.3.
6.5 [***]
6.6 FCCSU-LLC will deliver, together with each payment made pursuant to this
Section 6, a written report signed by an authorized representative of FCCSU-LLC
that describes (in reasonable detail) FCCSU-LLC's calculation of the payment
amount. FCCSU-LLC's failure to include such a signature shall not be deemed a
default under this Agreement.
6.7 GeoCities shall have the right, no more frequently than once during each
term, at its expense, upon thirty (30) days advance written notice to FCCSU-LLC
and FUSA and during FCCSU-LLC's normal business hours, to inspect and audit the
books and records of FCCSU-LLC, by an independent certified public accountant
and a GeoCities representative, for the purpose of verifying any payments due to
GeoCities under this Agreement. In the event any shortfall in payment to
GeoCities is found, then FCCSU-LLC shall promptly pay GeoCities the shortfall
amount.
Section 7. Implementation
7.1 GeoCities and FCCSU-LLC acknowledge that time is of the essence in the
design, development and commencement of the links, advertisements and
promotional placements specified in this Agreement. Accordingly, the Parties
will devote all commercially reasonable efforts to launch each link,
advertisement and promotional placement as soon as reasonably possible, in
accordance with a written development plan to be negotiated by the Parties in
good faith.
7.2 GeoCities, in cooperation with First USA, will test the links,
advertisements and promotional placements required under this Agreement prior to
the time that they "go live" on the GeoCities Site (i.e., prior to the time that
they are implemented and enabled on a production version of the GeoCities Site).
7.3 GeoCities will not cause any link, advertisement or promotional placement
under this Agreement to go live on the GeoCities Site prior to the applicable
date agreed by the Parties.
Section 8. Traffic Data
8.1 On a monthly basis, GeoCities will provide FCCSU-LLC with mutually agreed
data concerning search and browsing behavior on the GeoCities Site, to the
extent such behavior reasonably could relate to the online promotion or sale of
Consumer Card Products, or other
[***] Confidential treatment requested for redacted portion.
7
<PAGE>
products that FCCSU-LLC may sell from time to time. FCCSU-LLC will hold such
data in confidence and will use it only in accordance with reasonable guidelines
to be agreed by the Parties. Notwithstanding anything to the contrary contained
in this Section 8, GeoCities will not be required to deliver to FCCSU-LLC any
User data in violation of its then-existing policies regarding the protection of
User information. Prior to the Commencement Date of this Agreement the Company
shall deliver to both FUSA and FCCSU-LLC its then existing policies regarding
the protection of User information, and to the extent practicable, provide FUSA
and FCCSU-LLC with thirty (30) days notice of any changes to such policies.
8.2 FCCSU-LLC will use commercially reasonable efforts to provide GeoCities
with an online report, produced on a daily basis, of inquiries and/or
applications for FUSA's products submitted by Company Users. Such report is to
be used by GeoCities to actively track performance of various promotional tools
that it has in service. GeoCities will hold such data in confidence and will use
it only in accordance with reasonable guidelines to be agreed by the Parties.
Notwithstanding anything to the contrary contained in this Section, FCCSU-LLC
will not be required to deliver to GeoCities any data in violation of its then-
existing policies regarding the protection of information about consumers and
sales. Prior to the Commencement Date of this Agreement, FCCSU-LLC shall deliver
to the Company its then existing policies regarding the protection of such
information, and to the extent practicable, provide the Company with thirty (30)
days notice of any changes to such policies.
8.3 FCCSU-LLC may maintain separately all information which is submitted and/or
obtained as a result of an application for an account relationship with Company
Users. This information becomes a part of FCCSU-LLC's own files and shall not be
subject to this Agreement; provided that, any use of such information, except
for fulfilling obligations hereunder, will not imply or suggest an endorsement
of such information by the Company.
8.4 FCCSU-LLC and the Company mutually agree that given the nature of the
industry, additional and/or various marketing vehicles not specifically
addressed in this Agreement may require additional User information. As a
result, the Company agrees to use commercially reasonable efforts to provide
such User information upon the reasonable request of FCCSU-LLC which can be used
to assist FCCSU-LLC's efforts to target marketing messages to Users.
Section 9. Exclusivity and Media Guarantee
9.1 [***]
9.2 The financial card products now known as "business card(s)" and "corporate
card(s)" which are used by commercial entities (vs. individual consumers) for
business purposes ("Non-Consumer Card(s)") and their successor Non-Consumer Card
products, if any, shall not be deemed [***] for purposes of the limitations
described in Section 9.1 above. However, in the event that the Company intends
to enter into or renew any agreement(s) for
[***] Confidential treatment requested for redacted portion.
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the provision of advertising or otherwise offering Non-Consumer Card(s), the
Company shall first offer FCCSU-LLC, and/or its applicable Affiliate(s), the
opportunity to include such Non-Consumer Card(s) under this agreement or to
otherwise enter into such an agreement with the Company. The Company shall give
FCCSU-LLC notice of any such intent and shall offer each such opportunity to
FCCSU-LLC, and FCCSU-LLC shall promptly notify all of its applicable
Affiliate(s) of the Company's intent and offer. Such notice from the Company
shall include a description of the particular type of Non-Consumer Card
opportunity being offered. If FCCSU-LLC declines the offer or fails to respond
to the offer within ten (10) business days, the Company shall be deemed to have
satisfied and shall have no additional obligations under this Section 9.2 with
respect to the type of Non-Consumer Card referenced aforementioned notice. If
FCCSU-LLC, or one of its Affiliates accepts such offer within the applicable
time period, then Company and FCCSU-LLC (or, if applicable, its Affiliate) shall
negotiate in good faith towards an agreement to include such Non-Consumer Cards
under this Agreement or within a new agreement. If they are unable to reach such
an agreement within fifteen (15) business days following the commencement of
such negotiations, the Company shall be deemed to have no additional obligations
under this Section 9.2 with respect to such Non-Consumer Card.
9.3 To preserve the benefits provided to FCCSU-LLC under this Agreement, in
the event that GeoCities enters into any merger, acquisition, transfer of
control or sale of substantially all of its assets to, or any similar
transaction with, (a) any Competitor or any entity that owns a Competitor, or
(b) any entity that due to its products, services and/or reputation creates a
demonstrable and material conflict of interest for FCCSU-LLC or FUSA, FCCSU-LLC
may have the right to terminate this Agreement upon thirty (30) days' notice.
Section 10. Representations and Warranties
10.1 FCCSU-LLC represents and warrants that (i) it is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware; (ii) the execution and delivery by FCCSU-LLC of this
Agreement, and the performance by FCCSU-LLC of the transactions contemplated
hereby, are within FCCSU-LLC's corporate powers, have been duly authorized by
all necessary corporate action, do not require any consent or other action by or
in respect of, or filing with, any third party or governmental body or agency
(other than informational filings required by MasterCard or Visa), and do not
contravene, violate or conflict with, or constitute a default under, any
provision of applicable law or regulation or of the charter or by-laws of FCCSU-
LLC or of any agreement, judgment, injunction, order, decree or other instrument
binding upon FCCSU-LLC; and (iii) it has the right, power and authority to
execute this Agreement and act in accordance therewith.
10.2 The Company represents and warrants that it is a California corporation
duly organized, validly existing and in good standing under the laws of the
State of California. The Company further represents and warrants that (i) the
execution and delivery by the Company of this Agreement, and the performance by
the Company of the transactions contemplated hereby, are within the Company's
powers, have been duly authorized by all necessary action, do not require any
consent or other action by or in respect of, filing with,
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any third party or any governmental body or agency, and do not contravene,
violate or conflict with, or constitute a default under, any provision of
applicable law, regulation, or under any governing documents, charter or bylaw,
or any agreement, judgment, injunction, order, decree or other instrument
binding on the Company; (ii) it is not aware of any claims, and is not currently
involved in any litigation, challenging the Company's access to the Web and/or
the Internet; and (iii) it has the right, power and authority to execute this
Agreement and act in accordance herewith.
Section 11. Indemnification
11.1 The Company shall not be responsible in any way for any misrepresentation,
negligent act or omission or willful misconduct of FCCSU-LLC, its Affiliates,
officers, directors, agents, or employees in connection with the entry into or
performance of any obligation of FCCSU-LLC under this Agreement. FCCSU-LLC will
defend and indemnify GeoCities and its Affiliates (and their respective
employees, directors and representatives) against any claim or action brought by
a third party, to the extent relating to (a) the operation of the FUSA Site over
which FCCSU-LLC and/or FUSA has control; or (b) the violation of third-party
intellectual property rights by any editorial content or other materials
provided by FCCSU-LLC for display on the GeoCities Site; or (c) in connection
with the use or display of FUSA's or FCCSU-LLC's names, servicemarks, trademarks
and similar property rights supplied to the Company by FCCSU-LLC pursuant to
this Agreement. Subject to GeoCities' compliance with the procedures described
in Section 11.3, FCCSU-LLC will pay any award against GeoCities or its
Affiliates (or their respectiv
third party, to the extent relating to (a) the operation of the GeoCities Site;
(b) rules, regulations, laws, statutes or orders relating to the Company's
business practice as an Internet provider, servicer and administrator; (c) the
violation of any third-party intellectual property rights by any editorial
content or other materials provided by GeoCities for display on the FUSA Site;
or (d) in connection with the editorial content or materials (other than
materials supplied by FCCSU-LLC or FUSA) displayed on the GeoCities Site or any
other use or display of GeoCities' names, servicemarks, trademarks and similar
property rights supplied to FCCSU-LLC or FUSA by the Company pursuant to this
Agreement. Subject to FCCSU-LLC's compliance with the procedures described in
Section 11.3, GeoCities will pay any award against FCCSU-LLC or its Affiliates
(or their respective employees, or representatives) and any costs and attorneys'
fees reasonably incurred by FCCSU-LLC and its Affiliates resulting from any such
claim or action.
11.3 In connection with any claim or action described in this Section, the
Party seeking indemnification (a) will give the indemnifying Party prompt
written notice of the claim, (b) will cooperate with the indemnifying Party (at
the indemnifying Party's expense) in connection with the defense and settlement
of the claim, and (c) will permit the indemnifying Party to control the defense
and settlement of the claim, provided that the indemnifying Party may not settle
the claim without the indemnified Party's prior written consent (which will not
be unreasonably withheld). Further, the indemnified Party (at its cost) may
participate in the defense and settlement of the claim, but may not interfere
with the indemnifying Party's control of the defense and settlement of the
claim(s).
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Section 12. Intellectual Property Rights
12.1 Subject to the limited license granted to GeoCities under Section 12.2,
FCCSU-LLC reserves all of its right, title and interest in its intellectual
property rights (e.g., patents, copyrights, trade secrets, trademarks and other
intellectual property rights). Subject to the limited license granted to FCCSU-
LLC under Section 12.3, GeoCities reserves all of its right, title and interest
in its intellectual property rights (e.g., patents, copyrights, trade secrets,
trademarks and other intellectual property rights). Neither Party grants any
license to the other except as specifically set forth in this Section 12.
12.2 FCCSU-LLC hereby grants to GeoCities, during the term of this Agreement, a
non-exclusive, non-transferable license to use FUSA's trade names, trademarks,
service names and similar proprietary marks as is reasonably necessary to
perform GeoCities' obligations under this Agreement; provided, however, that any
materials containing FUSA's trademarks, tradenames, servicemarks or other
proprietary marks will be subject to FUSA's prior written approval.
12.3 GeoCities hereby grants to FCCSU-LLC, during the term of this Agreement, a
non-exclusive, non-transferable license to use GeoCities' trade names,
trademarks, service names and similar proprietary marks as is reasonably
necessary to perform its obligations under this Agreement; provided, however,
that any materials containing GeoCities' trademarks, tradenames, servicemarks or
other proprietary marks will be subject to GeoCities' prior written approval.
12.4 Neither GeoCities nor FCCSU-LLC will use the other Party's (or FUSA's)
trademarks, tradenames, servicemarks or other proprietary marks in a manner that
disparages the other Party (or FUSA) or its products or services, or portrays
the other Party or its products or services in a false, competitively adverse or
poor light. However, any approvals given and received pursuant to the approval
rights granted herein with respect to the use of each Party's trademarks,
tradenames, servicemarks or other proprietary marks shall constitute a waiver of
that Party's right to indicate such use as false, competitively adverse or in
poor light. Each of GeoCities and FCCSU-LLC will comply with the other Party's
requests as to the use of the other Party's trademarks, tradenames, servicemarks
or other proprietary marks and will avoid any action that diminishes the value
of such marks. Either Party's unauthorized use of the other's (or FUSA's)
trademarks, tradenames, servicemarks or other proprietary marks is strictly
prohibited.
Section 13. Term and Termination
13.1 The initial term of this Agreement will begin on the date first set forth
above and will end [***] following the Commencement Date.
13.2 No sooner than ninety (90) days after the Commencement Date and no later
than one hundred eighty (180) days after the Commencement Date, the Parties
mutually agree to
[***] Confidential treatment requested for redacted portion.
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negotiate in good faith over a period of not more than forty-five (45) days
toward an agreement whereby the Parties offer a Company Co-Branded Credit Card
Product.
13.3 In the event that the Parties enter into an agreement to issue a Company
CoBranded Credit Card Product as provided in Section 13.2 of this Agreement,
then no later than nine (9) months after the Commencement Date, the Parties
agree to negotiate in good faith over a period of not more than forty-five (45)
days for the purpose of entering into a combined agreement which serves as a
successor to this Agreement and to the agreement created as a result of Section
13.2.
13.4 In the event that the Parties fail to enter into a successor agreement as
provided in Section 13.3 of this Agreement, then FCCSU-LLC will have the option
to renew the term of this Agreement for a single [***] renewal term by giving
GeoCities written notice, at least thirty (30) days prior to the expiration of
the initial term, indicating FCCSU-LLC's exercise of its option to renew the
term of this Agreement. During any renewal term, all terms and conditions of
this Agreement, unless explicitly amended in writing and except this Section
13.4 will remain in full force and effect, and except that the fixed placement
fees payable pursuant to Section 6.2 will be adjusted [***]. The parties
acknowledge and agree that the result of the calculation described in the
preceding sentence may increase or decrease the fixed placement fees payable by
FCCSU-LLC. Further, the Company shall not impose an increase which is in
proportion materially greater than the increases for its other Basic Commerce
Platform partners.
13.5 Either GeoCities or FCCSU-LLC may terminate this Agreement if the other
Party materially breaches this Agreement and does not cure the breach within
thirty (30) days following its receipt of written notice from the non-breaching
Party except that the non-breaching Party may have an additional thirty (30)
days to cure the breach if it can demonstrate that it needs the additional
thirty (30) days to effectuate the cure. In the event that FCCSU-LLC terminates
this Agreement pursuant to the terms of this Section 13.3, FCCSU-LLC's
obligation to make any other payments under this Agreement will be eliminated in
addition to any other remedies at law or in equity available to the non-
breaching party.
13.6 Sections 10, 11, 12, 14 and 15 (together with all other provisions which
by their terms specifically state that they shall survive termination or
expiration of this Agreement) will survive the termination or expiration of this
Agreement.
Section 14. Disclaimers, Limitations and Reservations
14.1 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, GEOCITIES DOES NOT MAKE,
AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE GEOCITIES
SITE, GEOCITIES' SERVICES OR ANY PORTION
[***] Confidential treatment requested for redacted portion.
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THEREOF, INCLUDING (WITHOUT LIMITATION) IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, GEOCITIES SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY
REGARDING (A) THE AMOUNT OF SALES REVENUE THAT FCCSU-LLC MAY RECEIVE DURING THE
TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT THAT FCCSU-LLC MIGHT OBTAIN THROUGH
ITS PARTICIPATION IN THIS AGREEMENT.
14.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, FCCSU-LLC DOES NOT MAKE,
AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE FUSA SITE,
FCCSU-LLC'S SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT LIMITATION)
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, FCCSU-LLC SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT OF SALES
REVENUES THAT MAY OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR BENEFIT THAT
GEOCITIES MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.
14.3 NEITHER FCCSU-LLC NOR GEOCITIES WILL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR LOST DATA)
ARISING OUT OF THIS AGREEMENT. EACH PARTY'S ENTIRE LIABILITY ARISING FROM THIS
AGREEMENT (EXCEPT FOR LIABILITIES ARISING UNDER SECTION 11 OR RESULTING FROM THE
PARTY'S WILLFUL MISCONDUCT), WHETHER IN CONTRACT OR TORT, WILL NOT EXCEED AN
AMOUNT EQUAL TO THE TOTAL AMOUNT PAID.
14.4 FCCSU-LLC will remain solely responsible for the operation of the FUSA
Site, and GeoCities will remain solely responsible for the operation of the
GeoCities Site. Each Party (a) acknowledges that the FUSA Site and the GeoCities
Site may be subject to temporary shutdowns due to causes beyond the operating
Party's reasonable control, and (b) subject to the specific terms of this
Agreement, retains sole right and control over the programming, content and
conduct of transactions over its respective site. If temporary shutdowns due to
causes beyond the operating Party's reasonable control continue for a period of
five (5) business days or more, then the term of this Agreement shall be
extended for a period of time equal to the time lost.
Section 15. Miscellaneous
15.1 The Parties are entering this Agreement as independent contractors, and
this Agreement will not be construed to create a partnership, joint venture,
franchise or employment relationship between them. Neither Party will represent
itself to be an employee or agent of the other or enter into any agreement on
the other's behalf or in the other's name.
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15.2 (a) The Parties acknowledge and agree that the terms of this Agreement
and all information provided to or in connection with either party's performance
under this Agreement shall be considered confidential and proprietary
information ("Confidential Information") and shall not be disclosed to any third
party without the prior written consent of the Party providing the Confidential
Information (the "Disclosing Party"). Confidential Information shall include,
without limitation: (i) names, addresses, and demographic, behavioral, and
credit information relating to FUSA Cardmembers or potential FUSA Cardmembers;
(ii) Cardmember communication materials and issuance strategies or methods;
(iii) each Party's trade secrets, including but not limited to, financial
business objectives, assets and properties, processes, formulas, specifications,
programs, instructions, source code, technical know-how, methods and procedures
for operation, benchmark test results, information about employees, customers,
strategies, services, business or technical plans and proposals in any form; and
(iv) programming techniques and technical, developmental, cost and processing
information.
(b) The Party receiving such Confidential Information (the "Receiving
Party") shall use Confidential Information only for the purpose of performing
the terms of this Agreement and shall not accumulate in any way or make use of
Confidential Information for any other purpose. The Receiving Party shall ensure
that only its employees, authorized agents, or subcontractors who need to know
Confidential Information to perform this Agreement will receive Confidential
Information and that such persons agree to be bound by the provisions of this
Paragraph and maintain the existence of this Agreement and the nature of their
obligations hereunder strictly confidential.
(c) The obligations with respect to Confidential Information shall not
apply to Confidential Information that: (ii) either Party or its personnel
already know at the time it is disclosed as shown by their written records; (ii)
is publicly known without breach of this Agreement; (iii) either Party received
from a third party authorized to disclose it without restriction; (iv) either
Party, its agents or subcontractors, developed independently without use of
Confidential Information; or (v) either Party is required by law, regulation or
valid court or governmental agency order or request to disclose, in which case
the Party receiving such an order or request, to the extent practicable, must
give notice to the other Party, allowing them to seek a protective order.
(d) Each Party agrees that any unauthorized use or disclosure of
Confidential Information may cause immediate and irreparable harm to the
Disclosing Party for which money damages may not constitute an adequate remedy.
In that event, each Party agrees that injunctive relief may be warranted in
addition to any other remedies the Disclosing Party may have. In addition, the
Receiving Party agrees promptly to advise the Disclosing Party in writing of any
unauthorized misappropriation, disclosure or use by any person of the
Confidential Information which may come to its attention and to take all steps
at its own expense reasonably requested by the Disclosing Party to limit, stop
or otherwise remedy such misappropriation, disclosure or use.
(e) Upon either Party's demand, or upon the termination of this
Agreement, the Parties shall comply with each other's reasonable instructions
regarding the disposition of
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Confidential Information which may include return of any and all Confidential
Information (including any copies or reproductions thereof). Such compliance
shall be certified in writing, including a statement that no copies of
confidential information have been kept.
(f) Except as necessary for its performance under this Agreement, Company
shall not use the name of FUSA, its Affiliates or subsidiaries in connection
with any representation, publication or advertisement, or make any public
statement relating to FUSA, its Affiliates or subsidiaries, without the prior
full disclosure of same to FUSA, and the prior written consent of FUSA.
(g) Except as may be required by law, regulation or any governmental
authority, neither the Company, nor any of its Affiliates, shall issue a press
release or make public announcement or any disclosure to any third party related
to the transactions contemplated by this Agreement without the prior consent of
FUSA, which consent shall not be unreasonably withheld or delayed.
(h) The obligations of this Paragraph 15.2 shall survive the termination of
this Agreement for a period of two (2) years.
15.3 Following the execution of this Agreement, FCCSU-LLC and GeoCities will
prepare and distribute a joint press release (or coordinated press releases)
announcing the transaction. The contents and timing of the release (or releases)
shall be as mutually agreed by the Parties. Neither Party will issue any further
press releases or make any other disclosures regarding this Agreement or its
terms without the other Party's prior written consent unless required by law.
15.4 In its performance of this Agreement, each Party will comply with all
applicable laws, regulations, orders and other requirements, now or hereafter in
effect, of governmental authorities having jurisdiction. Without limiting the
generality of the foregoing, each Party will pay, collect and remit such taxes
as may be imposed upon it with respect to any compensation, royalties or
transactions under this Agreement. Except as expressly provided herein, each
Party will be responsible for all costs and expenses incurred by it in
connection with the negotiation, execution and performance of this Agreement.
15.5 Neither FCCSU-LLC nor GeoCities will be liable for, or will be considered
to be in breach of or default under this Agreement on account of, any delay or
failure to perform as required by this Agreement as a result of any causes or
conditions that are beyond such Party's reasonable control and that such Party
is unable to overcome through the exercise of commercially reasonable diligence.
If any force majeure event occurs, the affected Party will give prompt written
notice to the other Party and will use commercially reasonable efforts to
minimize the impact of the event.
15.6 Notices deliverable under this Agreement shall be given in writing,
addressed to the Parties set forth below and shall be deemed to have been given
either one (1) day after being given to an express overnight carrier with a
reliable system for tracking delivery; or when sent by a confirmed facsimile
with another copy sent by any other means specified in this
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paragraph; or three (3) business days after having been mailed postage prepaid
by United States registered or certified mail:
For notices to First USA: For notices to GeoCities:
James A. Rea
Name:___________________
Title:__________________
Address: 3 Christina Center, 201 N. Walnut St. Vice President Business
Development
City: Wilmington, DE 19801 1918 Main Street, 3rd Floor
Santa Monica, CA 90405-1030
Facsimile:______________
Copy to General Counsel (310) 664-6520
15.7 If any litigation is commenced to enforce any provision of this Agreement
or to seek a declaration of rights of the Parties hereunder or as a result of
any breach of any provision of this Agreement, the prevailing Party will be
entitled to recover from the non-prevailing Party all of its costs and expenses
incurred in connection with such litigation, including without limitation
reasonable attorneys' fees.
15.8 Neither FCCSU-LLC nor GeoCities may assign this Agreement, in whole or in
part, without the other Party's prior written consent (which will not be
withheld unreasonably), except to (a) any corporation resulting from any merger,
consolidation or other reorganization involving the assigning Party, (b) any of
its Affiliates with reasonably comparable resources, or (c) any individual or
entity to which the assigning Party may transfer substantially all of its
assets; provided that the assignee agrees in writing to be bound by all the
terms and conditions of this Agreement. Subject to the foregoing, this Agreement
will be binding on and enforceable by the Parties and their respective
successors and permitted assigns.
15.9 Informal Dispute Resolution. Any controversy or claim between the
---------------------------
Company, on the one hand, and FCCSU-LLC, on the other hand, arising from or in
connection with this Agreement whether based on contract, tort, common law,
equity, statute, regulation, order or otherwise ("Dispute") shall be resolved as
follows:
(a) Upon written request of either the Company, on the one hand, and
FCCSU-LLC, on the other hand, a duly appointed representative(s) of each Party
will meet for the purpose of attempting to resolve such Dispute. Should they be
unable to resolve the Dispute, the Senior Marketing Executive will meet with
FCCSU-LLC's Executive Vice President of Marketing (the "Executives") in an
effort to resolve the Dispute. Said meeting shall be in person or by telephone.
(b) The Executives shall meet as often as the Parties agree to discuss the
problem in an effort to resolve the Dispute without the necessity of any formal
proceeding.
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(c) Formal proceedings for the resolution of a Dispute may not be
commenced until the earlier of:
i. the Parties concluding in good faith that amicable resolution
through the procedures set forth in subsections (a)-(b) hereof does not appear
likely; or
ii. the expiration of the fifteen (15) business day period
immediately following the initial request to negotiate the Dispute;
provided, however, that this Section 15.9 will not be construed to prevent a
Party from instituting formal proceedings earlier to avoid the expiration of any
applicable limitations period, to preserve a superior position with respect to
other creditors or to seek temporary or preliminary injunctive relief.
15.10 Arbitration.
-----------
(a) If the Parties are unable to resolve any Dispute as contemplated by
Section 15.9, such Dispute shall be submitted to mandatory and binding
arbitration at the election of either the Company, on the one hand, and FCCSU-
LLC, on the other hand (the "Disputing Party"). Except as otherwise provided in
this Section, the arbitration shall be pursuant to the Commercial Arbitration
Rules of the American Arbitration Association ("AAA").
(b) To initiate arbitration, the Disputing Party shall notify the other
Party in writing (the "Arbitration Demand"), which shall (i) describe in
reasonable detail the nature of the Dispute, (ii) state the amount of the claim,
and (iii) specify the requested relief. Within fifteen (15) days after the other
Party's receipt of the Arbitration Demand, such other Party shall file, and
serve on the Disputing Party, a written statement (i) answering the claims set
forth in the Arbitration Demand and including any affirmative defenses of such
Party; (ii) asserting any counterclaim, which shall (A) describe in reasonable
detail the nature of the counterclaim, and (B) state the amount of the
counterclaim, and (C) specify the requested relief.
(c) If the amount of the controversy set forth in either the claim or
counterclaim is less than $100,000, then the matter shall be resolved by a
single arbitrator selected pursuant to the rules of the AAA; provided, however,
that if the arbitration hearing is held in Los Angeles County, the arbitrator(s)
shall be selected from the list of retired Los Angeles County Superior Court
judges who serve as AAA arbitrators.
(d) If the amount of the controversy set forth in either the claim or
counterclaim is equal to exceeds $100,000, then the matter shall be resolved by
a panel of three arbitrators (the "Panel") selected pursuant to the rules of the
AAA. Decisions of a majority of the members of the Panel shall be determinative;
provided, however, that if the arbitration hearing is held in Los Angeles
County, the arbitrator(s) shall be selected from the list of retired Los Angeles
County Superior Court judges who serve as AAA arbitrators.
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(e) The arbitration hearing shall be held in such neutral location as the
Parties may mutually agree or, if they cannot agree within five (5) business
days after the date on which the first proposal of a neutral location is made,
in the county in which the principal executive office of the Party that is not
the Disputing Party is located. The Panel is specifically authorized in
proceeding pursuant to Section (d) to render partial or full summary judgment as
provided for in the Federal Rules of Civil Procedure. Unless otherwise agreed by
the Parties, partial or full summary judgment shall not be available in
proceedings pursuant to subsection (c) above. In the event summary judgment or
partial summary judgment is granted, the nonprevailing Party may not raise as a
basis for a motion to vacate an award that the Panel failed or refused to
consider evidence bearing on the dismissed claim(s) or issue(s). The Federal
Rules of Evidence shall apply to the arbitration hearing. The Party bringing a
particular claim or asserting an affirmative defense will have the burden of
proof with respect thereto. The arbitration proceedings and all testimony,
filings, documents and information relating to or presented during the
arbitration shall be deemed to be information subject to the confidentiality
provisions of this Agreement. The Panel will have no power or authority, under
the Commercial Arbitration Rules of the AAA or otherwise, to relieve the Parties
from their agreement hereunder to arbitrate or otherwise to amend or disregard
any provision of this Agreement, including, without limitation, the provisions
of this Paragraph.
(f) Should an arbitrator refuse or be unable to proceed with arbitration
proceedings as tailed for by this Section, the arbitrator shall be replaced
pursuant to the rules of the AAA. If an arbitrator is so replaced after the
arbitration hearing has commenced, then a rehearing shall take place in
accordance with this Section and the Commercial Arbitration Rules of the AAA.
(g) At the time of granting or denying a motion of summary judgment as
provided for in (e) and within fifteen (15) days alter the closing of the
arbitration hearing, the arbitrator or Panel will prepare and distribute to the
Parties a writing setting forth the arbitrator's or Panel's finding of facts and
conclusions of law relating to the Dispute, including the reasons for the giving
or denial of any award. The findings and conclusions and the award, if any,
shall be deemed to be information subject to the confidentiality provisions of
this Agreement.
(h) The arbitrator of Panel is instructed to schedule promptly all
discovery and other procedural steps and otherwise assume case management
initiative and control to effect an expeditious resolution of the Dispute. The
arbitrator or Panel is authorized to issue monetary sanctions against either
Party if, upon a showing of good cause, such Party is unreasonably delaying the
proceeding.
(i) Any award rendered by the arbitrator or Panel will be final, conclusive
and binding upon the Parties and any judgment hereon may be entered and enforced
in any court of competent jurisdiction.
(j) Each Party will bear a pro rata share of all fees, costs and expenses
of the arbitrators, and notwithstanding any law to the contrary, each Party will
bear all the fees,
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costs and expenses of its own attorneys, experts and witnesses; provided,
however, that in connection with any judicial proceeding to compel arbitration
pursuant to this Agreement or to confirm, vacate or enforce any award rendered
by the arbitrator or Panel, the prevailing Party in such a proceeding shall be
entitled to recover reasonable attorney's fees and expenses incurred in
connection with such proceedings, in addition to any other relief to which it
may be entitled.
15.11 If any provision of this Agreement is declared null, void or otherwise
unenforceable, such provision will be deemed to have been severed from this
Agreement to the minimal extent if necessary, which Agreement will otherwise be
and remain in full force and effect to its remaining provisions.
15.12 This Agreement (a) represents the entire agreement between the Parties
with respect to the subject matter hereof and supersedes any previous or
contemporaneous oral or written agreements regarding such subject matter and (b)
may be amended or modified only by a written instrument signed by a duly
authorized agent of each Party.
15.13 This Agreement will be interpreted, construed and enforced in all
respects in accordance with the laws of the State of Delaware, without reference
to its choice of law rules. If any provision of this Agreement is held to be
invalid, such invalidity will not effect the remaining provisions.
19
<PAGE>
The parties have executed this Agreement on the date first written above.
First USA
/s/Carter Warren
By: Carter Warren
Its: Executive Vice President
_____________________
_____________________
Facsimile:________________
and
/s/__________________
By: _____________________
Its: Vice President
_____________________
_____________________
Facsimile:________________
GeoCities
/s/James A. Rea
By: James A. Rea
Its: Vice President Business Development
1918 Main Street, 3rd Floor
Santa Monica, California 90405
Facsimile:___________
and
/s/__________________
By: _____________________
Its: _____________________
1918 Main Street, 3rd Floor
Santa Monica, California 90405
Facsimile:___________
20
<PAGE>
EXHIBIT A - Linkage
FUSA Icon
Return Icon
21
<PAGE>
EXHIBIT B
Deployment of minimum FCCSU-LLC Advertising on GeoCities Platform
<TABLE>
<CAPTION>
Above Fold Below Fold Implementation
Imp/[***] Imp/[***] Timeframe
---------- ---------- -----------------
<S> <C> <C> <C>
Guaranteed Ads** [***] Commencement Date
Guaranteed Popups [***] Commencement Date
GeoCities Home Page [***] Commencement Date
Neighborhood Homepages [***] [***] Commencement Date
(currently 39 and growing)
Neighborhood Topic pages [***] [***] Commencement Date
(currently between 500 and 600)
World Report
On Release & Every 2 Months [***] 15 days after
(approx. 900,000 copies/issue) Commencement Date
E-mail Solicitations per Quarter [***] 30 days after
(approx. 600,000 addresses) Commencement Date
Marketplace 30 days after
[***] Commencement Date
Permanent Presence on 90 days after
Registration Pages for Commencement Date
New Users (21+) [***]
Permanent Presence in 90 days after
Financial Center [***] Commencement Date
Grand Total Imp/[***] [***]
Grand Total Imp/[***] [***]
</TABLE>
* Imp/[***] shall mean Impressions per [***]
** Ads shall mean advertisements, type at FCCSU-LLC's discretion (Banner, Popup)
*** Adjusted for monthly volume
[***] Confidential treatment requested for redacted portion.
22
<PAGE>
EXHIBIT 10.9
CODISTRIBUTION AGREEMENT
This CODISTRIBUTION AGREEMENT ("Agreement"), effective as of December 31,
1997 (the "Effective Date"), contains the understandings and agreement of
GeoCities ("GeoCities") and Yahoo! Inc. ("Yahoo") with regard to a strategic
alliance between such parties.
SECTION 1: RESPONSIBILITIES OF PARTIES.
- ---------------------------------------
1.1 GeoCities manages and operates a community-based free web page hosting
service and web site, www.geocities.com (the "GeoCities Properties").
GeoCities agrees to offer the GeoCities Properties to registered users of
www.yahoo.com (the "Yahoo Property"). Collectively, registered users of the
Yahoo Property are referred to herein as "Yahooville Members"; registered
users of GeoCities Properties are referred to herein as "Homesteaders", and
registered users of both the Yahoo Property and GeoCities Properties are
referred to herein as "Yahooville Homesteaders". GeoCities will use and
make available to Yahooville Members GeoCities technology, publishing and
community building tools, as set forth in Exhibit A attached hereto, which
---------
shall at all times be at the same level with respect to nature, quality,
feature, functionality and performance that GeoCities makes such
technology, publishing and community building tools available to other
members of GeoCities Properties. At all times GeoCities shall offer free
Web page hosting services reasonably competitive with those offered by
other leading providers of such services.
1.2 GeoCities will be Yahoo's Premier third party, branded partner providing
free, personal, non-commercial web page hosting services to Yahooville
Members from the Yahoo Property. For purposes of this Agreement, the phrase
"Yahoo's Premier", with respect to GeoCities' rights shall mean,
substantially as shown in Exhibit F (as such exhibit may be amended from
---------
time to time at Yahoo's sole discretion and upon notice to GeoCities), but
in no event less than: [***]. Yahoo will have the ability to list other
free web page hosting services [***]. In the event that Yahoo decides to
provide its own, proprietary, personal, non-commercial web page hosting
services to Yahoo users, then GeoCities will have the option of terminating
this Agreement without penalty referenced in Section 6.2, 6.3, or
otherwise.
[***] Confidential treatment requested for redacted portion.
June 29, 1998 1 CONFIDENTIAL
<PAGE>
1.3 Links to Yahoo's thematic content and the Yahoo brand will be displayed in
a GeoCities Premier Location on each of the main "neighborhood" and "topic"
pages, or future manifestations or successors thereof, of the various
GeoCities Properties thematic neighborhoods. For purposes of this
Agreement, the phrase "GeoCities Premier Location" shall mean, at a
minimum, prominently featured, typically in a central location, within the
top two-thirds of each relevant page of the GeoCities Properties, and in
any event consistent with other featured programs offered on GeoCities
Properties, as set forth in Exhibit B attached hereto, as such exhibit may
---------
be amended from time to time at GeoCities' sole discretion, consistent with
the requirements stated above in this Section 1.3, and upon notice to
Yahoo. In addition, as possible, GeoCities and Yahoo will cooperate to
establish Yahoo-branded, value-added programming services in windows on the
GeoCities Properties.
1.4 At the "topic" page of each GeoCities "neighborhood" or future
manifestations or successors thereof, GeoCities will make available a
button or mark (the "Yahooville Button") for dynamic sub-aggregation of
Yahooville Homesteader in the GeoCities Properties. The Yahooville Button
will be mutually agreed by the parties, will include appropriate
identification that the Yahooville Homesteader are registered users of
Yahoo Property, and, at a minimum, will conform to GeoCities'
specifications with respect to placement and size, and to Yahoo's
specifications with respect to graphical design and content. Yahoo will be
responsible for providing the graphical design and content for such
Yahooville Button. Such specifications, placement, size, and graphical
design shall be substantially as set forth in Exhibit C attached hereto.
---------
1.5 Each Yahooville Member who chooses to build a homepage on GeoCities will be
provided, and will retain, a Yahooville Members' mark or designation
substantially similar in size, placement and character to that set forth in
Exhibit D attached hereto.
---------
1.6 GeoCities members will be offered association with Yahoo in two fashions:
[***]. In any event, GeoCities Homesteaders [***].
1.7 GeoCities and Yahoo will mutually agree upon a "Welcome Yahooville Members
to GeoCities" jump page (hosted on Yahoo), that is co-authored and co-
branded by the parties, and which provides a smooth transition from the
Yahooville Members profile page to GeoCities. The parties agree that no
third party advertisements, third party offers,
[***] Confidential treatment requested for redacted portion.
June 29, 1998 2 CONFIDENTIAL
<PAGE>
or third party links will be contained on such jump pages or shall be
presented to Yahooville Members until registration is complete and such
member is part of the GeoCities Community. GeoCities agrees that it will
not specifically target in any way any soliciting, advertising, promotional
or marketing activities or materials to Yahooville Members on GeoCities
Properties on the basis of such person's status as a Yahooville Member.
The parties agree that GeoCities may offer an option to Yahooville
Homesteaders to register for other services and products at the end of the
registration form on GeoCities Properties; provided, however, that such
-------- -------
other products and services are not competitive with Yahoo's services, and
only once such Yahooville Members have completed registration as a
GeoCities Homesteader. To accomplish the foregoing, GeoCities may place a
button or text link that links to an offer for GeoCities services.
1.8 Any substantial reduction in the features, quality, or functionality of the
GeoCities Properties offered to Yahooville Homesteaders will be agreed upon
between the parties.
1.9 GeoCities and Yahoo will jointly agree on an equal "value" of banner
inventory on each respective service to be allocated solely for the purpose
of cross-promotion of the relationship set forth in this Agreement. The
parties agree that the first period to set "value'" will be [***] after the
implementation date. Thereafter, "value" will be determined on a [***]
basis. For purposes of this Agreement, the term "value" shall mean the
value of such banner inventory as reflected in each party's then-current
rate card, as set independently by each party.
1.10 GeoCities will have the ability to sell and retain [***]% of the revenue
from inventory on GeoCities Properties associated with all Yahooville
Members who join GeoCities Properties.
1.11 Each party hereto agrees to identify one to two employees to act as
contacts and to work as reasonably required under this Agreement.
1.12 GeoCities shall submit "featured Homestead Pages" from the GeoCities
Properties to Yahoo for inclusion, subject to Yahoo's ultimate editorial
control, in the Yahoo Property. GeoCities shall also provide suggestions to
Yahoo regarding the appropriate placement of such featured Homestead Pages
in the Yahoo Property, including suggestions for specific categories within
the Yahoo Property. The parties will discuss additional placement of such
featured Homestead pages in the Yahoo Property on a periodic basis.
SECTION 2: ADDITIONAL RESPONSIBILITIES OF YAHOO.
- ------------------------------------------------
2.1 Yahoo will market the GeoCities free web page hosting services in a premier
position from the Yahooville Members Profile page and, at its sole
discretion, from other areas of Yahoo Property, substantially in the manner
set forth in Exhibit F attached hereto. The
---------
[***] Confidential treatment requested for redacted portion.
June 29, 1998 3 CONFIDENTIAL
<PAGE>
parties will discuss additional exposure for GeoCities to the Yahoo members
on a periodic basis.
2.2 Yahoo will become GeoCities' Premier provider of navigational and directory
services (including , without limitation, content buttons/links to specific
content directories or aggregation points). For purposes of this Agreement,
the phrase "GeoCities' Premier", with respect to Yahoo's rights shall mean:
(i) prominently featured within the top two-thirds of each page within
GeoCities Properties (the "Section 2.2 GeoCities Premier Location"); and
(ii) no third party navigational or directory service will be offered in
such Section 2.2 GeoCities Premier Location, except for banner advertising;
------
provided, however, that GeoCities may include [***] in such Section 2.2
-------- -------
GeoCities Premier Location, solely to the extent that each such reference
or link to [***] appears below any reference to the Yahoo Property.
GeoCities will have the ability to provide other search and directory
services in a location outside the Section 2.2 GeoCities Premier Location
(i.e., in the lower one third of a page). In the event that GeoCities
obtains a replacement service to [***], then said service shall appear
outside the GeoCities Premier Location.
2.3 Yahoo will provide a GeoCities-specific value added programming module on
the My Yahoo! content page for GeoCities Homesteaders who elect the My
Yahoo! service, as set forth in Exhibit G attached hereto.
---------
2.4 Both Yahoo and GeoCities will be responsible for tracking the number of
registered users each party has distributed to the other. Within [***]
days after the date that is [***] after the Implementation Date, and within
[***] days after the end of each [***] thereafter, each party shall deliver
to the other party a written report setting forth the number of registered
users distributed to such other party during such reporting period. For
purposes of this Agreement, the "Implementation Date" shall mean the
registration date of the first Yahooville Homesteader.
2.5 Each party hereto shall solely be responsible for providing all levels of
customer support to users of its services and properties.
2.6 Yahoo agrees that it will not knowingly and specifically target in any way
on behalf of any third party any soliciting, advertising, promotional or
marketing activities or materials to Yahooville Homesteaders based on such
person's status as a Yahooville Homesteader.
SECTION 3: INTERNATIONAL; COMMERCIAL OFFERING.
- ----------------------------------------------
3.1 If Yahoo chooses to provide third party international free personal, non-
commercial web page hosting services similar in scope and nature to that
described in this Agreement, in the local language from other than from the
Yahoo Property, Yahoo will, prior to approaching any third party with
respect thereto, deliver to GeoCities a written notice describing such
services and Yahoo's reasonable business requirements for the
[***] Confidential treatment requested for redacted portion.
June 29, 1998 4 CONFIDENTIAL
<PAGE>
opportunity. At GeoCities' discretion, the parties will use good-faith
efforts to negotiate and execute a written amendment to this Agreement to
include such services under reasonable terms and conditions. If GeoCities
declines to commence negotiations regarding any services within fifteen
(15) days after receiving such written notice from Yahoo, or if the parties
fail to reach agreement within thirty (30) days following the commencement
of good faith negotiations (or such later date as is agreed by the
parties), Yahoo may offer such opportunity to any third party.
3.2 If Yahoo chooses to [***]. At GeoCities' discretion, the parties will
[***]. If GeoCities [***] within fifteen (15) days after receiving such
written notice from Yahoo, or if [***], Yahoo may [***].
SECTION 4: OWNERSHIP; CUSTOMER INFORMATION.
- -------------------------------------------
4.1 As between GeoCities and Yahoo, customer information and the content
created or supplied by those customers will be the property of the
respective party. Specifically, as between GeoCities and Yahoo, Yahooville
Members' profiles will be the property of Yahoo, and GeoCities' homepage
content and GeoCities' Homesteaders' profiles will be the property of
GeoCities, regardless of the origination of the member.
4.2 Yahoo and GeoCities will provide an automated mechanism for communicating
registration information (name, zip code, email) to the other service for
members joining the Yahoo Property from GeoCities Properties and for the
members joining GeoCities Properties from the Yahoo Property.
SECTION 5: EXCLUSIVITY.
- -----------------------
5.1 [***]
[***] Confidential treatment requested for redacted portion.
June 29, 1998 5 CONFIDENTIAL
<PAGE>
5.2 [***]
5.3 GeoCities reserves the right to pursue an OEM strategy with any site not on
the Exclusion List set forth in Section 5.1, except with respect to [***],
------
solely under the terms set forth in Section 5.4 hereto. An OEM strategy
would include, but not be limited to, providing free home page community
services to the OEM customer for a fee. GeoCities shall not pursue an OEM
strategy, or provide any free or fee web page creation, hosting, or similar
services to any site or property controlled by, under common control with
or controlling, branded, or co-branded by, any party on the Exclusion List,
except with respect to [***] as set forth in Section 5.4.
------
5.4 As part of the GeoCities OEM strategy, GeoCities will be permitted to
provide free web page hosting services to [***], on the [***] site. Such
service may be provided as a co-branded [***]/GeoCities service on the
[***] site, hosted by or for [***], with the [***] look and feel; provided,
--------
however, that such service or such [***] community members is not
-------
integrated with GeoCities Properties, and provided, further, that GeoCities
-------- -------
may provide a link to the [***] Community from the GeoCities Properties
only after presentation of the GeoCities Properties. In the event that
GeoCities implements an OEM relationship with [***], Yahoo shall have the
right to enter into negotiations with GeoCities for the purpose of entering
into an OEM relationship with GeoCities. If the parties successfully
conclude such negotiations, the agreement resulting therefrom shall
supersede this Agreement.
SECTION 6: TERM AND TERMINATION; AUDIT RIGHTS; SURVIVAL.
- --------------------------------------------------------
6.1 The Initial Term of this Agreement shall be through [***]. The Agreement
shall automatically be renewed for subsequent [***] renewal terms (the
"Renewal Terms") unless either party delivers to the other party written
termination notice at least ninety (90) days prior to the end of such
Initial Term or any Renewal Term then in effect. Neither party may
terminate this Agreement during the Initial Term or a Renewal Term, except
------
for breach by the other party which remains uncured for thirty (30) days
after written notice to the branching party, or pursuant to Section 6.3.
[***] Confidential treatment requested for redacted portion.
June 29, 1998 6 CONFIDENTIAL
<PAGE>
6.2 If GeoCities directly or indirectly is acquired by, merged or combined
with, or if all of substantially all of the assets of GeoCities are
acquired by, or if more than fifty percent (50%) of the voting power of
GeoCities is acquired by, (any of the above aforementioned events being
referred to as an "Acquisition") [***] or any subsidiaries thereof during
the Initial Term, GeoCities will pay Yahoo a "user factor" of: (i) $[***]
per reasonably identifiable unique user; multiplied by (ii) the total
distribution of Yahooville Members to GeoCities. Thereafter, during any
effective Renewal Term, upon an acquisition by the companies listed in this
Section 6.2 or any subsidiaries thereof, GeoCities will pay Yahoo a "user
factor" of: (a) $[***] per reasonably identifiable unique user; multiplied
by (b) the discrepancy in cross-distribution (rather than the total
distribution)/1/ over the [***] period immediately preceding the effective
date of such Acquisition. Yahoo will have the right to terminate this
agreement if GeoCities is acquired by the above companies, and the payment
will be in effect only if Yahoo elects to terminate the agreement. All
such payments under this Section 6.2 shall be payable net thirty (30) days
after the effective date of such termination, and shall be accompanied by a
written report setting forth the basis for such payments.
6.3 Each party shall maintain complete and accurate records in accordance with
generally accepted methods of accounting relating to the number of unique
users, pursuant to this Agreement, for three (3) years after the last
payment is due under this Agreement. An independent "Big Six" accounting
firm retained by one party (the "Auditing Party") shall have access to such
records of the other party (the "Audited Party"), no more frequently than
once per calendar year, upon reasonable notice and during normal business
hours, for purposes of auditing the number of unique users set forth in
Sections 6.2 hereto, for so long as such records are required to be
maintained. The Auditing Party shall pay the expenses of the accounting
firm, unless the number of unique users determined by the accounting firm
------
varies by an excess of ten percent (10%) of the number of unique users
reported by the Audited Party over the prior twelve (12) month period or
the life of this Agreement (whichever is shorter), in which case the
Audited Party shall promptly pay the Auditing Party the accounting firm's
reasonable fees for such audit, and shall promptly pay any amounts owed by
the Audited Party to the Auditing Party based on such number of unique
users.
6.4 The following terms and conditions shall survive the expiration or
termination of this Agreement: Sections 2.5, 4.1, 6.3 (solely as stated),
7.1, 7.2, 7.3, 7.5, 8, 9.1, and 9.2.
_________________
/1/ By way of example, but not limitation, in the event that 100 more Yahoo
members become Yahooville Members than GeoCities homesteaders become
Yahooville Members then, upon termination under this Section 6.2, GeoCities
shall pay to Yahoo a fee of $[***] (100), or $[***].
[***] Confidential treatment requested for redacted portion.
June 29, 1998 7 CONFIDENTIAL
<PAGE>
SECTION 7: INDEMNITY; REPRESENTATIONS AND WARRANTIES.
- -----------------------------------------------------
7.1 GeoCities, at its expense, will indemnify, defend and hold harmless Yahoo,
its employees, officers, directors, representatives, agents and affiliates,
against any claim, suit, action, or other proceeding brought against Yahoo
or such persons or entities based on or arising from a claim: (i) that any
technology, software, authoring tool, trademark, trade name, service mark,
service name or other brand feature, any material, content, information,
product or service produced, distributed, presented offered or publicized
through or on the GeoCities Properties or any other web site owned or
operated by GeoCities (whether created by GeoCities or any other person,
including, without limitation, homesteaders or other users of GeoCities
Properties) infringes in any manner any patent, copyright, trademark, trade
secret or any other intellectual property right of any third party, is or
contains any material or information that is obscene, defamatory, libelous,
slanderous, or that violates any law or regulation, or that otherwise
violates any rights of any person or entity, including, without limitation,
rights of publicity, privacy or personality, or has otherwise resulted in
any consumer fraud, product liability, tort, breach of contract, injury,
damage or harm of any kind to any third party; or (ii) based on breach of
any representation or warranty set forth in Section 7.3; provided, however,
-------- -------
that such indemnification shall not apply to any claims which arise out of
or result from any claim based on or arising from any data, content, or
other materials provided by Yahoo to GeoCities hereunder; and provided,
--------
further, that in any such case: (x) Yahoo provides GeoCities with prompt
-------
notice of any such claim; (y) Yahoo permits GeoCities to assume and control
the defense of such action upon GeoCities' written notice to Yahoo of its
intention to indemnify; and (z) upon GeoCities' written request, and at no
expense to Yahoo, Yahoo will provide to GeoCities all available information
and assistance necessary for GeoCities to defend such claim. GeoCities
will not enter into any settlement or compromise of any such claim without
Yahoo's prior written consent, which shall not be unreasonably withheld,
unless such settlement or compromise includes a complete release of all
------
claims against and liability for Yahoo. GeoCities will pay any and all
costs, damages, and expenses, including, but not limited to, reasonable
attorneys' fees and costs awarded against or otherwise incurred by Yahoo in
connection with or arising from any such claim, suit, action or proceeding.
7.2 Yahoo, at its expense, will indemnify, defend and hold harmless GeoCities,
its employees, officers, directors, representatives, agents and affiliates,
against any claim, suit, action, or other proceeding brought against
GeoCities or such persons or entities based on or arising from a claim:
(i) that any technology, software, authoring tool, trademark, trade name,
service mark, service name or other brand feature, any material, content,
information, product or service produced, distributed, presented offered or
publicized through or on the Yahoo Property or any other web site owned or
operated by Yahoo (whether created by Yahoo or any other person), infringes
in any manner any patent, copyright, trademark, trade secret or any other
intellectual property right of any
June 29, 1998 8 CONFIDENTIAL
<PAGE>
third party, is or contains any material or information that is obscene,
defamatory, libelous, slanderous, or that violates any law or regulation,
or that otherwise violates any rights of any person or entity, including,
without limitation, rights of publicity, privacy or personality, or has
otherwise resulted in any consumer fraud, product liability, tort, breach
of contract, injury, damage or harm of any kind to any third party; or (ii)
based on breach of any representation or warranty set forth in Section 7.3;
provided, however, that such indemnification shall not apply to any claims
-------- -------
which arise out of or result from any claim based on or arising from any
data, content, or materials provided by GeoCities to Yahoo hereunder; and
provided, however, that in any such case: (x) GeoCities provides Yahoo with
-------- -------
prompt notice of any such claim; (y) GeoCities permits Yahoo to assume and
control the defense of such action upon Yahoo's written notice to GeoCities
of its intention to indemnify; and (z) upon Yahoo's written request, and at
no expense to GeoCities, GeoCities will provide to Yahoo all available
information and assistance necessary for Yahoo to defend such claim. Yahoo
will not enter into any settlement or compromise of any such claim without
Yahoo's prior written consent, which shall not be unreasonably withheld,
unless such settlement or compromise includes a complete release of all
------
claims against and liability for GeoCities. Yahoo will pay any and all
costs, damages, and expenses, including, but not limited to, reasonable
attorneys' fees and costs awarded against or otherwise incurred by
GeoCities in connection with or arising from any such claim, suit, action
or proceeding.
7.3 Each party to this Agreement represents and warrants to the other party
that the execution of this Agreement by such party, and the performance by
such party of its obligations and duties hereunder, do not and will not
violate any agreement to which such party is a party or by which it is
otherwise bound.
7.4 GeoCities agrees that it shall maintain policies that are substantially and
effectively similar to its current policies with respect to publicity,
privacy, libel, slander, obscenity, and any complaints arising out of or
relating to all content on the GeoCities Properties.
7.5 EXCEPT FOR THE OBLIGATIONS PURSUANT TO SECTIONS 7.1, 7.2, AND 8, UNDER NO
CIRCUMSTANCES SHALL GEOCITIES, YAHOO, OR ANY AFFILIATE THEREOF BE LIABLE TO
ANOTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE,
OR EXEMPLARY DAMAGES ARISING FROM THIS AGREEMENT, EVEN IF THAT PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, SUCH AS, BUT NOT LIMITED
TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.
SECTION 8: CONFIDENTIALITY.
- ---------------------------
8.1 GeoCities and Yahoo hereby acknowledge that each of them may have access to
confidential and proprietary information which relates to the other party's
business (the "Confidential Information"). Such information shall be
------------------------
identified as confidential at the time of disclosure. Each party agrees to
preserve and protect the confidentiality of the
June 29, 1998 9 CONFIDENTIAL
<PAGE>
Confidential Information and not to disclose any applicable Confidential
Information without the prior written consent of the other party; provided,
--------
however, that any party hereto may disclose to any other party any
-------
information which is: (i) already publicly known; (ii) discovered or
created independently of any involvement with such party; (iii) otherwise
learned through legitimate means other than from such party; (iv)
independently created by the receiving party without reference to the other
party's Confidential Information; or (v) required by law or regulation to
be disclosed; provided, however, that the party disclosing such
-------- -------
Confidential Information under this Section 8.1(v) shall provide reasonable
prior notice thereof to the other party. Moreover, any party hereto may
disclose any Confidential Information hereunder to such party's agents,
attorneys and other representatives or any court or competent jurisdiction
or any other party empowered hereunder as reasonably required to resolve
any dispute between the parties hereto. The parties agree that the
existence of this Agreement is not Confidential Information under this
Section 8.1; provided, however, that the terms and conditions of this
-------- -------
Agreement are expressly considered Confidential Information under this
Section 8.1.
SECTION 9: MISCELLANEOUS.
- -------------------------
9.1 Notices. All notices, requests and other communications called for by this
-------
Agreement shall be deemed to have been given immediately if made by
telecopy or electronic mail (confirmed by concurrent written notice sent
first class U.S. mail, postage prepaid), if to Yahoo at 3400 Central
Expressway, Suite 201, Santa Clara, CA 95051, Fax: (408) 731-3301
Attention: Vice President (e-mail: [email protected]), with a copy to its
General Counsel (e-mail:[email protected]), and if to GeoCities at the
physical and electronic mail addresses set forth on the signature page of
this Agreement, or to such other addresses as either party shall specify to
the other. Notice by any other means shall be deemed made when actually
received by the party to which notice is provided.
9.2 Miscellaneous Provisions. All references by name to sections, areas, or
-------------------------
portions of the Yahoo Property refer to such sections, areas, or portions
as of the Effective Date, as well as any revisions, additions,
substitutions, replacements, or reclassifications made thereafter with
respect to such sections, areas, or portions. For purposes of example, and
without limiting the generality of the preceding sentence, a change in
designation of a portion of the Yahoo Property or GeoCities Properties
identified herein shall not relieve Yahoo or GeoCities of any of its
obligations or rights with respect to such portion. This Agreement will
bind and inure to the benefit of each party's permitted successors and
assigns. Neither party may assign this Agreement, in whole or in part,
without the other party's written consent. Any attempt to assign this
Agreement other than in accordance with this provision shall be null and
void. This Agreement will be governed by and construed in accordance with
the laws of the State of California, without reference to conflicts of laws
rules, and without regard to its location of execution or performance. If
any provision of this Agreement is found invalid or unenforceable, that
provision will be enforced to the maximum extent permissible, and the other
provisions of this Agreement will remain in force. Neither this Agreement,
nor any terms and conditions contained herein may be construed as creating
or constituting a partnership, joint venture or agency
June 29, 1998 10 CONFIDENTIAL
<PAGE>
relationship between the parties. No failure of either party to exercise or
enforce any of its rights under this Agreement will act as a waiver of such
rights. This Agreement and its exhibits are the complete and exclusive
agreement between the parties with respect to the subject matter hereof,
superseding and replacing any and all prior agreements, communications, and
understandings, both written and oral, regarding such subject matter,
including without limitation, the Yahoo! Inc. Link Agreement, effective as
of August 1, 1997. This Agreement may only be modified, or any rights under
it waived, by a written document executed by both parties. The prevailing
party in any claim or action brought by one party against the other party
shall be entitled to full reimbursement of all of its reasonable attorneys
fees and expenses incurred in connection with such claim or action.
9.3 The parties will cooperate to create any and all appropriate public
announcements relating to the relationship set forth in this Agreement.
Neither party shall make any public announcement regarding the content of
this Agreement without the other party's prior written approval and
consent.
This Codistribution Agreement has been executed by the duly authorized
representatives of the parties, effective as of the Effective Date.
YAHOO! INC. GEOCITIES
By: /s/ Tim Koogle By: /s/ David Bohnett
------------------------------ ----------------------------
Name: Tim Koogle Name: David Bohnett
Title: President & CEO Title: CEO
Address: Address:
Attn: Senior VP, Business Operations Attn: David Bohnett &
Stephen Hansen
3400 Central Expressway, Suite 201
Santa Clara, CA 95051 1918 Main Street, 3rd Floor
Tel.: (408) 731-3300 Santa Monica, CA 90405
Fax: (408) 731-3302 Tel: (310) 664-6500
e-mail: [email protected] Fax: (310) 664-6521
email: [email protected] &
[email protected]
June 29, 1998 11 CONFIDENTIAL
<PAGE>
EXHIBIT 10.10
EXODUS COMMUNICATIONS, INC
MASTER SERVICES AGREEMENT
AGREEMENT NO. ____
THIS MASTER SERVICES AGREEMENT (this "Agreement") is made effective as of
the Acceptance Date (November 7, 1997) indicated in the Services and Price Form
attached hereto as Attachment 1, by and between Exodus Communications, Inc., a
------------
California corporation doing business 2650 San Tomas Expressway, Santa Clara,
California 95051 ("Exodus") and the customer identified below ("Customer").
A. Exodus is in the business of providing certain services to
its customers, including Internet connectivity and the provision and
maintenance of physical space and facilities suitable for the
placement and operation of telecommunications, networking, and other
computer equipment.
B. Customer desires to engage Exodus to provide such services
to Customer, and Exodus desires to provide such services, on the terms
and conditions of this Agreement.
C. Customer and Exodus have agreed to enter into this Agreement
for Exodus's provision of, and Customer's payment to Exodus for such
services.
This Agreement, including all Attachments hereto listed below, which are
incorporated herein by this reference, constitutes the complete and exclusive
agreement between the parties with respect to the subject matter hereof, and
supersedes and replaces any and all prior or contemporaneous discussions,
negotiations, understandings and agreements, written and oral, regarding such
subject matter.
EXODUS COMMUNICATIONS, INC. Customer Name: GEOCITIES
2650 San Tomas Expressway Address: 1918 Main Street, 3rd Floor
Santa Clara, CA 95054 Santa Monica, CA 90405-1030
Phone: (408) 346-2200 Phone: (310) 664-6500
Fax: (408) 346-2206 Fax: (310) 664-6520
Signature: /s/ Dick Stoltz Signature: /s/ John C. Rezner
----------------------- ----------------------------
Print Name: Dick Stoltz Print Name: John C. Rezner
--------------------- ---------------------------
Title: CFO and COO Title: V.P. Operations
-------------------------- --------------------------------
Date: 11/10/97 Date: 11/08/97
--------------------------- ---------------------------------
INCLUDES: X Attachment 1: Services and Price Form
X Attachment 2: Terms and Conditions
X Attachment 3: Rules and Regulations
X Attachment 4: Customer Equipment
X Attachment 5: Registration Form
X Attachment 6: Negotiated Changes
1
<PAGE>
EXODUS
ATTACHMENT 1
PRICE QUOTATION FOR INTERNET DATA CENTER SERVICES
Customer Name: GeoCities Quote No: 0428-1A
Request for Service November 9, 1997 __________________________
Date
GEOCITIES SOLUTION
------------------
Exodus Communications shall provide GeoCities with scaleable bandwidth as
needed, a Virtual Internet Data Center, Tape Back-Up Services, Switch Management
Services, System Administration, Management Services for $[***] per Mbps as
outlined below:
Colocation Connectivity Tiered Pricing:
<TABLE>
<CAPTION>
- ---------------------------- ------------------------------------- ---------- ---------------- ----------------------
Product Number Description Qty Start up Monthly
- ---------------------------- ------------------------------------- ---------- ---------------- ----------------------
<S> <C> <C> <C> <C>
Exo-ColNet-U100 Dedicated Bandwidth as Required, 2 $[***]
Fast Ethernet connection(s), Floor
at 120 Mpbs (See Billing Schedule
Below)
- ---------------------------- ------------------------------------- ---------- ---------------- ----------------------
Exo-ColNet-U100SU Colocation backbone setup, per 100 2 $[***]
Mbps feed
- ---------------------------- ------------------------------------- ---------- ---------------- ----------------------
EXODUS SUBTOTAL $[***] $[***]
- ---------------------------- ------------------------------------- ---------- ---------------- ----------------------
</TABLE>
. Exodus Communications shall provision Full Duplex dedicated 100 Mbps
Fast Ethernet Connection(s) to GeoCities' colocation environment within
Exodus' Santa Clara Data Center as required to meet GeoCities bandwidth
requirements.
Billing Schedule for 120 Mbps Floor
<TABLE>
<CAPTION>
- --------------------------------------------- --------------------------------------------
Time Period Total Due per Month
- --------------------------------------------- --------------------------------------------
<S> <C>
Upon Connectivity through Fifty Month Usage Based @ $[***] per Mbps
- --------------------------------------------- --------------------------------------------
Sixth Month After Connectivity @ 120 Mbps $[***]@ 120 Mbps
- --------------------------------------------- --------------------------------------------
</TABLE>
[***] Confidential treatment requested for redacted portion.
2
<PAGE>
BILLING SCHEDULE TERMS: For the initial 150 Days and based on installation of
two Fast Ethernet Connections to GeoCities colocation environment within Exodus'
Santa Clara Data Center, Exodus shall bill GeoCities $ [***] per Mbps on a usage
basis. At the conclusion of the sixth month and each month thereafter, GeoCities
shall be billed at a floor of 120 Mbps at $[***] per Mbps, minimum, plus any
additional usage over the 120 Mbps at a rate of $[***] per month using the 95th
percentile usage measurement as described below.
[***] Confidential treatment requested for redacted portion.
3
<PAGE>
Additional Products and Services included in rate of $[***] per Mbps per Month:
<TABLE>
<CAPTION>
- ----------------------- --------------------------------------- --------------- --------------- ---------------
PRODUCT NUMBER DESCRIPTION QTY START UP MONTHLY
- ----------------------- --------------------------------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Exo-ColNetBU-Tl Private T1 backup access [***]
- ----------------------- --------------------------------------- --------------- --------------- ---------------
Exo-Cage Custom Virtual Data Center Space, 15 1 [***]
Racks
- ----------------------- --------------------------------------- --------------- --------------- ---------------
Exo-Cage Custom VDC Setup 1 $[***]
- ----------------------- --------------------------------------- --------------- --------------- ---------------
Exo-Sup-l0 Bundled 12 hours of on demand support 1 [***]
for customers via Exodus Support Line
- ----------------------- --------------------------------------- --------------- --------------- ---------------
Exo-TpBck-L1 Exodus will manage existing tape 1 $[***] [***]
backup procedures and software. Data
to be backed up to Exodus provided
tape device. This includes Tape
Management service and off-site
storage.
- ----------------------- --------------------------------------- --------------- --------------- ---------------
Exo-Card 24x7 card access deposit ($100 per 3 [***]
card)
- ----------------------- --------------------------------------- --------------- --------------- ---------------
Exodus Subtotal $[***] $[***]
Products & Services
- ----------------------- --------------------------------------- --------------- --------------- ---------------
Exodus Subtotal $[***] $[***]
Colocation
Connectivity
- ----------------------- --------------------------------------- --------------- --------------- ---------------
- ----------------------- --------------------------------------- --------------- --------------- ---------------
EXODUS TOTAL $[***] $[***]
- ----------------------- --------------------------------------- --------------- --------------- ---------------
</TABLE>
Custom Area
- -----------
. Exodus shall provide GeoCities with 17 Racks for initial configuration.
Baseline Ratio, 120 Mbps, 15 Racks, and (2) 20 Amp circuits per Rack.
(310) 664
<TABLE>
<CAPTION>
- ------------------------ ---------------------------------------- ---- ----------------------- ----------------------
Telco (WorldCom) Local loop access to customer cage $[***] $[***]
(T-l)
- ------------------------ ---------------------------------------- ---- ----------------------- ----------------------
<S> <C> <C> <C>
</TABLE>
NOTE 1:
USAGE BASED BANDWIDTH MEASUREMENT:
- ---------------------------------
The Exodus monitoring system will record 5 minute samples of the total line
usage (input and output) of your colocation network line over a period of a
month. At the end of the month the samples are sorted and the top 5% samples of
the total line usage are discarded. The highest remaining value is used as the
basis for the bandwidth usage rate for that month and is referred to as the "95
percentile." This rule allows customer to burst up to the 100 Mbps 5% during the
month without incurring any increase in price.
[***] Confidential treatment requested for redacted potion.
4
<PAGE>
Note 2:
Connectivity Layout:
[Diagram]
Note 3:
For a 3 Yr. term, Monthly fee will be $[***].
<TABLE>
<CAPTION>
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
Equipment
- ---------
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
CISCO Catalyst 5500
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
PRODUCT NO: DESCRIPTION: OTY UNIT PRICE EXTENSION
- ----------
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
<S> <C> <C> <C> <C>
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
WS-C5500 Catalyst 5500 Chassis 1 $ [***] $ [***]
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
WS-C5508 Catalyst 5500 Power 1 $ [***] $ [***]
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
WS-X5508/2 Catalyst5500 Second 1 $ [***] $ [***]
PowerSupply
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
WS-X5509 Catalyst 5500 1 $ [***] $ [***]
Supervisor Engine-TX
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
WS-X5213A Catalyst 5000 10/l00 4 $ [***] $ [***]
BaseTX Fast Ethernet
Switching Module
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
WS-X5302 Catalyst Switch 1 $ [***] $ [***]
Route Switch Module
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
MEM-RSM-64M 64MB DRAM Option 1 $ [***] $ [***]
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
Total $ [***]
- ------------------------------ ---------------------- ----------- ------------------- -------------------------------
</TABLE>
SHIPPING COST AND TAX WILL BE ADDED UPON DELIVERY
ADDITIONAL UNITS MAY BE PURCHASED FOR THE SAME PRICING
[***] Confidential treatment requested for redacted portion.
5
<PAGE>
QUOTATION INCLUDES:
- ------------------
. Managed Services: In addition to other standard descriptions, GeoCities
----------------
shall receive 12 Hours of bundled System Administration on demand on a
monthly, 7 x 24 basis, based on 120 Mbps floor. GeoCities shall receive 1
Hour of System Administration for each 10 Mbps of usage. Any additional
hours shall be billed at $[***] per Hour.
. Virtual Data Center: Exodus Communications shall provide Racks to GeoCities
-------------------
based on their requirements GeoCities reserves the first right of refusal
for current environment at 1605 Wyatt which is approximately 400 square
feet. Exodus shall provide GeoCities future growth and power based on ratio
established in this agreement as follows: for each 8 Mbps used by
GeoCities, GeoCities shall receive up to I Rack and (2) 20 Amp circuits, as
required. If space and power are required beyond this ratio, Exodus and
GeoCities shall negotiate in good faith.
. Tape Back-Up: See Exhibit I below for detailed overview of services. Note:
------------
Exodus and GeoCities shall jointly determine the optimal architecture,
configuration, and equipment to be utilized to implement a tape back-up
system that is an Exodus owned operated and managed DLT tape drive system.
. CISCO Catalyst 5500 Management: Exodus shall manage and monitor the
------------------------------
GeoCities' CAT5500 This service includes SNMP Monitoring and configuration.
. 24 x 7 monitoring services include the following: Continuity between the
Exodus network and the client point-of-presence; router and filter
administration; domain name administration; TCP/IP address assignment; M-
Bone tunneling; and DNS administration. This service includes 24 X 7
systems administration staff.
. Exodus shall power cycle GeoCities systems as necessary based on pre-
determined policies and procedures which include access to root passwords
and security identification procedures for requestor on a 7 x 24 basis. See
Exhibit II for detailed of Basic Operator Services. Exodus also shall allow
GeoCities to power cycle remotely by providing appropriate network devices
to perform these tasks.
. SNMP monitoring of the line and report if line is down.
. GeoCities reserves the right to secure and acquire their own unique set of
Internet IP addresses. Exodus will allow Customer to utilize a separately
contracted T3 line in the Exodus Data Center. Customer and their provider
of line will be responsible for installation and testing of the line
directly to the customer site at the Exodus facility. Exodus will cooperate
with Customer and their provider during installation, testing and servicing
of the line. Exodus will not be responsible for any maintenance, testing or
service of the line, nor will it assume any liability associated with the
line, except for the willful or grossly negligent acts of Exodus and its
employees.
. Exodus will provide a fully integrated CAT 5500 in the data center for
redundancy purposes. For other pertinent product options, see Exhibit III.
[***] Confidential treatment requested for redacted portion.
6
<PAGE>
The terms and conditions of this proposal include and incorporate by reference
Exodus' terms and conditions of service and Rules and Regulation.
GEOCITIES EXODUS COMMUNICATIONS, INC.
Signature: /s/ GeoCities Signature: /s/ Exodus Communications, Inc.
------------------------ --------------------------------
(Authorized Signature) (Authorized Signature)
Title: V.P. Operations Title: CFO and COO
---------------------------- ------------------------------------
Date: 11/08/97 Date: 11/10/97
----------------------------- -------------------------------------
7
<PAGE>
EXHIBIT 1
TAPE MANAGEMENT SERVICE
-----------------------
DESCRIPTION
Under this service offering Exodus operations personnel will remove and insert
backup tapes from a customer designated tape or jukebox device. Exodus personnel
can conduct this procedure according to a predefined schedule or on a on-demand
basis.
TYPICAL ACTIONS SUPPORTED
. Put new or recycled tapes into a jukebox or tape device
. Remove tapes from a jukebox or tape device
. Assist customer as "remote hands onsite" in the event of a tape jam
. Place removed tapes in customer designated tape storage container or
cabinet in colocation space
. Assist in making tapes available for off-site pickup via Exodus contracted
storage provider or customer chose provider
. Weekly off-site tape storage pickup for up to three 4/8mm tapes
RESPONSE TIMES FOR TAPE RETRIEVAL
. 1 hour response for tape insertion or removal requests of tapes located in
customer colocation space.
. 2 hour, 5 hour and 24 hour response times for off-site tapes can be offered
on a on-demand basis and will incur separate per incident charges.
. 1 week response time for off-site tapes is included.
REQUIRED INFORMATION
. Contact Information
Provides all customer contact information address, email, voice mail,
beeper.
A list of authorized people who can make use of tape exchange service
requests.
. Tape Insertion and Removal Procedure
Detail procedures describing how to handle tapes and access tape
device or jukebox.
. Sign in sheet
Log to be signed when Exodus employee enters customers cage
. Off-site storage log (optional service)
To be used as part of managing off-site storage. The log will record
date/time when and which tapes were picked up for off-site storage.
. Daily Email
Daily email will be sent that summarizes information that was backed-
up the previous day
8
<PAGE>
EXHIBIT II
BASIC OPERATOR SERVICES
-----------------------
DESCRIPTION
Under this service offering Exodus operations personnel can act as your remote
"hands on-site" when you can't physically be near your system. It does not
provide for any system administration level tasks. If a service requiring access
to the customer area or system is requested, it is assumed such permission will
be granted however, Exodus will notify Customer promptly after any such access.
Basic Operator Service shall be on a 24 x 7 basis. The creation and
establishment of this scope of work shall be defined by both GeoCities and
Exodus in best efforts not later than one month after connectivity.
TYPICAL SERVICES SUPPORTED
. Reboot or power-cycle colocated devices (from keyboard or power switch)
. Provide onsite equipment LED status feedback
. Provide console output feedback
. Cable check/swap
. Swap equipment and server components
REQUIRED INFORMATION
The above typical services must be requested on an on-demand basis or agreed
upon prior to installation between Exodus and the customer (i.e. documented with
an operator's manual). Below is some sample information that will be required
documentation for an operator's manual.
. Contact Information
Provides all customer contact information address, email, voice mail,
beeper.
A list of authorized people which can make use of operator service
requests.
. InterNIC Registration Information
Usually provides IP address, domain name...
. Equipment Inventory Information
System/component list for records (including serial numbers, system
name, 0/S revision etc.)
. Network Diagram (if applicable)
LAN diagram with system names and other relevant information
. Operators Guide (if applicable)
Any detailed instructions of procedures that may be requested of Exodus
operators on an on-demand basis.
9
<PAGE>
EXHIBIT III
OTHER PRODUCT OPTIONS:
---------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Product Number Description Qty Start up Monthly
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ex-ColNet-Dl0 10 Mbps Ethernet connection 1 $[***]
- ---------------------------------------------------------------------------------------------------------------
Exo-ColNet-U1OSU Collocation backbone setup and Configuration 1 $[***]
- ---------------------------------------------------------------------------------------------------------------
Exo-cage-R78 Basic 7x8 cage 1 $[***]
- ---------------------------------------------------------------------------------------------------------------
Exo-Cage-R785U 7x8 cage setup 1 $[***]
- ---------------------------------------------------------------------------------------------------------------
Exo-cage-R148 Basic 14x8 cage 1 $[***]
- ---------------------------------------------------------------------------------------------------------------
Exo-Cage-R148SU 14x8 cage setup 1 $[***]
- ---------------------------------------------------------------------------------------------------------------
Exo-Rack-100 Full Rack 1 $[***] $[***]
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
[***] Confidential treatment requested for redacted portion.
10
<PAGE>
ATTACHMENT 2
TERMS AND CONDITIONS
1 DEFINITIONS.
1.1 "Customer Area" means the portion of the Internet Data Centers made
available to Customer hereunder for the placement of Customer Equipment.
1.2 "Customer's Business" means Customer's services and/or products to be made
available via the Internet in connection with this Agreement.
1.3 "Customer Equipment" means Customer's computer hardware, peripheral, and
other tangible equipment justified in Attachment 4, as amended from time to
------------
time, that Customer places in the Customer Area pursuant to this Agreement. All
changes in Customer Equipment, including but not limited to installation and
removal of Customer Equipment, must be approved by Exodus, which shall not be
unreasonably withheld or delayed. As between Exodus and Customer, the parties
acknowledge and agree that all Customer Equipment is owned by Customer.
1.4 "Customer Materials" means all software, data, information contained in
documentation, and other information and intangibles used by Customer to
operate, install, and/or maintain Customer's Business through the Customer
Equipment or provided to Exodus by Customer for such purposes or otherwise
pursuant to this Agreement. As between Exodus and Customer, the parties
acknowledge and agree that all Customer Materials are owned by Customer.
1.5 "Installation Date" means the date the Customer Equipment is actually
installed and approved by Customer as operational.
1.6 "Internet Data Centers" means the sites owned or leased by Exodus
containing the Customer Area and equipment used by Exodus to provide Internet
Data Center Services.
1.7 "Internet Data Center Services" means the services and other benefits to be
provided by Exodus to Customer under this Agreement, as described in Attachment
----------
1, as amended from time to time, or substantially similar services if, in the
- -
reasonable opinion of Exodus, such substantially similar services would provide
Customer with substantially similar benefits.
1.8 "Representatives" means the individuals identified and authorized by
Customer to have access to the Internet Data Centers and the Customer Area in
accordance with this Agreement, whose names are listed in Section 4.4 herein.
The Representatives may be changed by Customer from time to time by written
notice to Exodus.
1.9 "Rules and Regulations" means the general rules and regulations issued by
Exodus relating to its provision of Internet Data Center Services to its
customers, the current version of which is attached as Attachment 3, which may
------------
be supplemented by Exodus from time to time, provided, however, that Customer
shall not be bound by any changes made by Exodus until Exodus has notified
Customer in writing of any changes and Customer has agreed to be bound thereto.
11
<PAGE>
2 INTERNET DATA CENTER SERVICES.
Subject to the terms and conditions of this Agreement, including but not limited
to Customer's timely payment to Exodus of all fees specified in this Agreement
and Customer's compliance with the Rules arid Regulations, Exodus will provide
to Customer the Internet Data Center Services.
3 FEES AND BILLING.
3.1 Fees. Customer will pay all fees due hereunder according to the Services
and Price Form attached as Attachment 1, as amended from time to time by the
------------
parties.
3.2 Billing Commencement. Except for any fees required to be paid prior to or
on the Installation Date (as indicated in the Services and Price Form), billing
for Internet Data Center Services indicated in the initial Services and Price
Form shall commence on the Installation Date. In the event that the Services and
Price Form is amended after the Installation Date to include additional Internet
Data Center Services, billing for such services shall commence on the date
Exodus first provides such additional Internet Data Center Services to Customer.
3.3 Billing and Payment Terms. Customer will be billed monthly in advance of
the provision of Internet Data Center Services, and payment of such fees will be
due within thirty (30) days of the date of each Exodus invoice. Customer shall
not be responsible for any fees, costs or any other charges that are not billed
by Exodus and received by Customer within ninety (90) days of the date that such
fees, costs or charges are incurred. In the event of a disputed invoice, the
parties agree to document any dispute settlements in writing. All payments will
be made in U.S. dollars at Exodus' address set forth in this Agreement or at
such other address, or to such other bank account, as Exodus may from time to
time indicate by proper notice to Customer. Late payments hereunder will accrue
interest at a rate of one and one-half percent (1 1/2%) per month, or the
highest rate allowed by applicable law, whichever is lower. If after
consultation with Customer and based on reasonable information Exodus determines
that Customer is not creditworthy or is otherwise not financially secure, Exodus
may, upon written notice to Customer with an adequate opportunity to provide
evidence of credit worthiness, modify the payment terms to require full payment
before the provision of Internet Data Center Services or other assurances to
secure Customer's payment obligations hereunder.
3.4 Taxes. All payments required by this Agreement are exclusive of all
national, state, municipal or other governmental excise, sales, value-added,
use, personal property, and occupational taxes, excises, withholding taxes and
obligations and other levies now in force or enacted in the future, all of which
Customer will be responsible for and will pay in full, except for taxes based on
Exodus' net income.
4 CUSTOMER'S OBLIGATIONS.
4.1 Compliance with Law. Customer agrees that in connection with the exercise
of its rights and performance of its obligations under this Agreement, Customer
will comply in all material respects with all applicable laws and regulations.
Customer acknowledges that Exodus exercises no control whatsoever over the
content of the information passing through its Internet Data Centers, and that,
as between Exodus and Customer, it is the sole responsibility of Customer to
ensure that the information it transmits and receives complies with all
12
<PAGE>
applicable laws and regulations.
4.2 Compliance with Rules and Regulations. Customer agrees that it will comply
at all times with Exodus' Rules and Regulations in existence from time to time
and of which it has been notified.
4.3 Customer's Costs. CUSTOMER AGREES THAT IT WILL BE SOLELY RESPONSIBLE, AND
AT EXODUS' REQUEST WILL REIMBURSE EXODUS, FOR ALL COST AND EXPENSES (OTHER THAN
THOSE INCLUDED AS PART OF THE INTERNET DATA CENTER SERVICES AND EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN) IT INCURS IN CONNECTION WITH THIS
AGREEMENT, SUBJECT TO THE LIMITATIONS SET FORTH IN SECTION 3.3. EXODUS SHALL
NOTIFY CUSTOMER WHEN ANY SUCH EXPENSES ARE EXPECTED TO BE INCURRED. EXODUS WILL
BE SOLELY LIABLE FOR COSTS INCURRED BY EXODUS AT EXODUS' INITIATION THAT ARE NOT
PRE-APPROVED BY CUSTOMER.
4.4 Access and Security. CUSTOMER WILL BE FULLY RESPONSIBLE FOR ANY CHARGES,
COSTS, EXPENSES, AND THIRD PARTY CLAIMS THAT MAY RESULT FROM ITS USE OF, OR
ACCESS TO, THE INTERNET DATA CENTERS AND/OR CUSTOMER AREA, INCLUDING BUT NOT
LIMITED TO ANY UNAUTHORIZED USE OF ANY ACCESS DEVICES PROVIDED TO CUSTOMER BY
EXODUS HEREUNDER, EXCEPT RESULTING DIRECTLY FROM EXODUS' OR ITS EMPLOYEES'
NEGLIGENCE OR WILLFUL MISCONDUCT. EXCEPT WITH THE ADVANCED WRITTEN CONSENT OF
EXODUS, CUSTOMER'S ACCESS TO THE INTERNET DATA CENTERS WILL BE LIMITED SOLELY TO
ITS REPRESENTATIVES LISTED ON THE REGISTRATION FORM ATTACHED HERETO AS
ATTACHMENT 5, AS AMENDED FROM TIME TO TIME.
4.5 No Competitive Services. Customer may not at any time permit any Internet
Data Center Services to be utilized for the provision of any services that
compete with any Exodus services, without Exodus' prior written consent. Exodus
agrees that none of the services currently provided by Customer competes with
any Exodus services.
4.6 Insurance.
(a) Minimum Levels. Each party will keep in force and effect during the
term of this Agreement: (i) comprehensive general liability insurance in an
amount not less than $1 million per occurrence for bodily injury and property
damage; (ii) employer's liability insurance in any amount not less than $1
million per occurrence; and (iii) workers' compensation insurance in any amount
not less than that required by applicable law. Each party also agrees that it
and its agents (including contractors and subcontractors) will maintain other
insurance at levels no less than those required by applicable law and customary
in each party's and its agents' industries.
(b) Certificates of Insurance. Prior to installation of any Customer
Equipment in the Customer Area, or access to the Internet Data Centers, Customer
will furnish Exodus with certificates of insurance which evidence the minimum
levels of insurance set forth above.
(c) Naming the other Party as an Additional Insured. Each party agrees
that prior to the installation of any Customer Equipment, it will cause its
insurance provider(s) to name the other party as an additional insured and
notify the other party in writing of the effective date thereof.
13
<PAGE>
5 REPRESENTATIONS AND WARRANTIES.
5.1 Warranties by Customer.
(a) Customer Equipment and Customer Materials. Customer 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 Customer Equipment not purchased from Exodus as
contemplated by this Agreement, and to use, modify, transmit, and distribute the
Customer Materials without infringing, misappropriating, or otherwise violating
any intellectual property rights of any third party. Customer further represents
and warrants that its placement, arrangement, and use of the Customer Equipment
not purchased from Exodus in the Internet Data Centers complies with the
Customer Equipment and Customer Materials Manufacturer's environmental and other
specifications.
(b) Rules and Regulations. Intentionally omitted.
(c) Customer's Business. Customer is familiar with the laws and
regulations applicable to Customer's Business. Customer represents and warrants
that Customer's Business does not as of the Installation Date, and will not
during the term of this Agreement, contain or transmit any material that would
violate any applicable local state, national, foreign or international law. In
the event of any breach, or reasonably anticipated breach, of such warranty, in
addition to any other remedies available at law or in equity, Exodus will have
the right after notice to Customer with an adequate opportunity to cure based on
the specific circumstances, in Exodus' sole discretion: (i) to terminate or
restrict access to any such materials in any manner, and/or (ii) to suspend any
related Internet Data Center Services provided Exodus takes the minimal
action(s) necessary to address the specific violation.
5.2 Warranties and Disclaimers by Exodus.
(a) Service Level Warranty. In the event Customer is unable to transmit
and receive information from Exodus' Internet Data Centers to other portions of
the Internet and Customer notifies Exodus immediately of such event and Exodus
determines in its reasonable judgment that such inability was caused by Exodus'
failure to provide Internet Data Center Services for reasons within Exodus'
reasonable control and not as a result of any actions or inactions of Customer
or any third parties, Exodus will, upon Customer's request, credit Customer's
account as follows: If Exodus failed to provide the Internet Data Center
Services for (i) more than two (2) consecutive hours in a calendar month, Exodus
will credit Customer's account the pro-rata connectivity charges for one (1) day
of service; and (ii) more than eight (8) consecutive hours in a calendar month,
Exodus will credit Customer's account the prorata connectivity charges for one
(1) week of service. Exodus' scheduled maintenance of the Internet Data Centers
and Internet Data Center Services, as described in the Rules and Regulations,
shall not be deemed to be a failure of Exodus to provide Internet Data Center
Services. THIS SECTION 5.2(A) STATES CUSTOMER'S SOLE AND EXCLUSIVE REMEDY FOR
ANY FAILURE BY EXODUS TO PROVIDE INTERNET DATA CENTER SERVICES.
(b) Internet Data Center Services. Exodus represents and warrants that it
has the legal right and authority, and will continue to maintain the legal right
and authority during the term of this Agreement,
14
<PAGE>
to provide the Internet Data Center Services to Customer as contemplated by this
Agreement, and without infringing, misappropriating, or otherwise violating any
intellectual property rights of any third party. Exodus further represents and
warrants that its provision of Internet Data Center Services complies with the
equipment Manufacturer's environmental and other specifications.
(c) Exodus represents that it exercises no control over the content of the
information passing through its Internet Data Centers.
(d) Exodus represents and warrants that, with respect to Customer
Equipment and Customer Materials sold or otherwise provided to Customer by
Exodus and based solely on Exodus' knowledge and reliance in part on any
manufacturer's and/or licensor's express representations and warranties
regarding such Customer Materials,
(i) Customer owns or has the legal right and authority to place and use
the Customer Equipment as contemplated by this Agreement, and to use, modify,
transmit, and distribute the Customer Materials without infringing,
misappropriating, or otherwise violating any intellectual property rights of any
third party; and
(ii) The placement, arrangement, and use of the Customer Equipment and
Customer Materials in the Internet Data Centers, as permitted by Exodus,
complies with the Customer Equipment and Customer Materials Manufacturer's
environmental and other specifications.
(e) No Other Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET OUT IN
SUBSECTIONS (A), (B), (C) AND (D) ABOVE, ALL SERVICES PERFORMED AND PRODUCTS
PROVIDED AND SPACE MADE AVAILABLE BY EXODUS HEREUNDER ARE PERFORMED, PROVIDED,
AND MADE AVAILABLE ON AN "AS IS" BASIS, AND CUSTOMER'S USE OF THE INTERNET DATA
CENTERS IS AT ITS OWN RISK. EXODUS DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY AND
ALL OTHER EXPRESS AND/OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NONINFRINGEMENT, AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING, USAGE, OR
TRADE PRACTICE. EXODUS DOES NOT WARRANT THAT THE INTERNET DATA CENTER SERVICES
PROVIDED HEREUNDER WILL BE UNINTERRUPTED, ERROR-FREE, OR COMPLETELY SECURE.
(f) Disclaimer of Actions Caused by and/or Under the Control of Third
Parties. WHILE EXODUS' INTERNET DATA CENTER SERVICES PROVIDE CUSTOMERS WITH
CONNECTIVITY TO THE INTERNET, EXODUS DOES NOT AND CANNOT CONTROL THE FLOW OF
INFORMATION TO OR FROM EXODUS' INTERNET DATA CENTERS TO OTHER PORTIONS OF THE
INTERNET. SUCH FLOW DEPENDS IN LARGE PART ON THE PERFORMANCE OF INTERNET
SERVICES PROVIDED OR CONTROLLED BY THIRD PARTIES. AT TIMES, ACTIONS OR
INACTIONS CAUSED BY THESE THIRD PARTIES CAN PRODUCE SITUATIONS IN WHICH EXODUS'
CUSTOMERS' CONNECTIONS TO THE INTERNET (OR PORTIONS THEREOF) MAY BE IMPAIRED OR
DISRUPTED. ALTHOUGH EXODUS WILL USE COMMERCIALLY REASONABLE EFFORTS TO TAKE
ACTIONS IT DEEMS APPROPRIATE TO REMEDY AND AVOID SUCH EVENTS, EXODUS CANNOT
GUARANTEE THAT THEY WILL NOT OCCUR. ACCORDINGLY, EXODUS DISCLAIMS ANY AND ALL
LIABILITY RESULTING FROM OR RELATED TO SUCH EVENTS.
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6 LIMITATIONS OF LIABILITY.
6.1 Personal Injury. EACH REPRESENTATIVE, AND ANY OTHER PERSONS, VISITING THE
INTERNET DATA CENTERS DOES SO AT ITS OWN RISK AND EXODUS ASSUMES NO LIABILITY
WHATSOEVER FOR ANY HARM TO SUCH PERSONS RESULTING FROM ANY CAUSE OTHER THAN
EXODUS' GROSS NEGLIGENCE OR WILLFUL MISCONDUCT RESULTING IN PERSONAL INJURY TO
SUCH PERSONS DURING SUCH A VISIT.
6.2 Damage to Customer Equipment or Materials.
(a) CERTAIN CUSTOMER EQUIPMENT, INCLUDING BUT NOT LIMITED TO CUSTOMER
EQUIPMENT LOCATED ON RACKS, MAY BE DIRECTLY ACCESSIBLE BY OTHER CUSTOMERS.
EXODUS ASSUMES NO LIABILITY FOR ANY DAMAGE TO, OR LOSS OF, ANY CUSTOMER
EQUIPMENT RESULTING FROM ANY CAUSE OTHER THAN EXODUS' NEGLIGENCE OR WILLFUL
MISCONDUCT. TO THE EXTENT EXODUS IS LIABLE FOR ANY DAMAGE TO, OR LOSS OF, THE
CUSTOMER EQUIPMENT FOR ANY REASON, SUCH LIABILITY WILL BE LIMITED SOLELY TO THE
THEN-CURRENT VALUE OF THE CUSTOMER EQUIPMENT.
(b) EXODUS ASSUMES NO LIABILITY FOR ANY DAMAGE TO, OR LOSS OF, ANY
CUSTOMER MATERIALS RESULTING FROM ANY CAUSE WHATSOEVER, EXCEPT AS A RESULT OF
EXODUS' GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
6.3 Exclusions. EXCEPT AS SPECIFIED IN SECTIONS 6.1 AND 6.2, IN NO EVENT WILL
EXODUS BE LIABLE TO CUSTOMER, ANY REPRESENTATIVE, OR ANY THIRD PARTY FOR ANY
CLAIMS ARISING OUT OF OR RELATED TO THE CUSTOMER EQUIPMENT, THE CUSTOMER
MATERIALS, THE CUSTOMER'S BUSINESS, OR OTHERWISE.
6.4 No Liability for Consequential Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL EXODUS BE LIABLE FOR ANY LOST
ADVERTISING OR OTHER REVENUE, LOST PROFITS, REPLACEMENT GOODS, LOSS OF
TECHNOLOGY, RIGHTS OR SERVICES, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
DAMAGES, LOSS OF DATA, OR INTERRUPTION OR LOSS OF USE OF SERVICE OR OF ANY
CUSTOMER EQUIPMENT OR CUSTOMER MATERIALS, EVEN IF ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE),
PRODUCTS LIABILITY OR OTHERWISE.
6.5 Maximum Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, EXODUS'S MAXIMUM AGGREGATE LIABILITY TO CUSTOMER RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT WILL BE LIMITED TO THE TOTAL AMOUNT PAID BY
CUSTOMER TO EXODUS HEREUNDER.
6.6 Basis of the Bargain; Failure of Essential Purpose. Customer acknowledges
that Exodus has set its prices and entered into this Agreement in reliance upon
the limitations of liability and the disclaimers of warranties and damages set
forth herein, and that the same form an essential bask of the bargain between
the parties. The parties agree that the limitations and exclusions of liability
and disclaimers specified in this Agreement will survive and apply even if found
to have failed of their essential purpose.
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7 INDEMNIFICATION.
7.1 Customer's Indemnification of Exodus.
(a) Customer will indemnity and hold Exodus, its affiliates, shareholders,
officers, directors, employees, agents, representatives, and customers harmless
from and against any and all costs, liabilities, losses, and expenses
(including, but not limited to, reasonable attorneys' fees arid fees of experts)
arising out of any claim, suit, action or proceeding (each, an "Action"), and
Customer will pay any settlement reached or judgment entered thereon against
Exodus or such third party, to the extent such Action arises from an allegation
that any of the following has occurred or will occur:
(i) with respect to the Customer's Business, Customer Materials, or
Customer Equipment: (A) infringement of any intellectual property rights; (B)
misappropriation of any intellectual property rights; (C) defamation, libel,
slander, obscenity, pornography, or violation of the rights of privacy or
publicity; or (D) flaming, spamming, or any other offensive, harassing or
illegal conduct or violation of the Rules and Regulations; or
(ii) any damage or destruction to the Customer Area, the Internet Data
Centers or the equipment of Exodus or any other customer by Customer or
Representative(s) or Customer's designees resulting from Customer's or
Customer's Representative's or Invitee's negligence or willful misconduct; or
(iii) any other damage arising from the Customer Equipment, Customer
Materials, or Customer's Business, except to the extent such damage is caused by
Exodus, its employees or other customers.
(b) Exodus will give Customer prompt written notice of the existence of
any such Action of which Exodus becomes aware, and an opportunity to participate
in the defense thereof at Customer's expense.
7.2 Exodus' Indemnification of Customer.
(a) Exodus will indemnify and hold Customer, its affiliates, shareholders,
officers, directors, employees, agents, and Representatives harmless from and
against any and all reasonable costs, liabilities, losses, and expenses
(including, but not limited to, reasonable attorneys' fees) arising out of (i)
the infringement of any third party registered U.S. copyright or issued U.S.
patent resulting from the provision of Internet Data Center Services pursuant to
this Agreement and (ii) personal injury to Customer's Representatives from
Exodus's negligence or willful misconduct.
(b) Customer will give Exodus prompt written notice upon of the existence
of any such event of which it becomes aware, and an opportunity to participate
in the defense thereof at Exodus' expense.
8 TERM AND TERMINATION.
8.1 Term. This Agreement will be effective for a period of one (1) year from
the Installation Date, unless earlier terminated according to the provisions of
this Section 8. The Agreement will automatically renew for additional terms of
one (1) year each.
8.2 Termination.
(a) For Convenience. Either party may terminate this Agreement for
convenience at any time effective after the first (1st) anniversary of the
Installation Date by providing ninety (90) days' prior written
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notice to the other party.
(b) For Cause. Either party will have the right to terminate this
Agreement if: (i) the other party materially breaches any term or condition of
this Agreement, including but not limited to the payment of fees, and fails to
cure such breach within thirty (30) days after written notice of the same; (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.
8.3 No Liability for Termination. Neither party will be liable to the other for
any termination or expiration of this Agreement in accordance with its terms.
8.4 Effect of Termination. Upon the effective date of expiration or termination
of this Agreement:
(a) Exodus will immediately cease providing the Internet Data Center
Services;
(b) any and all payment obligations of Customer which have accrued as of
such expiration or termination 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 except as required to comply with
any applicable legal, accounting, or administrative record keeping requirement;
and
(d) Customer will remove from the Internet Data Centers all Customer
Equipment, Customer Materials, and any of its other property within the Internet
Data Centers within five (5) business days of such expiration or termination and
return the Customer Area to Exodus in the same condition as it was on the
Installation Date, normal wear and tear excepted. If Customer does not remove
such property within such five-day period, Exodus will have the option to (i)
move any and all such property to secure storage and charge Customer for the
cost of such removal and storage, and/or (ii) after a final notice to Customer,
liquidate the property in any reasonable manner.
(e) Notwithstanding the foregoing, Customer shall be entitled to retain
control over the route of all IP addresses used by Customer during the preceding
ninety (90) days for thirty (30) days following the termination of this
Agreement.
8.5 Survival. The following provisions will survive any expiration or
termination of the Agreement: Sections 3, 4, 5, 6, 7, 8, 9, and 10.
9 CONFIDENTIAL INFORMATION.
9.1 Confidential Information. Each party acknowledges that it will have access
to certain confidential information and materials of the other party concerning
the other party's business, plans, customers, technology, and products,
including the terms and conditions of this Agreement ("Confidential
Information"). Confidential Information will include, but not be limited to,
each party's proprietary software and customer information. Each party agrees
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<PAGE>
that it will not use in any way, for its own account or the account of any third
party, except as expressly permitted by this Agreement, nor disclose 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.
9.2 Exceptions. Information will not be deemed Confidential Information
hereunder if such information: (i) is known to the receiving party prior to
receipt from the disclosing party directly or indirectly from a source other
than one having an obligation of confidentiality to the disclosing party; (ii)
becomes known (independently of disclosure by the disclosing party) to the
receiving party directly or indirectly from a source other than one having an
obligation of confidentiality to the disclosing 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.
9.3 Remedies. Notwithstanding anything to the contrary in this Agreement, in
the event of any intentional breach of this Section 9, the non-breaching party
will be entitled to any remedies available at law and/or in equity.
10 GENERAL PROVISIONS.
10.1 Governing Law. This Agreement is made under and will be governed by and
construed in accordance with the laws of the State of California, United States
of America (except that body of law controlling conflicts of law) and
specifically excluding from application to this Agreement that law known as the
United Nations Convention on the International Sale of Goods.
10.2 Arbitration. The parties will in good faith attempt to resolve any disputes
relating to the terms, interpretation or performance of this Agreement (other
than claims for preliminary injunctive relief or other prejudgment remedies)
through mutual consultation before resorting to any other dispute resolution
mechanisms. If mutual consultation fails to resolve any dispute, such dispute
will be resolved at the request of either party through binding arbitration.
Arbitration will be conducted in Santa Clara County, California, under the rules
and procedures of the Judicial Arbitration and Mediation Society ("JAMS"). The
parties will request that JAMS appoint a single arbitrator possessing knowledge
of online services agreements; however the arbitration will proceed even if such
a person is unavailable.
10.3 Force Majeure. Except for the obligation to pay money, neither party will
be liable for any failure or delay in its performance under this Agreement due
to any cause beyond its reasonable control, including act of war, acts of God,
earthquake, flood, embargo, riot, sabotage, labor shortage or dispute,
governmental act or failure of the Internet, provided that the delayed party:
(a) gives the other party prompt notice of such cause, and (b) uses its
reasonable commercial efforts to correct promptly such failure or delay in
performance.
10.4 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. Customer
acknowledges and agrees that it has been granted only a license to occupy the
Customer Space and use the Internet Data Centers in accordance
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with this Agreement, Customer has not been granted any real property interest in
the Customer Space or Internet Data Centers, and Customer has no rights as a
tenant or otherwise under any real property or landlord/tenant laws,
regulations, or ordinances. For good cause (eg, violation or threatened
violation of applicable law or Rules and Regulations), Exodus may suspend the
right of any Representative or other Customer personnel to visit the Internet
Data Centers.
10.5 Inherently Dangerous Applications. The Internet Data Center are not
intended nor provided for use in connection with, and Customer will not use them
for, any nuclear, aviation, mass transit, life-support, or any other inherently
dangerous applications or services, the failure of which could result in death,
personal injury, catastrophic damage, or mass destruction.
10.6 Marketing. Customer agrees that Exodus may refer to Customer by trade name
and trademark, and may briefly describe Customer's Business, in Exodus's
marketing materials and web site. Customer hereby grants Exodus a license to use
any Customer trade names, trademarks or service marks solely in connection with
the rights granted to Exodus pursuant to this Section 10.6.
10.7 Government Regulations. Customer will not export, re-export, transfer, or
make available, whether directly or indirectly, any regulated item or
information to anyone outside the U.S. in connection with this Agreement without
first complying with all export control laws and regulations which may be
imposed by the U.S. Government and any country or organization of nations within
whose jurisdiction Customer operates or does business.
10.8 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.
10.9 Waiver. The waiver of any breach or default of this Agreement will not
constitute a waiver of any subsequent breach or default, and will not act to
amend or negate the rights of the waiving party.
10.10 Assignment. Neither party may assign its rights or delegate its duties
under this Agreement either in whole or in part without the prior written
consent of the other party, except that this Agreement may be assigned in whole
as part of a corporate reorganization, consolidation, merger, or sale of
substantially all of its assets, provided that it has notified such other party
within thirty (30) days subsequent to the effective date of such event. Any
attempted assignment or delegation without such consent will be void. This
Agreement will bind and inure to the benefit of each party's successors and
permitted assigns.
10.11 Notices. Any notice or communication required or permitted to be given
hereunder may be delivered by hand, mailed by registered or certified mail,
return receipt requested, postage prepaid, or sent by confirmed facsimile, in
each case to the address of the receiving party indicated on the signature page
hereof, or at such other address as may hereafter be furnished in writing by
either party hereto to the other. Such notice will be deemed to have been given
as of the date it is delivered, or confirmed by facsimile, whichever is earlier.
10.12 Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original,
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but all of which together shall constitute one and the same instrument.
10.13 Relationship of Parties. Exodus and Customer are independent contractors
and this Agreement will not establish any relationship of partnership, joint
venture, employment, franchise or agency between Exodus and Customer. Neither
Exodus nor Customer have the power to bind the other or incur obligations on the
other's behalf without the other's prior written consent, except as otherwise
expressly provided herein.
10.14 Priority. The following order of precedence will govern any conflict or
discrepancy between any portions of this Agreement:
(1) Attachment 6.
(2) Attachment 2.
(3) Attachment 3.
(4) Signature Page.
(5) Attachment 4.
(6) Subsequent Attachment (s) 1.
(7) Initial Attachment 1.
(8) Attachment 5.
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ATTACHMENT 3
RULES AND REGULATIONS
Each Exodus Customer and its Representatives, employees, contractors,
customers, agents and users of Customer's online facilities are subject to these
Rules and Regulations in connection with their use of Exodus' Internet Data
Center Services.
ACCESS TO INTERNET DATA CENTERS
. Only those individuals identified by Customer as its Representatives may
access the Internet Data Centers. Customer may not allow any unauthorized
persons to access the Internet Data Centers.
. Customer will notify Exodus in writing of any change in Customer's
Representatives.
. Customer agrees to adhere at all times to security measures that have been
established by Exodus to protect the Internet Data Centers, its equipment
and its Customers' equipment.
USE OF INTERNET DATA CENTER FACILITY
Customer must keep the Customer Area clean at all times. Customer may
not store any paper products or materials of any kind in the Customer Area
(other than equipment manuals).
Customer may not bring, or make use of, any of the following into the
Facility:
. Food or drink. . Alcohol or other intoxicants.
. Tobacco products. . Electro-magnetic devices.
. Explosives. . Radioactive materials.
. Weapons. . Photographic or recording
. Chemicals. equipment of any kind
. Illegal drugs. (other than tape back-up
equipment).
EQUIPMENT AND CONNECTIONS
. All Customer Equipment must be clearly labeled with Customer's name (or
code name provided to Exodus) and individual component identification.
. Customers may not connect or disconnect any Customer Equipment or other
equipment except as specifically pre-approved by an authorized employee of
Exodus, at least 48 hours in advance of proposed installation, except as
otherwise approved by Exodus.
. All connections to and from Customer Equipment must be clearly labeled.
. Customer Equipment must be configured and run at all times in compliance
with the manufacturer's specifications, including clearance requirements.
. Exodus makes available at its Data Centers certain equipment for the
temporary use by Customers at the Internet Data Centers. This equipment is
provided on an "AS IS" basis without any warranties of any kind. Customer
may borrow and/or use any Exodus property or equipment, at its own risk,
after receiving permission from Exodus.
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SCHEDULED MAINTENANCE
Periodically, Exodus will conduct routine scheduled maintenance of its Internet
Data Centers and Internet Data Center Services pursuant to a schedule posted on
Exodus' World Wide Web site (http://www.exodus.net/exo maintenance frame.html).
During such time, Customer's Equipment may be unable to transmit and receive
data and Customer may be unable to access its Equipment. Customer agrees to
cooperate with Exodus during the scheduled maintenance so that Exodus may keep
such period or time to a minimum.
MISCONDUCT
Customer and its Representatives may not:
. Misuse or abuse any Exodus property or equipment;
. Make any unauthorized use or interfere with any property or equipment of
any other Exodus customer;
. Harass any individual, including Exodus personnel and representatives of
other customers of Exodus; or
. Engage in any activity that is in violation of the law, or aid in criminal
activity while on Exodus property or in connection with the Internet Data
Center Services.
ONLINE CONDUCT
Customer will not, and will not permit any persons using Customer's
online facilities (including but not limited to Customer's Web site(s) and
transmission capabilities), to do any of the following:
. Send Spam (unsolicited commercial messages or communications in any form)
. Infringe or misappropriate the intellectual property rights of others. This
includes posting copyrighted materials without appropriate permission,
using trademarks of others without appropriate permission or attribution,
and posting or distributing trade secret information of others in violation
of a duty of confidentiality.
. Violate the personal privacy rights of others. This includes using and
distributing information about Internet users without their permission,
except as permitted by applicable law.
. Send, post or host harassing, abusive, libelous or obscene materials or
take any similar actions.
. Intentionally omit, delete, forge or misrepresent transmission information,
including headers, return addressing information and IP addressees or take
any other actions intended to cloak Customer's or its users' identity or
contact information.
. Use the online facilities for any illegal purposes.
. Assist or permit any persons in engaging in any of the activities described
above. If Customer becomes aware of any such activities, Customer will take
all actions necessary to stop such activities immediately, including, if
necessary, terminating Customer's user's access to Customer's online
facilities.
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MODIFICATION OF RULES AND REGULATIONS
Exodus reserves the right to change these Rules and Regulations at any
time. Customer is responsible for regularly reviewing these Rules and
Regulations. Continued use of the Internet Data Center Services following any
such changes shall constitute the Customer's acceptance of such changes.
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ATTACHMENT 4
CUSTOMER EQUIPMENT
<TABLE>
<CAPTION>
Item Date In/Out Customer Initials Exodus Initials
- ---- ----------- ----------------- ---------------
<S> <C> <C> <C>
1. In:
Out:
2. In:
Out:
3. In:
Out:
4. In:
Out:
5. In:
Out:
6. In:
Out:
7. In:
Out:
8. In:
Out:
9. In:
Out:
10. In:
Out:
11. In:
Out:
12. In:
Out:
13. In:
Out:
14. In:
Out:
</TABLE>
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ATTACHMENT 5
REGISTRATION FORM
COMPANY INFORMATION
- --------------------------------------------------------------------------------
Company Name: Date:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City: State: Zip:
- --------------------------------------------------------------------------------
Contact Name: Title: Email:
- --------------------------------------------------------------------------------
Phone: Fax: Pager:
- --------------------------------------------------------------------------------
BILLING INFORMATION
- --------------------------------------------------------------------------------
Contact Name: Title: Email:
- --------------------------------------------------------------------------------
Phone: Fax: Pager:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City: State: Zip:
- --------------------------------------------------------------------------------
Purchase Order No.:
- --------------------------------------------------------------------------------
INSTALLATION SITE
- --------------------------------------------------------------------------------
Contact Name: Title: Email:
- --------------------------------------------------------------------------------
Phone: Fax: Pager:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City: State: Zip:
- --------------------------------------------------------------------------------
Contact Hours and Notes:
- --------------------------------------------------------------------------------
FIRST TECHNICAL CONTACT
- --------------------------------------------------------------------------------
Contact Name: Title: Email:
- --------------------------------------------------------------------------------
Phone: Fax: Pager:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City: State: Zip:
- --------------------------------------------------------------------------------
Contact Hours and Notes:
- --------------------------------------------------------------------------------
SECOND TECHNICAL CONTACT
- --------------------------------------------------------------------------------
Contact Name: Title: Email:
- --------------------------------------------------------------------------------
Phone: Fax: Pager:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City: State: Zip:
- --------------------------------------------------------------------------------
Contact Hours and Notes:
- --------------------------------------------------------------------------------
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THIRD TECHNICAL CONTACT
- --------------------------------------------------------------------------------
Contact Name: Title: Email:
- --------------------------------------------------------------------------------
Phone: Fax: Pager:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City: State: Zip:
- --------------------------------------------------------------------------------
Contact Hours and Notes:
- --------------------------------------------------------------------------------
TECHNICAL INFORMATION
- --------------------------------------------------------------------------------
Number of Host Computers or
IP Subnet Address space required: (1)
- --------------------------------------------------------------------------------
Currently assigned IP Subnet
Address or Not Applicable:
- --------------------------------------------------------------------------------
Circuit Demarcation
Information: (2)
- --------------------------------------------------------------------------------
Exists (Yes or No) Exodus DNS Support
(Primary or Secondary)
- --------------------------------------------------------------------------------
First Choice Domain Name:
- --------------------------------------------------------------------------------
Second Choice Domain Name:
- --------------------------------------------------------------------------------
Current Internet Service Provider:
- --------------------------------------------------------------------------------
Notes:
1. This information is used to determine the number of subnets and IP address
space that will be required.
2. A network diagram is required if the number of host computers or requested
address space is greater than 254.
3. Required for point to point circuits, i.e., T1.
For example: Room 105, Jack 34.
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ATTACHMENT 6
NEGOTIATED CHANGES
A. The following replaces and supersedes Sect on 5.2(a) of Attachment 2 (Terms
and Conditions):
5.2(a) Efforts to Avoid Customer Service Interruption or Disruption; Remedies
(i) Establishment of a Problem Resolution Committee. The parties
acknowledge and agree that maintaining Internet connectivity at the levels
contracted for by Customer pursuant to the internet Data Center Services is
critical to Customer's business. The parties also recognize that the individual
and joint efforts of both parties are necessary to ensure that such levels are
maintained and any problems relating thereto are addressed and resolved
expeditiously. Accordingly, Exodus and Customer hereby establish a Problem
Resolution Committee (the "Committee") comprised of two representatives each
from Exodus and Customer. Upon execution of this Agreement, each party will
provide the other with the names and contact information of its representatives
to the Committee. The Committee shall meet periodically at times and places
mutually agreed to by both parties to address and resolve any anticipated
problems or other issues that could adversely impact Customer's ability to
receive the Internet Data Center Services, including but not limited to steps
being taken by Exodus to ensure that Exodus can provide Internet Data Center
Services at future levels anticipated by Customer. At least one representative
from each party also shall meet (either in person or by telephone) immediately
upon the occurrence of any event that prevents Customer from receiving Internet
Data Center Services. Exodus and Customer each agrees to take all reasonable
actions, including immediately notifying the other party of any actual or
potential problems relating to the Internet Data Center Services, to resolve any
actual problems and avoid any potential problems. Exodus will not charge
Customer any additional fees for performing its obligations under this Section
5.2(a)(i) unless the problems to be resolved result from Customer's negligence
and require significant time commitments from Exodus.
(ii) Packet Loss and Packet Collision. To prevent packet loss and packet
collision, Exodus to provide to Customer, in connection with every 100 Mbps of
sustained bandwidth or fraction thereof utilized by Customer, Exodus will
provide two (2) connections on two switches to connect Customer's equipment to
Exodus' network.
(iii) Service Level Warranty. In the event Customer experiences any of the
following and Customer notifies Exodus of such event and Exodus determines in
its reasonable judgment that such inability was caused by Exodus' failure to
provide Internet Data Center Services for reasons within Exodus' reasonable
control and not as a result of any actions or inactions of Customer or any third
parties (including Customer Equipment and third party equipment), Exodus will,
upon Customer's request, credit Customer's account as described below:
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(A) Inability to Access the Internet (Downtime). If Customer is unable to
transmit and receive information from Exodus' Internet Data Centers (ie, Exodus'
LAN and WAN) to other portions of the Internet because Exodus failed to provide
the Internet Data Center Services for (i) more than [***] in a calendar month,
Exodus will credit Customer's account the pro-rata connectivity charges for
[***] of service, up to an aggregate maximum credit of connectivity charges for
[***] of service in any [***]. Exodus' scheduled maintenance of the Internet
Data Centers and Internet Data Center Services, as described in the Rules and
Regulations, shall not be deemed to be a failure of Exodus to provide Internet
Data Center Services provided the aggregate amount of time that Exodus causes
Customer to be unable to access the Internet as a result of such maintenance
does not exceed [***]. For purposes of the foregoing, "unable to transmit and
receive" shall mean sustained packet loss in excess of 50% based on a sampling
of at least 100 packets per destination per minute.
(B) Packet Loss and Latency. Exodus does not proactively monitor the
packet losses or transmission latency of specific customers. Exodus does,
however, proactively monitor the packet losses and transmission latencies of all
of its customers within its LAN and WAN. In the event that Exodus discovers
(either from its own efforts or after being advised by Customer) that Customer
is experiencing packet loss in excess of 2% (based on a sampling of at least 100
packets per destination) ("Excess Packet Loss") or transmission latency in
excess of 30 milliseconds within Exodus' LAN, 120 milliseconds within Exodus'
WAN within the United States (and 400 milliseconds for the WAN outside the
United States) (collectively, "Excess Latency," and with Excess Packet Loss
"Excess Packet Loss/Latency"), Exodus will take all actions necessary to
determine the source of the Excess Packet Loss/Latency.
(1) Time to Discover Source of Excess Packet Loss/Latency;
Notification of Customer. Within one (1) hour of discovering the existence of
Excess Packet Loss/Latency, Exodus will determine whether the source of the
Excess Packet Loss/Latency is limited to the Customer Equipment and the Exodus
equipment connecting the Customer Equipment to Exodus' LAN ("Customer Specific
Packet Loss Latency"). If the Excess Packet Loss/Latency is not a Customer
Specific Packet Loss/Latency, Exodus will determine the source of the Excess
Packet Loss/Latency within two (2) hours after determining that it is not a
Customer Specific Packet Loss/Latency. In any event, Exodus will notify Customer
of the source of the Excess Packet Loss Latency within thirty (30) minutes after
identifying the source.
(2) Resolution of Cause of Excess Packet Loss/Latency. If the Excess
Packet Loss/Latency is a Customer Specific Packet Loss/Latency, and the remedy
is within the control of Exodus, Exodus will remedy' the Excess Packet
Loss/Latency within two (2) hours of determining the source of the Excess Packet
Loss/Latency. If the Excess Packet Latency is caused from within Exodus' LAN
and/or WAN, Exodus will remedy the Excess Packet Loss/Latency within one (1)
hour of determining the source of the Excess Packet Loss/Latency. If the Excess
Packet Loss/Latency is caused from outside of the Exodus LAN or WAN, Exodus will
notify Customer and will use commercially reasonable efforts to notify the
party(ies) responsible for the source and cooperate with it(them) to resolve the
problem as soon as possible.
[***] Confidential treatment requested for redacted portion.
29
<PAGE>
(3) Failure to Determine Source and/or Resolve Problem. In the event
that Exodus is unable to determine the source of and remedy the Excess Packet
Loss/Latency within the time periods described above (where Exodus was in
control of the source), Exodus will credit Customer's account the pro-rata
connectivity charges for [***] of service for every [***] after the time periods
described above that it takes Exodus to resolve the problem, up to an aggregate
maximum credit of connectivity charges for [***] of service in any [***].
(iv) Remedies Shall Not Be Cumulative; Minimum Credit. In the event that
Customer is entitled to multiple remedies hereunder arising from the same event,
such remedies shall not be cumulative and Customer shall be entitled to receive
only the maximum single remedy available for such event. In no event will Exodus
be required to credit Customer in any [***] connectivity charges in excess of
[***] of service. A credit shall be applied only to the month in which there was
the incident that resulted in the credit. Customer shall not be eligible to
receive any credits for periods in which Customer received any Internet Data
Center Services free of charge. The parties agree that without imposing any
affirmative obligations on Customer and Exodus, if there are any instances where
Customer would be entitled to receive more credits, but for the [***]
limitation, Exodus and Customer shall meet and discuss whether Exodus can
compensate Customer for any losses incurred.
THIS SECTION 5.2(a) STATES CUSTOMER'S SOLE AND EXCLUSIVE REMEDY FOR ANY FAILURE
BY EXODUS TO PROVIDE INTERNET DATA CENTER SERVICES.
B. Additional Provisions.
Provided Customer continues to purchase Internet Data Center services at
levels not materially less than those described in the initial Service and Price
Order Form, Exodus agrees to provide the following services, for no additional
charge to Customer, and such services shall be deemed Internet Data Center
Services for purposes of this Agreement:
1. Until such time as Exodus commences direct private peering
relationships with MCI, Sprint and ANS, Exodus will provision a direct transit
DS3 circuit (or other level of bandwidth as may be mutually agreed to from time
to time between Exodus and Customer) directly to the Internet Data Center
containing the Customer Area from an Internet Service Provider that has direct
private peering relationships with MCI, Sprint and ANS. Exodus agrees to use its
best efforts to commence private peering relationships with MCI, Sprint and ANS
as soon as possible, and Exodus currently desires to complete such relationships
by the second quarter of 1998.
2. Exodus will provide tape data back-up and restore services for
Customer Materials such that Exodus and Customer will have the capability to
refresh Customer Materials at a rate of not less than 10GB/hour. Exodus will
provide daily logs of back-ups, to include start time, end time, data location,
and total amount backed up.
[***] Confidential treatment requested for redacted portion.
30
<PAGE>
EXHIBIT 10.11
JOINT VENTURE AGREEMENT
JOINT VENTURE AGREEMENT, dated as of November 6, 1997, by and between
SOFTBANK Corporation, a Japanese corporation ("SOFTBANK"), and GeoCities, a
California corporation ("GeoCities").
WHEREAS, GeoCities offers in the United States and certain other
geographic areas certain hosting and marketing services on the World Wide Web,
including, without limitation, GeoCities virtual communities.
WHEREAS, SOFTBANK is a leading computer publisher and software
distributor in Japan;
WHEREAS, SOFTBANK indirectly owns a minority interest in GeoCities
through one of its subsidiaries;
WHEREAS, SOFTBANK and GeoCities wish to form a joint venture company
in Japan called GeoCities Japan Corporation to establish and manage in Japan a
Japanese version (using the Japanese language) of the GeoCities virtual
communities on the internet, virtual community services, and conduct other
related businesses and;
WHEREAS, on July 16, 1997, SOFTBANK incorporated GeoCities Japan
Corporation, a Japanese corporation (the "Company") and GeoCities intends to
purchase 40% of the shares thereof in accordance with the procedures stipulated
in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Objectives of the Company
-------------------------
The objectives of the Company shall be to engage in the businesses set forth
below.
(i) establishment and management in Japan of a Japanese version
of the GeoCities virtual communities on the internet;
(ii) development of related Japanese virtual communities services;
(iii) related sale of virtual communities advertisement space;
(iv) addition of Japanese specific informational content to the
mirror site database in Japan;
(v) other businesses relating to the foregoing as agreed upon by
the parties from time to time.
2. Sale and Purchase of Shares; Ownership of the Company
-----------------------------------------------------
(a) Object to the terms and conditions hereof, SOFTBANK agrees to sell,
and GeoCities agrees to purchase, 1,600 shares of Common Stock of the
Company (the "Shares") at a price of (Yen)50,000 per share so that
after such sale SOFTBANK
<PAGE>
shall own 2,400 shares of Common Stock and GeoCities shall own 1,600
shares of Common Stock of the Company.
(b) Within five (5) days of the execution of this Agreement, SOFTBANK
shall deliver to GeoCities stock certificates representing the Shares
and registered in the name of SOFTBANK, against payment by GeoCities
of (Yen)80,000,000 therefor in immediately available funds to a bank
account designated by SOFTBANK. The completion of the purchase of
1,600 Shares by GeoCities shall be referred to hereafter as the
"Closing". The payment for the Shares shall be made in the currency of
Japanese Yen.
3. Representations and Warranties of SOFTBANK
------------------------------------------
SOFTBANK hereby represents and warrants to GeoCities as follows:
(a) SOFTBANK has been duly incorporated, and is a validly existing
corporation under the laws of Japan and has full power and authority
to enter into and perform its obligations under this Agreement
(b) This Agreement has been duly authorized, executed and delivered by
SOFTBANK and constitutes a valid and binding agreement of SOFTBANK,
enforceable against SOFTBANK in accordance with its terms.
(c) The company has been incorporated on July 16, 1997 as a kabushiki
kaisha (a stock limited company). The registered office of the
Company is at 24-1, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103, Japan.
The Company is a corporation under the laws of Japan and has full
power and authority to carry on its business as described in this
Agreement. Attached hereto as Exhibit A is true and correct copy of
the Articles of Incorporation of the Company ("teikan") and true and
complete English translation thereof.
(d) The Company's authorized capital is 16,000 shares of Common Stock, par
value (Yen)50,000 per share, of which 4,000 shares are issued and
outstanding. Prior to the Closing, SOFTBANK purchased such 4,000
shares for a purchase price of (Yen)50,000 per share in cash, and
SOFTBANK owns all of such issued and outstanding shares of the
Company. There are no options, warrants or commitments of any kind
relating to the capital stock of the Company, including any preemptive
or other rights to purchase its capital stock.
(e) The Shares have been duly authorized (including any required approval
by the Board of Directors of the Company) and validly issued and are
fully paid and non-assessable. Title to the Shares will be transferred
from SOFTBANK to GeoCities upon physical delivery of the stock
certificates to GeoCities at the Closing, free and clear of all liens,
encumbrances, equities or claims.
(f) Prior to the Closing, the Company has not been engaged in any business
or activities and has not entered into to any contracts, except as
contemplated by this
2
<PAGE>
Agreement and the Company has net assets of (Yen)200,000,000 in the
form of cash and cash equivalents.
(g) The Company has no mutual liabilities, contingent or otherwise, and
the Company has complied in all material respects with all laws and
regulations. There is no mutual litigation pending or threatened, and
no basis therefor known to the Company, to which the Company is or
would be a party, to which any of the Company's assets are or would be
subject, or which question or challenge this Agreement or the
transactions contemplated hereby.
(h) No consent, approval or authorization of or declaration or filing with
any governmental authority or other person or entity on the part of
SOFTBANK is required in connection with the execution or delivery of
this Agreement or the consummation of the transactions contemplated
hereby other than as described in Section 15 hereof.
(i) A certified copy of the commercial register of the Company ( and a
true and complete English translation thereof) is attached to this
Agreement as Exhibit B, and all information contained therein is
complete and accurate.
4. Representations and Warranties of GeoCities
-------------------------------------------
GeoCities represents and warrants to SOFTBANK as follows:
(a) GeoCities has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of
California, and has full power and authority to enter into and perform
this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by
GeoCities and constitutes a valid and binding agreement of GeoCities,
enforceable against GeoCities in accordance with its terms.
(c) No consent, approval or authorization of or declaration or filing with
any governmental authority or other person or entity on the part of
GeoCities is required in connection with the execution or delivery of
this Agreement or the consummation of the transactions contemplated
hereby other than as described in Section 15 hereof.
5. Licensing Agreement
-------------------
Concurrently with the execution of this Agreement, GeoCities shall enter
into a licensing agreement, in the form of Exhibit C attached hereto (the
"Licensing Agreements"), with the Company.
6. Board of Directors; Statutory Auditors
--------------------------------------
(a) The total number of Directors comprising the Board shall be five.
SOFTBANK shall designate three Directors, and GeoCities shall
designate two Directors.
3
<PAGE>
(b) The Company shall have one Statutory Auditor, which shall be
designated by SOFTBANK.
(c) The Company shall have one Representative Director, who shall be the
President. The President and Representative Director shall be
appointed by SOFTBANK.
(d) In case of a vacancy in the office of Director, Statutory Auditor or
Representative Director during the term of office for whatever reason,
the vacancy shall be filled by the party that nominated the Director,
Statutory Auditor or Representative Director whose office became
vacant.
(e) At any annual or special meeting of shareholders or any meeting of the
Board of Directors called for such purpose, each party shall vote or
cause to be voted all shares owned by it for the election of nominees
designated as Directors, Statutory Auditor or Representative Director
in accordance with this Section 6 and otherwise as may be necessary to
implement the provisions of this Agreement.
(f) No change shall be made in the number and/or allocation of Directors,
Statutory Auditor or Representative Director as stated in this Section
6 or in the Articles of Incorporation of the Company; provided that if
the parties' respective shareholdings change, the parties shall adjust
the number and allocation of Directors and the designation or
nomination of the Statutory Auditor or Representative Director if and
to the extent appropriate so that their respective representation on
the Board and in the Company is generally proportionate to their
respective shareholdings.
7. Management of the Company
-------------------------
(a) The Board of Directors of the Company shall be responsible for
establishing the overall policy and operating procedures with respect
to the business affairs of the Company.
(b) Except as otherwise required by mandatory provisions of law and as
otherwise provided herein, resolutions of the Board of Directors shall
be adopted only by the affirmative vote of a majority of the Directors
present at a meeting duly called at which a quorum is present. A
majority of the Board of Directors shall constitute a quorum for the
transaction of business provided at least one Director designated by
GeoCities is present. Board meetings shall be held in Japan in
accordance with applicable law provided that the Board of Directors
shall meet no less frequently than once in each calendar month.
(c) Notwithstanding the general provisions set forth above, in addition to
any special approval requirements under the Articles of Incorporation
or under law, each of the following corporate actions may be taken by
the Company only (i) in the case of any action that is permitted by
law or under the Articles of Incorporation to be taken by the Board of
Directors alone, upon authorization by affirmative vote of at least
one SOFTBANK director and at least one GeoCities director and (ii) in
the case of actions required by law or the Articles of Incorporation
to be approved
4
<PAGE>
by the Company's shareholders, upon authorization by affirmative vote
of both GeoCities and SOFTBANK as shareholders:
(i) any merger or consolidation, whether or not the Company is
the surviving corporation; any sale, lease, exchange or
other disposition of all or substantially all of the
assets of the Company; any acquisition of all or
substantially all of the capital stock or assets of any
other entity; or the liquidation or voluntary dissolution
of the Company;
(ii) any capital expenditure of (Yen)10 million or more;
(iii) the raising of additional equity capital or the issuance
or sale of any debt or equity securities (including any
shareholder loan or guaranty) and the terms thereof,
whether or not in connection with a call for additional
capital pursuant to Section 8 hereof;
(iv) any declaration or payment of any dividend or other
distribution, directly or indirectly, on account of any
shares of capital stock of the Company, or any redemption,
retirement, purchase or other acquisition, directly or
indirectly, by the Company of any such shares (or of any
warrants, rights or options to acquire any such shares);
(v) the incurrence or guarantee (directly or indirectly) by
the Company with respect to any indebtedness for borrowed
money in excess of (Yen)10 million;
(vi) any amendment, alteration or repeal of any provision of
the Articles of Incorporation of the Company; or
(vii) approval of an annual business plan and operating budget
for the Company (which shall be made no later than thirty
(30) days prior to the commencement of each fiscal year of
the Company), and any deviation in any material respect
from such business plan or budget as so approved;
8. Additional Capital
------------------
(a) In the event that the Company requires capital in excess of two
hundred million yen ((Yen)200,000,000), SOFTBANK will make this
additional capital available to the Company without dilution to
GeoCities equity share. The mechanism by which such additional capital
is made available shall be mutually agreed upon by SOFTBANK and
GeoCities.
(b) Subject to Section 7(c) hereof, the Board may, by written notice to
the parties, call for the parties to subscribe for additional shares
of capital stock of the Company or to make loan guarantees or loans to
the Company in proportion to their
5
<PAGE>
respective holdings of Common Stock at any time. Each party agrees to
provide such additional capital or support in accordance with the
Board's action.
9. Disposition of Common Stock
---------------------------
Neither party shall directly or indirectly sell, assign, transfer or
otherwise dispose of, or pledge or otherwise encumber, any shares of Common
Stock of the Company without the prior consent of the other party; provided
that, at such time as the shares of the Company are publicly traded, either
party shall be entitled to make sales of its shares in the open market to the
extent permitted by applicable law.
10. Accounting; Access to Information
---------------------------------
(a) The fiscal year of the Company shall be from the first day of April of
each year to the 31st day of March of the following year.
(b) The Company shall maintain its accounts and prepare its financial
statements (including, without limitation, a balance sheet, profit and
loss statement and statement of cash flows) in accordance with
generally accepted accounting principles in Japan, and shall cause its
annual financial statements to be audited by an internationally
recognized independent auditing firm reasonably acceptable to each
party, and such financial statements and the auditors' opinion to be
delivered to each party no later than sixty (60) days following the
end of each fiscal year. The Company also shall deliver to each party
unaudited monthly and quarterly financial statements within thirty
days following the end of each month or fiscal quarter, as the case
may be, certified (in the case of quarterly financial statements) by
the chief accounting officer of the Company. All annual and quarterly
financial statements shall be accurately and completely translated
into English at the expense of GeoCities prior to delivery to
GeoCities.
(c) Each party shall, during normal business hours and at all other times
as reasonable, have access to the books and records of the Company and
to the legal, tax and auditing personnel of the Company, internal and
external; provided, however, that the cost and expense necessary for
such inspection shall be borne by the party making the inspection.
11. Term of the Agreement
---------------------
Subject to Section 13, this Agreement shall remain in effect perpetually,
provided that, if as of [***], or any [***], (i) the Company has sustained net
losses (determined in accordance with generally accepted Japanese accounting
principles and certified by the Company's independent auditors) for the [***]
preceding such [***], and (ii) GeoCities and SOFTBANK, in good faith, differ
with respect to the future business plans and prospects of the Company, then
each party shall have the right to terminate this Agreement, which termination
shall be effective ninety (90) days following notice thereof to the other party.
______________________
[***] Confidential treatment requested for redacted portion.
6
<PAGE>
12. Termination of the Agreement
----------------------------
(a) If either party fails in any material respect to perform or fulfill in
the time and manner herein provided any obligation or condition herein
required to be performed or fulfilled by such party, and if such
default shall continue for sixty (60) days after written notice
thereof from the other party, then the other party shall have the
right to terminate this Agreement by written notice of termination to
the defaulting party at any time after such sixty (60) days, or
longer, if the breach cannot be reasonably cured within sixty (60)
days and the failing party is making diligent efforts to cure it.
Either party may also terminate this Agreement immediately by giving a
written notice to the other party in the event such other party shall
be dissolved or liquidated or declared insolvent or bankrupt.
(b) Upon termination of this Agreement, the parties shall negotiate in
good faith the possible purchase by one party of all the shares in the
Company held by the other party or the sale of the Company to a third
party. If such negotiation fails to result in a mutually acceptable
agreement, the Company shall be dissolved in accordance with Japanese
law.
(c) Termination of this Agreement for any reason shall not release either
party from any liability which at the time of termination has already
accrued to the other party or which thereafter may accrue in respect
of any act or omission prior to such termination.
13. Confidentiality
---------------
Each party shall hold and shall cause its respective representatives to
hold in confidence all confidential information made available to it or its
representatives by the other party, directly or through the Company, and shall
not pass such information on, wholly or partly, to third parties without the
written consent of the other party, unless such information (i) becomes
generally available to the public other than as a result of a disclosure by such
party or its representatives, (ii) becomes available to such party from other
sources not known by such party to be bound by a confidentiality obligation, or
(iii) is independently acquired by such party as a result of work carried out by
any employee or representative of such party to whom no disclosure of such
information has been made.
14. Government Filing
----------------
(a) Within fifteen (15) days following the date of the Closing, GeoCities
will submit the required notification to the Bank of Japan under the
Foreign Exchange and Foreign Trade Control Law.
(b) If any Japanese withholding taxes are imposed on dividends payable to
GeoCities by the Company under Section 11, the Company shall withhold
such amounts, pay the same to the Japanese tax authority, and promptly
furnish GeoCities with appropriate documentation of the amounts so
withheld as soon as practicable. The Company shall cooperate with
GeoCities to make any necessary filings to utilize
7
<PAGE>
the lowest available withholding rate under applicable treaty between
Japan and the United States.
15. Other Ventures
--------------
(a) Neither party will engage directly or indirectly in any business
activities in Japan that compete with the business activities of the
Company in Japan; provided that GeoCities may continue to make
available its services and any other properties or products in
languages other than Japanese.
(b) GeoCities hereby agrees to discuss in good faith with SOFTBANK joint
efforts to establish similar ventures in Europe and other
international markets where SOFTBANK or its affiliates (which term is
intended to be limited to entities controlled by or under common
control with SOFTBANK and/or entities in which SOFTBANK takes an
active role in such entities' management) have operations and are the
appropriate partners; provided that the foregoing shall not obligate
either party to enter into any such arrangement.
16. Governing Law
-------------
This Agreement shall be governed by and construed in accordance with the
laws of Japan.
17. Dispute Resolution
------------------
All disputes between the parties hereto arising directly or indirectly out
of this Agreement shall be settled by the parties amicably through good faith
discussions upon the written request of either party. In the event that any such
dispute cannot be resolved thereby within a period of thirty (30) days after
such notice has been given, such dispute shall be finally settled by arbitration
by three arbitrators. If GeoCities commences such arbitration, it shall be held
in Japan, using the English language, and in accordance with the rules then in
effect of the Japan Commercial Arbitration Association. If SOFTBANK commences
such arbitration, it shall be held in the U.S.A., using the English language,
and in accordance with the rules then in effect of the American Arbitration
Association.
18. Miscellaneous
-------------
(a) This Agreement may be amended only by a written instrument signed by
both parties.
(b) This Agreement may not be assigned by either party hereto except with
the written consent of the other party; provided, however, that this
Agreement may be assigned to a corporation which shall succeed to the
business of a party by merger, consolidation, or the transfer of all
or substantially all of the assets of such party and which shall
expressly assume the obligations of such party hereunder.
8
<PAGE>
(c) Any and all notices, requests, demands and other communications
required or otherwise contemplated to be made under this Agreement
shall be in writing and in English and shall be deemed to have been
duly given (a) if delivered personally, when received, (b) if
transmitted by facsimile, upon receipt of a confirmation of receipt,
(c) if sent by registered airmail, return receipt requested, postage
prepaid, on the sixth business day following the date of deposit in
the mail or (d) if by international courier service, on the second
business day following the date of deposit with such courier service,
or such earlier delivery date as may be confirmed to the sender by
such courier service. All such notices, requests, demands and other
communications shall be addressed as follows;
(i) If to SOFTBANK:
SOFTBANK Corporation
24-1, Nihonbashi-Hakozakicho
Chuo-ku, Tokyo 103, Japan
Attention: Mr. Masayoshi Son
President and Chief Executive Officer
Telephone: (813) 5642-8020
Facsimile: (813) 5641-3400
(ii) If to GeoCities:
GeoCities
1918 Main Street Third Floor
Santa Monica, CA 90403-1030
USA
Attention: David Bohnett
President and Chief Executive Officer
Telephone: (310) 664-6500, Ext. 201
Facsimile: (310) 664-6521
With a copy to:
GeoCities
1918 Main Street Third Floor
Santa Monica, CA 90403-1030
USA
Attention: Ed Pierce, General Counsel
Telephone: (310) 664-6500, Ext. 251
Facsimile: (310) 664-6520
9
<PAGE>
Or in each case to such other address or facsimile number as the party may have
furnished to the other party in writing.
(d) In the event of the invalidity or unenforceability of any part or
provision of this Agreement, such invalidity shall not affect the
validity or enforceability of any other part or provision of this
Agreement.
(e) No waiver by any party of any default in the performance of or
compliance with any provision herein shall be deemed to be a waiver of
the performance and compliance as to any other provision, or as to
such provision in the future; nor shall any delay or omission of any
party to exercise any right hereunder in any manner impair the
exercise of any such right accruing to it thereafter. No remedy
expressly granted herein to any party shall be deemed to exclude any
other remedy which would otherwise be available.
(f) This Agreement including the exhibits hereto constitutes the entire
agreement among the parties with respect to the subject matter hereof
and shall supersede all prior understandings and agreements between
the parties with respect to such subject matter. This Agreement may
be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and
the same instrument.
(g) Nothing herein expressed or implied is intended to or shall be
construed to confer upon or give to any person, firm, corporation or
legal entity, other than the parties hereto and their affiliates, any
interests, rights, remedies or other benefits with respect to or in
connection with any agreement or provision contained herein or
contemplated hereby.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly signed this Agreement as
of the day and year first above written.
SOFTBANK CORPORATION
By: /s/ Masayoshi Son
----------------------------------
Name: Masayoshi Son
Title: President
GEOCITIES
By: /s/ David Bohnett
----------------------------------
Name: David Bohnett
Title: President & CEO
Attachments:
Exhibit A Articles of Incorporation of Company.
Exhibit B Commercial Register of the Company.
Exhibit C Licensing Agreement
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS OF GEOCITIES AS OF MARCH 31, 1998 AND DECEMBER 31, 1997, RESPECTIVELY,
AND THE RELATED STATEMENTS OF OPERATIONS, STOCKHOLDERS' EQUITY (DEFICIENCY) AND
CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND FOR THE YEAR ENDED
DECEMBER 31, 1997, RESPECTIVELY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> MAR-31-1998 DEC-31-1997
<CASH> 2,014,000 3,785,000
<SECURITIES> 23,318,000 0
<RECEIVABLES> 1,622,000 1,304,000
<ALLOWANCES> 174,000 98,000
<INVENTORY> 0 0
<CURRENT-ASSETS> 26,980,000 30,394,000
<PP&E> 2,280,000 1,842,000
<DEPRECIATION> 769,000 626,000
<TOTAL-ASSETS> 30,986,000 32,868,000
<CURRENT-LIABILITIES> 4,776,000 3,943,000
<BONDS> 778,000 834,000
37,585,000 37,585,000
0 0
<COMMON> 1,508,000 744,000
<OTHER-SE> (13,661,000) (10,238,000)
<TOTAL-LIABILITY-AND-EQUITY> 30,986,000 32,868,000
<SALES> 0 0
<TOTAL-REVENUES> 2,173,000 4,582,000
<CGS> 0 0
<TOTAL-COSTS> 1,565,000 4,634,000
<OTHER-EXPENSES> 3,633,000 8,869,000
<LOSS-PROVISION> 76,000 98,000
<INTEREST-EXPENSE> 28,000 121,000
<INCOME-PRETAX> (2,897,000) (8,902,000)
<INCOME-TAX> 1,000 1,000
<INCOME-CONTINUING> (2,898,000) (8,903,000)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,898,000) (8,903,000)
<EPS-PRIMARY> (1.37) (4.52)
<EPS-DILUTED> (1.37) (4.52)
</TABLE>
