<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 31, 1996
REGISTRATION NO. 333-03340
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
OPEN MARKET, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 7372 04-3214536
(PRIMARY STANDARD (I.R.S. EMPLOYER
(STATE OR OTHER INDUSTRIAL IDENTIFICATION NUMBER)
JURISDICTION OF CLASSIFICATION CODE
INCORPORATION OR NUMBER)
ORGANIZATION)
----------------
245 FIRST STREET
CAMBRIDGE, MASSACHUSETTS 02142
(617) 621-9500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
GARY B. EICHHORN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OPEN MARKET, INC.
245 FIRST STREET
CAMBRIDGE, MASSACHUSETTS 02142
(617) 621-9500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
PAUL P. BROUNTAS, ESQ. DAVID C. CHAPIN, ESQ.
HALE AND DORR ROPES & GRAY
60 STATE STREET ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109 BOSTON, MASSACHUSETTS 02110
(617) 526-6000 (617) 951-7000
----------------
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<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 2 to Registration Statement on Form S-1
(File No. 333-03340) of Open Market, Inc. is filed solely to file copies of the
exhibits identified in Item 16(a) hereto.
<PAGE>
OPEN MARKET, INC.
CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY
ITEMS IN PART I OF FORM S-1
<TABLE>
<CAPTION>
REGISTRATION STATEMENT ITEM AND CAPTION LOCATION IN PROSPECTUS
--------------------------------------- ----------------------
<S> <C>
1.Forepart of Registration Statement and
Outside Front Cover Page of
Prospectus............................. Outside Front Cover Page
2.Inside Front and Outside Back Cover Pages
of Prospectus.......................... Inside Front Cover Page; Outside
Back Cover Page
3.Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges..... Prospectus Summary; Risk Factors
4.Use of Proceeds.......................... Prospectus Summary; Use of Proceeds
5.Determination of Offering Price.......... Underwriting
6.Dilution................................. Dilution
7.Selling Security Holders................. Not Applicable
8.Plan of Distribution..................... Outside Front Cover Page;
Underwriting
9.Description of Securities to be
Registered............................. Description of Capital Stock
10.Interests of Named Experts and Counsel... Legal Matters; Experts
11.Information With Respect to the
Registrant:
(a)Description of Business................ Prospectus Summary; Business;
Management's Discussion and
Analysis of Financial Condition and
Results of Operations
(b)Description of Property................ Business-Facilities
(c)Legal Proceedings...................... Not Applicable
(d)Market Price of and Dividends on the
Registrant's Common Equity and
Related Stockholder Matters.......... Front Cover Page; Dividend Policy;
Management-Executive Compensation;
Description of Capital Stock;
Shares Eligible for Future Sale
(e)Financial Statements................... Capitalization; Consolidated
Financial Statements
(f)Selected Financial Data................ Selected Consolidated Financial Data
(g)Supplementary Financial Information.... Not Applicable
(h)Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... Management's Discussion and Analysis
of Financial Condition and Results
of Operations
(i)Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure................. Not Applicable
(j)Directors, Executive Officers,
Promoters and Control Persons........ Management--Executive Officers,
Directors and Key Employees;
Certain Transactions
(k)Executive Compensation................. Management-Executive Compensation
(l)Security Ownership of Certain
Beneficial Owners and Management..... Principal Stockholders
(m)Certain Relationships and Related
Transactions......................... Certain Transactions
12.Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................ Not Applicable
</TABLE>
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1 Form of U.S. Underwriting Agreement.
1.2 Form of International Underwriting Agreement.
3.1 Certificate of Incorporation of the Registrant, as amended.
3.2 Form of Amended and Restated Certificate of Incorporation of the
Registrant (to be filed upon the closing of the offering to which this
Registration Statement relates).
3.3 By-Laws of the Registrant.
3.4 Form of Amended and Restated By-laws of the Registrant (to be
effective upon the Offerings to which this Registration Statement
relates).
4.1 Specimen Certificate for shares of Common Stock, $.001 par value, of
the Registrant.
5 Opinion of Hale and Dorr with respect to the validity of the
securities being offered.
10.1 1994 Stock Incentive Plan.
10.2 1996 Employee Stock Purchase Plan.
10.3 1996 Director Option Plan.
10.4 Employment Agreement between the Registrant and Gary B. Eichhorn,
dated November 7, 1995.
10.5 Incentive Stock Option Agreement dated November 10, 1995, between the
Registrant and Gary B. Eichhorn.
10.6 Invention and Non-Disclosure Agreement dated November 10, 1995,
between the Registrant and Gary B. Eichhorn.
10.7 Promissory Note dated February 5, 1996 in the principal amount of
$1,500,000 issued by David K. Gifford to the Registrant.
10.8 Pledge Agreement dated February 5, 1996, between the Company and David
K. Gifford.
10.9 Series A Preferred Stock Purchase Agreement, dated June 8, 1994, among
the Registrant and certain stockholders of the Registrant.
10.10 Series B Preferred Stock Purchase Agreement, dated April 12, 1995,
among the Registrant and certain stockholders of the Registrant.
10.11 Series C Preferred Stock Purchase Agreement, dated January 26, 1996,
among the Registrant and certain stockholders of the Registrant.
10.12 Second Amended and Restated Registration Rights Agreement, dated
January 26, 1996, among the Registrant and certain stockholders of the
Registrant.
10.13*+ Master Agreement, dated as of August 23, 1995, by and between FTP
Software, Inc. and the Registrant.
10.14*+ Development and Services Agreement dated as of January 1, 1995 by and
between Time Inc. New Media and the Registrant, as amended.
10.15+ Master Development Agreement, dated as of February 21, 1995, by and
between Conde Net, Inc. and the Registrant.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.16+ TMS Software License Agreement, dated as of February 27, 1996, by and
between Tribune Interactive Network Services and the Registrant.
10.17+ License Agreement dated October 17, 1994 by and between Massachusetts
Institute of Technology and the Registrant.
10.18 Letter Agreement dated January 11, 1995 by and between Silicon Valley
Bank and the Registrant.
10.19 Promissory Note dated August 14, 1995 issued by the Registrant to
Silicon Valley Bank, as modified to date.
10.20 Form of OM-Transact Software License Agreement of Registrant.
10.21 Form of Agreement for Annual Software Support of Registrant.
10.22 Form of Master Development Agreement of Registrant.
10.23 Form of Software License and Distribution Agreement of Registrant.
10.24 Form of Start-Up Services Agreement of Registrant.
10.25 Form of Professional Services Agreement of Registrant.
10.26+ Software License Agreement, effective March 15, 1996, by and between
Novell, Inc. and the Registrant.
10.27+ Master Development Agreement, dated as of May 22, 1995, by and between
Parade Net, Inc. and the Registrant.
10.28+ OEM Master License Agreement, dated June 30, 1995, by and between RSA
Data Security, Inc. and the Registrant.
10.29+ Public Key Patent License, effective as of September 6, 1995, by and
between Caro-Kann Corporation and the Registrant.
10.30 Commercial Security Agreement, dated January 11, 1995 by and between
the Registrant and Silicon Valley Bank.
10.31 Start-Up Services Agreement, dated as of February 27, 1996, by and
between the Registrant and Tribune Interactive Network Services.
10.32 Promissory Note dated January 11, 1995 issued by the Registrant to
Silicon Valley Bank, as modified to date.
10.33 Founder's Agreement dated June 8, 1994 by and between David K. Gifford
and the Registrant.
10.34*+ License and Exclusive Distribution Agreement dated as of April 10,
1996 by and between Time Inc. New Media and the Registrant.
11 Computation of income per common share.
21 Subsidiary of the Registrant.
23.1 Consent of Hale and Dorr (included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
24.1 Additional Power of Attorney
</TABLE>
- --------
*Filed herewith.
+Confidential treatment requested as to certain portions.
All other exhibits have been previously filed.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF BOSTON, COMMONWEALTH OF MASSACHUSETTS, ON THIS 31ST
DAY OF MAY, 1996.
Open Market, Inc.
/s/ Gary B. Eichhorn
By: _________________________________
GARY B. EICHHORN PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW
BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Gary B. Eichhorn President, Chief
- ------------------------------------- Executive Officer May 31, 1996
GARY B. EICHHORN and Director
(Principal
Executive Officer)
Regina O. Sommer* Chief Financial
- ------------------------------------- Officer (Principal May 31, 1996
REGINA O. SOMMER Financial and
Accounting Officer)
Gulrez Arshad* Director
- ------------------------------------- May 31, 1996
GULREZ ARSHAD
Shikhar Ghosh* Director
- ------------------------------------- May 31, 1996
SHIKHAR GHOSH
David K. Gifford* Director
- ------------------------------------- May 31, 1996
DAVID K. GIFFORD
II-3
<PAGE>
Bruce Judson* Director
- ------------------------------------- May 31, 1996
BRUCE JUDSON
William S. Kaiser* Director
- ------------------------------------- May 31, 1996
WILLIAM S. KAISER
Ray Stata* Director
- ------------------------------------- May 31, 1996
RAY STATA
Robert J. Tarr, Jr.* Director
- ------------------------------------- May 31, 1996
ROBERT J. TARR, JR.
Eugene F. Quinn* Director
- ------------------------------------- May 31, 1996
EUGENE F. QUINN
Gary B. Eichhorn
---------------------------------
*By:
GARY B. EICHHORN
ATTORNEY-IN-FACT
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<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 10.13
MASTER AGREEMENT
between
FTP Software, Inc.
and
Open Market, Inc.
<PAGE>
TABLE OF CONTENTS
DEFINITIONS............................................. 1
ARTICLE II - MARKETING AND DISTRIBUTION OF OMI
PRODUCTS BY FTP......................................... 5
ARTICLE III - DEVELOPMENT OF DERIVATIVE PRODUCTS........ 8
ARTICLE IV - MARKETING AND DISTRIBUTION OF FTP
PRODUCTS BY OMI......................................... 10
ARTICLE V - INCORPORATION OF FTP PRODUCT TECHNOLOGIES
IN OMI PRODUCTS......................................... 11
ARTICLE VI - DISTRIBUTION OF FTP CLIENT
PRODUCTS BY OMI......................................... 11
ARTICLE VII - INCORPORATION OF OMI PRODUCT TECHNOLOGIES
IN FTP PERSONAL WEB SERVER.............................. 13
ARTICLE VII - CONTINUED PRODUCT DEVELOPMENT
BY OMI.................................................. 14
ARTICLE IX - PROPRIETARY RIGHTS......................... 14
ARTICLE X - PROGRAM MANAGEMENT.......................... 16
ARTICLE XI - DEVELOPMENT FEE............................ 18
ARTICLE XII - ROYALTIES................................. 18
ARTICLE XIII - MARKETING................................ 23
ARTICLE XIV - SUPPORT................................... 23
ARTICLE XV - TRAINING................................... 27
ARTICLE XVI - SIMILAR PRODUCTS.......................... 28
ARTICLE XVII - MOST FAVORED NATION...................... 29
ARTICLE XVIII - REPRESENTATIONS AND WARRANTIES.......... 29
ARTICLE XIX - CONFIDENTIAL INFORMATION.................. 32
ARTICLE XX - TRADEMARKS................................. 33
ARTICLE XXI - PRICES.................................... 34
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ARTICLE XXII - TERM; DEFAULT; TERMINATION............... 34
ARTICLE XXIII - INTELLECTUAL PROPERTY INDEMNIFICATION... 36
ARTICLE XXIV - INDEMNIFICATION AND INSURANCE............ 38
ARTICLE XXV - WARRANTIES; LIMITATION OF LIABILITY....... 39
ARTICLE XXVI - MISCELLANEOUS............................ 39
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<PAGE>
LIST OF SCHEDULES
<TABLE>
<CAPTION>
Schedule Title
<S> <C>
1 OMI Products, FTP Products, FTP Client Products
2.6 OMI Products: Master Copies to be Provided to FTP
2.7 End-User License Requirements Imposed by OMI Third
Party Agreements
4.5 End-User License Requirements Imposed by FTP Third
Party Agreements
6.4 FTP Client Products: Master Copies to be Provided to
OMI
7.1 FTP Personal Web Server Criteria
8 OMI Roadmap
9.3 Limitations Imposed by Third Party Agreements
10.3 Derivative Products Project Plan
14.1 - 14.14 Support Procedures
18.1(e) FTP Client Products: List of Exceptions to Right to
License
18.2(e) OMI Products: List of Exceptions to Right to License
20.1 List of OMI Trademarks
20.2 List of FTP Trademarks
23.1 OMI Trademark Jurisdictions
23.2 FTP Trademark Jurisdictions
</TABLE>
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<PAGE>
MASTER AGREEMENT
This Master Agreement (the "Agreement") is made and entered
into as of August 23, 1995 between FTP Software, Inc., a
Massachusetts corporation ("FTP") and Open Market, Inc., a
Delaware corporation ("OMI").
In consideration of the mutual covenants and agreements
contained herein, and other consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I - DEFINITIONS
For all purposes of this Agreement, the following terms shall have
the meanings ascribed to them below:
"Affiliate" shall mean, as to any Person, any other Person
which is directly or indirectly controlling, controlled by or
under common control with the Person in question.
"Bankruptcy" shall mean (a) the filing by a Person of a
voluntary petition seeking liquidation, reorganization,
arrangement or readjustment, in any form, of its debts under any
applicable United States or other insolvency law, or such Person's
filing an answer consenting to or acquiescing in any such
petition; (b) the making by such Person of any assignment for the
benefit of its creditors; or (c) the expiration of sixty (60) days
after the filing of an application for the appointment of a
receiver for the assets of such Person or an involuntary petition
seeking liquidation, reorganization, arrangement or readjustment
of its debts under any applicable United States or other
insolvency law, provided that the same shall not have been
vacated, set aside or stayed within such sixty-day period.
"Contract Year 1" shall mean the period extending from the
Effective Date through December 31, 1996.
"Contract Year" shall mean any of Contract Year 1, calendar
year 1997, and succeeding calendar years.
"Defect" means any condition of a program which causes it not
to operate substantially in accordance with the specifications and
User Documentation for such program.
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<PAGE>
"Derivative Products" shall mean the Object Programs, Source
Programs, User Documentation and Programmer Documentation that are
modified, developed or adapted by OMI, FTP or both and adapted
from OMI Products.
"Derivative Product Components" shall mean the Object
Programs, Source Programs, User Documentation and Programmer
Documentation comprising individual modules of a Derivative
Product that are developed by FTP or OMI.
"Development Tools" shall mean all software tools,
documentation and other information and materials (other than
materials generally available from third parties) necessary to
port and adapt the applicable OMI Products and which, in each
case, OMI has a legal right to disclose.
"Effective Date" shall mean the date first written above.
"FTP Client Products" shall mean FTP's Web browser, other
Explore applications, and FTP's Personal Web Server, including
both the versions that exist upon the Effective Date of this
Agreement and any Updates created during the term of this
Agreement. FTP Client Products that currently exist or are under
development are identified in Schedule 1.
"FTP Direct Marketed Products" shall mean FTP Products that
are not marketed, sold or licensed to end-users by third parties.
"FTP Personal Web Server" shall mean a Web server intended
for individual end-users that exhibits the criteria set forth in
Exhibit 7.1.
"FTP Products" shall mean all Derivative Products that are
developed by FTP. FTP Products that currently exist or are under
development are identified in Schedule 1.
"FTP Server Products" shall mean the Object Programs, Source
Programs, User Documentation and Programmer Documentation
comprising the FTP Products that are derived from and have
functionality substantially similar to the OMI Server Products,
including all Updates to the foregoing.
"Marketing Visibility" shall mean, with respect to the
distribution of an OMI or FTP Product as an adjunct to a Product
of the other party, that the adjunct Product will bear the
trademarks of its owner, that other materials referencing the
adjunct Product, including written quotations, will identify its
owner, that marketing materials supplied by its owner will be
distributed with the adjunct Product and that the distributing
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<PAGE>
party will use reasonable efforts to provide the names of
customers receiving the adjunct Product to its owner.
"Maintenance Update" shall mean an Update developed to
correct one or more Defects.
"Net Revenue" shall mean the proceeds, funds and credits
actually received by a party in respect of any Product, net of any
applicable discounts, returns, allowances and shipping costs if
separately invoiced.
"Non-Unix Operating System Platforms" shall mean all
Microsoft Windows operating system platforms, Novell NetWare
operating system platforms, any successor platforms and such other
platforms as FTP and OMI mutually agree.
"Object Program" shall mean a program provided on machine
readable media in machine executable form, usually designated as
binary code, object code, executable code or their equivalents.
"OMI Direct Marketed Products" shall mean OMI Products that
are not marketed, sold or licensed to end-users by third parties.
"OMI New Products" shall mean the Object Programs, Source
Programs, User Documentation and Programmer Documentation
comprising all of OMI's products, other than OMI Server Products,
including those set forth on Schedule 1, developed during the term
of this Agreement.
"OMI Products" shall mean all OMI Server Products and OMI New
Products. OMI Products shall include any Derivative Products
developed by OMI.
"OMI Server Products" shall mean Object Programs, Source
Programs, User Documentation and Programmer Documentation
comprising all of OMI's server products, including all current
variations of such products, international versions of such
products, and all supplementary products, including demonstration,
evaluation, add-on and adjunct products, and all Updates to the
foregoing, in each case whether developed prior to or during the
term of this Agreement. In the event that OMI markets a
transaction link product as a standalone product that connects a
Web server to the Transaction Management Server, such product
shall constitute an OMI Server Product.
"Person" shall mean any individual, partnership, joint
venture, corporation, trust, unincorporated organization,
association, government or department or agency of a government or
other entity.
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<PAGE>
"Products" shall mean the OMI Products, the Derivative
Products and the FTP Client Products.
"Programmer Documentation" means any programmer documentation
and any other relevant explanatory material that is necessary for
a complete understanding of the logic and structure of a computer
program, including flowcharts, logic diagrams and internal
specifications.
"Confidential Information" shall mean any and all information
of FTP or OMI, as applicable, (the "Discloser") that is not
generally known by others with whom the Discloser competes or does
business, or with whom the Discloser plans to compete or do
business and any and all information, publicly known in whole or
in part or not, which, if disclosed by the Discloser would assist
in competition against it. Confidential Information includes
without limitation such information relating to (i) the
development, research, testing, marketing and financial activities
of the Discloser, (ii) the Technology and intellectual property of
the Discloser, (iii) the costs, sources of supply, financial
performance and strategic plans of the Discloser, (iv) the
identity and special needs of the customers or suppliers of the
Discloser and (v) the people and organizations with whom the
Discloser has business relationships and those relationships.
Confidential Information shall not include information that (a) is
in the public domain or rightfully in the possession of the
receiving party without restriction at the time of receipt under
this Agreement; (b) is independently developed by the receiving
party by or through persons who do not have access, directly or
indirectly, to the information; (c) becomes known to the receiving
party from a source other than the disclosing party who is free to
make such disclosure; (d) is made available by the disclosing
party to a third party on an unrestricted, non-confidential basis.
"Resellers" shall mean resellers, distributors, agents, VARs
and OEMs.
"Source Program" means machine readable and human readable
source codes for a computer program and the information contained
therein.
"Support Tools" shall mean, with respect to any Product, any
computer programs, documentation, information or Update to the
foregoing that is used to maintain such Product or support
customers' use of such Product.
"Update" means a correction, modification, upgrade,
enhancement or new or successor version of a computer program or
documentation.
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<PAGE>
"User Documentation" means any material that is not
Programmer Documentation that in any way describes, illuminates or
explains the use of a computer program, including manuals,
templates, forms, tutorials, hypertext and any other explanatory
material or documentation in any form and on any medium.
"Wholly Owned Subsidiary" or "Wholly Owned Subsidiaries"
shall mean any corporation, 100% of the outstanding voting stock
of which shall at the time be owned by FTP or OMI, as the case may
be, or by one or more Wholly-Owned Subsidiaries, or any other
entity or enterprise 100% of the equity of which shall at the time
be owned by FTP or OMI, as the case may be, or by one or more
Wholly-Owned Subsidiaries.
"Web" shall mean the world wide web and any related, similar
or successor technologies.
Each of the following terms shall have the meaning ascribed
to it in the section set forth beside such term in the table
below:
Term Section
"AAA" 26.4
"Allowable Costs" 12.1(c), 12.3(b)
"Audited Party" 12.17
"Auditing Party' 12.17
"Minimum Royalty" 12.2(a)
"Prohibited Countries" 26.16
"Reference Sale" 2.2(a)
"Regulations" 26.16
"Representatives" 19.1(d)
"Royalties Paid" 12.2(d)
"Royalty Records" 12.16
"Twelve-Month Revenue" 12.1(c), 12.3(b)
ARTICLE II - MARKETING AND DISTRIBUTION OF OMI PRODUCTS BY FTP
2.1. Right to Market and Distribute OMI Server Products. OMI
grants to FTP the right, as further defined below, to market and
distribute the OMI Server Products.
2.2. Right to Market OMI Transaction Management System.
(a) Reference Sales. Upon OMI's completion of a
satisfactory business, distribution model for external sales of
the OMI Transaction Management System, FTP shall have the right to
promote the sale and license of and assist OMI in making reference
sales, as defined below, of the OMI Transaction Management System.
Unless otherwise agreed by OMI, FTP shall not have the right to
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<PAGE>
sell or license or solicit orders for the OMI Transaction
Management System.
Upon identification of a prospective purchaser of OMI's
Transaction Management System, FTP shall register the prospective
customer with OMI as a lead. Upon confirmation from OMI that the
prospective customer is a valid lead that was not when registered
by FTP under development by OMI, FTP will assist OMI in obtaining
access for OMI to the relevant customer decision maker and will
coordinate an initial sales meeting involving OMI and the
prospective customer. In the event that this process results in
OMI obtaining a binding commitment from the customer to purchase
the OMI's Transaction Management System within six months
following the initial sales meeting (twelve months for an
international sale), as may be extended by mutual agreement (a
"Reference Sale"), FTP shall be entitled to receive a finder's fee
pursuant to Section 12.3(b).
(b) In the event that OMI sells or licenses the OMI
Transaction Management System through a Reseller or other third
party, OMI shall grant to FTP the right to market and distribute
the OMI Transaction Management System, subject to mutual agreement
of the parties concerning royalty rates and other applicable
terms, including where appropriate terms different from or in
addition to those set forth below.
2.3. Option to Market and Distribute OMI New Products. In
the event that OMI sells or licenses any OMI New Product through a
Reseller or other third party, OMI shall grant to FTP the right to
market and distribute such OMI New Product, subject to mutual
agreement of the parties concerning royalty rates and other
applicable terms.
2.4. Internationalization. The right to market and
distribute shall include the right to develop, market and
distribute localized versions of the OMI Products for
international markets. Subject to mutual agreement of FTP and OMI
as to royalty rates pursuant to Section 12.8 and any reasonable
restrictions imposed upon FTP by any FTP international partner,
OMI shall have an option, exercisable by written notification to
FTP, to obtain the right, as further defined below, to market and
distribute all internationalized versions of OMI Products
developed by FTP.
2.5. Licenses Supporting Right to Market and Distribute. For
any OMI Products for which FTP has been granted the right to
market and distribute such OMI Products, OMI grants to FTP:
(a) a nonexclusive, worldwide license to load, execute,
copy, have copied, modify, market, demonstrate, and transmit
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<PAGE>
electronically the Object Programs and User Documentation
comprising such OMI Products;
(b) in the event that FTP obtains the Source Programs
comprising such OMI Products for support and customization, a
nonexclusive, worldwide license to load, execute, copy, have
copied, and modify the Source Programs, Programmer Documentation
and User Documentation comprising such OMI Products, for the
purpose of correcting Defects and making minor modifications to
such OMI Products;
(c) a nonexclusive, worldwide license to load, execute,
copy, have copied, and modify the Source Programs, Programmer
Documentation and User Documentation comprising such OMI Products,
for the purpose of developing and marketing localized versions of
such OMI Products for international markets; and
(d) a nonexclusive, worldwide right to sublicense to
Resellers and end-users, and to grant to its Resellers the right
to sublicense, market, and demonstrate, the Object Programs and
User Documentation comprising such OMI Products.
The license granted in subsection (c) above shall include the
right to sublicense to a contractor that FTP engages to develop a
localized version, provided that OMI shall have the right to
disapprove any contractor where OMI has a reasonable good faith
basis for believing that the contractor will not respect OMI's
proprietary rights or will produce a poor quality product.
Any contractor that FTP has entrusted with FTP source code shall
be presumed to be acceptable to OMI, subject to OMI's right to
disapprove where OMI has a reasonable basis for doing so. In the
event that OMI fails to disapprove a contractor within two
business days following receipt of notification by FTP of its
intent to utilize a given contractor, FTP shall be free to use
such contractor. Section 19.4 shall be applicable to the Source
Program licenses granted under this section.
2.6. Delivery of Master Copies.
(a) Object Programs and User Documentation. OMI shall:
(i) upon execution of this Agreement;
(ii) upon the exercise of any option under this
Article II;
(iii) upon the earlier of sixty days prior to first
customer ship or the release of the beta version of
any OMI Product or Update; and
(iv) upon the release of any final version of any OMI
Product or Update;
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provide to FTP master copies of all Object Programs and User
Documentation comprising and Support Tools related to any OMI
Products that FTP has the right to market and distribute. Those
master copies to be delivered upon execution of this Agreement are
listed in Schedule 2.6.
(b) Source Programs and Programer Documentation -
Internationalization. OMI shall provide the Source Programs and
Programmer Documentation for any OMI Product that FTP has the
right to market and distribute upon notification by FTP that it
intends to develop a localized version of such OMI Product.
Section 19.4 shall be applicable to any Source Programs provided
pursuant to this section.
2.7. Use of FTP End-User License Agreement. Distribution of
the OMI Products shall be covered by FTP's then current applicable
software license agreements and shall be in accordance with FTP's
then current software licensing policies, provided that such
license agreements contain provisions intended to protect OMI's
intellectual property in the OMI Products, maintain the
confidentiality of the trade secrets and other proprietary
material embodied in the OMI Products, prevent the licensee from
assigning the license (other than in connection with the sale of
the licensee's business), and limit warranties and licensor
liability in a fashion consistent with industry standards and as
may be reasonably required by terms of third party agreements
entered into by OMI (a list identifying all presently existing
requirements is set forth in Schedule 2.7). FTP agrees to include
any notices that are required by OMI's agreements with third
parties (unless rendered inapplicable by agreements entered into
by FTP), which in the case of products including RSA security
technology include notices (i) prominently identifying OMI as the
source of the product in any packaging in which the product is
bundled with other products, (ii) in the end-user license
agreement for such bundled products, identifying OMI as a source
for the products, (iii) in FTP's packaging, documentation and
software for the bundled products prominently acknowledging RSA
Data Security, Inc. as a source of the security technology in the
bundled product, and (iv) identifying FTP as a distributor of
OMI's products. FTP agrees not to make any representation or
warranty on behalf of OMI. FTP's current standard end-user
license agreement is attached to Schedule 2.7. OMI acknowledges
that such license agreement adequately meets the above
requirements.
2.8. Branding. FTP shall have the right to identify the OMI
Products that are marketed and distributed by FTP as products of
FTP or of FTP and OMI (using appropriate OMI trademarks and logos,
as mutually agreed by the parties), and to mark such OMI Products
with FTP's trademarks.
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2.9. No Duty to Market. Except as expressly set forth
herein, FTP shall not, by virtue of this Agreement or otherwise,
have any obligation to promote the sale and license of or
otherwise market the OMI Products.
2.10. Sublicensing. Except as set forth above, FTP shall
not sublicense any Source Programs or Programmer Documentation
provided to FTP pursuant to Section 2.6.
ARTICLE III - DEVELOPMENT OF DERIVATIVE PRODUCTS
3.1. Right to Port OMI Server Products. OMI and FTP intend
to port and adapt the OMI Server Products to Non-Unix Operating
System Platforms. Particular Derivative Products may be developed
by OMI, by FTP or by the parties jointly. OMI grants to FTP the
right to port and adapt, as further defined below, the OMI Server
Products to operate on Non-Unix Operating System Platforms.
3.2. New Derivative Products. As plans for new OMI Products
are developed by OMI, the parties will, through the program
management process, determine whether to develop Derivative
Products, identify appropriate target operating system platforms
and whether FTP or OMI should carry out the development, provided
that OMI shall have the final control over whether Derivative
Products are developed and whether FTP or OMI carries out the
development. OMI and FTP shall each have the right to market and
distribute, as defined in Articles II and IV respectively, new
Derivative Products. For those OMI Products for which OMI and FTP
develop Derivative Products, FTP will have the right to port and
adapt, as further defined below, such OMI Products.
3.3. Licenses Supporting Right to Port and Adapt. For any
OMI Products for which FTP has been granted the right to port and
adapt such OMI Products, OMI grants to FTP:
(a) a nonexclusive, worldwide license to load, execute,
copy, have copied, port, modify, adapt and create derivative works
based upon the Source Programs and Programmer Documentation
comprising such OMI Products;
(b) the nonexclusive right to use any Development Tools; and
(c) the nonexclusive right to use any know-how, trade
secrets, methodologies and other information disclosed by OMI to
FTP.
Section 19.4 shall be applicable to the Source Program
licenses granted under this section.
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3.4. Provision of Source Code and Tools by OMI. In order to
enable FTP to port and adapt OMI Products, OMI shall provide to
FTP Source Programs, User Documentation and Programmer
Documentation and Development Tools for any OMI Products that FTP
has the right to port and adapt. OMI will provide initial
delivery upon execution of the Agreement, and prompt, effective
and ongoing access to, these materials. Section 19.4 shall be
applicable to any Source Programs provided under this section.
3.5. Access to Engineering Assistance. In order to enable
FTP to port and adapt OMI Products, OMI shall promptly and
effectively provide FTP with such engineering assistance as is
reasonably requested by FTP. For each class of OMI Products that
FTP has the right to port and adapt, OMI shall designate an
engineer who is experienced with the class of OMI Products as
FTP's primary engineering resource. Such engineers shall be
responsible for responding to all reasonable requests of FTP for
engineering support. In addition, OMI agrees that such engineer
will be available when essential to assist FTP with the resolution
of a difficult problem. OMI agrees that, with respect to the OMI
Products that FTP is then porting and adapting, OMI shall not
provide any third party software partner, joint developer or
contractor with access to OMI's relevant engineering resources
that is materially superior to the access provided to FTP.
3.6. Use of Contractors. FTP shall be entitled to exercise
its rights under this Article III either itself or through third
party contractors, vendors and agents, provided that FTP shall be
responsible for ensuring that any such contractor, vendor or agent
complies with the restrictions and duties imposed by this
Agreement upon FTP. OMI shall have the right to disapprove any
external contractor (i.e. contractors other than those that are
located at FTP's locations and are integrated into FTP's
workforce) where OMI has a reasonable good faith basis for
believing that the contractor will not respect OMI's proprietary
rights or will produce a poor quality product. Any contractor
that FTP has entrusted with FTP source code shall be presumed to
be acceptable to OMI, subject to OMI's right to disapprove where
OMI has a reasonable basis for doing so. In the event that OMI
fails to disapprove a contractor within two business days
following receipt of notification by FTP of its intent to utilize
a given contractor, FTP shall be free to use such contractor.
ARTICLE IV - MARKETING AND DISTRIBUTION OF FTP PRODUCTS BY OMI
4.1. Right to Market and Distribute FTP Server Products. FTP
grants to OMI the right, as further defined below, to market and
distribute the FTP Server Products.
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4.2. Option to Market and Distribute Other FTP Products.
Subject to mutual agreement of FTP and OMI as to royalty rates
pursuant to Section 12.8, OMI shall have an option, exercisable by
written notification to FTP, to obtain the right, as further
defined below, to market and distribute all FTP Products,
excluding FTP Direct Marketed Products.
4.3. Licenses Supporting Right to Market and Distribute. For
any FTP Products for which OMI has been granted the right to
market and distribute, FTP grants to OMI:
(a) a nonexclusive, worldwide license to load, execute,
copy, have copied, modify, market, demonstrate, and transmit
electronically the Object Programs and User Documentation
comprising such FTP Products;
(b) a nonexclusive, worldwide license to load, execute,
copy, have copied, and modify the Source Programs, Programmer
Documentation and User Documentation comprising such FTP Products,
solely for the purpose of correcting Defects and making minor
modifications to such FTP Products; and
(c) a nonexclusive, worldwide right to sublicense to
Resellers and end-users, and to grant to its Resellers the right
to sublicense, market, and demonstrate, the Object Programs and
User Documentation comprising such FTP Products.
Section 19.4 shall be applicable to the Source Program licenses
granted under this section.
4.4. Delivery of Master Copies. FTP shall:
(a) upon the exercise of any option under this Article IV;
(b) upon the earlier of sixty days prior to first customer
ship or the release of the beta version of any FTP Product or
Update; and
(c) upon the release of the final version of any FTP Product
or Update;
provide to OMI master copies of all Object Programs and User
Documentation comprising and Support Tools related to any FTP
Products that OMI has the right to market and distribute.
4.5. Use of OMI End-User License Agreement. Distribution of
the FTP Products shall be covered by OMI's then current applicable
software license agreements and shall be in accordance with OMI's
then current software licensing policies, provided that such
license agreements protect FTP's intellectual property in the FTP
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Products, maintain the confidentiality of the trade secrets and
other proprietary material embodied in the FTP Products, prevent
the licensee from assigning the license (other than in connection
with the sale of the licensee's business), and limit warranties
and licensor liability in a fashion consistent with industry
standards and as may be reasonably required by terms of third
party agreements entered into by FTP (a list identifying all
presently existing requirements is set forth in Schedule 4.5).
OMI agrees not to make any representation or warranty on behalf of
FTP.
4.6. Branding. OMI shall have the right to identify the FTP
Products that are marketed and distributed by OMI as products of
OMI or of FTP and OMI (using appropriate FTP trademarks and logos,
as mutually agreed by the parties), and to mark such FTP Products
with OMI's trademarks.
4.7. No Duty to Market. Except as expressly set forth
herein, OMI shall not, by virtue of this Agreement or otherwise,
have any obligation to promote the sale and license of or
otherwise market the FTP Products.
ARTICLE V - INCORPORATION OF FTP PRODUCT TECHNOLOGIES
IN OMI PRODUCTS
Subject to mutual agreement of FTP and OMI concerning royalty
rates and other applicable terms, FTP grants to OMI the right to
incorporate portions of FTP Products in the corresponding OMI
Products.
ARTICLE VI - DISTRIBUTION OF FTP CLIENT PRODUCTS BY OMI
6.1. Distribution of FTP Client Products. FTP grants to OMI
the following limited rights, as further defined below, in
connection with the FTP Client Products:
(a) Reference Sales of FTP Client Products. OMI shall have
the right to promote the sale and license of and assist FTP in
making Reference Sales of the FTP Client Products.
(b) System Package Sales. Subject in each case to mutual
agreement of FTP and OMI as to royalty rates pursuant to
Section 12.8, OMI may license FTP Client Products as part of a
larger system of products including OMI Products licensed to a
customer.
(c) OMI Server Products. Upon mutual agreement in each case, OMI
shall have the right to license one copy of a mutually agreeable FTP
Client Product on a complimentary basis in conjunction with any sale of
an OMI Server or the OMI Transaction Management System without any
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CONFIDENTIAL MATERIALS OMITTED AND FILED
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COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
obligation to pay a royalty to FTP, ** ****** for which *** ****
******* ********* **********, provided that *** ***** ********* *** for
any ******** ** ***** ******* ** ***** ** ******* ***** ******** as a
result of such license.
Unless otherwise agreed by FTP, OMI shall not, except as set forth
in this Section 6.1 and Section 6.2, have the right to sell or
license or solicit orders for the FTP Client Products. OMI will
not have the right to sublicense to Resellers or grant to
Resellers the right to sublicense the FTP Client Products.
6.2. Option to Market and Distribute FTP Client Products.
OMI shall have an option, exercisable by written notification to
FTP, to obtain the right, as further defined below, to market and
distribute the FTP Client Products, subject to mutual agreement of
OMI and FTP concerning royalty rates and other applicable terms.
6.3. Licenses Supporting Right to Market and Distribute. For
any FTP Client Products for which OMI has been granted the right
to license such FTP Client Products, FTP grants to OMI a
nonexclusive, worldwide license to load, execute, copy, have
copied, market, demonstrate, and transmit electronically the
Object Programs and User Documentation comprising such OMI
Products.
6.4. Supply of FTP Client Product. FTP shall:
(a) upon execution of this Agreement;
(b) upon the exercise of any option under this Article VI;
(c) upon the earlier of sixty days prior to first customer
ship or the release of the beta version of any FTP Client Product
or Update; and
(d) upon the release of the final version of any FTP Client
Product or Update;
provide to OMI master copies of all Object Programs and User
Documentation comprising and Support Tools related to any FTP
Client Products that OMI has the right to market and distribute.
Those master copies to be delivered upon execution are listed in
Schedule 6.4.
6.5. Use of OMI End-User License Agreement. Distribution of
the FTP Client Products shall be covered by OMI's then current
applicable software license agreements and shall be in accordance
with OMI's then current software licensing policies, provided that
such license agreements protect FTP's intellectual property in the
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FTP Client Products, maintain the confidentiality of the trade
secrets and other proprietary material embodied in the FTP Client
Products, prevent the Licensee from assigning the license (other
than in connection with the sale of the Licensee's business), and
limit warranties and licensor liability in a fashion consistent
with industry standards and as may be required by terms of third
party agreements entered into by FTP (a list identifying all
presently existing requirements is set forth in Schedule 4.5).
OMI agrees not to make any representation or warranty on behalf of
FTP.
6.6. No Duty to Market. Except as expressly set forth
herein, OMI shall not, by virtue of this Agreement or otherwise,
have any obligation to promote the sale and license of or
otherwise market the FTP Client Products.
ARTICLE VII - INCORPORATION OF OMI PRODUCT TECHNOLOGIES
IN FTP PERSONAL WEB SERVER
7.1. Right to Incorporate OMI Technology in Personal Web
Server. OMI grants to FTP the right to incorporate portions of
OMI's Server Products into FTP's Personal Web Server. FTP and OMI
will mutually determine the functionality to be provided in the
Personal Web Server and the portions of OMI's Server technology to
be included therein, to be reflected in Schedule 7.1, through the
program management process set forth in Section 10.3. OMI and FTP
agree that upon execution of this Agreement FTP may proceed to
develop, market and distribute a Personal Web Server having the
functionality and incorporating the portions of OMI's Server
Product technology set forth in the initial version of Schedule
7.1.
7.2. License Supporting Right to Incorporate. OMI grants to
FTP a nonexclusive, worldwide license to load, execute, copy, have
copied, and modify the Source Programs, Programmer Documentation
and User Documentation comprising the OMI Server Products, solely
for the purpose set forth in Section 7.1. Section 19.4 shall be
applicable to the Source Program licenses granted under this
section.
7.3. OMI Marketing Visibility. FTP agrees to provide OMI
with marketing visibility in the form of prominent display of
OMI's logos, trademarks and copyrights on appropriate computer
screens, in FTP marketing literature and at appropriate industry
marketing events (trade shows, conferences, announcements and
seminars) with respect to the FTP Personal Web Server. FTP shall
use all commercially reasonable efforts to seek OMI's input on the
use of OMI's logos and trademarks on appropriate computer screens
in the FTP Personal Web Server prior to its release.
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ARTICLE VIII - CONTINUED PRODUCT DEVELOPMENT BY OMI
OMI agrees to continue to upgrade existing products or to
introduce and license to FTP new products, in order to ensure that
the products licensed to FTP remain competitive in the market, and
to support the level of business forecasted by FTP. Attached as
Schedule 8 is a roadmap of OMI's planned new releases of existing
products and new products for the first Contract Year, including a
schedule for the development and release of such new products. At
least three months prior to the end of each Contract Year, OMI
will develop a schedule for the following Contract Year. In the
event of a significant and continued failure to make product
contributions, FTP will have the right to seek an equitable
adjustment in subsequent minimum royalties pursuant to
Section 12.9.
ARTICLE IX - PROPRIETARY RIGHTS
9.1. Proprietary Rights in OMI Products. Except to the
extent licenses or rights are granted herein, OMI retains the
entire right, title and interest, including all copyrights, in and
to the OMI Products. Notwithstanding the foregoing, the FTP
Products and any Derivative Product Components developed by FTP
pursuant to Article III shall remain the property of FTP and any
program modules licensed from a third party that are incorporated
into the Derivative Products shall remain the property of such
third party.
9.2. Proprietary Rights in FTP Products. Except to the
extent licenses or rights are granted herein, FTP retains the
entire right, title and interest, including all copyrights, in and
to the FTP Products. Notwithstanding the foregoing, the OMI
Products and any Derivative Product Components developed by OMI
pursuant to Article III shall remain the property of OMI and any
program modules licensed from a third party that are incorporated
into the Derivative Products shall remain the property of such
third party.
9.3. Background License for Derivative Products. OMI grants
to FTP a perpetual, fully paid-up, nonexclusive, sublicensable,
worldwide license to any and all rights in the OMI Products and
Derivative Products that are necessary to permit FTP full and
unencumbered use and distribution of the Derivative Products
pursuant to this Agreement, but in the case of software licensed
to OMI by a third party only to the extent and subject to the
conditions pursuant to which OMI is authorized to sublicense such
software. All such presently existing conditions, including for
RSA Data Security, Inc., are set forth Schedule 9.3. The parties
agree to work in good faith to minimize any adverse effect upon
this Agreement resulting from the RSA contract. Except pursuant
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to the limited circumstances set forth in Section 22.4, this
license is irrevocable and shall survive expiration or termination
of this Agreement for any reason whatsoever.
9.4. Background License for OMI Products. FTP grants to OMI
a perpetual, fully paid-up, nonexclusive, sublicensable, worldwide
license to any and all rights in the Derivative Products that are
necessary to permit OMI full and unencumbered use and distribution
of the OMI Products and Derivative Products pursuant to this
Agreement, but in the case of software licensed to FTP by a third
party only to the extent and subject to the conditions pursuant to
which FTP is authorized to sublicense such software. Except
pursuant to the limited circumstances set forth in Section 22.4,
this license is irrevocable and shall survive expiration or
termination of this Agreement for any reason whatsoever.
9.5. Background License for FTP Personal Web Server. OMI
grants to FTP a perpetual, fully paid-up, nonexclusive,
sublicensable, worldwide license to any and all rights in the OMI
Server Products that are necessary to permit FTP full and
unencumbered use and distribution of the FTP Personal Web Server,
but in the case of software licensed to OMI by a third party only
to the extent and subject to the conditions pursuant to which OMI
is authorized to sublicense such software. Except pursuant to the
limited circumstances set forth in Section 22.4, this license is
irrevocable and shall survive expiration or termination of this
Agreement for any reason whatsoever.
9.6. License to Background Intellectual Property. To the
extent necessary to give effect to this Agreement, the licenses
and other rights granted herein shall include rights under any
applicable patents, copyrights, trademarks and other proprietary
rights belonging to the granting party or under which the granting
party has acquired rights but only to the extent and subject to
any conditions pursuant to which the granting party is authorized
to do so.
9.7. Internal Use Licenses.
(a) Subject to Section 9.7(c), (d) and (e) below, OMI grants
a nonexclusive, royalty free, worldwide license to load, execute,
copy, have copied, and distribute Object Programs and User
Documentation comprising the OMI products for FTP's own internal
use by FTP's employees and contractors.
(b) Subject to Section 9.7(c), (d) and (e) below, FTP grants
to OMI a nonexclusive, royalty free, worldwide license to load,
execute, copy, have copied and distribute Object Programs and User
Documentation comprising all FTP products for OMI's own internal
use by OMI's employees and contractors.
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(c) Each party shall have in place or will implement
internal procedures and policies intended to protect the
intellectual property embodied in the products of the other party.
(d) Either party may exclude a product from the licenses set
forth in Sections 9.7(a) and (b) where a substantial business
justification exists for doing so. Either party may exclude a
product from the licenses set forth in Sections 9.7(a) and (b)
where such party is legally prohibited from granting such license.
(e) Either party may require the other party to reimburse
such party for any payments to third parties or media or packaging
costs occurring as a result of the other party's internal use,
provided that such party has been apprised of such cost prior to
incurring liability for the same.
ARTICLE X - PROGRAM MANAGEMENT
10.1. Project Manager and Liaisons. Each party shall
designate a Project Manager. The Project Manager will have
overall responsibility for managing his or her company's
development work and will function as the primary liaison to the
other party. FTP hereby designates Jon Rodin as its initial
Project Manager, Peter Grossman as its initial Engineering
Liaison, and Steve Hanlon as its initial Marketing Liaison. OMI
hereby designates Bob Weinberger as its initial Project Manager,
Pat McGowan as its initial Engineering Liaison, and Pierre
Bouchard as its initial Marketing Liaison. The duties of each
party's Project Manager and Liaisons include responding promptly
and fully to all reasonable requests from the other party.
10.2. Technology Interchange. The parties will develop
project management mechanisms for coordinating the technology
interchange between the parties, including procedures for
exchanging and managing source code trees and related material.
10.3. Roadmap for Derivative Products. The parties have
jointly developed and attached to this Agreement as Schedule 10.3
an initial project plan for the development of Derivative
Products. The project plan set forth, for the initial phase of
the project, the Derivative Products to be developed, the schedule
for the development and release of the Derivative Products, a list
of the Derivative Product Components comprising the Derivative
Product and the identity the parties to performing the development
of such Derivative Product Components. The parties agree to use
reasonable efforts to perform the development and other tasks
assigned to it in the Derivative Products project plan.
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10.4. Project Management Meetings.
(a) Monthly Meetings of Engineering and Marketing Liaisons.
The Engineering Liaisons and the Marketing Liaisons shall each
hold meetings at least monthly for the purpose of ensuring
adequate technical and marketing communication and coordination
between the parties.
(b) Quarterly Meetings of Project Managers. The Project
Managers shall hold quarterly project management meetings for the
purpose of reviewing the technical and business status of the
project and resolving any issues that have arisen as a result of
the liaison meetings or otherwise.
(i) Technical Status. At each meeting, the parties
will review the technical status of ongoing projects, present
revised development timetables, and resolve any technology
interchange issues.
(ii) Product Development. The meetings will provide a
forum for discussing and coordinating product development.
The parties will present their updated product development
roadmaps and schedules, propose and discuss the merits of
planned and potential new products, product features and
operating system platforms, and identify the appropriate
party for carrying out the development of Derivative
Products. Determination of the party to perform the
development of a particular Derivative Product will be based
upon availability of engineering and financial resources,
time to market, and the nexus between the planned product and
the party's existing products.
(iii) Channel Coordination. The meetings will provide a
forum for discussing and coordinating distribution channels
with the goal of reducing, to the extent possible, channel
conflict.
10.5. Annual Review. OMI and FTP shall conduct a
comprehensive review of the relationship at least once per year.
The review shall occur at one of the regular quarterly project
management meetings, or at such other time as the parties shall
agree.
The parties will discuss and seek to resolve any significant
issues affecting the project, including any failure of a party to
meet its responsibilities under the Derivative Products roadmap
(Schedule 8), any action by a third party that has a significant
deleterious effect on the value of the relationship to either
party or any circumstances that have had or in the immediate
future will have a significant effect on the fairness of the
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current royalty rates or minimum royalty payments. In the event
that any such issue is not resolved to the satisfaction of both
parties, a Project Summit meeting will be held in accordance with
Section 12.9.
10.6. Cooperation. The parties agree that their ability to
meet their obligations hereunder depends upon mutual cooperation,
assistance and timely receipt of information. Each party agrees
that its failure to cooperate, assist and provide timely
information could delay or postpone the delivery of products and
services provided by this Agreement and may constitute a material
breach of this Agreement.
10.7. Authority. The Project Manager will have authority to
determine product content, functionality and product development
project plans and roadmaps. The Project Manager will not have
authority to bind the party he or she represents to commitments or
obligations contrary to those set forth in this Agreement and its
attachments, as amended from time to time, or to waive the other
party's compliance with any commitment or obligations set forth in
this Agreement and its attachments, as amended from time to time.
ARTICLE XI - DEVELOPMENT FEE
Upon OMI's delivery to FTP of the materials required to be
delivered upon the Effective Date pursuant to Sections 2.6 and
3.4, FTP shall pay OMI a development fee of $2 million. The
payment made by FTP pursuant to this Section is nonrefundable,
except as otherwise explicitly provided for in this Agreement.
ARTICLE XII - ROYALTIES
12.1. Royalties Payable by FTP. OMI shall accrue the right
to receive royalties from FTP as follows:
(a) ** ******* of the Net Revenue received by FTP in return
for licenses for OMI Server Products.
(b) ** ******* of the Net Revenue received by FTP in return
for licenses for FTP Server Products.
(c) ** ******* of the Twelve-Month Revenue received by FTP
in connection with each OMI-assisted Reference Sale of any FTP
Client Product. "Twelve-Month Revenue" shall mean the Net Revenue
received for all products and services provided by FTP to the
customer in connection with the FTP Client Product during the
twelve months following the effective date of the license
agreement, net of Allowable Costs. "Allowable Costs" shall mean
the amount of any payments by FTP to third parties to purchase
third party products and services provided to the customer.
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12.2. Minimum Royalty Payable by FTP.
(a) FTP agrees to pay OMI a minimum royalty of ** *******
per Contract Year (the "Minimum Royalty") for each of the first
four Contract Years.
(b) FTP shall pay the Minimum Royalty for Contract Year 1
upon OMI's delivery to FTP of the materials required to be
delivered upon the Effective Date pursuant to Sections 2.6 and
3.4.
(c) FTP shall pay the Minimum Royalty for Contract Year 2 on
or before the first day of Contract Year 2.
(d) For Contract Years 3 and 4, FTP shall pay ******** of
the Minimum Royalty on or before the first day of such Contract
Year and ******** of the Minimum Royalty, less Royalties Paid, on
or before the date six months following the first day of such
Contract Year. "Royalties Paid" shall equal the total amount of
royalties paid by FTP for the first six months of such Contract
Year in excess of the ******** Minimum Royalty paid by FTP at the
beginning of such Contract Year.
(e) The Minimum Royalty is subject to adjustment pursuant to
Section 12.9.
12.3. Royalties Payable by OMI. FTP shall accrue the right
to receive royalties from OMI as follows:
(a) ** ******* of the Net Revenue received by OMI in return
for licenses for FTP Server Products.
(b) ** ******* of the Twelve-Month Revenue received by OMI
in connection with each FTP-assisted Reference Sale of the OMI
Transaction Management System. "Twelve-Month Revenue" shall mean
the Net Revenue received for all products and services provided by
OMI to the customer in connection with the Transaction Management
System during the twelve months following the effective date of
the license agreement, net of Allowable Costs. "Allowable Costs"
shall mean the amount of any payments by OMI to third parties to
purchase third party products and services provided to the
customer during the twelve month period.
12.4. Joint Sales. The parties may identify other joint
sales opportunities where the relative contributions of the
parties justify a fee or royalty different from the finder's fee
or royalties established by this section. The parties will
establish a written joint sales plan setting forth their mutual
agreement regarding their relative sales responsibilities and the
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COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
fee or royalty to be earned as soon as possible after
identification of a joint sales opportunity.
12.5. Royalty ****. Upon payment of an aggregate total of
********** in royalties to OMI on sales of FTP Server Products,
FTP shall have ** ******* ********** ** *** *** *** *******
********* ********** on FTP Server Products. FTP shall remain
obligated to pay royalties on OMI Server Products as provided in
Section 12.1 herein, except that except any Minimum Royalties due
thereafter shall be ******* ** ******** of what they otherwise
would have been. In the event that *** ****** ** *** ********* on
sales of FTP Server Products on ********** ** *** ******* ***, OMI
shall be obligated to provide Updates to FTP for ** **********
**** for only one additional year. Upon payment of an aggregate
total of ********** in royalties to FTP on sales of FTP Server
Products, *** ***** **** ** ******* ********** ** *** *** ***
******* ********* ********** on FTP Server Products. In the event
that *** ****** ** *** ********* on sales of FTP Server Products
on ********** ** *** ******* **** FTP shall be obligated to
provide Updates to OMI for at no additional cost for only one
additional year. The foregoing shall have no effect on any
minimum royalties subsequently agreed to by the parties for any
OMI New Products or FTP new products.
12.6. Royalties on Updates. Royalties shall accrue on
revenue received in return for licenses for Updates. Where
revenue for Updates and support/maintenance services is
undifferentiated, royalties shall be payable on the portion of
such revenue allocable to the Updates, which in the case of FTP's
and OMI's standard packages of support services will be **
*******.
12.7. No royalty on Evaluation Licenses. No royalties shall
accrue in connection with evaluation licenses. It is expected
that evaluation licenses shall not, in the ordinary course, exceed
60 days.
12.8. Royalties on Other Products Subject to Agreement.
Royalties on Products other than those Products specified in
Sections 12.1 and 12.3 are subject to mutual agreement of FTP and
OMI. OMI and FTP agree to negotiate in good faith any royalty
rates which are to be established pursuant to this Section.
12.9. Adjustments to Royalty Rates and Minimum Royalty. In
the event a Project Summit meeting is called pursuant to
Section 10.5, senior officers of OMI and FTP having authority to
amend this Agreement shall meet within 10 days to discuss the
circumstances precipitating the meeting and possible remedies. In
the event of (a) a significant and continued failure of a party to
make product contributions under its roadmap (Schedule 8) or (b) a
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major adverse impact upon future sales of Products caused wholly
or substantially by factors beyond the reasonable control of the
parties or either party, the parties shall in good faith negotiate
an equitable adjustment in the royalty rates or minimum royalties
to be paid in the future by the other party. In the event that
the parties are unable to agree on such an equitable adjustment,
either party shall be entitled to submit the disagreement to
binding, expedited arbitration pursuant to Section 26.4, provided,
however, that under no circumstances shall any adjustment to
royalty rates or minimum royalty payments be made retroactive or
require a refund of payments previously made.
12.10. Payment Terms.
(a) Royalties and other amounts due pursuant to Section 12.1
or 12.3 shall be payable not later than thirty days after the
close of the quarter in which such royalties accrue.
(b) Concurrently with the payment of royalties, the party
paying such royalties shall provide a statement of Net Revenue,
together with an itemization of any amounts withheld pursuant to
any federal, state, local or foreign laws, ordinances, regulations
and orders.
(c) Except as set forth below, royalties shall be paid in
cash money.
(d) The amount of any royalties otherwise payable by FTP to
OMI shall be reduced by the full amount of any royalties payable
by OMI to FTP. The amount of any royalties otherwise payable by
OMI to FTP shall be reduced by the full amount of any royalties
payable by FTP to OMI.
(e) During Contract Years 1 through 4, until the entire
amount of any Minimum Royalty paid to OMI pursuant to Section 12.2
is recouped by FTP, the amount of any royalties otherwise due to
OMI shall be reduced by the full amount of any unrecouped Minimum
Royalty. After the entire amount of any Minimum Royalty has been
recouped by FTP, each royalty payment shall be payable to OMI in
cash money.
12.11. Foreign Currency. Net Revenue denominated in foreign
currencies will be converted into U.S. dollars according to the
standard internal conversion procedures of the relevant party,
including such party's standard internal rates and conversion
schedule (but in no event later than the last day of the fiscal
quarter in which the sales are made).
12.12. Bundled Products. If royalty-bearing Products are
sold in bundled form with other products, processes or services,
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
the royalty due will be based upon *** ******** ***** ** ***
*************** ********. Where the bundled products are
available separately at an established list price, the separate
value of the royalty-bearing products shall equal *** ***** *****
*** *** ******* ******** ********** ** *** **** ***** *** ***
*************** ******** ******* ** *** ********* **** ***** **
*** ******* ********. Where the bundled products are not each
available separately at an established list price, the parties
shall determine the separate value of the royalty-bearing Products
through good-faith negotiation.
12.13. Returns. It is acknowledged that in the normal course
of business, a certain percentage of products will be returned for
credit. Full credit will be allowed for royalties paid for
Products that are returned to for credit or, in lieu of return,
are destroyed. The credit allowed shall be applied to future
royalties earned under this Agreement, or if no further royalties
will accrue under this Agreement, the credit shall be paid back in
cash money.
12.14. Withholding. Royalty payments shall be reduced by
the amount of any tax required to be withheld against income from
royalties by a government or governmental agency; provided,
however, that the parties shall cooperate in good faith to reduce
such withholding to the extent legally possible. Any party
subject to withholding shall provide the other party with
certification of the amounts withheld and copies of any
certificates furnished by a withholding jurisdiction. In the
event a party, at the other party's request, makes any payment
without deduction of withholding tax, the other party shall
indemnify such party against any subsequent liability arising from
the failure to make such a deduction. In the event that a party
receives a credit in lieu of tax withheld, such credit shall be
included in Net Revenue for purposes of determining the royalty
due.
12.15. Taxes. Each party shall pay all sales, use, transfer
or similar taxes, whether foreign, federal state or local, however
designated, which are levied or imposed by reason of the
transactions such party engages in, and any penalties, interest
and collection or withholding costs associated with any of the
foregoing items, excluding, however, income taxes and, to the
extent provided in Section 12.14, certain withholding taxes.
12.16. Records. FTP and OMI shall each maintain complete and
accurate records relating to Net Revenue, including records
reflecting the total amount of Net Revenue, the calculations used
to determine Net Revenue and the underlying sales on which Net
Revenue is based ("Royalty Records").
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12.17. Audit. FTP and OMI shall each have the right, during
normal business hours on reasonable notice, to have the other
party's books and records relating to its royalty or other
financial obligations under this agreement audited by an a
national, independent accounting firm (which is paid on other than
a contingent fee basis) for the sole purpose of determining
whether the other party is complying with its royalty or other
financial obligations under this Agreement; provided, however,
that (i) neither party shall be required to submit to more than
one such audit per Contract Year concerning Net Revenue, (ii) the
Net Revenue for any Contract Year may be audited only once, and
(iii) no Contract Year may be audited more than three years after
the end thereof. The accounting firm will provide to both parties
a written report detailing its conclusions and the basis therefor.
If the party on whose behalf the audit was conducted (the
"Auditing Party") concludes that the audited party (the "Audited
Party") has under-reported Net Revenue or otherwise breached its
financial obligations under this Agreement, the Auditing Party
shall give written notice to the Audited Party of its conclusion
and the Auditing Party and the Audited Party shall endeavor in
good faith to resolve any differences between their respective
calculations. Any such audit shall be at the Auditing Party's
expense, except that the Audited Party shall reimburse the
Auditing Party for reasonable costs associated with such audit in
the event that as a result of the audit either the Audited Party
is required to pay additional royalties and actual Net Revenue for
the period audited is finally determined to have exceeded Net
Revenue reported by more than * ******* or the Audited Party is
otherwise obligated to make any payment or reimbursement in excess
of $10,000.
ARTICLE XIII - MARKETING
13.1. Marketing Assistance. OMI will supply FTP, at no
charge, with such aids and technical assistance, in reasonable
quantities, as the parties agree is necessary to enable FTP to
market the OMI Products. FTP will supply OMI, at no charge, with
such aids and technical assistance, in reasonable quantities, as
the parties agree is necessary to enable OMI to market the
Derivative Products and FTP Client Products.
13.2. Share Marketing Information. In order to maximize
sales of Products by the parties, they will periodically share
their marketing plans and will confer from time to time on matters
relating to market conditions, sales forecasting and product
planning. Either party may request the other party to provide it
with specific marketing information, to the extent such marketing
information exists or can be generated without undue cost and
expense and provided further that providing such information is
consistent with antitrust laws in applicable jurisdictions.
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13.3. Joint Marketing. The parties will work together to
define and pursue joint marketing opportunities, such as jointly
developing and evangelizing API's and standards.
13.4. Market Intelligence. Each party shall advise the
other party promptly concerning any market information that may
come to its attention regarding the other party, its Products, or
its market position or the continued competitiveness of its
Products in the marketplace, including but not limited to charges,
complaints, or claims by customers, or other persons.
ARTICLE XIV - SUPPORT
14.1. Direct Support by FTP of FTP Customers. FTP will
provide direct support for Derivative Products and OMI Products to
its customers. Direct support is defined as Level 1 and Level 2
Support as described in Schedule 14.1 with FTP as Licensee (as
that term is used in Schedule 4.1) and OMI as Vendor (as that term
is defined in Schedule 14.1). Except as set forth below and in
Schedule 14.1, OMI will not be responsible for responding directly
to FTP's customers.
14.2. Direct Support by OMI of OMI Customers. OMI will
provide direct support for Derivative Products to its customers.
OMI will optionally provide direct support for FTP Client Products
to its customers. Direct support is defined as Level 1 and Level
2 Support as described in Schedule 14.1 with OMI as Licensee and
FTP as Vendor. Except as set forth below and in Schedule 14.1,
FTP will not be responsible for responding directly to OMI's
customers.
14.3. Direct Support by FTP of OMI Customers. In the event
OMI elects not to provide direct support for FTP Client Products
to a specific OMI customer, FTP grants OMI the right to sell a FTP
support contract to the customer at FTP's then current list price
for such support contracts. The royalties and other applicable
terms OMI will receive for selling a FTP support contract are
subject to mutual agreement of the parties.
FTP will provide direct support for FTP Client Products to
those OMI customers sold a FTP Support Contract by OMI. Direct
support is defined as Level 1 and Level 2 Support as described in
Schedule 14.1 with FTP as both Vendor and Licensee. OMI will not
be responsible for responding directly to OMI's customers for FTP
Client Products serviced by a FTP Support Contract. Except as set
forth below and in Schedule 14.1, FTP will not be responsible for
responding directly to OMI's customers for OMI Products and
Derivative Products.
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
14.4. Engineering Support by OMI for OMI Products and
Derivative Products. OMI will provide technical engineering
services to FTP for OMI Products and for OMI originated Derivative
Product components. Technical engineering services is defined as
Level 3 Support as described in Schedule 14.1 with OMI as Vendor
and FTP as Licensee. Such support includes the responsibility for
responding to and resolving reported problems in OMI Products and
OMI originated Derivative Product components. OMI agrees to
provide to FTP ******** *** **** of technical support per year by
assigning an engineer who is experienced with the OMI Products
being marketed and distributed by FTP to devote up to ******** of
his or her time providing technical support for FTP. Upon FTP's
request given at least sixty days in advance, OMI will increase or
decrease the level of support in ******** *** **** increments.
FTP shall pay OMI $****** per one-half man year of support.
14.5. Access to Read/Write Source Code. In the event that
OMI fails to provide the technical engineering services necessary
to correct a serious error in or perform a requested minor
modification to the OMI Products within a reasonable period of
time, FTP will have access to read/write source code solely for
the purpose of correcting such error or performing such
modification. OMI shall have no obligation to include the
resulting modified source code in the base source code tree for
the affected OMI Product. Such modification will relieve OMI from
any and all obligations to provide support for any such modified
products. Section 19.4 shall be applicable to any Source Programs
provided under this section.
14.6. Engineering Support by FTP for FTP Client Products and
Derivative Products. FTP will provide technical engineering
services to OMI for FTP Client Products and FTP originated
Derivative Product Components. Technical engineering services is
defined as Level 3 Support as described in Schedule 14.1 with FTP
as Vendor and OMI as Licensee.
FTP will also provide technical engineering services for FTP
Client Products in the event FTP is also providing direct support
for such products to OMI customers. In such circumstances,
technical engineering services is defined as Level 3 Support as
described in Schedule 14.1 with FTP as both Vendor and Licensee.
Level 3 Support includes the responsibility for responding to
and resolving reported problems in FTP Client Products and FTP
originated Derivative Product Components.
14.7. Access to Read/Write Source Code. In the event that
FTP fails to provide the technical engineering services necessary
to correct a serious error in or perform a requested minor
modification to the FTP Client Products within a reasonable period
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of time, OMI will have access to read/write source code solely for
the purpose of correcting such error or performing such
modification. FTP shall have no obligation to include the
resulting modified source code in the base source code tree for
the affected FTP Client Product. Such modification will relieve
FTP from any and all obligations to provide support for such
modified products. Section 19.4 shall be applicable to any Source
Programs provided under this section.
14.8. Exchange of Support Information. FTP and OMI will
develop mechanisms and procedures for granting access to or
periodically exchanging customer support information and
diagnostic tools and procedures. The support information to be
exchanged will include, but it is not limited to the following:
lists of known problems, call frequency metrics, problem/solution
databases, lists of frequently asked support questions, technical
notes, and white papers.
Support information will be exchanged by both parties for OMI
Products and Derivative Products. Support information will also
be exchanged by both parties for FTP Client Products in the event
OMI elects to provide direct support of such products to its
customers. Both parties will maintain all copyrights and
warranties associated with such information.
14.9. Designation of Technical Account Managers. FTP and
OMI will each designate a Technical Account Manager. The Technical
Account Manager may be changed at any time by providing one week's
electronic notice to the other party.
The Technical Account Managers will monitor all support
processes, insure the timely exchange of support information, and
be available for resolution of any procedural difficulties. They
will work together in their performance of these tasks.
14.10. Periodic Review. The OMI and FTP Technical Account
Managers will meet on a regular basis for the purpose of reviewing
the effectiveness of all support processes and procedures,
suggested changes, implementing improvements, and reviewing and
sharing technical information. All lists outstanding and
unresolved problems will also be reviewed at this time.
Meetings may either be face-to-face or via teleconferencing
as mutually agreed upon. They will take place at least on a
quarterly basis. Either Technical Account Manager may also
request a meeting at any time by providing one week's electronic
notice.
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14.11. FTP Access to OMI Product Read-Only Source Code. OMI
will provide Read-Only source code code to FTP for existing OMI
Server Products and OMI originated Derivative Product components
for purposes of support, and to assist in the identification of
software problems. Through the project management process FTP may
request and OMI may provide additional Read-Only source code code
for other OMI Products for these same purposes. OMI's provision
of Read-Only source code code to FTP for support purposes is
separate and distinct from OMI's provision to FTP of Read/Write
source code code for FTP creation of Derivative Products. Except
as provided below, FTP will have no rights to modify, enhance, or
alter in any way the Read-Only source code code provided by OMI.
All Read-Only source code code provided by OMI to FTP will be
subject to Section 19.4.
14.12. OMI Access to FTP Derivative Product Component
Read-Only Source Code. FTP will provide Read-Only source code to
OMI for FTP originated Derivative Product Components for purposes
of support, and to assist in the identification of software
problems. FTP's provision of Read-Only source code code to OMI
for support purposes is separate and distinct from FTP's provision
to OMI of Read/Write source code for OMI creation of Derivative
Products. Excepted as provided below, OMI will have no rights to
modify, enhance, or alter in any way the Read-Only source code
provided by FTP. All Read-Only source code code provided by FTP
to OMI will be subject to Section 19.4.
14.13. Escrow of OMI Source Code. OMI will place into
Escrow source code and Programmer Documentation for OMI Products
and OMI component contributions to Derivative Products. The
placement of OMI originated materials into Escrow, and the
conditions for their release from Escrow, which shall include a
final adjudication of OMI as bankrupt and OMI ceasing for any
reason to maintain and support any of the OMI Products, will be in
accordance with the OMI Escrow Agreement attached hereto as
Schedule 14.13, and made a part hereof by this reference.
14.14. Escrow of FTP Source Code. FTP will place into
Escrow Source Programs and Programmer Documentation for FTP
Derivative Product Components. The placement of FTP originated
materials into Escrow, and the conditions for their release from
Escrow, which shall include a final adjudication of FTP as
bankrupt and FTP ceasing for any reason to maintain and support
any of the FTP Products, will be in accordance with the FTP Escrow
Agreement attached hereto as Schedule 14.14, and made a part
hereof by this reference.
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
ARTICLE XV - TRAINING
15.1. OMI Training Materials. When developed, and after a
mutually agreed royalty arrangement has been reached, OMI will
deliver to FTP all training materials it has developed for OMI
Products and Derivative Products. OMI will also deliver to FTP
any non-Product oriented training materials it develops. FTP may
use these materials only to train FTP employees and contract
employees on OMI Products, Derivative Products, and non-product
concepts at no additional cost. FTP will maintain the copyrights
and warranties associated with all OMI provided materials.
OMI's delivery of training materials shall constitute a grant
by OMI to FTP of a world-wide, non-exclusive, license to use for
the purposes of this Section, edit, modify, copy, and have copied
the materials. The foregoing license shall be revocable only as
set forth in Article XXII.
15.2. FTP Client Products and Derivative Product Training
Materials. FTP shall deliver to OMI all training materials it has
developed for FTP Client Products and Derivative Products when
developed and after a mutually agreed royalty arrangement has been
reached. FTP will also deliver to OMI any non-Product oriented
training materials it develops. OMI may use these materials only
to train OMI employees and contract employees on FTP Client
Products, Derivative Products, and non-product concepts at no
additional cost. OMI will maintain the copyrights and warranties
associated with all FTP provided materials.
FTP's delivery of training materials shall constitute a grant
by FTP to OMI of a worldwide, non-exclusive, license to use for
the purposes of this Section, edit, modify, copy, and have copied
the materials. The foregoing License shall be revocable only as
set forth in Article XXII.
15.3. FTP and OMI Cooperation. OMI and FTP agree to
cooperate in the development of Derivative Product and non-
Product, concept based training. The parties may take
responsibility for developing different courses in an overall
course curriculum. Both parties may contribute individual
components to a specific course. The parties may also agree to
review each other's materials while they are undergoing
development. All cooperation will be mediated through the project
management process.
15.4. FTP Access to OMI Training Courses. OMI may provide training
on OMI Products and Derivative Products. OMI will allow FTP employee
and contractor access to such training at no additional cost for ******
trainees per quarter, whenever room is available in an OMI sponsored
training course.
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
15.5. OMI Access to FTP Training Courses. FTP provides
training on FTP Client Products. FTP may provide training on
Derivative Products. FTP will allow OMI employees and contract
employees access to such training at no additional cost for ******
trainees per quarter, whenever room is available in an FTP
sponsored training course.
ARTICLE XVI - SIMILAR PRODUCTS
16.1. Development by FTP. OMI understands that FTP develops
and acquires software for its own computer products, and that
existing or planned software independently developed or acquired
by FTP may contain ideas and concepts similar or identical to
those in the OMI Products. OMI also understands that, over time,
FTP's employees will gain familiarity with the general concepts
contained in the OMI Products. OMI agrees that entering this
Agreement shall not preclude FTP from developing or acquiring
similar software for any purpose or from using FTP employees who
have worked with OMI source code from doing so, without obligation
to OMI, provided FTP does not breach its obligations with respect
to Confidential Information or any other relevant obligations to
OMI under this Agreement.
16.2. Development by OMI. FTP understands that OMI develops
and acquires software for its own computer products, and that
existing or planned software independently developed or acquired
by OMI may contain ideas and concepts similar or identical to
those in the FTP Products. FTP also understands that, over time,
OMI's employees will gain familiarity with the general concepts
contained in the FTP Products. FTP agrees that entering this
Agreement shall not preclude OMI from developing or acquiring
similar software for any purpose or from using OMI employees who
have worked with FTP source code from doing so, all without
obligation to FTP, provided OMI does not breach its obligations
with respect to Confidential Information or any other relevant
obligations to FTP under this Agreement.
ARTICLE XVII - MOST FAVORED NATION
17.1. Most Favored Nation. If OMI grants to any Person the
right to distribute any OMI Product on a given hardware platform
for a royalty rate lower than the applicable royalty rate to be
paid by FTP pursuant to this Agreement, OMI shall, except as set
forth in Section 17.3 below, immediately:
(a) notify FTP of the existence of such grant, the name of
the OMI Product, the hardware platform and the lower royalty rate,
and
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(b) offer in writing to FTP the lower royalty rate for such
OMI Product on such hardware platform, effective as of the
effective date of OMI's agreement with the other grantee. FTP
shall have 90 business days in which to accept or reject the offer
in writing.
FTP shall be entitled to any such lower royalty rate only for
so long as such lower royalty rate is in effect for the other
grantee.
17.2. Existing Agreement. OMI has an existing Agreement
pursuant to which it has granted a third party the right to
distribute an OMI Product on a specific hardware platform for a
royalty rate that is analogous to the applicable royalty rate to
be paid by FTP pursuant to this Agreement. In the event that the
royalty rate is reduced below the present royalty rate, such
royalty rate shall be deemed to be a lower royalty rate for
purposes of, and shall be subject to, Section 17.1.
17.3. Exclusion. OMI shall not be obligated to disclose or
offer to FTP the lower royalty rate pursuant to Section 17.1(b) in
the event that the lower rate is based upon: (i) OMI's good faith
expectation, based upon OMI written projections, that the volume
of OMI Products to be distributed by the other grantee will be
materially in excess of the greater of (1) the volume of OMI
Products being distributed or that the parties in good faith
expect to be distributed by FTP, or (2) the volume represented b
the Minimum Royalty plus $*******; or (ii) another business
justification that OMI in good faith and in the exercise of its
reasonable business judgment, based upon written projections,
believes justifies granting the other grantee the lower royalty
rate. OMI shall maintain the written projections and any other
related written records for a period of three years.
ARTICLE XVIII - REPRESENTATIONS AND WARRANTIES
18.1. Representations and Warranties of FTP. FTP represents
and warrants to OMI as follows:
(a) Organization and Authority. FTP is a corporation duly
organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the corporate power to
own its property and to carry on its business as now being
conducted by it. FTP has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) Due Authorization. The execution, delivery and
performance by FTP of the Master Agreement have been duly
authorized by all requisite corporate proceedings. FTP has duly
executed and delivered the Master Agreement and the Master
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Agreement constitutes a valid and binding agreement enforceable
against FTP in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, and similar laws of general
application affecting the rights and relief of creditors and
secured parties and to the further extent that the availability of
the remedies of specific performance and injunctive relief and
other equitable remedies is subject to the discretion of the court
before which any proceeding there for may be brought. FTP has
furnished to OMI true and correct copies of its Certificate of
Incorporation and By-Laws, each as amended and in effect on the
Effective Date.
(c) No Conflict with Other Agreements. The execution,
delivery and performance by FTP of the Master Agreement do not and
will not conflict with or result in a breach of the terms,
conditions or provisions of, or give rise to a right of
termination or constitute a default under, or result in any
violation of, its Certificate of Incorporation or By-Laws,
(ii) any mortgage or other material agreement or instrument to
which it is a party, (iii) any order, judgment or decree binding
on it or any of its property, or (iv) any applicable law, rule or
regulation to which FTP or any of its respective property and
assets are subject, or (v) any material license, waiver or permit
currently held by FTP.
(d) Actions Pending; Compliance with Law. Except as
otherwise disclosed in writing to OMI, there is no action, suit or
proceeding pending or, to the knowledge of FTP, threatened against
FTP before any court, arbitrator or governmental body, agency or
official, which (i) questions the validity of any of the
transactions contemplated in this Agreement or (ii) would, if
adversely determined, have a material adverse effect on the
business, financial position or results of operations of FTP and
its consolidated subsidiaries, taken as a whole.
(e) Title and Infringement. FTP warrants that, except as
set forth in Schedule 18.1(e), it has all rights in the FTP Client
Products necessary to grant the licenses granted hereunder,
including all rights under applicable copyrights, trade secrets,
patents, trademarks and other applicable proprietary rights, free
and clear of all liens or encumbrances and free from all claims
and demands of third parties, that there are no infringements of
any third party U.S. patent, U.S. copyright, trade secret,
trademark or other third party proprietary right concerning the
FTP Client Products, that there are no impending threatened or
pending infringement actions of any third party patent, copyright,
trade secret, trademark or other third party proprietary right
concerning the FTP Client Products and that, to the best of FTP's
knowledge, there are no infringements of any third party non-U.S.
patent or non-U.S. copyright concerning the FTP Client Products.
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18.2. Representations and Warranties of OMI. OMI
represents and warrants to FTP as follows:
(a) Organization and Authority. OMI is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware and has the corporate power to own its
property and to carry on its business as now being conducted by
it. OMI has the corporate power and authority to execute, deliver
and perform its obligations under this Agreement.
(b) Due Authorization. The execution, delivery and
performance by OMI of the Master Agreement have been duly
authorized by all requisite corporate proceedings. OMI has duly
executed and delivered the Master Agreement and the Master
Agreement constitutes a valid and binding agreement enforceable
against OMI in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, and similar laws of general
application affecting the rights and relief of creditors and
secured parties and to the further extent that the availability of
the remedies of specific performance and injunctive relief and
other equitable remedies is subject to the discretion of the court
before which any proceeding therefor maybe brought. OMI has
furnished to FTP true and correct copies of its Certificate of
Incorporation and By-Laws, each as amended and in effect on the
Effective Date.
(c) No Conflict with Other Agreements. The execution,
delivery and performance by OMI of the Master Agreement do not and
will not conflict with or result in a breach of the terms,
conditions or provisions of, or give rise to a right of
termination or constitute a default under, or result in any
violation of, (i) its Certificate of Incorporation or By-Laws,
(ii) any mortgage or other material agreement or instrument to
which it is a party, (iii) any order, judgment or decree binding
on it or any of its property, or (iv) any applicable law, rule or
regulation to which OMI or any of its respective property and
assets are subject, or (v) any material license, waiver or permit
currently held by OMI.
(d) Actions Pending; Compliance with Law. Except as
otherwise disclosed in writing to FTP, there is no action, suit or
proceeding pending or, to the knowledge of OMI, threatened against
OMI before any court, arbitrator or governmental body, agency or
official, which it questions the validity of any of the
transactions contemplated in this Agreement or (ii) would, if
adversely determined, have a material adverse effect on the
business, financial position or results of operations of OMI and
its consolidated subsidiaries, taken as a whole.
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(e) Title and Infringement. OMI warrants that, except as
set forth in Schedule 18.2(e), it has all rights in the OMI
Products necessary to grant the licenses granted hereunder,
including all rights under applicable copyrights, trade secrets,
patents, trademarks and other applicable proprietary rights, free
and clear of all liens or encumbrances and free from all claims
and demands of third parties that there are no infringements of
any third party U.S. patent, U.S. copyright, trade secret,
trademark or other third party proprietary right concerning the
OMI Products, that there are no impending threatened or pending
infringement actions of any third party patent, copyright, trade
secret, trademark or other third party proprietary right
concerning the OMI Products and that, to the best of OMI's
knowledge, there are no infringements of any third party non-U.S.
patent or non-U.S. copyright concerning the OMI Products.
ARTICLE XIX - CONFIDENTIAL INFORMATION
19.1. Non-Disclosure Obligations. FTP and OMI expect from
time to time to transmit and exchange Confidential Information.
Each party agrees that with respect to Confidential Information of
the other party:
(a) it shall protect and keep in confidence and shall not
disclose, copy or distribute Confidential Information to any third
party, except as necessary to carry out the purposes of this
Agreement;
(b) it shall use at least the same degree of care to
maintain in confidence and prevent disclosure of the Confidential
Information as it employs with respect to its own most important
Confidential Information (each party represents that such degree
of care provides adequate protection for its own Confidential
Information);
(c) it shall not, except as required to perform the tasks
contemplated in this Agreement, directly or indirectly use such
Confidential Information for its own benefit or for the benefit of
any third party without the prior written consent of the
disclosing party;
(d) it shall disclose Confidential Information only to those
of its directors, officers, employees, agents, representatives and
consultants ("Representatives") who have a need to know such
information to perform the tasks contemplated in this Agreement,
and shall take all steps necessary to ensure that all
Representatives who have access to Confidential Information shall
comply with this Article XIX;
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(e) it shall not remove any proprietary rights legend from,
and shall, upon reasonable request, add any proprietary legend to,
materials disclosing or embodying Confidential Information; and
(f) it shall immediately advise the Discloser in writing of
any misappropriation or misuse by any Person of Confidential
Information of which the receiving party becomes aware; provided,
however, that the foregoing shall not prohibit a party from
disclosing Confidential Information: (i) under this Agreement with
appropriate restrictive legends to the U.S. government or an
authorized representative thereof under the provisions of the
Federal Acquisition Regulations, or similar regulations of other
government agencies limiting use and disclosure; or (ii) under
order of a court of competent jurisdiction or a valid
administrative or governmental subpoena, provided that the
receiving party promptly notifies the disclosing party of such
event so that the disclosing party may seek an appropriate
protective order.
19.2. Disclosure Pursuant to Law. In the event that a party
is ordered to disclose Confidential Information pursuant to a
judicial or governmental request, requirement or order, such party
shall immediately, and in any event prior to complying therewith,
notify the disclosing party and take reasonable steps to assist
the disclosing Party in contesting such request, requirement or
order or otherwise protecting the disclosing party's rights.
19.3. No License. Other than as expressly specified herein,
no license is granted under any copyrights, patents, trademarks,
service marks, trade secrets or other proprietary rights to use or
reproduce Confidential Information. In the event that
Confidential Information is or becomes the subject of a patent
application, patent, copyright or other proprietary right, each
party agrees and understands that the disclosing party will have
all the rights and remedies available to it under the law as a
result of said patent application, patent, copyright or other
proprietary right.
19.4. Source Code. Any source code disclosed by one party
to the other under this Agreement will constitute Confidential
Information and will not be used or disclosed by the recipient
except as otherwise permitted by this Agreement. The Recipient
shall use all reasonable measures to protect the confidentiality
of such source code, including restricting access to the source
code to those who have entered into appropriate confidentiality
agreements and have a need to have access the source code to
perform their functions.
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ARTICLE XX - TRADEMARKS
20.1. MI Trademarks. FTP is authorized to use the
trademarks set forth in Schedule 20.1 and all other trademarks or
tradenames directly associated with the OMI Products and the
designation "Authorized OMI Distributor" in connection with FTP's
advertisement, promotion and distribution of the OMI Products, in
accordance with current OMI policies. Upon termination of FTP's
right to distribute any OMI Products, FTP will cease all display,
advertising and use of any applicable OMI names, marks, logos and
designations. FTP agrees not to alter, erase or overprint any
copyright notice or other notice of proprietary rights on anything
provided by OMI and will not attach any additional trademarks,
logos or designations to the OMI Products or affix any OMI
trademark, logo or designation to any non-OMI product.
20.2. FTP Trademarks. During the term of this Agreement,
OMI is authorized to use the trademarks set forth in Schedule 20.2
and all other trademarks or tradenames directly associated with
the FTP Products and the designation "Authorized FTP Distributor"
in connection with OMI's advertisement, promotion and distribution
of the OMI Products, in accordance with current FTP policies.
Upon termination of OMI's right to distribute any FTP Products,
OMI will cease all display, advertising and use of any applicable
OMI names, marks, logos and designations. OMI agrees not to
alter, erase or overprint any copyright notice or notice of
proprietary rights on anything provided by FTP and will not attach
any additional trademarks, logos or designations to the FTP
Products or affix any FTP trademark, logo or designation to any
non-FTP product.
ARTICLE XXI - PRICES
Each party is free to determine unilaterally its own prices
and per copy fees to its customers. Although a party may publish
suggested prices and per copy fees, these are suggestions only and
the other party shall be entirely free to determine the actual
price and per copy fee at which products will be sold or licensed
to its customers. No employee or representative of a party or
anyone else associated or affiliated with a party has any
authority to tell the other party what its prices and per copy
fees for products must be or to inhibit in any way the other
party's discretion with respect to its prices or per copy fees for
such products. Each party agrees to report promptly to the other
party in writing any attempts by anyone to do so.
ARTICLE XXII - TERM; DEFAULT; TERMINATION
22.1. Term. The term of the Agreement shall begin upon the
Effective Date and, unless earlier terminated pursuant to the
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termination provisions, extend through the first four Contract
Years. The agreement shall automatically renew for successive one
year periods unless either party notifies the other in writing not
less than six months in advance of the expiration of the then
current period.
22.2. Breach; Cure; Default.
(a) Breach; Cure. Upon any allegation that a breach of this
Agreement has occurred or is likely to occur, both parties agree
to cooperate in using their best efforts to address and attempt to
cure or prevent the alleged breach. As soon as possible after
receiving notice of the alleged breach, the parties will
investigate the circumstances surrounding the alleged breach and
agree upon the steps necessary to remedy the breach. Throughout
the process the parties will share any relevant information and
materials that would be relevant to determining whether a breach
has occurred or the steps necessary to remedy the breach. To
ensure high level attention and cooperation, both parties shall
make their senior management available to one another as necessary
to carry out the investigation and any remedial steps.
(b) Default. "Default" shall mean a significant breach of
this Agreement in the payment of money that remains uncured for
30 days after notice of such breach or a significant breach of any
other material term of the Agreement that remains uncured as a
result of the breaching party's failure to have used its best
efforts to remedy such breach for 90 days after notice of such
breach.
22.3. Termination. Either party may terminate the Agreement
upon 10 days prior written notice in the event of a Default.
22.4. Effect of Termination. Upon termination or expiration
of this Agreement:
(a) the parties' obligations to exchange technology and to
provide product support shall immediately cease;
(b) in the event of termination as a result of a Default,
(i) the non-Defaulting Party shall retain its licenses
to market and distribute the other party's Products for a
period of five years pursuant and subject to the terms of
this Agreement, including the royalty provisions;
(ii) the Defaulting Party shall retain its licenses to
market and distribute the then existing versions of the other
party's Products for two years pursuant and subject to the
terms of this Agreement, including the royalty provisions,
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but shall not be entitled to market or distribute subsequent
versions of the other party's Products;
(c) except as set forth below, OMI shall retain its license
under Section 9.4, except that OMI shall not in any subsequent OMI
product any portion of any FTP Product that has not previously
been incorporated into a Derivative Product;
(d) except as set forth below, FTP shall retain its licenses
under Sections 9.3 and 9.5, except that FTP shall not use in any
subsequent FTP product any portion of any OMI Product that has not
previously been incorporated into a Derivative Product; and
(e) end-user licenses granted by either party prior to
receipt of notice of termination or date of expiration, as the
case may be, shall remain in effect, including any obligations of
either party to indemnify the other party relative thereto.
Neither termination nor expiration of this Agreement shall affect
OMI's ownership of the OMI Products or FTP's ownership of the FTP
Products or FTP Client Products.
22.5. Termination of Background Licenses. Upon the final
judgment of a court or other neutral party having jurisdiction
that OMI has willingly or intentionally breached Articles XII or
XIX or willfully or intentionally infringed a copyright of FTP,
OMI's license under Section 9.4 shall terminate. Upon the final
judgment of a court or other neutral party having jurisdiction
that FTP has willfully or intentionally breached Articles XII or
XIX or willfully or intentionally infringed a copyright of OMI,
FTP's licenses under Sections 9.3 and 9.4 shall terminate.
22.6. Maintenance of Status Quo. Notwithstanding any other
provisions of this Article XXII, in the event of a bona fide
dispute between the parties concerning whether a Default has
occurred, all of the rights and obligations of the parties under
this Agreement shall remain in force and shall not be terminated
unless a Default is determined to have occurred by a court,
arbitrator or neutral third party.
ARTICLE XXIII- INTELLECTUAL PROPERTY INDEMNIFICATION
23.1. OMI shall indemnify, hold harmless and defend FTP and
its customers from and against any and all suits, actions,
damages, costs, losses, expenses (including settlement awards and
reasonable attorneys' fees) and other liabilities arising from or
in connection with any claim alleging that the OMI Products
infringes any (a) U.S. patent, trade secret, mask work, or other
intellectual property interest, (b) any U.S. or foreign copyright,
(c) any trademark in any of the jurisdictions set forth in
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Schedule 23.1 and any other registered trademarks in the
jurisdictions where they have been registered and shall pay all
costs and damages awarded, if OMI is notified promptly in writing
of such a claim. FTP, at OMI's sole expense, shall maintain
control and direction of the defense of such a claim or claims
brought against FTP. OMI shall have the right to refuse to pay
for any settlement that it does not approve, provided that it
first posts a bond in the amount of the proposed settlement. The
bond shall be payable to FTP in the event that FTP proceeds to
defend the claim or claims and a judgment is obtained against FTP
on the claim or claims. If an injunction against FTP's or FTP's
customers' manufacture, use, sale, lease, license or other
distribution of the OMI Products results from such a claim (or, if
FTP reasonably believes that such an injunction is likely), OMI
shall, at its expense (and in addition to its other obligations
hereunder) and upon FTP's request, either obtain for FTP and FTP's
customers the right to continue making, using, selling, leasing,
licensing or otherwise distributing the OMI Products; or replace
or modify it so it becomes non-infringing but functionally
equivalent. The foregoing shall constitute the sole remedies of
FTP and the sole obligations of OMI with respect to intellectual
property infringement of any OMI Product. OMI's obligations under
this Section shall not extend to: (i) any claim for infringement
resulting from OMI's compliance with FTPs written designs, or any
specific or direct written instructions from FTP; (ii) any claim
that any written information, documentation, software program or
component, as supplied by FTP to OMI, infringes a third party
patent, copyright, trademark, trade secret, mask work, or other
intellectual property right in any country; or (iii) any claim
arising from or based upon the combination, operation or use of
any OMI Product with equipment, data or programming not supplied
by OMI, or arising from any alteration or modification of the OMI
Products; or (iv) any claim arising from or based upon equipment,
data or programming supplied to OMI by a third party vendor to the
extent that said vendor has limited its liability to OMI for such
claim.
23.2. FTP shall indemnify, hold harmless and defend OMI and
its customers from and against any and all suits, actions,
damages, costs, losses, expenses (including settlement awards and
reasonable attorneys' fees) and other liabilities arising from or
in connection with any claim alleging that the FTP Products or FTP
Client Products infringe any (a) U.S. patent, trade secret, mask
work, or other intellectual property interest, (b) any U.S. or
foreign copyright, (c) any trademark in any of the jurisdictions
set forth in Schedule 23.2 and any other registered trademarks in
the jurisdictions where they have been registered and shall pay
all costs and damages awarded, if FTP is notified promptly in
writing of such a claim, except to the extent that the OMI
Products from which the allegedly infringing FTP Products are
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derived also infringe such intellectual property interest. FTP,
at FTP's sole expense, shall maintain control and direction of the
defense of such a claim or claims brought against OMI, provided,
however, that OMI shall have the right to approve papers filed
regarding dispositive motions and shall have the right to approve
any settlement of the claims brought against it. OMI agrees to
provide FTP with any and all reasonable assistance which FTP may
request in connection with its defense of such claims. If an
injunction against OMI's or OMI's customers' manufacture, use,
sale, lease, license or other distribution of the FTP Products or
FTP Client Products results from such a claim (or, if OMI
reasonably believes that such an injunction is likely), FTP shall,
at its expense (and in addition to its other obligations
hereunder) and upon OMI's request, either obtain for OMI and OMI's
customers the right to continue making, using, selling, leasing,
licensing or otherwise distributing the FTP Products or FTP Client
Products; or replace or modify it so it becomes non-infringing but
functionally equivalent. The foregoing shall constitute the sole
remedies of OMI and the sole obligations of FTP with respect to
intellectual property infringement of any FTP Product or FTP
Client Product. FTP's obligations under this Section shall not
extend to: (i) any claim for infringement resulting from FTP's
compliance with OMI's written designs, or any specific or direct
written instructions from OMI; (ii) any claim that any written
information, documentation, software program or component, as
supplied by OMI to FTP, infringes a third party patent, copyright,
trademark, trade secret, mask work, or other intellectual property
right in any country; (iii) any claim arising from or based upon
the combination, operation or use of any FTP Product with
equipment, data or programming not supplied by FTP, or arising
from any alteration or modification of the FTP Products; or
(iv) any claim arising from or based upon equipment, data or
programming supplied to FTP by a third party vendor to the extent
that said vendor has limited its liability to FTP for such claim.
ARTICLE XXIV - INDEMNIFICATION AND INSURANCE
24.1. OMI agrees to take all necessary precautions to
prevent injury to any persons (including employees of FTP) or
damage to property (including FTP's property) during the term of
this Agreement and shall indemnify and save FTP harmless against
all loss and expense resulting from any act on the part of OMI,
its agents, employees or subcontractors pursuant to OMI's
performance under this Agreement, except to the extent that any
loss is due solely and directly to the negligence of FTP.
24.2. Should FTP permit OMI to use any of FTP's equipment,
tools or facilities during the term of this Agreement, such
permission will be gratuitous and OMI shall indemnify and save FTP
harmless from and against any claim for personal injuries
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
including death or for any other liability arising out of the use
of any such equipment, tools or facilities, whether or not such
claim is based upon the condition thereof or the alleged
negligence of FTP in permitting use thereof.
24.3. FTP agrees to take all necessary precautions to
prevent injury to any persons (including employees of 0MI) or
damage to property (including OMI's property) during the term of
this Agreement and shall indemnify and save OMI harmless against
all loss and expense resulting from any act on the part of FTP,
its agents, employees or subcontractors pursuant to FTP's
performance under this Agreement, except to the extent that any
loss is due solely and directly to the negligence of OMI.
24.4. Should OMI permit FTP to use any of OMI's equipment,
tools or facilities during the term of this Agreement, such
permission will be gratuitous and FTP shall indemnify and save OMI
harmless from and against any claim for personal injuries
including death or for any other liability arising out of the use
of any such equipment, tools or facilities, whether or not such
claim is based upon the condition thereof or the alleged
negligence of OMI in permitting use thereof.
ARTICLE XXV - WARRANTIES; LIMITATION OF LIABILITY
25.1. Disclaimer of Warranties. Neither party makes any
warranties or representations as to performance of Products,
except as expressly set forth in this Agreement or in OMI's or
FTP's limited end-user warranty accompanying delivery of Products.
25.2. TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL
IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, TITLE AND NON-INFRINGEMENT, ARE HEREBY EXCLUDED.
25.3. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, NEITHER PARTY SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE TO
THE OTHER PARTY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES EVEN IF
THE PARTY OR THE PARTY'S REPRESENTATIVE HAS BEEN APPRISED OF THE
LIKELIHOOD OF SUCH DAMAGES OCCURRING.
25.4. IN NO EVENT SHALL A PARTY'S LIABILITY (WHETHER BASED
ON AN ACTION OR CLAIM IN CONTRACT, TORT OR OTHERWISE) TO THE OTHER
PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED ***
*******, EXCEPT THAT EACH PARTY'S LIABILITY FOR INTENTIONAL OR
WILFUL COPYRIGHT INFRINGEMENT SHALL NOT BE SO LIMITED.
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ARTICLE XXVI- MISCELLANEOUS
26.1. Publicity and Public Information. The parties agree
that neither of them will make any public statement referencing
the collaboration between the parties or the existence or terms of
this Agreement without prior consultation with and approval by the
other party, except as required by law.
26.2. Notices. All notices, requests and other
communications to any party hereunder shall be in writing
(including any facsimile transmission or similar writing), and
shall be sent either by facsimile, by reputable overnight courier
or delivered in person addressed as follows:
If to FTP, to it at:
General Counsel
FTP Software, Inc.
100 Brickstone Square
Andover, Massachusetts 01810
Facsimile: 508-794-4498
If to OMI, to it at:
Chief Financial Officer
Open Market, Inc.
245 First Street
Cambridge, Massachusetts 02142
Facsimile: 617-621-1703
or to such other persons or addresses as any party may designate
by written notice to the others. Each such notice, request or
other communication shall be effective (i) if given by facsimile,
when such facsimile is transmitted and the appropriate answer back
is received, (ii) if given by reputable overnight courier, one
business day after being delivered to such courier or (iii) if
given by any other means, when received at the address specified
in this Section.
26.3. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the provisions, policies
or principles thereof relating to choice or conflict of laws.
26.4. Resolution of Disputes. A party may seek a
preliminary injunction or other equitable relief, if in the
party's judgment such action is necessary to avoid irreparable
damage, or in aid of arbitration. Despite such action the parties
will continue to participate in good faith in the arbitration
process set forth in this Agreement.
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If a dispute arises between the parties relating to the
interpretation or performance of this Agreement or the grounds for
the termination thereof, either party may call a meeting by
written notice to be attended by individuals with decision-making
authority regarding the dispute, to attempt in good faith to
negotiate a resolution of the dispute prior to pursuing other
available remedies. If, within thirty (30) days after such
notice, the parties have not succeeded in negotiating a resolution
of the dispute, either party may request that such dispute be
resolved through final and binding arbitration. Such arbitration
shall be conducted by three (3) arbitrators in Boston,
Massachusetts, in accordance with the then-current Commercial
Arbitration Rules of the American Arbitration Association ("AAA").
Such arbitrators shall be selected by the mutual agreement of the
parties or, failing such agreement, shall be selected according to
the relevant AAA rules. The parties shall bear the costs of such
arbitrators equally. The prevailing party in any such arbitration
or in any judicial enforcement or review proceedings shall be
entitled to its reasonable attorneys' fees and costs in addition
to any other amount of recovery ordered by such arbitrator or
court. If judicial enforcement or review of such arbitrator's
award is sought by either party, judgment may be entered upon such
award in any court of competent jurisdiction. The arbitrators may
not award punitive or multiple damages. The duty of the parties
to arbitrate any dispute relating to the interpretation or
performance of this Agreement or the grounds for termination
thereof shall survive the expiration or termination of this
Agreement for any reason.
Either party may request that any arbitration to be conducted
pursuant to the preceding paragraph be designated an "expedited
arbitration" and be carried out in accordance with the following
procedures. Such expedited arbitration must result in a final
binding decision, without a right of appeal, in no less than
thirty days from the date of the notice of a dispute under this
section from one party to another. In the event the parties
cannot agree to appoint three arbitrators within five business
days of the date of filing and notice of demand for arbitration,
the AAA shall be empowered to appoint a neutral arbitrator. The
chairman of the arbitration panel appointed by the parties, or the
arbitrator selected by the AAA, shall be empowered to establish
procedures and rules reasonably calculated to complete the
proceedings within thirty days.
26.5. Survival. The provisions of Articles 9, 11, 12, 16,
18, 19, 20, 23, 24, 25 and 26 shall survive any expiration or
termination of this Agreement. Any other provisions of this
Agreement which by their nature are intended to survive expiration
or termination of this Agreement shall so survive.
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26.6. Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject
matter hereof and supersedes any prior agreement or understanding
among the parties with respect to the subject matter hereof.
There are no representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than
those expressly set forth herein.
26.7. Amendment; Waiver. This Agreement may not be amended
nor may any rights hereunder be waived except by an instrument in
writing signed by all of the parties hereto.
26.8. Binding Effect; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties and
their respective successors and permitted assigns. Neither this
Agreement nor any interests or obligations hereunder shall be
assigned or transferred (by operation of law or otherwise) to any
person without the prior written consent of the other party. The
term "assign" shall include the assignment of any rights or duties
under this Agreement, the liquidation, dissolution,
recapitalization or reorganization of a party, and any merger or
consolidation, sale, lease or other disposal of all or
substantially all of a party's assets with or to a third entity
where the party is not the surviving entity and where such third
entity is a competitor of OMI (in the case of FTP) or FTP (in the
case of OMI). The term "assign" shall not include any other
merger or consolidation, sale, lease or other disposal of all or
substantially all of a party's assets, or purchase or acquisition
of all or substantially all of the assets of a third entity,
either through the purchase of stocks or of assets. Any purported
assignment in violation of this provision shall be null and void.
26.9. Counterparts. This Agreement may be executed in any
number of counterparts of the signature pages, each of which shall
be considered an original, but all of which together shall
constitute one and the same instrument.
26.10. Severability. If any term or provision of this
Agreement shall become or be declared illegal, invalid or
unenforceable, such term or provision shall be divisible from this
Agreement and shall be deemed to be deleted from this Agreement,
provided that if such deletion substantially affects or alters the
commercial basis of this Agreement the parties shall negotiate in
good faith to amend and modify the terms and provisions of this
Agreement to give effect to the original intent of the parties.
26.11. Independent Contractors. The parties shall be
independent contractors. Neither party shall have, and shall not
represent that it has, any power, right or authority to bind the
other party, or to assume or create any obligation or
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responsibility, express or implied, on behalf of the other party
or in the other party's name, except as herein expressly provided.
Nothing stated in this Agreement shall be construed as
constituting FTP and OMI as partners or as creating the
relationships of employer/employee, franchisor/franchisee, or
principal/agent between the parties.
26.12. Headings. The section and other headings contained
in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
26.13. The Products constitute "restricted rights software"
for purposes of government contracting and subcontracting and,
therefore, FTP shall ensure that the rights granted to any United
States Government or United States Government subcontractor,
licensee, or sublicensee shall be only those minimum "restricted
rights" described in FAR 52.227*14(g)(3) or DFARS
252.227-7013(a)(17) or their successor regulations, whichever is
applicable. FTP shall place appropriate "restricted rights"
legends upon all copies of the Products in accordance with the FAR
and DFAR regulations specified above.
26.14. Schedules 1 through 23.2 are attached to and made a
part of this Agreement.
26.15. Each party shall, if necessary, obtain any
governmental approvals, permits, or licenses, required to
discharge its obligations under this Agreement.
26.16. Each party will comply with all export laws and
regulations of the United States of America (the "Regulations") in
effect during the term hereof, and will provide FTP with all
documentation and/or information require for compliance with the
Regulations in any respect. Each party will not export or
re-export the Products, directly or indirectly, without first
having obtained written approval from the United States Office of
Export Administration and other appropriate governmental agencies,
into any of those countries listed, at the time of any shipment of
Products, in supplements to part 370 to Title 15 of the Code of
Federal Regulations of the United States of America as "prohibited
or restricted" countries or any other country to which such
exports or re-exports may be restricted (collectively, the
"Prohibited Countries"). Neither party will distribute or supply
the Products to any person or entity if such party has reason to
believe that such person or entity intends to export, re-export,
or otherwise take it to, or to use it in, any of the Prohibited
Countries. Each party will indemnify and hold harmless the other
party from and against any and all costs and expenses arising from
or as a result of such party's failure to comply strictly with the
requirements of this Section.
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26.17. Neither party will be responsible for any failure to
perform due to acts of God, war, riot, embargoes, acts of civil or
military authorities, denial of or delays in processing of export
license applications, fire, floods, earthquakes, accidents,
strikes, or fuel crises, provided that such party gives prompt
written notice thereof to the other party, or other similar events
beyond such party's control. The time for performance will be
extended for a period equal to the duration of the event, but in
no event longer than sixty (60) days.
IN WITNESS WHEREOF, the parties have executed this Master
Agreement as of the date first written above.
FTP SOFTWARE, INC. OPEN MARKET, INC.
By: By:
Name: Name:
Title: Title:
-46-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 1
I. OMI PRODUCTS
OMI Server Products: Existing and Under Development
Web Server (existing)
Secure Web Server (existing)
Web Reporter (existing)
Webmaster Workbench products ***** *************
Related Timeout and Evaluation Versions of such products
(existing)
Publishing Server ****** ************
Advertising Server ****** ************
Enterprise Server ****** ************
OMI New Products
Merchant Solution (Storebuilder, Transaction Link,
Secure Web Server)
Marketplace Solution (Merchant Solution, Staging
Solution, Rights to Resell Int. Commerce Service)
II. FTP CLIENT PRODUCTS
III. FTP PRODUCTS
Web Server
-47-
<PAGE>
Schedule 2.6
OMI Products: Master Copies to be Provided to FTP
[attached]
-48-
<PAGE>
Schedule 2.7
End-User License Requirements Imposed by OMI
Third Party Agreements
[attached]
-49-
<PAGE>
EXHIBIT "B"
LICENSEE SEALS, LOGOS, AND TRADEMARKS
RSA encourages its licensees to use RSA seals, logos and
trademarks on licensee product data sheets, packaging and
advertising... but it is important to use them properly.
When using RSA trademarks in ads, product packaging, documentation
or collateral materials, be sure to use the correct trademark
designator: for registered trademarks, and for claimed or
pending trademarks. RSA trademarks and their correct designators
are depicted below. To ensure proper usage, please allow RSA
Marketing to review any materials using or mentioning RSA
trademarks prior to general release. We promise to give you a
quick turnaround!
Using these licensee seals (and the nearly identical seals
that identify other RSA algorithm implementations like RC2 and
RC4) does not require written permission; in fact, we encourage
you to use them on your product packaging and collateral!
[insert]
RSA Digital Signature , RSA Digital Envelope
RC2 Symmetric Block Cipher, RC4 Symmetric Stream Cipher
BSAFE , TIPEM
Certificate Issuing System , Co-Issuer Tool
MailSafe , RSA Secure
RSA Sign , RSA Check
Because some things are better left unread.
The keys to privacy and authentication.
RSA Public Key Cryptosystem
MD , MD2 , MD4 , MD5
-50-
<PAGE>
Schedule 4.5
End-User License Requirements Imposed by FTP
Third Party Agreements
None.
-51-
<PAGE>
Schedule 6.4
FTP Client Products: Master Copies to be Provided to OMI
[attached]
-52-
<PAGE>
Schedule 7.1
FTP Personal Web Server Criteria
[attached]
-53-
<PAGE>
Schedule 7.1
This document describes a personal web server. A personal web
server is a standalone utility primarily to be used as a web
server. The functionality of a personal web server will be
sufficiently limited to prevent its use as a workgroup,
departmental or enterprise web server.
FTP and Open Market may agree to revise these descriptions in the
future.
For a complete description of each of the features listed below,
see the Windows NT/95 Internet Server Development Plan written by
John McNamara dated August , 1995.
Supported Features of Personal Web Server
This list is the permissible list of features to go into a
personal web server. FTP is not committing to implement these in
any particular release or at any particular date.
HTTP 1.0 and future revisions of HTTP
Export quality encryption with SSL; 40 bit keys today, possibly 64
bit keys in the future
Basic authentication via SSL only
Generic user authentication w/file restrictions
CGI limited to Visual Basic interface
Mime mapping
Clickable images
Configuration
Reconfiguration
OLE enabled
Mail to support
Logging
Functionality Not Provided by Personal Web Server
SHTTP
SSL with 128 bit keys
Users/Group authentication
TCL
PERL
CGI mapping
Virtual patch
Server side includes
Multiple virtual servers
search capabilities
URL redirection
-54-
<PAGE>
External APIs, except OLE
Database support
Link checker
Proxy servers
-55-
<PAGE>
Schedule 8
OMI Roadmap
-56-
<PAGE>
Schedule 8
Open Market Inc. Product Roadmap
August 23, 1995
SCHEDULE 8 CONTAINS CONFIDENTIAL MATERIALS
WHICH HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
-57-
<PAGE>
SCHEDULE 8 CONTAINS CONFIDENTIAL MATERIALS
WHICH HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
-58-
<PAGE>
Schedule 9.3
Limitations Imposed by Third Party Agreements
See attached OMI/RSA contract sections 2.3,6.4.2,6.6,7.1,9.8.
-59-
<PAGE>
1.13 "RSA Object Code" means the Licensed Software in machine-readable,
compiled object code form.
1.14 "RSA Software" means RSA proprietary software known as BSAFE and
TIPEM as described in the user Manuals associated therewith. "RSA Software"
shall also include all modifications and enhancements (including all New
Releases and New Versions) to such programs as provided by RSA to OEM.
1.15 "RSA Source Code" means the mnemonic, high level statement versions
of the RSA Software written in the source language used by programmers.
1.16 "Territory" means those countries or portions of countries listed on
page 1 hereof.
1.17 "User Manual" means the most current version of the user manual
customarily supplied by RSA to end users who license the RSA Object Code.
2. GRANT OF LIMITED LICENSES
-------------------------
2.1 RSA Source Code License. For OEM's convenience, RSA wishes to permit
-----------------------
OEM to port the RSA Software to any environment OEM desires in accordance with
the following license, if granted. If a course code license is specified in a
License/Product Schedule, RSA hereby grants OEM a non-exclusive, non-
transferable, non-assignable limited license in the Territory during the term
specified in Section 8 to:
2.1.1 Modify the RSA Source Code to create interfaces and other
software necessary to permit the object code to the RSA Software to operate in
accordance with the User Manual in any of OEM's proprietary products (all such
modifications to the RSA Source Code referenced collectively as "Interface
Modifications").
2.1.2 Use the RSA Source Code to provide support of Bundled Products
to End User Customers.
2.1.3 Compile the RSA Source Code to create object code solely to
permit creation of Interface Modifications and for the purposes set forth in
Section 2.2 (with the limitations set forth in Section 2.3).
2.2 Object Code Licenses. RSA wishes to permit OEM to incorporate into
--------------------
Bundled Products only specified portions and functionality of the RSA Software;
additional portions and functionality of the RSA Software can be added and
additional Bundled Products can be added by executing an amendment to a
License/Product Schedule or a new License/Product Schedule. RSA hereby grants
OEM a non-exclusive, non-transferable, non-assignable, limited license in the
Territory during the term specified in Section 8 to:
2.2.1 Incorporate the Licensed Functionality of the RSA Object Code
into the OEM Product to create a Bundled Product.
2.2.2 Reproduce, have reproduced, and sublicense the Licensed
Functionality of the RSA Object Code and the User Manual Incorporated in a
Bundled Product.
60
<PAGE>
2.3 Limitations On Object Code License. The licenses granted in Section
----------------------------------
2.2 shall be limited as follows:
2.3.1 Sublicenses of the RSA Object Code to Licensed Software shall be
granted only to (1) Distributors and (2) End User Customers.
2.3.2 OEM may not in any way sell, rent, license, sublicense or
otherwise distribute the RSA Software or any part thereof or the right to use
the RSA Software or any part thereof as a stand-alone product to any person or
entity.
2.3.3 OEM may not incorporate into any Bundled Product any algorithm
or other functionality included within the RSA Software which is not Licensed
Software as set forth on the License/Product Schedule with respect to such
Bundled Product.
2.3.4 If Licensed Software with respect to a bundled Product has a
specified Licensed Functionality, it may be incorporated, reproduced, or
sublicensed only with respect to such Licensed Functionality and no other
functionality of such Licensed Software is permitted to be incorporated,
reproduced, or sublicensed in such Bundled Product. If no Licensed
Functionality restriction is specified for an item of Licensed Software with
respect to a Bundled Product, then OEM shall have the rights set forth in
Section 2.2 with respect to all functionalities of such Licensed Software with
respect to such Bundled Product.
2.4 Title.
-----
2.4.1 Except for the limited licenses granted in Sections 2.1 and 2.2,
RSA shall at all times retain full and exclusive right, title and ownership
interest in and to the RSA Software and in any and all related patents,
trademarks, copyrights or proprietary or trade secret rights.
2.4.2 OEM shall at all times retain full and exclusive right, title
and ownership interest in and to the interface Modifications and in any and all
related copyrights or proprietary or trade secret rights; provided, however,
that OEM hereby agrees that it will not assert against RSA any of such
copyrights or proprietary or trade secret rights with respect to any interfaces
independently developed by RSA without reference to the source code to the
Interface Modifications.
3. LICENSE FEES
------------
3.1 License Fees. In consideration of RSA's grant to OEM of the limited
------------
license rights hereunder, OEM shall pay to RSA the amounts set forth below (the
"License Fees");
3.1.1 Source Code License Fees. If RSA is granted to OEM RSA Source
------------------------
code license rights as specified in a License/Product Schedule, OEM shall pay to
RSA the license fee as specified on each such License/Product Schedule.
3.1.2 Object Code License Fees. In consideration of RSA's grant to
------------------------
OEM of the RSA Object Code sublicense rights for each Bundled Product described
in each License/Product Schedule, OEM shall pay to RSA the license fees.
61
<PAGE>
Distributors, employees, agents or any other person.
6.4.2 OEM agrees not to remove or destroy any proprietary, trademark
or copyright markings or confidentiality legends placed upon or contained within
the RSA Source Code, RSA Object Code, User Manuals or any related materials or
documentation. OEM further agrees to insert and maintain: (I) within every
Bundled Product and any related materials or documentation a copyright notice in
the name of OEM; and (II) within the splash screens, user documentation, printed
product collateral, product packaging and advertisements for the Bundled
Product, the appropriate RSA "License Seal" from the form attached as Exhibit
"B" to this Agreement and a statement that the Bundled Product contains the RSA
Software. OEM shall not take any action which might adversely affect the
validity of RSA's proprietary, trademark or copyright markings or ownership by
RSA thereof, and shall cease to use the markings, or any similar markings, in
any manner on the expiration or other termination of the license rights granted
pursuant to Section 2.
6.4.3 OEM acknowledges the extreme importance of the confidentiality
and trade secret status of the RSA Source Code and OEM agrees, in addition to
complying with the requirements of Sections 6.4.1 and 6.4.2 as they relate to
the RSA Source Code, to: (I) inform any employee that is granted access to all
or any portion of the RSA Source Code of the importance of preserving the
confidentiality and trade secret status of the RSA Source Code; and (II)
maintain a controlled, secure environment for the storage and use of the RSA
Source Code.
6.4.4 The placement of a copyright notice on any of the RSA Software
shall not constitute publication or otherwise impair the confidential or trade
secret nature of the RSA Software.
6.4.5 OEM acknowledges that the restrictions contained in this Section
6.4 are reasonable and necessary to protect RSA's legitimate interests and that
any violation of those restrictions will cause irreparable damage to RSA within
a short period of time and OEM agrees that RSA will be entitled to injunctive
relief against each violation. OEM further agrees that all confidentiality
commitments hereunder that survive the expiration or termination for any reason
of this Agreement or the license rights granted pursuant to Section 2.
6.5 Federal Government Sublicense. Any sublicense of a Bundled Product
-----------------------------
acquired from OEM or any Distributor under a United States government contract
shall be subject to restrictions as set forth in subparagraph (ch(1)(4)) of
Defense Federal Acquisition Regulations Supplement (DFARs) Section 252.227-7013
for Department of Defense contracts and as set forth in Federal Acquisition
Regulations (FARs) Section 52.227-10 for civilian agency contracts or any
successor regulations. OEM agrees that any such sublicenses shall set forth all
of such restrictions and the tape or diskette label for the Bundled Product and
any documentation delivered with the Bundled Product shall contain a restricted
rights legend conforming to the requirements of the current, applicable DFARs or
FARs.
6.6 Notices. OEM shall immediately advise RSA of any legal notices served
-------
on OEM which might affect RSA, the RSA Software or any Bundled Products.
62
<PAGE>
6.7 INDEMNITY. OEM EXPRESSLY INDEMNIFIES AND HOLDS HARMLESS RSA, ITS
---------
SUBSIDIARIES, AGENTS AND AFFILIATES FROM: (I) ANY AND ALL LIABILITY OF ANY KIND
OR NATURE WHATSOEVER TO OEM'S END USER CUSTOMERS, DISTRIBUTORS AND THIRD PARTIES
WHICH MAY ARISE FROM ACTS OF OEM OR FROM THE LICENSE OF BUNDLED PRODUCTS BY OEM
OR ANY DOCUMENTATION, SERVICES OR ANY OTHER ITEM FURNISHED BY OEM TO ITS END
USER CUSTOMERS OR DISTRIBUTORS; AND (II) ANY LIABILITY ARISING IN CONNECTION
WITH AN UNAUTHORIZED REPRESENTATION OR ANY MISREPRESENTATION OF FACT MADE BY OEM
OR ITS AGENTS, EMPLOYEES OR DISTRIBUTORS TO ANY PARTY WITH RESPECT TO THE RSA
SOFTWARE OR ANY BUNDLED PRODUCTS.
7. DISCLAIMER OF WARRANTIES; LIMITATION OF LIABILITY; INTELLECTUAL PROPERTY
------------------------------------------------------------------------
INDEMNITIES
- -----------
7.1 DISCLAIMER. EXCEPT FOR THE EXPRESS LIMITED WARRANTY PROVIDED IN
----------
SECTION 4.1, THE RSA SOFTWARE IS PROVIDED "AS IS" WITHOUT ANY WARRANTY
WHATSOEVER. RSA DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO
ANY MATTER WHATSOEVER, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. RSA DISCLAIMS ANY WARRANTY OR REPRESENTATION
TO ANY PERSON OTHER THAN OEM WITH RESPECT TO THE RSA SOFTWARE. OEM SHALL NOT,
AND SHALL TAKE ALL MEASURES NECESSARY TO INSURE THAT ITS AGENTS AND EMPLOYEES DO
NOT, MAKE OR PASS THROUGH ANY SUCH WARRANTY ON BEHALF OF RSA TO ANY DISTRIBUTOR,
END USER CUSTOMER OR OTHER THIRD PARTY.
7.2 LIMITATION OF LIABILITY. IN NO EVENT WILL RSA BE LIABLE TO OEM (OR TO
-----------------------
ANY PERSON CLAIMING RIGHTS DERIVED FROM OEM) FOR INDIRECT, INCIDENTAL SPECIAL
CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THE TRANSACTIONS
CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS,
BUSINESS INTERRUPTION OR LOSS OF BUSINESS INFORMATION, EVEN IF RSA HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNDER NO CIRCUMSTANCES SHALL RSA'S
TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL
AMOUNT PAID BY OEM TO RSA HEREUNDER, REGARDLESS OF WHETHER ANY ACTION OR CLAIM
IS BASED ON WARRANTY, CONTRACT, TORT OR OTHERWISE.
7.3 Proprietary Rights Infringement by RSA.
--------------------------------------
7.3.1 Subject to the limitations set forth below, RSA, at its own
expense, shall (i) defend, or at its option, settle any claim, suit or
proceeding against OEM on the basis of infringement of any United States patent,
copyright or trade secret in the field of cryptography by the unmodified
Licensed Software as delivered by RSA (excluding the Interface Modifications) or
any claim that RSA has no right to license the Licensed Software hereunder, and
(ii) pay any final judgment entered or settlement against OEM on such issue in
any such suit or proceeding defended by RSA. RSA shall have no obligation to OEM
pursuant to this Section 7.3.1 unless: (A) OEM gives RSA prompt written notice
of the claim; (B) RSA is given the right to control and direct the
investigation, preparation, defense and settlement of the claim; and (C) the
claim is based on OEM's use of the unmodified Licensed Software in accordance
with this Agreement.
63
<PAGE>
7.3.2 If RSA receives notice of an alleged infringement RSA shall have
the right, at its sole option, to obtain the right to continue use of the
Licensed Software or to replace or modify the Licensed Software so that it is no
longer infringing. If neither of the foregoing options is reasonably available
to RSA, then the license rights granted pursuant to Section 2 may be terminated
at the option of either party hereto without further obligation or liability
except as provided in Sections 7.3.1 and 8.3 and in the event of such
termination, RSA shall refund the License Fees paid by OEM hereunder less
depreciation for use assuming straight line depreciation over a five (5)-year
useful life.
7.3.3 THE RIGHTS AND REMEDIES SET FORTH IN SECTIONS 7.3.1 AND 7.3.2
CONSTITUTE THE ENTIRE OBLIGATION OF RSA AND THE EXCLUSIVE REMEDIES OF OEM
CONCERNING RSA'S PROPRIETARY RIGHTS INFRINGEMENT.
7.4 Proprietary Rights Infringement by OEM.
--------------------------------------
7.4.1 Subject to the limitations set forth below, OEM, at its own
expense, shall (i) defend, or at its option settle, any claim, suit or
proceeding against RSA on the basis of infringement of any United States patent,
copyright or trade secret by any Bundled Product (excluding the unmodified RSA
Software) or the Interface Modifications; and (iii) pay any final
64
<PAGE>
If to RSA, with a copy to:
Timothy Tomlinson, Esq.
Tomlinson Zisko Morosoll & Maser
200 Page Mill Road, Second Floor
Palo Alto, California 94308
OEM: To the address set forth on page 1
Such communications shall be effective when they are received by the
addresses thereof; but if sent by certified or registered mail in the manner set
forth above, they shall be effective five (5) days after being deposited in the
United States mail in the contiguous 48 states or ten (10) days after being
deposited in the United States mail in any other location. Any party may change
its address for such communications by giving notice thereof to the other party
in conformity with this Section.
9.8 Foreign Reshipment Liability. THIS AGREEMENT IS EXPRESSLY MADE
----------------------------
SUBJECT TO ANY LAWS, REGULATIONS, ORDERS OR OTHER RESTRICTIONS ON THE EXPORT
FROM THE UNITED STATES OF AMERICA OF THE RSA SOFTWARE OR BUNDLED PRODUCTS OR OF
INFORMATION ABOUT SUCH RSA SOFTWARE OR BUNDLED PRODUCTS WHICH MAY BE IMPOSED
FROM TIME TO TIME BY THE GOVERNMENT OF THE UNITED STATES OF AMERICA.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, OEM SHALL
NOT EXPORT OR REEXPORT, DIRECTLY OR INDIRECTLY, ANY RSA SOFTWARE OR BUNDLED
PRODUCTS OR INFORMATION PERTAINING THERETO TO ANY COUNTRY FOR WHICH SUCH
GOVERNMENT OR ANY AGENCY THEREOF REQUIRES AN EXPORT LICENSE OR OTHER
GOVERNMENTAL APPROVAL AT THE TIME OF EXPORT OR REEXPORT WITHOUT FIRST OBTAINING
SUCH LICENSE OR APPROVAL.
9.9 Trade Names, Logos, Publicity. By reason of this Agreement or the
-----------------------------
performance hereof, OEM shall acquire no rights of any kind in any RSA
trademark, trade name, logo or product designation under which the RSA Software
was or is marketed and OEM shall not make any use of the same for any reason
except as expressly authorized by this Agreement or otherwise authorized in
writing by RSA. RSA shall have the right during the term of the license rights
granted hereunder to disclose to third parties that OEM is an OEM of the RSA
Software and that any publicly-announced Bundled Product incorporated the RSA
Software. OEM shall provide to RSA, solely for RSA's display purposes, one (1)
working copy of each Bundled Product which consists solely of computer software
and one (1) working or non-working unit of any hardware product in which is
incorporated a Bundled Product which consists of an integrated circuit or other
hardware.
9.10 Remedies Non-Exclusive. Any remedy provided for in this Agreement is
----------------------
deemed cumulative with, and not exclusive of, any other remedy provided for in
this agreement or otherwise available at law or in equity. The exercise by a
party of any remedy shall not preclude the exercise by such party of any other
remedy.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
65
<PAGE>
first written above.
OEM:
OPEN MARKET, INC.
By:____________________________________
Printed Name:__________________________
Title:___________________________________
RSA DATA SECURITY, INC.
By:____________________________________
Printed Name:__________________________
Title:___________________________________
66
<PAGE>
Schedule 10.3
Derivative Products Project Plan
[attached]
-67-
Pages 1-16 contain confidential materials which have been omitted and filed with
the Securities and Exchange Commission.
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
******
******
******
******
******
******
Development Resources
+-------------------------+------------------------------------------+
| Team Member | Role |
+-------------------------+------------------------------------------+
| John McNamara | Development Manager |
+-------------------------+------------------------------------------+
| Karen Kohn | Server Port, Core Server Features |
+-------------------------+------------------------------------------+
| Chan Chan | KeyPack Integration, CGI Development |
+-------------------------+------------------------------------------+
| John Cushman | Configuration applications |
+-------------------------+------------------------------------------+
| David Towers | Database Integration |
+-------------------------+------------------------------------------+
| William Ruh | Server and utilities Port, Performance, |
| | Core Server |
+-------------------------+------------------------------------------+
-68-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
+------------------------+------------------------------------------+
| Brian Bresnahan | Database Wizard, Configuration |
| | Applications |
+------------------------+------------------------------------------+
| Vlad Zakashansky | Configuration Applications |
+------------------------+------------------------------------------+
| Gene Durso | Test Verification |
+------------------------+------------------------------------------+
| Harald Skardal | Search Engine Investigation |
+------------------------+------------------------------------------+
| TBH 1 | Security/Encryption |
+------------------------+------------------------------------------+
| TBH 2 | Search Engine Integration |
+------------------------+------------------------------------------+
| TBH 3 | Proxy Server |
+------------------------+------------------------------------------+
| TBH 4 | Proxy Server |
+------------------------+------------------------------------------+
| | |
+------------------------+------------------------------------------+
****** Servers
Mail Server
News Server
DNS Server
Chat Server
DHCP Server
-69-
<PAGE>
Schedule 14.1 - 14.14
Support Procedures
[attached]
-70-
<PAGE>
Schedule 14.1
Support & Training
1. Levels of Support
Licensee and Vendor acknowledge that three (3) levels of
support are required.
1.1 Level 1 Support
Level 1 (problem verification) handles support calls
requiring a relatively low but broad degree of Product
expertise. Level 1 activities include, but are not limited
to, the following:
Provide Initial Customer Contact.
Maintain Problem Log.
Provide Problem Description and Definition
Maintain Customer Configuration Data
Resolve Software Installation Inquiries and Problems
Provide Remote System Administration and Configuration
Assistance.
Attempt Problem Reproduction
Maintain Appropriate Metrics on Call Volumes.
1.2 Level 2 Support
Level 2 (problem determination and temporary fix) requires
both broad and in-depth product expertise. Level 2 support
has full responsibility for problem trouble-shooting and
development of avoidances and work-arounds. It is the goal of
Level 2 support to provide a reproducible test case for all
problems reported. When read access to source code is
available, Level 2 support will also attempt to specifically
identify faults at the line of code. Level 2 activities
include, but are not limited to the following:
Provide Problem Determination and Verification.
Perform Remote Diagnosis.
Provide Work-Around or Avoidance.
Provide Engineering (Level 3) Interface.
Develop Product Problem Diagnostic Procedures.
Develop and Publish Technical Tutorials.
1.3 Level 3 Support.
Level 3 (permanent problem resolution) requires engineering
level expertise. The Level 3 Support organization has
complete ownership of the field release process, and
similarly is responsible for providing timely and accurate
product defect descriptions and resolution plans to Level 1
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<PAGE>
and Level 2 Support Organizations. Level 3 activities
include, but are not limited to, the following:
Perform Line of Code Fault-Isolation (Source Code
Available)
Provide Permanent Defect Fix or Resolve Problem to
Customer's
Satisfaction.
Provide AU Software (patch, Maintenance, Update, Major)
Releases.
Develop Product Problem Diagnostic Procedures.
Develop and Publish Technical Tutorials.
In the event, a non-reproducible problem is escalated to the
Level 3 Support Organization by the Level 2 Support
Organization, the former will also:
Provide Problem Determination and Verification,
Perform Remote Diagnosis.
Perform Line of Code Fault-Isolation.
Provide Work-Around or Avoidance.
1.4 Licensee and Vendor Responsibilities.
The Licensee will be responsible for providing both Level 1
and Level 2 Support on Vendor Product(s) to Licensee's
Customers. The Vendor will be responsible for providing Level
3 Support on Vendor Product(s).
2. Support Coverage Hours.
Support Coverage Hours consists of Standard Coverage,
Extended Coverage, and Custom Coverage Hours.
2.1 Standard Coverage.
Standard Coverage for Licensee's Level 1 and Level 2 Support
Organizations will be 8am-8pm EST M-F, exclusive of holidays.
Standard Coverage for Vendor's Level 3 Support Organization
will be 9am-6pm EST M-F, exclusive of holidays.
2.2 Extended Coverage.
Extended Coverage will be provided by the Vendor's Level 3
Support Organization as negotiated on a case by case basis.
2.3 Custom Coverage.
Custom Coverage may be provided by the Licensee's Level 1 and
Level 2 Organizations for specific customers. Such coverage
will be as per the Customer's Contract/Support Plan with the
Licensee.
-72-
<PAGE>
3. Required Set-up.
The Licensee's Level 1 and 2 Support Organizations will have
the necessary equipment, software, and Vendor Product(s)
including Product Documentation required to reproduce any
Licensee Customer reported problems with Vendor.
Product(s). The Vendor's Level 3 Support Organization will
have the necessary equipment and software required to
reproduce and resolve any Licensee reported problems with
Vendor Product(s).
4. Licensee Customer Problem Reporting.
The Licensee will maintain a number of mechanisms to allow
Licensee Customer to report Problems with Vendor Product(s)
and request support. These mechanisms will include, but are
not limited to:
Support telephone hot-lines
FAX Services
Electronic Mail
On-Line: Problem Reporting Forms
5. Problem Severity Levels.
Severity levels will be assigned to Problems by the
Licensee's Level 1 Support Organization. Such assignments
may be modified by the Licensee's Level 2 Support
Organization. All Problems will be assigned one of the
following severity levels:
5.1 Severity Level.
A Severity Level 1 Problem is a Critical Problem. The
Customer is unable to use the Vendor Product(s) or is
severely restricted in an operational environment. The
Product may:
corrupt or permanently destroy data
repeatedly fail catastrophically
require the system to be repeatedly rebooted
No temporary fix exists for the Critical Problem.
5.2 Severity Level 2.
A Severity 2 Level Problem is a Severe Problem. The Customer
is able to use the Vendors Product(s) but operations are
restricted by the Problem. The Product may:
be usable but incomplete (one or more documented
commands or
functions are inoperable or missing)
-73-
<PAGE>
fail catastrophically
require the system to be rebooted
suffer sufficient degraded performance (throughout and
response) such that there is a severe impact on use
A temporary fix may exist for the Severe Problem.
5.3 Severity Level 3.
A Severity Level 3 Problem is a Moderate Problem. The
Customer is able to use the Vendor's Product(s) with some
restrictions on functions used. The Product may be usable
and complete but inconvenient on occasion (one or more
documented commands or functions are not available in the
most convenient or expeditious manner)
A temporary fix may exist for the Moderate Problem.
Failures to install Vendor Product(s) are also classified as
Moderate Problems because there is no operational impact on
the Customer.
5.4 Severity Level 4.
A Severity Level 4 Problem is a Minor Problem. The Customer
is able to fully use the Vendor's Product(s) with some minor
deviations from documented practices or expected operation.
The Product:
does not operate strictly according to specifications
contains one or more errors in the Product documentation
A Minor Problem has no operational impact, and a temporary
fix may exist.
5.4 Severity Level 5.
A Severity Level 5 Problem is a Comment, Suggestion, or
Inquiry. The Customer is fully able to use the Vendor's
Product(s), but has some question or comment/suggestion about
the Product.
6. Problem Resolution.
The resolution of Problems reported by the Licensee's
Customers may involve the Vendor's Level 3 Support
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<PAGE>
Organization as well as the Licensee's Level 1 and Level 2
Support Organizations.
6.1 General Problem Resolution Process.
The general process flow for each problem reported by a
Licensee Customer will be as follows:
1) Licensee Level 1 Support Organization Processing:
Initial Processing:
- Receives and acknowledges Licensee Customer Problem
Report.
- Opens a Customer Problem Call.
- Establishes a Customer Problem Log.
- Assigns a Problem Severity Level.
Handling of Severity Level 5 Problems (Comment/Inquiry/
Suggestion):
- Informs Customer of answers to Inquiries.
- Acknowledges Comments/Suggestions to Customer, and
electronically forwards Licensee Customer remarks
to Vendor's Level 3 Support Organization.
- Updates Customer Problem Log.
- Closes Customer Problem Call.
Handling of Known Problems with Fixes:
- Informs Customer of solution to reported Problem
and provides suggested fix(es).
- Updates Customer Problem Log.
- Closes Customer Problem Call.
Handling of Unknown Problems and Known Problems Without
Fixes:
- Attempts to reproduce Problem by executing Vendor
supplied and Licensee developed diagnostic routines
and procedures.
- Documents all actions in Customer Problem Log.
- Escalates Problem to License Level 2 Support
Organization.
2) Licensee Level 2 Support Organization Pre-Service Request
Processing:
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Accepts responsibility for Customer Problem Call.
Verifies existence of Problem by executing Vendor
supplied and Licensee developed diagnostic routines and
procedures.
Finds a reproductible test case or sets of conditions
under which the Problem can be reproduced.
Documents all actions in Customer Problem Log.
Logs a Service Request with Vendor's Level 3 Support
Organization.
3) Vendor Level 3 Support Organization Service Request
Processing:
Acknowledges receipt of Service Request and
responsibility for reported Problem.
Opens a Service Request Call.
Establishes a Service Request Log.
Provides Action Plan for Problem resolution.
Isolates Problem to line(s) of code (Source Code
Available).
Routinely provides updates to Action Plan.
Attempts to effect a temporary fix to reported Problem.
Attempts to permanently resolve reported Problem.
Documents all actions in Service Request Log.
Provides Final Report on Service Call to Licensee's
Level 2 Support Organization.
Closes Service Request Call.
4) Licensee Level 2 Support Organization Post-Service Request
Processing:
Updates Customer Problem Log with Action Plan and Action
Plan Updates.
Updates Customer Problem Log with Service Call Final
Report.
Closes Customer Problem Call.
Several of the steps in this general Problem resolution
process flow will be discussed in more detail. In addition,
many of the steps in Service Request Processing by the
Vendor's Level 3 Support Organization have associated
Response Time Expectations. These Expectations are also
governed by the Severity Level of the reported Problem.
These too are documented below.
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6.2 Service Request Call Logging.
When the Licensee Level 2 Support Organization wishes to Log
a Service Request Call with the Vendor's Level 3 Support
Organization the following procedure will be used:
1) Licensee "packages" up all information currently known
about the Customer Problem Call. Included will be the
results of any Vendor specified diagnostic programs and
procedures as well as the results of any Licensee
developed programs and procedures.
2) Licensee electronically transfers the "package" to the
Vendor.
Service Request is transmitted by electronic mail
to a Vendor supplied mail alias.
Bulk information, such as programs and data, are
transferred via FTP to a Vendor supplied FTP
account.
3) Licensee may immediately call the Vendor in the case of
Severity Level 1 Problems. Outside business hours, the
Licensee may contact the Vendor by means of an
electronic paging device in cases where parties have
agreed upon Extended Coverage.
4) Upon receipt of the Service Requests, the Vendor will
call back the Licensee acknowledging reception of the
Request, and accepting responsibility for the Problem
reported.
5) For non-Severity Level 1 Problems, the Licensee may call
the Vendor if the Vendor has not called back within an
appropriate time interval.
The goal of this process is a successful hand-off of the
Customer Problem Call from the Licensee's Level 2 Support
Organization to the Vendor's Level 3 Support Organization.
For this hand-off to be successful, it is critical that the
Vendor receive all information required to verify, replicate,
and correct the problem before acknowledging the Service
Request and accepting responsibility for the problem.
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6.3 Service Call Response Time Expectations.
Problem Initial Action Plan Temporary Permanent
Severity Initial Action Update Fix Fix
Level Callback Plan Frequency Target Target
Critical 1 hour 1 day Daily 2 days N/A
Severe 1 hour 1 day Daily 5 days 90 days
Moderate 1 day 10 days As agreed 25 days 180 days
Minor 1 day 25 days As agreed 50 days 180 days
Comment/ 1 day N/A N/A N/A N/A
Inquiry
Notes on Response Time Expectation Table
N/A is Non Applicable.
Hours refer to clock hours and days refer to business
day. Clock hours for Severe Severity Level Problems are
during business days only.
Updates to Action Plans for Moderate and Minor Severity
Level Problems are scheduled within the Action Plan
itself.
Temporary Fix and Permanent Resolution Target Dates
represent desirable goals. What is important is
continual and scheduled contact between the Vendor and
the Licensee in the form of Action Plan Updates. This
will allow the Licensee to communicate reasonable
expectations to their Customers and keep the appraised
of developments as relates to the resolution of the
Problems they report.
Severity Level 1 Problems do NOT require Permanent
Resolution as discussed below.
6.4 Severity Level 1 Call Processing.
Severity Level 1 Call Processing differs from the processing
of all other Severity Levels by its urgency and its primary
goal. Only those Customer Problems which severely restrict
use of the Vendor's Product(s) in an operational environment
can be assigned this Severity Level. Some of the
ramifications of this assignment are as follows:
The Licensee may immediately contact the Vendor when
logging a Service Request.
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The License may contact the Vendor outside business
hours to log a Service Request by means of an electronic
paging device.
Customer, Licensee, and Vendor resources may all be
required to solve the reported problem.
Daily activities by all parties may be required, and are
expected.
Daily updates to the Action Plan are required.
The entire focus of all Problem resolution efforts associated
with Severity Level 1 Problems is the restoration of some
operational functionality to the customer as soon as
possible. When this has been accomplished, the Problem can
be reclassified to Severity Level 2, and all further Problem
resolution activities can proceed on that basis.
6.5 Action Plans.
The Vendor will create an Action Plan for each Licensee
logged Service Request. At a minimum, Action Plans will
include the following:
Licensee and Vendor assigned Problem Call/Service
Request numbers
Product Name, Platform, and Product Version
Contact information for all Vendor and Licensee
participants
Contact information for Customer, is appropriate
Executive summary of Problem
Description of Temporary Fix, if any
Actions taken to date, and by whom
Actions to be taken, and by whom
Date of next scheduled update to Action Plan
Action Plans are always transmitted electronically from the
Vendor to the Licensee.
Action Plans provide both past and future road maps for the
resolution of Customer Problem Calls escalated by the
Licensee to the Vendor. They provide the principal means by
which the Vendor communicates status to the Licensee about
Licensee submitted Service Requests, and are the method
through which both parties set expectations and manage the
Problem resolution process.
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6.6 Temporary Fixes.
Temporary Fixes to a Problem may either be a work-around or
avoidance, or a Patch Software Release that requires code
changes. The work-around can be provided either by the
Level 2 or Level 3 Support Organization. The Patch Software
Release must be provided by the Level 3 Support Organization
because it represents a Source Code change.
A work-around or avoidance is always more desirable than a
patch because it is less invasive. It allows the Customer to
proceed about their business even if full functionality is
not restored. It does not require re-building, re-kiting,
and re-testing of the Vendor's Product(s), and does not
introduce the possibility of additional Problems due to the
changes made at the Source level.
Patch Software Releases are always to be avoided. They
should only be considered for Severity Level 1 or Severity
Level 2 Problems when all courses of action have been
attempted and failed, and no work-around or avoidance can be
developed. When developing a Patch Software Release the
Vendor must follow these rules:
Customer Problems to be patched must be of Severity
Level 1 or Severity Level 2.
Only the most current Software Release is patched.
Patch Software Releases are cumulative (i.e., they
contain all previous patches to the most current
Software Release).
Patch Software Releases are assigned a specific number
to allow their version level to be identified.
Patch Software Release Version levels are kept constant
across all Product platforms.
The Release Notes for a Patch Software Release contain
the problem(s) fixed by the Patch.
Patch Software Releases are tested rigorously before
release.
When a decision is made to release a Patch for a specific
Severity Level 1 Problem, the Vendor must always apply the
Source Code changes made in the patch to the next scheduled
release of the Product.
6.7 Permanent Problem Resolution.
The Permanent Resolution of a Problem may either be to
Permanently Fix a Defect in Source Code or to Resolve the
Problem to the Customer's Satisfaction. Of these two methods
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of resolving problems, a Permanent Fix in Source Code by the
Vendor for the next scheduled release of the product is
always the most desirable.
Sometimes the Vendor can achieve a Permanent Fix in Source
Code, but not for the next scheduled release of the Product.
This situation will occur only when the Problem is of
Severity Level 3 (Moderate) or Lower and the next scheduled
release of the Product has almost completed its Beta testing.
In such cases the Vendor will schedule the Permanent Defect
Fix for a subsequent release of the Product.
Sometimes no Permanent Fix will exist for a specific problem.
There are a number of situations in which this will occur:
The Product is to undergo retirement soon.
Fixing the Problem permanently breaks either the
compatibility or interoperability some Customers have
grown dependent upon.
The amount of time and effort required to permanently
fix the problem is much greater than the benefits
derived from the fix.
A more than adequate work-around or avoidance exists.
The problem is so minor that its relative priority for
resolution is too low for it to ever be fixed within a
release.
When a Problem is not be permanently fixed within a scheduled
release, the Problem must still be resolved in some fashion
to the Customer's satisfaction. The Licensee's level 2
Support Organization and Vendor's Level 3 Support
Organization will together be responsible for resolving such
Problems to the Customer's satisfaction.
6.8 Service Call Final Reports.
The Vendor will create a Service Call Final Report for each
Licensee logged Service Request. At a minimum, a Final
Report will include the following information:
Licensee and Vendor assigned Problem Call/Service
Request numbers
Product Name, Platform, and Product Version
Contact information for all Vendor and Licensee
participants
Contact information for Customer, if appropriate
Executive summary of Problem
Description of Temporary Fix, if any
Description of Permanent Fix, if any
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Service Call Final Reports are always transmitted
electronically from the Vendor to the Licensee.
Service Call Final Reports provide the principal means by
which the Vendor notifies the Licensee of the final
disposition of their Service Requests. In them are
descriptions of any temporary fixes as well as descriptions
of any permanent fixes to be made, including in which release
the fix will be made available.
6.9 Closing Service Request and Customer Problem Calls.
The Vendor cannot close a Service Request without first
transmitting a Service Call Final Report to the Licensee. In
that report is the final disposition of the reported problem
from the Vendor's perspective. This not only provides the
Licensee with information regarding any permanent fix for the
Problem, so that appropriate expectations can be set for the
Customer, but provides the Licensee with an opportunity to
disagree with the Vendor's final disposition of the Problem.
When the Licensee and Vendor are in agreement about final
disposition, the Customer Problem Call is closed. When
Licensee and Vendor disagree, they must work together to
resolve the problem to the satisfaction of all parties
concerned, including the Customer.
7. Communications.
Communications between Vendor and Licensee will be
principally electronic, supplemented by phone when required.
The format of Email messages will be less important than
their content which should be precise, accurate, and
complete.
The Vendor will maintain an electronic paging device
accessible by the Licensee. The Licensee will only contact
the Vendor through this device when log Service Requests
Calls for Severity Level 1 Problems during non-business
hours.
8. Training.
The Vendor will train the Licensee on the Vendor's Products
prior to the Licensee assuming responsibility for providing
Level 1 and Level 2 Support to the Licensee's customers, and
on major releases of Vendor's Product(s). The extent of this
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training will be consistent with that outlined in ARTICLE XV,
Section 15.4 and 15.5 of this agreement.
8.1 Initial Training.
Initial Training of the Licensee by the Vendor will focus on
the design, theory, operation, installation, configuration,
administration, maintenance, and support of the Vendor
Product(s). The Training will be of a minimum of one (1) day
duration per Product. It will take place at the Vendor's
training facility during normal business hours and will
commence at a time mutually agreed upon by both parties. The
Licensee will be responsible for all travel and living
expenses incurred by its employees in connection with
attending such training. The extent of this training will be
consistent with that outlined in ARTICLE XV, Section 15.4 and
15.5 of this agreement.
8.2 Training.
For Major Releases. Training of the Licensee by the Vendor
following a major release of the Vendor's Product(s) will
focus on the changes and enhancements made to the design,
theory, operation, installation, configuration,
administration, maintenance, and support of the Vendor
Product(s). The Training will be of a minimum of one (1) day
duration per Product. It will take place at the Vendor's
training facility during normal business hours and will
commence at a time mutually agreed by both parties. The
Licensee will be responsible for all travel and living
expenses incurred by its employees in connection with
attending such training. The extent of this training will be
consistent with that outlined in ARTICLE XV, Section 15.4 and
15.5 of this agreement.
8.3 Additional Training.
Additional Training of the Licensee may be provided by the
Vendor at the request of the Licensee. Any additional
training will be provided at the Vendor's then current
training fee. It will take place at the Vendor's training
facility during normal business hours and will commence at a
time mutually agreed upon by both parties. The Licensee will
be responsible for all travel and living expenses incurred by
its employees in connection with attending such training.
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9. Technical Account Managers.
Technical Account Managers will be designated by both Vendor
and Licensee. The Technical Account Manager may be changed
at any time by providing one (1) week's electronic notice to
the other party. The Technical Account Managers will monitor
all support processes, insure the timely exchange of support
information, and be available for resolution of any
procedural difficulties. They will work together in their
performance of these tasks.
10. Periodic Review Meetings.
Periodic Review Meetings will take place on a regular basis
for the purpose of reviewing the effectiveness of all support
processes and procedures, suggested changes, implementing
improvements, and reviewing and sharing technical
information. All lists of outstanding and unresolved
problems will also be reviewed at this time. Meetings may
either be face-to-face or via teleconferencing as mutually
agreed upon. They will take place at least on a quarterly
basis. Either Technical Account Manager may also request a
meeting at any time by providing one (1) week's electronic
notice.
11. Exchange of Customer Support Information.
Vendor and Licensee will develop mechanisms and procedures
for granting access to or periodically exchanging customer
support information and diagnostics tools and procedures.
The support information to be exchanged will include, but it
is not limited to the following:
lists of known problems
call frequency metrics
problem/solution databases
lists of frequently asked support questions
technical notes
white papers
Both parties will continue to maintain all copyrights and
warranties on exchanged customer support information.
12. Additional Licensee Responsibilities.
In addition to the responsibilities mentioned above, the
Licensee will have the following responsibilities:
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Manage and control Problem situations arising at
Licensee Customer sites by providing and facilitating
direct Customer contact for all forms of technical
support assistance
Review Vendor's Product(s) for compatibility and inter-
operability prior to assuming responsibility for
providing Level 1 and 2 Support to the Licensee's
customers.
Participate in all Beta Tests of Vendor's Product(s) to
ensure continuing compatibility and inter-operability of
Vendor's Product(s), and for early familiarization with
new features and enhancements.
Provide to Vendor all Beta and formal releases of
Licensee's Hardware/Software and Documentation (if
applicable) for compatibility and inter-operability
testing, and for early familiarization with new features
and enhancements.
13. Additional Vendor Responsibilities.
In addition to the responsibilities mentioned above, the
Vendor will have the following responsibilities:
Provide to Licensee all Maintenance, Update, and Major
Releases of Vendor(s) Products including Documentation.
Provide to Licensee all Beta Releases of Vendor(s)
Products including Documentation for compatibility and
inter-operability testing, and for early familiarization
with new features and enhancements.
Provide Vendor with Level 3 Support for all Minor
Releases since the most recent Major Release, the most
recent Major Release, and the Minor Release preceding
the most recent Major Release.
Test Vendor's Product(s) for compatibility and inter-
operability with new releases of Licensee's Hardware/
Software (if applicable).
14. Licensee Access to Read-Only Vendor Source Code.
The Vendor will provide Read-Only Source Code to the Licensee
for purposes of support, and to assist in the identification
of software problems. Excepted as provided below, the
Licensee shall have no rights to modify, enhance or alter in
any way the Read-Only Source Code provided by the Vendor.
All Read-Only Source Code provided by Vendor to Licensee will
be in accordance with the Vendor Source Code License
Agreement attached hereto as Exhibit H, and made a part
hereof by this reference.
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Schedule 18.1(e)
FTP Client Products: List of Exceptions to Right to License
None.
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Schedule 18.2(e)
OMI Products: List of Exceptions to Right to License
See Schedule 9.3.
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Schedule 20.1
List of OMI Trademarks
[attached]
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Schedule 20.2
List of FTP Trademarks
FTP Software
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Schedule 23.1
OMI Trademark Jurisdictions
[attached]
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Schedule 23.2
FTP Trademark Jurisdictions
Worldwide
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 10.14
DEVELOPMENT
AND
SERVICES
AGREEMENT
BY AND BETWEEN
TIME INC. NEW MEDIA
AND
OPEN MARKET, INC.
Dated as of January 1, 1995
<PAGE>
TABLE OF CONTENTS
Page
1. DEFINITIONS................................................ 2
1.1 Affiliate........................................... 2
1.2 Change of Control................................... 3
1.3 Consulting Services................................. 4
1.4 Customer Support Services........................... 4
1.5 Developments ...................................... 4
1.6 Discounted Time and Material Rates.................. 4
1.7 Documentation....................................... 4
1.8 Exchange Act........................................ 5
1.9 Excluded Entities................................... 5
1.10 Full-time........................................... 5
1.11 Functional Specifications........................... 5
1.12 Hardware............................................ 6
1.13 Implementation Plan................................. 6
1.14 Initial Consulting Period........................... 6
1.15 Initial Consulting Services Fee..................... 6
1.16 License Fees........................................ 7
1.17 Maintenance Fee..................................... 7
1.18 Maintenance Period.................................. 7
1.19 Maintenance Services................................ 7
1.20 Merchant Server Hardware............................ 7
1.21 Merchant Server Software............................ 7
1.22 Non-Affiliate....................................... 8
1.23 Payment Schedule.................................... 8
1.24 Person.............................................. 8
1.25 Phase 2............................................. 8
1.26 Phase 2 Deliverables................................ 8
1.27 Phase 2 Resources................................... 8
1.28 Project Resource Plan............................... 8
1.29 Regulatory Requirements............................. 8
1.30 Reserve Resources................................... 9
1.31 Server Software..................................... 9
1.32 Services............................................ 9
1.33 SIMS................................................ 9
1.34 Software Updates.................................... 10
1.35 System.............................................. 10
1.36 Tax Server Software................................. 10
1.37 Term................................................ 11
1.38 Third Party Hard Good............................... 11
1.39 Third Party Soft Good............................... 11
1.40 Third Party Subscription Services................... 12
1.41 Third Party Transaction............................. 12
1.42 Third Party Transaction Fees........................ 13
1.43 Third Party Transaction Value....................... 13
1.44 Third Party Travel Goods............................ 13
1.45 Time/TWC Joint Venture.............................. 14
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1.46 Transaction......................................... 14
1.47 Transaction Server Hardware......................... 14
1.48 Transaction Server Software......................... 14
1.49 Other Terms......................................... 14
2. COLLABORATIVE APPROACH..................................... 16
3. SITE REQUIREMENTS, HARDWARE AND SYBASE DATABASE............ 16
3.1 Preparation......................................... 16
3.2 Hardware and Third Party Software Delivery and
Installation........................................ 17
3.3 Time's Sole Benefit................................. 17
3.4 Title and Risk of Loss.............................. 18
4. THE LICENSE................................................ 18
4.1 License and Sublicense of Software.................. 18
4.2 Scope of License.................................... 19
4.3 Disclosure to Third Parties......................... 20
4.4 Delivery of Pathfinder.............................. 21
4.5 Third Party Content................................. 21
4.6 Disaggregated Content............................... 21
4.7 High Capacity Content............................... 22
4.8 Third Party Transaction Processing Services......... 22
4.9 Reorganization...................................... 23
4.10 License Fees........................................ 24
4.11 Additional Copies of Developments................... 24
4.12 Additional Copies................................... 25
4.13 Productized Developments............................ 25
4.14 Stager, Rewriter.................................... 26
4.15 Proprietary Rights Notices.......................... 26
5. INITIAL CONSULTING PERIOD, PHASE 2, AND FUTURE PROJECTS.... 26
5.1 Initial Consulting Period........................... 26
5.2 Phase 2............................................. 26
5.3 Future Projects..................................... 27
6. IMPLEMENTATION AND ACCEPTANCE.............................. 27
6.1 Timely Performance.................................. 27
6.2 Delivery of "Final" Functional Specifications....... 28
6.3 Phased Implementation and Acceptance Testing........ 28
6.4 Final Acceptance.................................... 30
6.5 Acceptance Test Cure Periods and Refund............. 30
7. SOURCE CODE ESCROW......................................... 31
7.1 Escrow Agreement.................................... 31
7.2 Delivery............................................ 32
7.3 Release............................................. 32
7.4 Escrow Refresh...................................... 34
8. TIME ACCESS TO SOURCE CODE FOR TIME MODIFICATIONS.......... 35
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9. DOCUMENTATION.............................................. 35
10. OMI PERSONNEL.............................................. 36
10.1 Skill Level and Continuity.......................... 36
10.2 OMI Project Manager................................. 37
10.3 Phase 2 Commitment.................................. 37
10.3.1 Phase 2 Deliverables........................ 37
10.3.2 Additional Services......................... 38
10.4 Status Reports...................................... 39
11. TIME PERSONNEL............................................. 39
12. INTELLECTUAL PROPERTY...................................... 40
12.1 OMI Ownership....................................... 40
12.2 Time Intellectual Property.......................... 40
12.3 Stager and Rewriter................................. 41
12.4 Notice of Ownership................................. 41
13. THE TRANSITION............................................. 42
13.1 Intent to Transition Transaction Server............. 42
13.2 Interim Processing.................................. 43
13.3 Transaction Services................................ 43
13.4 Correction or Restoration of Data................... 44
13.5 Successful Transition............................... 45
14. CHANGE CONTROL PROCEDURE................................... 46
14.1 Proposed Changes.................................... 46
14.2 Change in Scope Proposal............................ 46
14.3 Information to be Included in Change in Scope
Proposal............................................ 47
14.4 Time Discretion..................................... 48
15. PAYMENT.................................................... 48
15.1 Payment............................................. 48
15.2 Audit Rights........................................ 49
15.2.1 OMI's Audit Rights.......................... 49
15.2.2 Time's Audit Rights......................... 50
15.3 Fee Tracking System................................ 50
16. PATHFINDER CUSTOMER SUPPORT SERVICES....................... 51
16.1 Customer Support Services........................... 51
16.2 Fees................................................ 51
17. WARRANTY AND MAINTENANCE SERVICES.......................... 51
17.1 Warranty Services................................... 51
17.2 Maintenance Services................................ 52
17.3 Maintenance Periods................................. 52
17.4 Maintenance Fees.................................... 53
17.5 Renewal............................................. 53
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17.6 Maintenance of Server Software...................... 53
17.7 Software Updates.................................... 54
17.7.1 New Updates................................. 55
17.7.2 Compatibility and Accuracy.................. 55
17.7.3 Hardware Configuration...................... 56
17.8 Maintenance of Developments......................... 56
17.9 Maintenance of Stager/Rewriter...................... 57
17.10 Regulatory Requirements Compliance.................. 57
17.11 Correction or Restoration of Files.................. 58
17.12 Maintenance of Tax Server Software.................. 58
18. REPRESENTATIONS AND WARRANTIES............................. 58
18.1 Ownership........................................... 58
18.2 Duly Authorized..................................... 60
18.3 Non-Interference.................................... 62
18.4 Documentation....................................... 63
18.5 Disclaimer.......................................... 63
19. PROPRIETARY AND CONFIDENTIAL INFORMATION................... 63
19.1 Pathfinder Information.............................. 63
19.2 Confidential Information............................ 64
19.3 Restrictions........................................ 64
19.4 Exceptions.......................................... 65
19.5 Return or Destroy................................... 66
19.6 OMI's Duty to Inform................................ 66
20. INDEMNIFICATION............................................ 67
20.1 OMI Indemnification................................. 67
20.2 Time Indemnification................................ 69
20.3 Limitation.......................................... 70
20.4 Section 365(n)...................................... 70
20.5 Publicity........................................... 71
20.6 Most Favored Customer............................... 71
21. LIMITATION OF LIABILITY.................................... 72
21.1 Limitation of Liability for Time.................... 72
21.2 Limitation of Liability for OMI..................... 72
22. TERMINATION................................................ 73
22.1 Time Termination Without Cause...................... 73
22.2 Termination For Cause by Time....................... 74
22.3 Time's Rights on Termination for Cause.............. 76
22.4 Termination for Cause by OMI........................ 78
22.5 Termination of License by OMI....................... 79
22.6. Delivery on Termination............................. 79
22.7 Transition Assistance............................... 80
22.8 Survival............................................ 80
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23. MISCELLANEOUS.............................................. 80
23.1 Insurance........................................... 80
23.2 Notice.............................................. 82
23.3 Personnel Rules and Regulations..................... 83
23.4 Independent Contractor.............................. 83
23.5 Force Majeure....................................... 84
23.6 No Waiver........................................... 84
23.7 Severability........................................ 84
23.8 Assignment.......................................... 85
23.9 Governing Law and Venue............................. 85
23.10 Counterparts........................................ 86
23.11 Entire Agreement.................................... 86
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DEVELOPMENT AND SERVICES AGREEMENT
THIS AGREEMENT made and entered into on this 14th day of
November, 1995 (the "Agreement Date") is effective as of
January 1, 1995 (the "Effective Date") by and between Open Market,
Inc., a corporation existing under the laws of the State of
Delaware with offices at 245 First Street, Cambridge,
Massachusetts 02142 (hereinafter referred to as "OMI") and Time
Inc. New Media, a corporation existing under the laws of the State
of Delaware with offices at Time & Life Building, Rockefeller
Center, New York, N.Y. 10020 (hereinafter referred to as "Time").
WHEREAS, OMI is in the business of developing; licensing,
operating and maintaining server software and systems in
connection with the Internet's World Wide Web protocol (the "World
Wide Web");
WHEREAS, Time has a site on the World Wide Web currently
known as "Pathfinder" and desires to upgrade the capabilities of
Pathfinder;
WHEREAS, OMI desires to develop, install, license and
maintain certain server software in order to upgrade the
capabilities of Pathfinder and provide certain other services
related to Pathfinder pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises set
forth herein, OMI and Time hereby agree as follows:
<PAGE>
1. DEFINITIONS
1.1 Affiliate. The term "Affiliate" shall mean, for either
party to this Agreement, any entity that directly or indirectly
through one or more intermediaries, controls, is controlled by, or
is under common control with that party. For the purposes of this
definition the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the
possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of an entity, whether
through the ownership of voting securities, by contract, or
otherwise. Affiliates of Time shall include: (A) any entity that
obtains control of, becomes controlled by or becomes under common
control with Time at any time during the Term; (B) partnerships or
joint ventures in existence as of the date of Final Acceptance:
(i) in which Time or any of its Affiliates is a controlling
partner, or (ii) in which Time or any of its Affiliates owns
forty-five percent (45%) or more of the equity interest and has
the ability to block any action proposed to be taken by such
partnership or joint venture with respect to such partnership or
joint venture; (C) the Time/TWC Joint Venture, regardless of
whether such partnership or joint venture is formed after the date
of Final Acceptance; and (D) Turner Broadcasting System or any of
its Affiliates or subsidiaries (provided that a Time Affiliate
acquires at least majority control of either the outstanding
capital stock or substantially all of the assets of Turner
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Broadcasting System as a whole and/or such of its Affiliates,
including, but not limited to, Cable News Network, separately).
Notwithstanding the foregoing, Affiliates shall exclude any of the
Excluded Entities or any entity (other than a corporation which is
subject to the reporting requirements of Section 15(d) of the
Exchange Act) in which the Excluded Entity holds an equity
interest. To the extent that Time Affiliates are granted any
rights, receive any benefits or are provided with access to any
Confidential Information of OMI under this Agreement, such
Affiliate(s) shall be bound by the terms and conditions of this
Agreement to the same extent as Time hereunder and,
notwithstanding the foregoing, Time shall be solely responsible
for any breach of the terms and conditions of this Agreement by
any such Affiliate.
1.2 Change of Control The term "Change of Control" shall
mean (i) any merger or consolidation to which OMI or any majority
shareholder of OMI is a party (unless each other party to such
transaction is a majority-owned direct or indirect subsidiary of
OMI) or any sale, transfer or disposition of the System and/or of
all or substantially all of the assets of OMI (unless each other
party to such transaction is a majority-owned direct or indirect
subsidiary of OMI); (ii) the acquisition by any Person (including
any "group" of Persons within the meaning of Regulation 13d-5
under the Exchange Act) of beneficial ownership (within the
meaning of Regulation 13d-3 under the Exchange Act) (other than a
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majority-owned direct or indirect subsidiary of OMI), directly or
indirectly, of forty percent (40%) or more of the outstanding
securities of OMI entitled at the time of such acquisition to vote
for the election of OMI's directors; (iii) the adoption or
implementation by OMI of any plan or proposal for the liquidation
or dissolution of OMI; or, (iv) Shikhar Ghosh ceases to be
actively involved in an executive management capacity at OMI.
1.3 Consulting Services. The term "Consulting Services"
shall mean the consulting and development services rendered by OMI
during the Initial Consulting Period and Phase 2, and any other
consulting and development services which OMI provides Time at
Time's request pursuant to this Agreement.
1.4 Customer Support Services. The term "Customer Support
Services" shall have the meaning set forth in Article 16.
1.5 Developments. The term "Developments" shall mean all of
OMI's work product developed pursuant to the Consulting Services,
including without limitation, modifications, customizations and
enhancements to the Server Software and SIMS, and any
Documentation or updates related thereto (including any functional
specifications, product performance guides and documentation
provided to Time in conjunction with such updates).
1.6 Discounted Time and Material Rates. The term
"Discounted Time and Material Rates" shall mean the schedule of
hourly rates set forth in Exhibit D.
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1.7 Documentation. The term "Documentation" shall mean the
materials identified in Exhibit G. To the extent Time
incorporates any Software Update into the System, the
Documentation shall be deemed to be amended to incorporate the
documentation provided to Time in conjunction with the Software
Update.
1.8 Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934.
1.9 Excluded Entities. The term "Excluded Entities" shall
mean "***** ****", ******** ***** *******, a New York corporation,
and ******** ************** ***********, a Delaware corporation.
During the term of this Agreement, OMI may request that this
definition of Excluded Entities be supplemented with additional
entities, and if agreed to by Time in writing, this definition
will be deemed amended to include such additional entities.
1.10 Full-time. The term "Full-time" shall describe devoting
at least forty (40) or more hours per week to the fulfillment of
OMI's obligations to Time under this Agreement.
1.11 Functional Specifications. The term "Functional
Specifications" shall mean the description of the functionality of
the System and shall include the minimum performance standards of
the System, including without limitation, System response time and
System volume capacity on designated hardware and other mutually
agreed upon benchmark standards (the "Technical Specifications").
To the extent Time incorporates any Software Update into the
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System, the Functional Specifications shall be deemed to be
amended to incorporate the functional specifications and product
performance guides provided to Time in conjunction with the
Software Update. An "initial" version of the Functional
Specifications (including an "initial" version of the Technical
Specifications) is attached hereto as Exhibit A, but may be
subject to modification as mutually agreed upon by the parties.
Both parties contemplate that "final" version of the Functional
Specifications (including a "final" version of the Technical
Specifications) shall be prepared by OMI for Time's review and
written approval, and that upon such approval, the final version
of the Functional Specifications shall be incorporated herein by
reference and shall supersede those Functional Specifications
attached hereto as Exhibit A.
1.12 Hardware. The term "Hardware" shall mean the Merchant
Server Hardware and Transaction Server Hardware as described in
Exhibit I.
1.13 Implementation Plan. The term "Implementation Plan"
shall mean the timetable of milestones and deliverables for OMI's
development and installation of the System and finalization of the
Functional Specifications as set forth in Exhibit A (as it may be
amended from time-to-time by the mutual written agreement of Time
and OMI), which shall include certain specified tasks that Time
will be required to perform.
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1.14 Initial Consulting Period. The term "Initial Consulting
Period" shall mean the period which commenced on the Effective
Date and extended to June 30, 1995.
1.15 Initial Consulting Services Fee. The term "Initial
Consulting Services Fee" shall mean the fees for Initial
Consulting Services, as set forth in the Payment Schedule
(Exhibit F).
1.16 License Fees. The term "License Fees" shall mean the
fees set forth in the Payment Schedule (Exhibit F) payable in
consideration for the license(s) of the Server Software (or any
component thereof) which Time elects to procure hereunder.
1.17 Maintenance Fee. The term "Maintenance Fee" shall mean
the fees for Maintenance Services set forth in the Payment
Schedule (Exhibit F).
1.18 Maintenance Period. The term "Maintenance Period" shall
mean the period of time during which Time procures Maintenance
Services from OMI pursuant to this Agreement.
1.19 Maintenance Services. The term "Maintenance Services"
shall have the meaning ascribed to it in Section 17.2 herein.
1.20 Merchant Server Hardware. The term "Merchant Server
Hardware" shall mean all hardware necessary to operate the
Merchant Server Software in accordance with the terms of this
Agreement. The Merchant Server Hardware is identified in
Exhibit I.
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1.21 Merchant Server Software. The term "Merchant Server
Software" shall mean software (including updates thereto) with the
functionality and features of the "Secure WebServer",
"StoreBuilder", "TransactionLink", "WebReporter" and "SID
Extension" as described in the Functional Specifications entitled
"Functional Specifications - Payment".
1.22 Non-Affiliate. The term "Non-Affiliate" shall mean any
entity other than Time or Time's Affiliates.
1.23 Payment Schedule. The term "Payment Schedule" shall
mean the schedule of payments of all fees hereunder, as set forth
in Exhibit F.
1.24 Person. The term "Person" shall mean an individual, a
partnership, a joint venture, a corporation, a trust, and an
unincorporated association.
1.25 Phase 2. The term "Phase 2" shall mean the period
commencing on July 1, 1995 and extending until Time's Final
Acceptance (as defined in Section 6.4) of all Phase 2
Deliverables.
1.26 Phase 2 Deliverables. The term "Phase 2 Deliverables"
shall mean software modules embodying the functionality described
in Exhibit C, any other Developments arising out of services
performed during the Initial Consulting Period and Phase 2 as set
forth in the Implementation Plan and any other deliverables to be
delivered by OMI during Phase 2.
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1.27 Phase 2 Resources. The term "Phase 2 Resources" shall
mean the resources identified in the Project Resource Plan under
"REGISTRATION", "PAYMENT" and "SUBSCRIBER INFO MGMT SYSTEM".
1.28 Project Resource Plan. The term "Project Resource Plan"
shall mean the resources set forth in Exhibit M.
1.29 Regulatory Requirements. The term "Regulatory
Requirements" shall mean any U.S. federal, state or local law,
regulation, ordinance or requirement, including regulations of
administrative agencies or bodies, in whatever form, now existing
or to come into existence during the Term.
1.30 Reserve Resources. The term "Reserve Resources" shall
mean, through March 5, 1996, the resources identified in the
Project Resource Plan as "RESERVE RESOURCES" and thereafter, the
resources which the parties agree, pursuant to the terms of this
Agreement, to utilize as "Reserve Resources".
1.31 Server Software. The term "Server Software" shall mean
the source code, object code and Documentation for the Merchant
Server Software and the Transaction Server Software (including
updates thereto, as well as any functional specifications, product
performance guides and documentation provided to Time in
conjunction with such updates).
1.32 Services. The term "Services" shall mean the Consulting
Services (as defined in Section 1.3 herein), Maintenance Services
(as defined in Section 1.19), Warranty Services (as defined in
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Section 17.1) and Customer Support Services (as defined in Section
1.4) to be performed by OMI hereunder.
1.33 SIMS. The term "SIMS" shall mean software (including
updates thereto) with the functionality and features of the
"Subscriber Information Management System" or "SIMS" as described
in the Functional Specifications entitled "Subscriber Information
Management System (SIMS) Functional Specifications (Release
2.0.1)".
1.34 Software Updates. The term "Software Updates" shall
mean any enhancements, modifications, error corrections, fixes,
upgrades or other changes which are made to the Server Software by
OMI or OMI's Affiliates at any time, any new software or releases
or versions of the server Software which OMI or OMI's Affiliates
may market at any time as a full or partial alternative or
replacement for the Server Software, even if a user of such new or
improved software is not required to license the Server Software
in order to operate such new or improved software, and any
Developments which OMI uses or incorporates as part of any
software product it offers, markets, distributes or otherwise
makes commercially available at any time (including any
documentation related thereto).
1.35 System. The term "System" shall mean the Server
Software and the Developments.
1.36 Tax Server Software. The term "Tax Server Software"
shall mean the computer software programs developed and owned by
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AVP Systems, including updates and documentation thereto, that
shall be sublicensed to Time by OMI (subject to the terms and
conditions of the AVP Systems Licensing Agreement attached hereto
as Exhibit 0) for use by Time with the Server Software for the
purpose of providing related sales and use tax data and
calculations. As provided herein, OMI shall assume sole
responsibility for the maintenance of the Tax Server Software.
1.37 Term. The "Term" of this Agreement shall mean the
period beginning as of the Effective Date and continuing until the
termination of this Agreement pursuant to Article 22 herein.
1.38 Third Party Hard Good. The term "Third Party Hard Good"
shall mean any tangible object: (i) which is offered for sale on
Pathfinder by a Non-Affiliate; (ii) which is electronically
ordered by a user of Pathfinder for a fee which is in addition to
the fee paid by the user to access Pathfinder, if any; and
(iii) the purchase of which is processed as a Transaction on the
Transaction Server.
1.39 Third Party Soft Good. The term "Third Party Soft Good"
shall mean a stand-alone, separately priced, separately branded
(with a brand belonging to or associated with a Non-Affiliate)
digitized information (including software): (i) which is offered
for sale or license on Pathfinder by a Non-Affiliate; (ii) which
is electronically ordered by a user of Pathfinder and is
downloaded to the user's computer for a fee which is in addition
to the fee paid by the user to access Pathfinder, if any; and
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(iii) the purchase of which is processed as a Transaction on the
Transaction Server. In addition, the parties acknowledge that
Third Party Soft Good shall not include information (e.g., news
feeds, stock quotes and sports statistics) which has been
repackaged, personalized or modified (except for technical
reformatting or reconfiguration solely for the purpose of making
such information technically compatible with Pathfinder's
configuration) by Time or a Time Affiliate.
1.40 Third Party Subscription Services. The term "Third
Party Subscription Services" shall mean a stand-alone, separately
priced, separately branded (with a brand belonging to or
associated with a Non-Affiliate) information service: (i) which
is offered for sale or license on Pathfinder by a Non-Affiliate;
(ii) which is electronically ordered by a user of Pathfinder and
appears on the user's screen (and is not downloaded to a user's
computer) for a fee which is in addition to the fee paid by the
user to access Pathfinder, if any; and (iii) the purchase of which
is processed as a Transaction on the Transaction Server. In
addition, the parties acknowledge that Third Party Subscription
Services shall not include information (e.g., news feeds, stock
quotes and sports statistics) which has been repackaged,
personalized or modified (except for technical reformatting or
reconfiguration solely for the purpose of making such information
technically compatible with Pathfinder's configuration) by Time or
a Time Affiliate.
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1.41 Third Party Transaction. The term "Third Party
Transaction" shall mean a Transaction in which a user of
Pathfinder purchases Third Party Hard Goods, Third Party Travel
Goods or Third Party Subscription Services, or downloads Third
Party Soft Goods. The parties acknowledge and agree that a single
Third Party Transaction shall be measured, unless otherwise
mutually agreed, according to the "Merchant Smart Statement" (as
described in the Functional Specifications relating to the
Transaction Server Software) for each relevant Qualified
Non-Affiliate, as of the first day of every calendar month for all
Transactions processed during the prior calendar month.
1.42 Third Party Transaction Fees. The term "Third Party
Transaction Fees" shall mean the fees identified in the Payment
Schedule (Exhibit F) payable by Time to OMI for the processing of
a Third Party Transaction.
1.43 Third Party Transaction Value. The term "Third Party
Transaction Value" shall mean the revenues actually received from
a user of Pathfinder for the cost of an item ordered in a Third
Party Transaction (which shall exclude applicable sales taxes,
shipping charges, handling charges, and insurance charges), less
any credit card verification costs, financial processor fees,
credit card and debit card fees and any other actual billing or
processing fees that are payable to a third party.
1.44 Third Party Travel Goods. The term "Third Party Travel
Goods" shall mean the purchase of travel related items and
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services (e.g., transportation tickets, rental cars, hotel rooms
and other room and board, tours, cruises, restaurant meals):
(i) which are offered for sale on Pathfinder by a Non-Affiliate;
(ii) which are electronically ordered by a user of Pathfinder for
a fee which is in addition to the fee paid by the user to access
Pathfinder, if any; and (iii) the purchase of which is processed
as a Transaction on the Transaction Server.
1.45 Time/TWC Joint Venture. The term "Time/TWC Joint
Venture" shall mean a partnership or joint venture which includes,
among its partners Time Warner Cable or Time (or Affiliates of
either or both respective party(ies)) formed to of fer cable
delivery of on-line services.
1.46 Transactions. The term "Transactions" shall mean
commercial transactions (including, but not limited to, Third
Party Transactions) posted by users over Pathfinder in which such
users procure goods or services for money and/or other
consideration.
1.47 Transaction Server Hardware. The term "Transaction
Server Hardware" shall mean all hardware necessary to operate the
Transaction Server Software in accordance with the terms of this
Agreement. The Transaction Server Hardware is identified in
Exhibit I.
1.48 Transaction Server Software. The term "Transaction
Server Software" shall mean software (including updates thereto)
with the functionality and features of the "Secure WebServer" and
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the "Transaction Management System" or "TMS" as described in the
Functional Specifications entitled "Functional Specifications -
Payment".
1.49 Other Terms. Certain other terms used herein are
defined in the following provisions.
"Acceptance Test Plan" 6.3
"Accessory Equipment" 3.3
"Additional Copies" 4.12
"Aggregate License Fees" Exhibit F
"Aggregate Standard Hours" Exhibit D
"Agreement Date" Preamble
"Back-up Copy" 4.1.1
"Business Hours" Exhibit N
"Change in Scope Proposal" 14.2
"Change Request" 14.1
"Code" 20.4
"Completed Software" 22.3.5
"Confidential Information" 19.2
"Critical Problems Exhibit N
"Customer Support Services" 16.1
"Deliverables" 6.3
"Delivery Means" 4.4
"Deposit" 7.2
"Disaggregated Content" 4.6
"Discounted Customized Work Rates" Exhibit D
"Discounted Standard Work Rates" Exhibit D
"Effective Date" Preamble
"Escrow Agent" 7.1
"Escrow Agreement" 7.1
"Final Acceptance" 6.4
"Final Acceptance Test" 6.4
"Foreign Patents" 20.1
"Incremental Copy" Exhibit F
"Incremental License Fee" Exhibit F
"Initial Maintenance Period" 17.3
"Installation Notification" 6.3
"License" 4.2
"Maintenance Services" 17.2
"Minor Problem" Exhibit N
"Moderate Problem" Exhibit N
"Non-Affiliate Disaggregated Content" 4.6
"Notice of Termination Without Cause" 22.1
"Notice of Ownership" 12.3
"OMI" Preamble
"OMI Project Manager" 10.2
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"Option Period" 7.3(b)
"Pathfinder" Recitals
"Pathfinder Content" 4.6
"Pathfinder Information" 19.1
"Phase Acceptance" 6.3
"Phase Acceptance Test" 6.3
"Primary Copies" 4.12
"Qualified Non-Affiliates" Exhibit F
"Release Events" 7.3(a)
"Reorganization" 4.9
"Site Requirements" 3.1
"Sybase Database" 3.2
"Termination Date" 22.1
"Third Party Rights" 18.1
"Time" Preamble
"Time Project Manager" 11
"Time Software" 12.2
"Transaction Services" 13.3
"Transaction Server" 13.1
"Transition " 13.1
"Warranty Period" 17.1
"World Wide Web" Recitals
2. COLLABORATIVE APPROACH
Time acknowledges that the Deliverables and Services to be
provided by OMI hereunder require a collaborative approach and
that Time shall be required to undertake certain specified tasks
and to reasonably cooperate with OMI in assisting OMI to perform
OMI's obligations hereunder. OMI acknowledges that Time has
relied on OMI's experience and expertise in specifying,
developing, installing, implementing, operating and servicing
transaction server and merchant server systems and that the
Deliverables and Services to be provided by OMI are essential to
Time's business. Both parties recognize the importance of meeting
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the milestones set forth in the Implementation Plan and shall
cooperate in good faith to meet the milestones set forth therein.
3. SITE REQUIREMENTS, HARDWARE AND SYBASE DATABASE
3.1 Preparation. All configuration and site requirements
(including, without limitation, requirements relating to the
physical environment and network connections) relating to the
System and the Hardware (the "Site Requirements") are set forth in
Exhibit I hereto. OMI shall be responsible for fulfilling all
Site Requirements for the Transaction Server while the Transaction
Server is installed and operated at OMI's premises.
3.2 Hardware and Third Party Software Delivery and
Installation. In reliance upon OMI's specifications therefor,
Time agrees to: (i) purchase the Hardware (including operating
system software); (ii) license the right to use Sybase SQL Server
(the "Sybase Database") as part of the System; and (iii) configure
the System's operating environment in accordance with the Site
Requirements. As of the Effective Date, and except for the Sybase
Database, Tax Server Software, and any additional Hardware
requirements agreed to in writing by Time set forth in Section
17.7.3, OMI represents that no other hardware or third party
software is required and no other configuration or site
requirements are necessary to operate the System in accordance
with the terms of this Agreement. Time agrees to: (i) deliver
the Transaction Server Hardware and Sybase Database to OMI in
accordance with the Implementation Plan to be installed by OMI at
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OMI's facilities; (ii) obtain the Merchant Server Hardware for
OMI's installation at Time's facilities; and (iii) obtain the
Transaction Server Hardware and the Sybase Database for operation
at Time's facilities.
3.3 Time's Sole Benefit. OMI shall use the Transaction
Server Hardware, the Sybase Database, the Tax Server Software and
any other accessory equipment associated therewith and procured by
Time (or by OMI if OMI was or will be reimbursed therefor by Time)
(the "Accessory Equipment") solely and exclusively for the
purposes of fulfilling OMI's obligations to Time hereunder. OMI
shall not process or operate any other software on the Hardware,
and shall not store any data upon such Hardware relating to any
entity or organization other than Time, Time's Affiliates or
customers of Time and Time's Affiliates.
3.4 Title and Risk of Loss. As between OMI and Time, Time
shall retain title to all Hardware, the Sybase Database and
Accessory Equipment located at OMI's facility and Time's facility.
Risk of loss of the Transaction Server Hardware, the Sybase
Database, the Tax Server Software, and Accessory Equipment located
at OMI's facility shall pass to OMI upon delivery of the same to
OMI at OMI's facility. Risk of loss shall pass back to Time upon
redelivery from OMI's facility to Time's facility and Time's
inspection and acceptance thereof pursuant to Section 13.5 herein.
Time shall retain sole and exclusive ownership of all databases
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and all data elements contained therein, including without
limitation, any data which populates the System.
4. THE LICENSE
4.1 License and Sublicense of Software.
4.1.1 In consideration of the License Fees payable
pursuant to Section 4.10, OMI hereby grants to Time a perpetual,
non-exclusive, irrevocable (unless terminated pursuant to Section
22.5) license to use, maintain, upgrade, modify and enhance (and,
except as otherwise provided in this Article 4, excluding the
rights to sublicense or further distribute): (i) that number of
copies of the System (or any component thereof) which Time elects
to license hereunder; and (ii) a copy of the System (or any
component thereof) which is not in commercial operational use but
which is available in the event the copy that is in commercial
operational use is no longer operative (a "Backup Copy") for each
copy licensed hereunder. The license granted hereunder shall
apply to the source and object code of the System, but Time's
access to the source code for the Server Software shall be limited
solely to the circumstances set forth in Articles 7 and 8 and
Sections 22.3.3 and 22.3.4.
4.1.2 OMI hereby grants to Time, a perpetual,
non-exclusive, irrevocable (unless terminated pursuant to Section
22.5) license to use, maintain, upgrade, modify and enhance (and,
except as otherwise provided in this Article 4, excluding the
rights to sublicense or further distribute) the Developments,
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provided, however, that Time's license hereunder to SIMS shall be
unconditionally irrevocable.
4.1.3 OMI hereby grants to Time a sublicense to use the
Tax Server Software as set forth herein, and subject to the terms
of Exhibit O. OMI and Time agree that Time may endeavor to enter
into a separate agreement with AVP Systems or modify the agreement
currently in place among Time, OMI and AVP Systems with respect to
Time's rights to utilize the Tax Server Software, and OMI shall
reasonably assist and cooperate with Time in such efforts.
4.2 Scope of License. Pursuant to the licenses granted in
Section 4.1.1 and 4.1.2 and sublicenses granted in Section 4.1.3
above (the "License") Time is authorized to use the System on the
Hardware (and a back-up system), on any hardware configuration
replacing the Hardware, or on any temporary substitution as
provided in this Agreement. Time shall have the right to
reproduce the System (or any component thereof) as required for
Time's use in accordance with the terms of this Agreement, and to
perform any activities related to the use of the System subject
only to the terms and the conditions hereof.
4.3 Disclosure to Third Parties. Notwithstanding anything
in this Agreement to the contrary, Time shall have the right to
disclose the System (including the Documentation) on a
need-to-know basis to any Affiliate or any third party providing
maintenance or development services, disaster recovery services,
or facilities management or outsourcing services to Time, if such
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disclosure is made pursuant to an appropriate written
confidentiality agreement and provided that such disclosure will
not be made, either directly or, to Time's knowledge, indirectly,
to Excluded Entities. Such written confidentiality agreement
shall provide, among other things, that any entity to which Time
discloses the System, either in whole or in part, shall
(i) restrict access to the System (including source code, if any)
only to those employees, agents or representatives who require
access to enable such entity to use the System to the extent
required by Time; and (ii) secure and protect the System
(including source code, if any) using at least the same degree of
care as such entity uses to protect its own confidential and
proprietary information.
4.4 Delivery of Pathfinder. Time shall have the right,
pursuant to the License, to use the System and the Tax Server
Software to deliver, transmit, broadcast or electronically,
communicate any content, advertising, data or information and to
conduct Transaction processing services for Transactions
(including Third Party Transactions) made available through
Pathfinder by any means now known or hereafter to become known,
including without limitation, by means of cable, wire, fiber of
any material, over-the-air in any frequency band, cable
television, master antenna, satellite master antenna, low power
television microwave, closed circuit television, single and
multi-channel multipoint distribution service or satellite
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transmission (the "Delivery Means"). Such right shall include the
right to use the System and the Tax Server Software to distribute
Pathfinder to and through the Time/TWC Joint Venture (including
through Time Warner Cable Affiliates).
4.5 Third Party Content. Time shall have the right to make
any third party content, information, advertising or other data
available on or through Pathfinder without any obligation to OMI
including, without limitation, with respect to the payment of any
fees.
4.6 Disaggregated Content. Pursuant to the License, Time
shall have the right to use the Merchant Server Software to
deliver to and through the Time/TWC Joint Venture or through other
Delivery Means: (i) portions of content originating from
Pathfinder as it appears in the Internet's World Wide Web protocol
("Pathfinder Content") which are separated and/or duplicated
therefrom (the "Disaggregated Content"); and (ii) content
originating from a Non-Affiliate which appears in Pathfinder in
the same area as the Disaggregated Content ("Non- Affiliate
Disaggregated Content"). Time shall have the right to use the
Transaction Server Software to conduct Transaction processing
services for Transactions that are made available within the
Disaggregated Content or the Non-Affiliate Disaggregated Content
(including Third Party Transactions).
4.7 High Capacity Content. Pursuant to the License, Time
shall have the right to utilize the System and the Tax Server
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Software to deliver by any Delivery Means (including through the
Time/TWC Joint Venture), whether as part of Pathfinder or as part
of the Disaggregated Content or the Non-Affiliate Disaggregated
Content, content which is different from the content that is
available to users of Pathfinder as it appears in the Internet's
World Wide Web protocol, which difference is a result of the
technological (e.g., variation in bandwidth) or geographic
capabilities or requirements of the applicable Delivery Means.
4.8 Third Party Transaction Processing Services. Pursuant
to the License, Time shall have the unrestricted right to use the
System and the Tax Server Software to conduct, sell or provide
Transaction processing services; provided, however, that Time's
Affiliates shall not have the right to use the System themselves
to process Third Party Transactions (although Time shall be
permitted to process Transactions for its Affiliates) and Time
shall not use the System and the Tax Server Software to conduct
Third Party Transaction processing services for any Non-Affiliate,
unless, at the time such Third Party Transaction processing
services are being provided, content, information, advertising or
other data originating from such Non-Affiliate is available on
Pathfinder. Time shall pay to OMI the Third Party Transaction
Fees for such Third Party Transaction processing services provided
by Time to such Non-Affiliate. Notwithstanding anything to the
contrary herein, OMI shall not be entitled to receive any Third
Party Transaction Fees on a bundle, package or combination of one
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
or more Third Party Subscription Services and/or Third Party Soft
Goods and/or Third Party Travel Goods that is made available to
users of Pathfinder as such a bundle, package or combination and
has been assembled by Time or a Time Affiliate.
4.9 Reorganization. Notwithstanding the provisions of
Section 4.8 above, in the event Time or any of Time's Affiliates
reorganizes in any way during the ***** (**) years following the
date of Final Acceptance, or in the event that the Time/TWC Joint
Venture or Time Warner Cable undergoes one or more corporate
reorganizations of any type (with the effect that, in the case of
the Time/TWC Joint Venture, neither Time nor any Time Affiliate
owns at least a fifty percent (50%) equity interest in the Time/
TWC Joint Venture, and in the case of Time Warner Cable, no Time
Affiliate controls Time Warner Cable) during the Term of this
Agreement (a "Reorganization"), Time or such Affiliate of Time,
and the Time/TWC Joint Venture or Time Warner Cable (or any
entities which by future merger, acquisition or other transaction,
acquires all or substantially all of the assets of the Time/TWC
Joint Venture or Time Warner Cable) will still be considered to be
an Affiliate after such Reorganization and can utilize Transaction
processing services through the System, without the payment of any
Third Party Transaction Fees, to the extent necessary to allow
such entity to utilize the System and the Tax Server Software as
it anticipated to use the System and the Tax Server Software prior
to the Reorganization.
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4.10 License Fees. Time shall pay the License Fees in
accordance with the Payment Schedule for each copy (which includes
the Back-up Copy) of the Merchant Server Software and Transaction
Server Software (including updates and all Developments
appurtenant thereto) and the Tax Server Software which Time elects
to license hereunder. Time shall pay no additional license fees
for each copy (which includes the Back-Up Copy) of the
Developments (including SIMS), other than the fees to be paid by
Time as set forth in this Agreement in connection with OMI's
development thereof.
4.11 Additional Copies of Developments. Time shall have the
unrestricted right to ****** **** the Developments to use the
Developments as specified in this Article 4 within the scope of
the License.
4.12 Additional Copies of Other Software. Upon the execution
of this Agreement, Time and OMI acknowledge that Time has elected
to license *** (*) copy (which includes a separate Back-Up Copy)
of the Transaction Server Software (and appurtenant Developments),
**** (*) copies (which includes four (4) separate Back-up Copies)
of the Merchant Server Software (and appurtenant Developments),
*** (*) copy (which includes a separate Back-up Copy) of SIMS (and
appurtenant Developments), and one (1) copy of the Tax Server
Software (the "Primary Copies"). Without limitation of the
provisions of Section 4.10, Time may, at any time during the Term
of this Agreement, elect to license additional copies of the
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Merchant Server Software or Transaction Server Software or Tax
Server Software (the "Additional Copies"). To procure a license
for such Additional Copies (including the Back-up Copy for each
Additional Copy, excluding the Tax Server Software, at no extra
cost), upon Time's written notification to OMI of Time's intent to
license Additional Copies (or any component thereof) (including
the Back-up Copy) of the System and the Tax Server Software (and
any or all Developments appurtenant thereto), OMI shall use
reasonable commercial efforts to provide Time with Additional
Copies in accordance with Time's delivery and installation
instructions. OMI shall invoice Time for any additional license
fees due and payable in accordance with the Payment Schedule as
set forth in Exhibit F.
4.13 Productized Developments. In the event that OMI
incorporates fully or in substantial part any Developments into a
product which OMI offers, markets, distributes or otherwise makes
commercially available at any time, OMI shall offer a license to
Time for such product ** ** ****, under the terms applicable to
the System herein.
4.14 Stager Rewriter. In the event that OMI incorporates
fully or in substantial part software modules commonly referred to
as "Stager" and "Rewriter", into a product which OMI offers,
markets, distributes or otherwise makes commercially available at
any time, OMI shall offer a license to Time for such product ** **
****, under the terms applicable to the System herein.
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4.15 Proprietary Rights Notices. Time agrees that all copies
of the System made by Time will include any proprietary notices,
including copyright notices, which were contained in the original
copy of the System.
5. INITIAL CONSULTING PERIOD, PHASE 2, AND FUTURE PROJECTS
5.1 Initial Consulting Period. During the Initial
Consulting Period, OMI provided certain consulting services to
Time in connection with the implementation of certain
Developments. The work performed by OMI during the Initial
Consulting Period was preliminary to, and is to be completed
pursuant to the Services to be performed in Phase 2, and therefore
constitutes an integral part of the Phase 2 Deliverables as
defined in the Functional Specifications.
5.2 Phase 2. During Phase 2, OMI shall develop and deliver
the Phase 2 Deliverables. OMI shall use best efforts to
successfully complete and install the Phase 2 Deliverables by
*********, ****, but Phase 2 shall continue as long as necessary
to accomplish Final Acceptance. OMI and Time agree that Time's
cost for the Phase 2 Deliverables will be limited to the
fixed-price specified in the Payment Schedule and that such fee
will be increased only subject to the terms of Article 14.
5.3 Future Projects. It is the parties' intent that the
scope, schedule and cost of future consulting and development
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projects shall be mutually agreed to pursuant to the procedure set
forth in Article 14.
6. IMPLEMENTATION AND ACCEPTANCE
6.1 Timely Performance. The Implementation Plan sets forth
the expectations of the parties as of July 5, 1995 as to the
timing of the creation, implementation and acceptance of the
System. In the event any milestone set forth in the
Implementation Plan is not met, and the failure to meet such
milestone is not due in material part to the fault of Time, OMI
shall not earn and Time shall not be required to remit the payment
associated with such milestone until such milestone is met and,
subject to the terms of Section 22.2(a) herein, any such slippages
will give rise to Time's right to terminate this Agreement
pursuant to the terms of Article 22. Either party shall have the
right to address any slippages or cost overruns due solely to the
fault of the other party through the Change Control Procedure set
forth in Article 14. Any alterations in the Implementation Plan,
including any postponements in the achievement of milestones
subsequent to slipped milestones, must be in a writing signed by
both parties, and, if applicable, shall be subject to the Change
Control Procedure set forth in Article 14 herein. Unless
otherwise agreed upon by the parties as provided in this Section
6.1; in the event such a change is agreed upon, Time shall not be
liable for, and OMI shall not be entitled to, any compensation for
any costs or expenses incurred by OMI as a result of such
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permitted extension. In the event of a delayed milestone, both
Time and OMI shall use their best efforts to ensure that any
alteration to the Implementation Plan, including any agreed upon
postponements in the achievement of milestones subsequent to
slipped milestones set forth therein, does not result in slippage
of later milestones.
6.2 Delivery of "Final" Functional Specifications. In
addition to its obligations under the Implementation Plan, and
without any utilization of the Reserve Resources, OMI shall
develop and deliver to Time for Time's review and written approval
in accordance with the Implementation Plan, the "final" version of
the Functional Specifications. In the event that OMI does not
deliver to Time an acceptable final version of the Functional
Specifications, the version attached hereto shall set forth the
minimum standards with respect to the functionality and
performance of the System.
6.3 Phased Implementation and Acceptance Testing. OMI shall
install the object code for the Server Software, Tax Server
Software, the Sybase Database and Developments in phases in
accordance with the Implementation Plan. Upon completion of
installation of all of the software and other deliverables (the
"Deliverables") to be delivered in a phase of the Implementation
Plan, and OMI's successful test of Deliverables as installed, OMI
shall notify Time in writing thereof (the "Installation
Notification"). After receipt of the Installation Notification,
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Time shall conduct an acceptance test developed by OMI in
consultation with Time (at no additional cost to Time and without
any utilization of the Reserve Resources) and delivered to Time
for approval (the "Acceptance Test Plan") (to be incorporated by
reference hereto as Exhibit L), which will be sufficient to test
the functionality of the Deliverables and their conformity with
the applicable Functional Specifications and Documentation ("Phase
Acceptance Test"). At no additional cost to Time (and without any
utilization of the Reserve Resources), OMI personnel shall assist
as reasonably required during such Phase Acceptance Test as
requested by Time. Each Phase Acceptance Test shall demonstrate
that the Deliverables for that phase perform in accordance with
the applicable Functional Specifications and Documentation. Time
shall have thirty (30) calendar days from receipt of the
Installation Notification for a particular phase to notify OMI in
writing whether Time accepts or rejects any or all of the
Deliverables for that phase on the basis of the Phase Acceptance
Test. Time will be deemed to accept the Deliverables associated
with such phase if: (i) Time delivers to OMI a written notice of
acceptance of that phase; or (ii) within such thirty (30) calendar
day period, Time fails to notify OMI of its rejection of any or
all of the Deliverables for such phase ("Phase Acceptance").
6.4 Final Acceptance. After Phase Acceptance of all of the
Deliverables of all of the phases of the Implementation Plan, Time
shall perform a final acceptance test of the System sufficient to
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test the functionality of the System ("Final Acceptance Test") to
determine if the System, and each of the specified functions of
the System, operates in accordance with the Functional
Specifications and Documentation. Time shall have ****** (**)
******** **** from the date of the last Phase Acceptance to notify
OMI in writing whether Time accepts or rejects the System on the
basis of the Final Acceptance Test. Time will be deemed to accept
the System if: (i) Time delivers to OMI a written notice of
acceptance of the System; or (ii) within such ****** (**) ********
*** period, Time fails to notify OMI of its rejection of the
System ("Final Acceptance").
6.5 Acceptance Test Cure Periods and Refund. If any portion
of the System fails to pass any Phase Acceptance Test or Final
Acceptance Test, Time shall so notify OMI in writing, specifying
the nature of such failure in reasonable detail. If the System or
any portion thereof fails to pass the Final Acceptance Test, Time
shall have the right to reconduct any or all of the Phase
Acceptance Tests to determine which Phase is the cause of the
failure of the System to successfully pass the Final Acceptance
Test. OMI shall have ******** (**) ******** **** in which to
correct the cause of such failure, redeliver Deliverables as
necessary to correct the failure, and provide to Time a written
explanation of which Deliverables caused the failure. After OMI's
redelivery of such Deliverables, Time shall reconduct the Phase
Acceptance--Test, or if the failure occurred during the Final
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Acceptance Test, the Phase Acceptance Test(s) which relate to the
Deliverables which caused the failure of the Final Acceptance
Test. In the event that the System or any portion thereof
continues to fail the Phase Acceptance Tests or Final Acceptance
Test, then Time may, at its sole discretion and without limitation
of its other rights and remedies (i) give OMI another ***** (*)
******** **** in which to cure the problem and recommence the
Phase or Final Acceptance Test(s); (ii) terminate the cure and
testing period and return the System, the Deliverable(s) or any
portions thereof to OMI in return for OMI's prompt refund of all
monies paid to OMI pursuant to this Agreement (such allocation to
reflect the actual beneficial use or the System enuring to Time
prior to Time's return of the System, less any adverse impact upon
Time based on the cessation of use of the System); or (iii) accept
any nonconforming Deliverables subject to a mutually agreed upon
reduction in fees due to OMI hereunder (or a refund of amounts
already paid by Time to OMI).
7. SOURCE CODE ESCROW
7.1 Escrow Agreement. Within fifteen (15) days after the
execution of this Agreement, Time, OMI and a third party escrow
agent acceptable to Time (the "Escrow Agent") shall enter into the
escrow agreement (the "Escrow Agreement") attached hereto as
Exhibit K.
7.2 Delivery. Upon the execution of the Escrow Agreement,
OMI will deliver to the Escrow Agent, in escrow pursuant to the
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terms hereof and the Escrow Agreement, the complete source code
for the Server Software, the Developments (promptly following each
completion), and such additional proprietary information necessary
to compile and execute such source code on the Hardware (the
"Deposit").
7.3 Release. The Escrow Agreement shall provide that Time
shall be entitled to a release of the Deposit from the Escrow
Agent as described below:
a. Time shall be entitled to a release of the Deposit at no
cost in the event any of the following events (the "Release
Events") occur: (i) OMI ceases doing business and its business is
not continued by another corporation or entity, or is continued by
another corporation or entity which Time for reasonable cause
deems unacceptable; (ii) OMI becomes insolvent; (iii) OMI makes a
general assignment for the benefit of creditors; (iv) OMI suffers
or permits the appointment of a receiver for its business or
assets which is not removed within a period of ninety (90) days;
(v) OMI avails itself of, or becomes subject to, any proceeding
under the Federal Bankruptcy Act or any other statute of any state
relating to insolvency or the protection of rights of creditors or
conditions outlined elsewhere; (vi) OMI discontinues its Services
under this Agreement or abandons the implementation and/or
maintenance of the System; or (vii) any event in Section 22.3.3
occurs. The Escrow Agreement will give OMI the right to challenge
Time's assertion that a Release Event occurred, and subject to the
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resolution of any such challenge (pursuant to the procedures set
forth in the Escrow Agreement), Time shall be entitled to receive
a copy of such source code immediately from the Escrow Agent upon
Time's notification to the Escrow Agent of any of the
circumstances set forth above.
b. Without limitation of subparagraph (a) herein,
commencing upon the Effective Date and continuing for a period of
three (3) years after the date of Final Acceptance (the "Option
Period"), Time may procure a release of the Deposit (Time's use of
such Deposit to be subject to the scope of the License as set
forth in Article 4 herein), upon the payment by Time to the Escrow
Agent in trust for OMI of ********. The Escrow Agent shall not
release such payment to OMI unless and until Time determines
(using reasonable efforts to make such determination within
fifteen (15) business days, but in no event later than thirty (30)
calendar days after receipt of the Deposit) that the Deposit
represents the most current implementation of the System. If Time
is unable to so confirm for any reason (other than a failure by
Time to commit reasonable resources in a timely manner), Time
shall so notify OMI in writing and OMI shall within three (3)
business days of Time's written notice, deliver to Time the
Deposit representing the most current implementation of the
System. In no event shall the Escrow Agent release any payment to
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OMI until Time notifies the Escrow Agent in writing that Time has
accepted the Deposit (which acceptance shall not be unreasonably
withheld).
c. The Option Period may be extended for an additional two
(2) years after the expiration of the original Option Period by
(i) the payment by Time to the Escrow Agent in trust for OMI of
********; or (ii) without any payment, upon a Change of Control
occurring during the Option Period (provided, however, that the
foregoing shall not be construed to limit Time's rights under
Section 22.3.3). Notwithstanding the foregoing, Time shall not be
required to make any payments to obtain the Deposit in the event a
Release Event occurs during the Option Period or any extension
thereof.
7.4 Escrow Refresh. OMI shall make the initial Deposit to
escrow upon the execution of the Escrow Agreement. OMI shall
update the Deposit: (a) on June 1 of every year during the Option
Period, and (b) whenever OMI implements new or modified software
as part of the System, provided, however, that OMI shall not be
obligated to update the Deposit more than once a month. In
addition, Time may periodically require OMI to refresh the
Deposit, and Time shall reimburse OMI for its actual costs for the
preparation and deposit of a refreshed Deposit made at Time's
request. In addition to triggering the deposit of a refreshed
Deposit, Time shall have the right to validate the Deposit upon
thirty (30) days prior written notice to and in the presence of
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OMI, but no more frequently than two (2) times per year. Such
verification shall be at Time's expense unless the Deposit is not
current, in which event OMI shall bear all costs associated
therewith.
8. TIME ACCESS TO SOURCE CODE FOR TIME MODIFICATIONS
OMI agrees that upon Time's request from time to time during
and after the Term, OMI shall provide to Time portions of the
then-current source code to the System at no additional cost
to Time for use by Time in Time's own modification, customization
or enhancement efforts subject to Article 19 hereunder. OMI agrees
that it shall consider and grant such requests on a case-by-case
basis consistent with past practice and in good faith and shall
not unreasonably withhold Time's access to such source code. OMI
will be under no obligation to provide Maintenance Services for
such modifications, customizations or enhancements (other than by
utilizing the Reserve Resources as set forth in Section 10.3.2
herein).
9. DOCUMENTATION
OMI shall create the Documentation for all changes,
modifications, customizations and enhancements to the Server
Software and Developments created by OMI under this Agreement.
During the Warranty Period and Maintenance Period(s), OMI shall
deliver to Time ***** (*) ****** of all Documentation and any
updates, changes, modifications or enhancements thereto. Time may
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duplicate the Documentation solely for Time's own use, provided
that Time reproduces OMI's copyright notice on such copies.
10. OMI PERSONNEL
10.1 Skill Level and Continuity. OMI represents that each of
its employees, agents and subcontractors assigned to perform any
Services hereunder shall have the proper experience, skill,
knowledge, training, background and availability so as to be able
to perform the Services to be performed hereunder in a competent
and professional manner and that all Services shall be performed
in accordance with the highest professional standards in the
software development industry, and with the highest degree of care
which OMI utilizes in the development of software products. Time
shall have the right to reject any individual(s) assigned to
perform Services under this Agreement based upon their prior
background and experience or performance under this Agreement. In
the event that any OMI employee or subcontractor performing
Services is unacceptable to Time (in Time's good faith judgment),
OMI shall remove said employee or subcontractor from performing
Services for Time and shall use reasonable commercial efforts to
provide a qualified replacement. OMI agrees to use best
reasonable commercial efforts to ensure the continuity of OMI
personnel assigned to perform Services under this Agreement. In
the event OMI reassigns any of its personnel assigned to perform
Services under this Agreement, OMI shall promptly provide a
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qualified replacement acceptable to Time, ensuring continuity in
the implementation of the System, ** ** ********** **** ** ****.
10.2 OMI Project Manager. ** ** ********** **** ** ****
***** **** *** *** for Phase 2 Deliverables, OMI shall appoint a
project manager (the "OMI Project Manager") to work during the
Term on a Full-time basis, and to coordinate all OMI activities on
behalf of Time under this Agreement, including without limitation,
the installation and implementation of the System and the delivery
of the Services. OMI shall include project management fees, if
any, in its quoted fees for future projects. The OMI Project
Manager will have extensive experience in managing the
installation of systems and the delivery of services similar to
the System and Services being installed and delivered hereunder.
The OMI Project Manager shall be available to discuss issues and
problems as they arise with Time personnel during normal business
hours. The OMI Project Manager shall coordinate the efforts of
all personnel working in connection with this Agreement.
10.3 Phase 2 Commitment. During Phase 2, in addition to the
OMI Project Manager, OMI shall devote the Phase 2 Resources on a
Full-time basis to the development and implementation of the Phase
2 Deliverables and the Reserve Resources to the delivery of
additional Services to Time.
10.3.1 Phase 2 Deliverables. OMI represents that the
Phase 2 Resources will be sufficient for the successful
development and implementation of the Phase 2 Deliverables *****
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** **********, **** and OMI agrees to devote such resources (and
unless otherwise specified by Time, not the Reserve Resources) to
the development and implementation of Phase 2 Deliverables through
Final Acceptance.
10.3.2 Additional Services. The Reserve Resources
shall be devoted to tasks designated by Time including:
(i) implementation of unanticipated customizations to the Server
Software or Phase 2 Deliverables; (ii) any additional consulting
or development services which Time determines are necessary;
(iii) efforts to accelerate the timing of the milestones set forth
on the Implementation Schedule; (iv) efforts to remedy delays,
caused solely by Time, in the achievement of milestones; and
(v) maintaining any or all of the Developments. OMI agrees to
make the Reserve Resources available to Time through March 5, 1996
for the fees set forth in Exhibit F. Thereafter, OMI shall
continue to provide Reserve Resources to Time, provided, however,
that if Time desires to increase the Reserve Resources from the
level set forth in the Project Resource Plan, Time shall give OMI
at least sixty (60) days prior written notice; and if Time desires
to decrease the level of such Reserve Resources, Time shall
provide OMI with at least thirty (30) days prior written notice;
and provided further that any such additional Reserve Resources
shall be made available at the Discounted Time and Material Rates
which are applicable to the tasks contemplated. None of the
Reserve Resources shall be utilized by, or attributed directly or
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indirectly to, OMI's development of, or modifications to, the
Functional Specifications, the Implementation Plan, the Acceptance
Test Plan or except as stated in (i) to (v) above, the Phase 2
Deliverables. Time shall also have the right to purchase Reserve
Resources pursuant to the Change Control Procedure set forth in
Article 14.
10.4 Status Reports. At the end of each week during the
Term, the OMI Project Manager shall deliver to Time a written
status report, stating in sufficient detail so as to be clear and
understandable to Time: (i) a detailed summary of accomplishments
and progress by OMI on behalf of Time under this Agreement; (ii) a
detailed summary of any problems or anomalies experienced by OMI
or the System during such week and the actions taken to resolve or
mitigate such problems or anomalies; (iii) any indications of the
possibility of future problems or anomalies anticipated by OMI or
the System related to this Agreement; and (iv) a schedule of
activities and utilization of the Phase 2 Resources (or other
future resources) and Reserve Resources by person, including
without limitation, a projection of the schedule of activities and
utilization of Phase 2 Resources and Reserve Resources on a weekly
basis by project, identifying the individuals to be assigned to
the project and the tasks expected to be performed.
11. TIME PERSONNEL
Time shall appoint a project manager (the "Time Project
Manager") to work with OMI during the Term and to coordinate the
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provision of any information needed by OMI from Time hereunder.
The Time Project Manager will have extensive experience in
coordinating system project developments, and will be available
during normal business hours to discuss problems as they arise
with OMI and to coordinate the efforts of all Time personnel
working in connection with this Agreement.
12. INTELLECTUAL PROPERTY
12.1 OMI Ownership. Subject to and except as provided in
Sections 12.2 and 12.3 herein, and unless otherwise agreed to in
writing between the-parties, all Server Software and all
Developments prepared by OMI under this Agreement shall be the
property of OMI and all right, title and interest therein shall
vest in OMI. To the extent Time seeks any ownership of any rights
in or to any of the Developments, OMI and Time must agree to
Time's ownership thereof in writing prior to the development of
such Developments, or all right, title and interest therein shall
be deemed to be vested exclusively in OMI. All Developments shall
be considered to be part of the System for all purposes of this
Agreement, but Time's right to access the source code for the
Developments shall be limited to the circumstances set forth in
Articles 7 and 8 and Sections 22.3.3 and 22.3.4.
12.2 Time Intellectual Property. Nothing herein shall be
construed to vest OMI with any right, title or interest in any
content, software materials, data, Pathfinder Information (as
defined in Section 19.1 herein) or other information which is
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provided by Time or other parties or used in or in conjunction
with the System. Without limitation of the foregoing, nothing
herein shall be construed to vest OMI with any right, title or
interest in any software which has been primarily developed by
Time, its Affiliates or their respective agents, including,
without limitation, software modules known as "Wabbit", the
Encyclopedia Britannica "Ticketing" system, "News Now" (also known
as "My News"), "Signpost", and the marketing database management
system to be implemented by Time as part of the System, or any
successors thereof, and any other software which has been or may
be primarily developed by Time or its agents (the "Time
Software").
12.3 Stager and Rewriter. Notwithstanding the provisions of
Section 12.1 herein, Time shall have an unconditional,
royalty-free, perpetual, non-exclusive, irrevocable license to
use, maintain, upgrade, modify and enhance the software known as
"Stager" and "Rewriter" (including the source and object code
thereto) for the internal use of Time and its Affiliates.
12.4 Notice of Ownership. For the purpose of clarification
as to ownership of Time Software, if, in conjunction with OMI's
Services under this Agreement, Time intends to provide OMI with
access to any software primarily developed by Time (other than the
software identified in Section 12.2 above), Time shall provide OMI
with a written notice, either separately or as part of the Change
Control Procedure, captioned "Notice of Ownership" identifying
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such software. OMI shall have ten (10) business days in which to
respond to such Notice of Ownership, and will be deemed to have
agreed that Time has primarily developed any software identified
in the Notice of Ownership, unless OMI objects to the Notice of
Ownership within such ten (10) business day period. If OMI
objects to the Notice of Ownership within such period, the parties
shall meet to discuss the ownership of the software identified in
the Notice of Ownership and OMI shall not access such software
until the parties reach a written resolution to OMI's objection.
Time's failure to provide a Notice of Ownership shall not be
deemed to be a waiver of Time's claim of ownership to any
software, but shall preserve OMI's right to contest such ownership
until such Notice of Ownership is issued.
13. THE TRANSITION
13.1 Intent to Transition Transaction Server. OMI and Time
acknowledge and agree that it is Time's desire and intent to
relocate the Transaction Server Software and Transaction Server
Hardware (the "Transaction Server") from OMI's premises to Time's
premises in accordance with the Implementation Plan (the
"Transition"). Time, in accordance with the Implementation Plan,
shall provide written or "e-mail" notice to OMI (in the case of
e-mail, from the Time Project Manager directed to the OMI Project
Manager) when Time desires to commence the Transition. OMI shall
use reasonable commercial efforts to assist Time in relocating the
Transaction Server in accordance with the Implementation Plan.
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Without limitation of the foregoing, OMI shall, at no cost to
Time, provide Time with the transition assistance identified in
Exhibit J hereto.
13.2 Interim Processing. To effectuate the Transition, it is
contemplated that Time will configure Time's facilities in
conformity with the Site Requirements. OMI agrees that Time may
copy, install and operate additional copies of the Transaction
Server Software upon the Transaction Server Hardware at Time's
facilities without the payment of any additional license fees;
provided, however, that upon Time's written or "e-mail"
notification to OMI (in the case of e-mail, from the Time Project
Manager directed to the OMI Project Manager) that the Transition
has been successfully completed, OMI may delete the Transaction
Server Software from Time's Transaction Server Hardware then
located at OMI's facilities.
13.3 Transaction Services. In the event (i) OMI fails to
perform in accordance with the Implementation Plan and as a result
of such failure, Time is not ready to effectuate the Transition
before it desires to process Transactions on the Transaction
Server, or (ii) Time is ready to process Transactions on the
Transaction Server and the Transition is occurring, OMI shall, at
no additional cost to Time: (a) operate the Transaction Server at
OMI's facility; (b) accurately and completely process Transactions
for Time and its Affiliates (in accordance with OMI's obligations
as set forth in Section 13.4); and (c) provide Time, at the end of
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every seven (7) day period (or more frequently, if requested by
Time), electronic reproductions of all databases which exist as
part of the Transaction Server as of a time to be mutually agreed
to by the parties (the "Transaction Services"). In the event that
Time is not ready to effectuate the Transition due in no part to
any failure on the part of OMI, but Time desires to process
Transactions on the Transaction Server, OMI shall provide the
Transaction Services at a mutually agreed upon rate which shall
not exceed the applicable Discounted Time and Materials Rate.
13.4 Correction or Restoration of Data. In the event that
OMI provides Transaction Services in accordance with Section 13.3,
OMI shall, at its own cost and expense, be responsible for the
operation of the Transaction Server and the complete and accurate
processing of Transactions. Without limitation of the foregoing,
as part of this responsibility, OMI shall, at no cost to Time
(i) correct, restore and reprocess Transaction data which were
incorrectly or incompletely processed by OMI; (ii) recreate any
data which were lost or deleted from the Transaction Server; and
(iii) take all other steps reasonably necessary to provide that
the Transaction Services are provided to the full satisfaction of
Time. To the extent that Time incurs any losses, costs, expenses,
or liabilities as a result of OMI's operation of the Transaction
Server and processing of Transactions pursuant to Section 13.3,
OMI shall indemnify and hold Time harmless against all such
losses, costs, expenses, or liabilities, provided that: (i) any
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SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
such losses, costs, expenses or liabilities are not due to
inaccurate information provided by Time or Time Affiliates, or
their respective employees, agents or representatives, or any
third parties (excluding OMI); and (ii) except for losses, costs,
expenses or liabilities incurred as a result of OMI's gross
negligence, willful misconduct or abandonment of OMI's obligations
hereunder, the amount of OMI's liability for such losses, costs,
expenses or liabilities under this Section 13.4 shall not exceed
*** ******* ******** ******* (********) per occurrence.
Notwithstanding the foregoing, in the event that OMI knows of or
becomes aware of the existence of such inaccurate data, OMI shall
promptly notify Time of the nature and location of such
inaccuracies.
13.5 Successful Transition. Upon Time's written or "e-mail"
(in the case of e-mail, from the Time Project Manager directed to
the OMI Project Manager) notification to OMI that the Transition
has been successfully completed, OMI shall cease performing the
Transaction Services, and OMI shall, within thirty (30) days of
such notice, deliver to Time the Transaction Server Hardware,
Sybase Database Software, Accessory Equipment and Tax Server
Software then located at OMI's facilities. Upon delivery of the
Transaction Server Hardware, Sybase Database Software, Accessory
Equipment and Tax Server Software from OMI's facilities to Time's
facilities, Time shall inspect and test the Transaction Server
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Hardware, Sybase Database Software, Accessory Equipment and Tax
Server Software prior to acceptance thereof.
14. CHANGE CONTROL PROCEDURE
14.1 Proposed Changes. At any time during the Term, either
party may, upon written notice to the other party, request changes
to the scope of the System and Services to be performed under this
Agreement (a "Change Request"). Such Change Requests may include,
without limitation, requests to change the System, to perform
consulting services in addition to the Services then currently
being performed by OMI, to change the scope of the Services then
being performed, and to procure additional Reserve Resources
beyond March 5, 1996. In addition, if the implementation of the
System or the provision of any other Services is behind schedule
and either party believes that such delays were due solely to the
fault of the other party, the party which believes the other party
has caused such delay may, pursuant to this Article 14, issue a
Change Request proposing measures or actions that it reasonably
believes are necessary to address such delays.
14.2 Change in Scope Proposal. Upon a party's receipt of a
Change Request issued by the other party, the parties shall confer
regarding the Change Request. Upon a mutual determination of the
parties that the Change Request should be implemented and that
Reserve Resources are not available to perform the Change Request,
OMI shall review the Change Request and OMI, at no additional cost
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to Time (except as provided in the last two sentences of this
Section 14.2), shall submit to Time a change in scope proposal
(the "Change in Scope Proposal") which shall be structured in
accordance with Section 14.3 and shall outline in sufficient
detail the tasks to be performed to accomplish the Change Request.
In the event that Time issues a request for a change which
requires an unusually detailed Change in Scope Proposal for which
OMI reasonably believes that OMI will incur out-of-pocket expenses
significantly more than those typically required to prepare a
Change in Scope Proposal, OMI will propose to Time a price to
charge for its work in preparing such Change of Scope Proposal and
Time will consider OMI's proposal, but in no event shall the
amount proposed by OMI exceed the applicable Discounted Time and
Materials Rates or a fixed price which can be demonstrated to be
based on the applicable Discounted Time and Materials Rates. If
Time: (i) agrees in writing to pay OMI for its work in preparing
such Change in Scope Proposal; (ii) accepts the Change in Scope
Proposal thereby submitted by OMI; and (iii) authorizes OMI to
perform work pursuant to the Change in Scope Proposal; then the
amount due to OMI for its work in preparing the Change in Scope
Proposal shall be deemed to be a credit against the amount due to
OMI for the work to be performed under the Change in Scope
Proposal.
14.3 Information to be Included in Change in Scope Proposal.
OMI shall use reasonable commercial efforts to create a way to
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effect the Change Request without incurring any additional cost to
Time and without a delay in any on-going Services. In the event
OMI believes that additional costs will have to be incurred by
Time to implement the Change Request, or that any on-going
Services will be delayed, the Change in Scope Proposal shall
contain a separate budget for such additional costs (including
both a fixed price option and an estimated price option for the
work to be done), a definition of all tasks and deliverables, a
completion date for all tasks and a description of the adverse
effect, if any, the implementation will have on any on-going
Services. In calculating the fixed price option and the estimated
price option, OMI agrees that the rates used in its calculations
shall not exceed the Discounted Time and Material Rates applicable
to the specific tasks outlined in the Change in Scope Proposal.
14.4 Time Discretion. Time, at its sole discretion, reserves
the right to accept, modify with OMI's consent, or reject any or
all Change in Scope Proposals received from OMI. If Time does not
accept in writing OMI's Change in Scope Proposal, neither party
shall have any additional obligations to the other party with
respect to the Change Control Procedure or the Change in Scope
Proposal. Acceptance of a particular Change in Scope Proposal and
authorization to begin work will be based upon Time instructing
OMI in writing to commence work for an amount not to exceed, at
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Time's sole option, the fixed price or the estimated price
contained in the Change in Scope Proposal.
15. PAYMENT
15.1 Payment. Subject to OMI's performance in accordance
with the terms of this Agreement, payment shall be made by Time to
OMI hereunder in accordance with the Payment Schedule attached
hereto as Exhibit F.
15.2 Audit Rights. OMI shall keep full and complete records
of all services rendered hereunder and all time spent, costs,
expenses and invoices associated therewith (including, without
limitation, the status reports specified in Section 10.4) and Time
shall keep full and complete records of all Third Party
Transactions rendered through the System for a period of two (2)
years after the processing of such Third Party Transactions.
Either party may upon reasonable advance notice (but not more than
once in any calendar year), audit the other party's records to
validate, in the case of OMI, its invoices issued to Time
hereunder, and in the case of Time, its payment to OMI of Third
Party Transaction Fees processed solely during the prior two (2)
years, in accordance with the terms and conditions of Section 4.8
and Exhibit F. In no event shall any party be entitled to review
the records of the other party that such party has previously
reviewed.
15.2.1 OMI's Audit Rights. If any audits by OMI of
Time's records should disclose any under-reporting of Third Party
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Transaction Fees and such results are confirmed by Time, Time
shall promptly pay OMI such amount, and if the under-reporting
exceeds *** ******* (***) (unless such under-reporting is due to
the fault of OMI), then Time shall also pay the interest on the
excess at the rate of 1.5% per month or the highest interest rate
allowed by law, whichever is lower, from the date on which such
amount became due to OMI from Time. If the amount under-reported
by Time is equal to or greater than ****** ******* (***) of the
total payment due to OMI for the payment period so audited, then
the out-of-pocket cost of the audit shall be borne by Time. Any
overpayments discovered by OMI shall be promptly refunded to Time.
15.2.2 Time's Audit Rights. If any audits by Time of
OMI's records should disclose any overbilling and such results are
confirmed by OMI, OMI shall promptly repay Time such amount, and
if the overbilling exceeds *** ******* (***) of the amount
actually due to OMI, then OMI shall also pay the interest on the
excess at the rate of 1.5% per month or the highest interest rate
allowed by law, whichever is lower, from the date on which such
amount became due to Time from OMI. If the amount overbilled by
OMI is equal to or greater than ****** ******* (***) of the amount
actually due to OMI for the payment period so audited, then the
cost of the audit shall be borne by OMI.
15.3 Fee Tracking System. OMI acknowledges that in order to
properly implement the provisions of this Agreement related to the
payment of Third Party Transaction Fees, Time needs to have an
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SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
effective method to track, monitor, calculate and record the Third
Party Transaction Fees, and OMI agrees to cooperate with and work
with Time to create a payment system that will accurately track,
monitor, calculate and record the Third Party Transaction Fees.
16. PATHFINDER CUSTOMER SUPPORT SERVICES
16.1 Customer Support Services. Subject to the terms of this
Agreement, OMI and Time agree that OMI began performing the
Customer Support Services as defined in Exhibit H (the "Customer
Support Services") in February, 1995 and shall continue performing
these Customer Support Services through the completion of the
Transition pursuant to Time's notification thereof as described in
Section 13.2 herein, unless Time terminates OMI's Customer Support
Services earlier by providing thirty (30) days advance notice to
OMI. If, after the Transition, Time desires to purchase
additional Customer Support Services, Time shall have the option
of purchasing the Customer Support Services by giving OMI thirty
(30) days prior written notice, subject to OMI's written approval
(such approval not to be unreasonably withheld).
16.2 Fees. Time agrees to pay OMI for the Customer Support
Services in accordance with the Payment Schedule (Exhibit F).
17. WARRANTY AND MAINTENANCE SERVICES
17.1 Warranty Services. For a period of ****** (**) ********
**** after Final Acceptance (the "Warranty Period"), OMI
represents, warrants and agrees that it shall, at no cost to Time,
maintain the Transaction Server Software and the Developments in
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
good working order and remedy any defects, errors, or
malfunctions, or any failures of the Transaction Server Software
or the Developments to perform in accordance with the Functional
Specifications and Documentation (including defects, errors,
malfunctions or failures in performance that are discovered during
the Warranty Period) (the "Warranty Services"). OMI shall provide
such Warranty Services in accordance with the terms of Exhibit N,
provided, however, that "Critical Beeper Service" and "On-Site
Support" as specified therein shall be available to Time during
the Warranty Period at no fee to Time.
17.2 Maintenance Services. Time shall have the right to
engage OMI to provide the services described in this Article 17
(the "Maintenance Services") pursuant to the terms hereof.
17.3 Maintenance Periods. Time and OMI acknowledge and agree
that Time has already procured an initial term of Maintenance
Services with respect to the copies of the Server Software that
Time has elected to license as of the Agreement Date (the "Initial
Maintenance Period"). The Initial Maintenance Period for the
Primary Copy of the Transaction Server Software and Merchant
Server Software commenced upon April 1, 1995 and shall continue
until March 31, 1996. The Initial Maintenance Period for the
***** (*) Additional Copies of the Merchant Server Software
licensed prior to the Agreement Date commenced on June 1, 1995 and
shall continue until May 31, 1996. Time and OMI further
acknowledge that the initial Maintenance Period for any other
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copies of the Server Software (or any components thereof) that
Time elects to license after the Agreement Date shall commence on
the date on which that particular copy of the Server Software is
received by Time and shall continue for one (1) year.
17.4 Maintenance Fees. The annual Maintenance Fee for
Maintenance Services with respect to the Server Software is set
forth in the Payment Schedule and is payable as set forth therein.
17.5 Renewal. Upon written notice to OMI, Time shall have
the option to renew the Maintenance Services for the Server
Software from year to year for the applicable twelve (12) month
periods at the applicable Maintenance Fee. OMI shall give Time
prior written notice at least sixty (60) but not more than ninety
(90) days before the expiration of the applicable initial
Maintenance Period and applicable renewal Maintenance Period(s).
If Time does not exercise the option to renew the Maintenance
Services, Time shall have the right to maintain the System, or any
component thereof, itself (consistent with the rights granted
under Section 4.1 herein) or engage third parties to perform
maintenance services, subject to Section 4.3 herein. OMI shall
offer Maintenance Services to Time for the System throughout the
Term of this Agreement.
17.6 Maintenance of Server Software. As part of the
Maintenance Services, and without limitation of the other terms of
this Article 17, OMI represents, warrants and agrees that it
shall, at no additional cost to Time, maintain the Server Software
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in good working order, correct and remedy any defects, errors or
malfunctions or any failures of the Server Software to perform in
conformity with the Functional Specifications and the
Documentation, and render such Maintenance Services in accordance
with the terms of Exhibit N.
17.7 Software Updates. During the Warranty Period and
Maintenance Period, OMI shall, as part of the Warranty Service and
the Maintenance Service and at no additional cost to Time,
provide: (i) all Software Updates released by OMI during such
period; (ii) updated Functional Specifications, and/or product
performance guidelines and Documentation with respect to the
Software Update; (iii) a written description as to what additional
third party hardware and/or software would be necessary, if any,
to utilize the Software Update as part of the System in accordance
with the Functional Specifications, Documentation and the terms
and conditions of this Agreement; (iv) written instructions as to
the manner by which the Software Update may be installed; and
(v) a written description of the adverse impact, if any, which the
Software Update will have on the System functionality as it then
currently exists. Upon Time's request and at an additional cost
to Time (which cost may, at Time's discretion, be charged against
the Reserve Resources, if any), OMI shall provide Time with
assistance in installing any Software Updates at Time's facility.
Time shall have the right to refuse (which refusal shall be given
in writing) to utilize any Software Updates. To the extent Time
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SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
refuses to utilize any Software Update that corrects or fixes an
error or nonconformity in the performance of the System in
accordance with the Functional Specifications and Documentation,
OMI shall be relieved from its obligations under Section 17.7.3
with respect to such correction or fix.
17.7.1 New Updates. OMI shall provide update planning
in writing in advance of the release of an update upon
finalization of such release (e.g., informing Time of new and
planned Software Updates, enhanced functionality anticipated to be
included in the Software Updates, and any additional Hardware or
third party software required to implement the Software Update,
etc.) at no additional cost to Time.
17.7.2 Compatibility and Accuracy. OMI shall provide
standard Maintenance Services, at no additional cost to Time, to
support up to *** (*) major releases prior to the existing
commercial available major release. OMI represents that the data
files utilized in the System will be compatible with future
Software Updates of the System for at least the next *** full
commercial releases of the Server Software following the Final
Acceptance. To the extent that any future Software Updates issued
thereafter are incompatible with the System's data files, OMI
shall provide to Time: (i) conversion tools to enable Time to
convert the data files to the format compatible with such Software
Update; and (ii) full documentation of the revised file format,
including without limitation, full file format information. OMI
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represents that it will fully test all Software Updates prior to
delivery to Time to provide for compatibility with the Hardware,
the Sybase Database, the Tax Server Software, and any other third
party software used by Time in connection with its use of the
System. OMI represents that any software, documentation and/or
instructions provided under this Section 17.7 shall be complete
and accurate.
17.7.3 Hardware Configuration. OMI represents that any
Software Updates provided by OMI to correct or fix an error or
nonconformity in the performance of the System in accordance with
the Functional Specifications and Documentation shall not give
rise to any additional requirements with respect to additional
Hardware or third party software.
17.8 Maintenance of Developments. After the Warranty Period,
OMI shall, at Time's request, utilize the Reserve Resources to
correct any defects, errors or malfunctions and remedy any
failures of the Developments to perform in conformity with the
Functional Specifications and the Documentation except for such
defects, errors; malfunctions or failures discovered during the
Warranty Period, which will be corrected or remedied without
utilization of Reserve Resources). In the event Reserve Resources
are not available, any maintenance or other modifications of the
Developments which are requested by Time shall be subject to the
Change of Control Procedure set forth in Article 14. In the event
that OMI incorporates any Development, in whole or in substantial
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part, into a product which OMI offers, markets, distributes or
otherwise makes commercially available at any time (other than a
product made available as a Software Update to the System), and
Time elects to license that product pursuant to Section 4.13
herein (which license is to be provided at no additional cost to
Time), OMI shall provide to Time standard Maintenance Services
(including any updates) for that product at the lesser Of:
(i) the lowest available OMI standard fixed price maintenance fee
for the product; or (ii) the product of (a) the lowest available
OMI standard license fee for that product; and (b) the lowest
available OMI standard percentage charged as a maintenance fee for
that product. In the event OMI incorporates any Development, in
whole or in part, into a product which OMI includes as a Software
Update to the System, Time shall not have to pay any Maintenance
Fees in addition to those Maintenance Fees payable in connection
with the License of the Server Software.
17.9 Maintenance of Stager/Rewriter. In the event OMI
incorporates Stager or Rewriter, in whole or in substantial part,
into a product which OMI offers, markets, distributes or otherwise
makes commercially available at any time (other than a product
made available as a Software Update to the System), and Time
elects to license that product pursuant to Section 4.14 herein
(which license is to be provided at no additional cost to Time),
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SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Time shall not have to pay any Maintenance Fees in addition to
those Maintenance Fees payable in connection with the License of
the Server Software.
17.10 Regulatory Requirements Compliance. During the Warranty
Period and the Maintenance Period(s), OMI represents that, at no
additional cost to Time, the System shall comply with the
Regulatory Requirements which apply to the Server Software,
consistent with the compliance to such Regulatory Requirements of
other similar commercially available products. OMI shall use
reasonable commercial efforts to implement updates necessary to
conform with Regulatory Requirements and in any event, such
updates shall be made to the System within *** (*) ****** after
the release of such Regulatory Requirements or by the effective
date of such Regulatory Requirements, whichever is later.
17.11 Correction or Restoration of Files. During the Warranty
Period and the Maintenance Period(s), to the extent that Time's
files, databases or data need to be corrected, recreated, restored
or reprocessed due solely to OMI's fault or negligence or Time's
reliance on OMI's instructions, OMI shall be responsible for doing
so on a highest priority basis at no additional cost to Time.
17.12 Maintenance of Tax Server Software. OMI represents and
warrants that the Tax Server Software shall operate in accordance
with its documentation and in conjunction with the System. OMI
agrees that to the extent Time reasonably believes the Tax Server
Software fails to function as specified in the applicable
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documentation, upon notification from Time, OMI shall use all
remedies available to OMI pursuant to its agreement with AVP
Systems to remedy all defects, errors, bugs and nonconformities in
the Tax Server Software as soon as possible.
18. REPRESENTATIONS AND WARRANTIES
18.1 Ownership. OMI represents that it owns or otherwise has
the irrevocable right to license the System, that it has the right
to license the Tax Server Software to Time hereunder, that it
possesses all right, title and interest in the System and the Tax
Server Software necessary to enter into this Agreement. OMI
represents that the Services, the System (including the Server
Software and the Developments) and the Tax Server Software or any
components thereof, and any other software or deliverables
provided by OMI under this Agreement, and the use of any of the
foregoing by Time, do not and shall not infringe, violate or
misappropriate in any way the rights of any third party, including
without limitation, the rights under any United States or foreign
patent, copyright, trademark, trade secret, or any other
proprietary rights or other rights of any third party ("Third
Party Rights"). OMI represents that as of the Agreement Date,
except as set forth in Exhibit B hereto, OMI has no notice of nor
knows of any actions, claims, demands, threats or allegations that
the Services, the System (including the Server Software and the
Developments), the Tax Server Software and any other software or
deliverables developed or to be developed under this Agreement, or
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the use of any of the foregoing by Time, infringes, violates or
misappropriates in any way Third Party Rights. OMI shall
throughout the Term promptly notify Time in writing of any such
actions, claims, demands, threats or allegations of which it
becomes aware that should be added to Exhibit B. OMI represents,
warrants and agrees that it will not breach or violate any
warranties, representations or obligations made to AVP with
respect to the AVP Software at any time while OMI is party to any
agreement which gives Time the right to utilize the Tax Server
Software.
18.2 Duly Authorized. (a) OMI makes the following
representations:
(1) OMI is a corporation duly organized and existing
and is in good standing under the laws of the State of Delaware
and is qualified and in good standing as a foreign corporation
under the laws of any jurisdiction where the ownership of its
assets or the conduct of its business require OMI to be so
qualified, or if OMI is not so qualified, the failure to so
qualify will not have a material adverse effect on the ability of
Time to enforce this Agreement;
(2) There is no action, suit or proceeding pending or
threatened against or affecting OMI before or by any court,
administrative agency or other governmental authority which in any
way will impair OMI's ability to perform all of its obligations
hereunder, or which otherwise brings into question the
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enforceability or validity of the transactions contemplated by the
Agreement;
(3) OMI's execution, delivery, and performance of this
Agreement has been duly authorized by all appropriate corporate
action on the part of OMI, if any, and this Agreement constitutes
the valid and binding obligations of OMI enforceable against OMI
in accordance with the terms hereof; and
(4) Neither the execution and delivery by OMI of this
Agreement, nor the consummation by OMI of the transactions
contemplated hereby, nor compliance by OMI with the provisions
hereof, conflicts with or results in a breach of any of the
provisions of the Certificate or Articles of Incorporation or
By-Laws of OMI or any amendments thereto, or any applicable law,
judgment, order, writ, injunction, decree, rule or regulation of
any court, administrative agency or other governmental authority,
or of any agreement or other instrument to which OMI is a party or
by which it is bound, or constitutes a default under any provision
thereof.
(b) Time makes the following representations:
(1) Time is a corporation duly organized and existing
and is in good standing under the laws of the State of Delaware
and is qualified and in good standing as a foreign corporation
under the laws of any jurisdiction where the ownership of its
assets or the conduct of its business require Time to be so
qualified, or if Time is not so qualified, the failure to so
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qualify will not have a material adverse effect on the ability of
Time to enforce this Agreement;
(2) There is no action, suit or proceeding pending or
threatened against or affecting Time before or by any court,
administrative agency or other governmental authority which in any
way will impair Time's ability to perform all of its obligations
hereunder, or which otherwise brings into question the
enforceability or validity of the transactions contemplated by the
Agreement;
(3) Time's execution, delivery, and performance of this
Agreement has been duly authorized by all appropriate corporate
action on the part of Time, if any, and this Agreement constitutes
the valid and binding obligations of Time enforceable against Time
in accordance with the terms hereof; and
(4) Neither the execution and delivery by Time of this
Agreement, nor the consummation by Time of the transactions
contemplated hereby, nor compliance by Time with the provisions
hereof, conflicts with or results in a breach of any of the
provisions of the Certificate or Articles of Incorporation or
By-Laws of Time or any amendments thereto, or any applicable law,
judgment, order, writ, injunction, decree, rule or regulation of
any court, administrative agency or other governmental authority,
or of any agreement or other instrument to which Time is a party
or by which it is bound, or constitutes a default under any
provision thereof.
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18.3 Non-Interference. OMI represents that the System and
each component thereof (with the exception of the Sybase Database
and the Tax Server Software, and any operating system software)
shall not, when delivered, contain any "viruses" or other such
devices that will cause the System or any component thereof to be
erased or become inoperable or incapable of processing or affect
other System operations. OMI shall retain a copy of all
Deliverables under seal, in the form delivered to Time hereunder,
in order to determine whether such Deliverables conformed with
this provision.
18.4 Documentation. OMI represents that the initial version
of the Functional Specifications (unless superseded by the final
version), the final version of the Functional Specifications, and
the Documentation provided hereunder will accurately reflect the
operation of the System as of the time of Final Acceptance.
18.5 Disclaimer. EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THIS AGREEMENT, THE SYSTEM, DEVELOPMENTS, THE TAX
SERVER SOFTWARE, OR SERVICES RENDERED HEREUNDER, AND EACH PARTY
DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT
THERETO, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
19. PROPRIETARY AND CONFIDENTIAL INFORMATION
19.1 Pathfinder Information. All data residing on or
processed through the System or residing on the Hardware,
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including without limitation, information, records or other data
relating to the use of Pathfinder, content, advertising,
promotional material, the Pathfinder end-user interface (including
without limitation, logos, icons, screen displays, and other
graphical or audio/visual components thereof), information
relating to users' names, identities, addresses, demographic data,
financial records, activity and usage records, credit card data,
access logs, billing data, databases and other information
("Pathfinder Information") is the proprietary information of Time.
Time shall be the exclusive owner of all right, title and interest
in and to the Pathfinder Information, and all copies thereof,
whether in print or electronic form (including computer memory)
and OMI shall have no rights whatsoever in such Pathfinder
Information.
19.2 Confidential Information. "Confidential Information",
shall mean: (a) the Pathfinder Information; (b) the System
(except aspects of the System, which by the nature of their
utility, are exposed to third parties); (c) any information
disclosed by OMI or Time in writing designated as confidential,
proprietary or marked with words of like import; (d) any
information orally conveyed by OMI or Time if the disclosing party
provides specific written notice that such oral communication
shall be considered to be "Confidential Information" and delivers
a confirmation thereof in writing to the receiving party within
ten (10) days of the oral conveyance; (e) any information
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disclosed pursuant to audits as set forth in Section 15.2.
Without limitation of the foregoing, the parties agree that
Confidential Information shall include: (i) this Agreement and
its terms and conditions; and (ii) Time's business plans, ideas,
projections, forecasts, improvements, know how, concepts, future
activities and any information relating to Pathfinder.
19.3 Restrictions. The recipient of Confidential Information
agrees that, absent the prior written consent of the disclosing
party, it shall not reveal or disclose any Confidential
Information for any purpose to any other person, firm, corporation
or other entity, or use any Confidential Information for any
purpose other than as contemplated herein. The recipient shall
keep any copies of the Confidential Information in as secure a
location as the recipient uses for its own similar information,
shall inform the employees, agents or representatives of the
recipient or the recipient's Affiliates of their obligations under
this Agreement, and shall take such steps as may be reasonable in
the circumstances, or as may be reasonably requested by the
disclosing party, to prevent any unauthorized disclosure, copying
or use of the Confidential Information. The recipient shall grant
access to the Confidential Information only to those employees,
agents and representatives of the recipient or the recipient's
Affiliates, who are required to obtain such access to enable the
undersigned to use the Confidential Information for the purposes
permitted by this Agreement.
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19.4 Exceptions. Confidential Information shall not include
information which: (a) at or prior to the time of disclosure was
lawfully known to the receiving party; (b) at or after the time of
disclosure becomes generally available to the public other than
through any act or omission of the receiving party; (c) is
developed by the receiving party independent of any Confidential
Information it receives from the disclosing party; (d) is received
from a third party free to make such disclosure without breach of
any legal obligation; or (e) is required to be disclosed pursuant
to any statute, regulation, order, subpoena or document discovery
request, provided that prior written notice of such disclosure is
furnished to the disclosing party as soon as practicable in order
to afford the disclosing party an opportunity to seek a protective
order (it being agreed that if the disclosing party is unable to
obtain or does not seek a protective order and the receiving party
is legally compelled to disclose such information, disclosure of
such information may be made without liability).
19.5 Return or Destroy. Time and OMI each agree that upon
the termination of this Agreement for any reason, each party shall
promptly return or destroy (as directed by the other party) all
Confidential Information of the other party including all copies
thereof (excluding any Confidential Information which is subject
to a license surviving termination of this Agreement). Upon
request by a party, the other party shall deliver a certificate
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
signed by a' senior executive officer stating that the party has
complied in full with the terms of this Section.
19.6 OMI's Duty to Inform. If Time requests that OMI develop
or implement any software pursuant to Time's detailed instructions
or detailed specifications that, to the best of the knowledge and
belief of OMI's Project Manager or any other individuals assigned
by OMI to such development or implementation, is likely to
infringe on any Third Party Rights, OMI shall promptly so notify
Time in reasonable detail in writing.
20. INDEMNIFICATION
20.1 OMI Indemnification
(a) OMI, at its own expense, shall indemnify and hold
harmless Time and defend any action brought against Time with
respect to any claim, demand, cause of action, debt, liability or
expense, including attorneys' fees, due to claims: (i) that the
System, the Tax Server Software or any component thereof used in
accordance with the terms of this Agreement, infringes, violates
or misappropriates any Third Party Rights (as defined in Section
18.1) (provided, however, that OMI's indemnification Obligations
with respect to patents issued under the laws of countries other
than the United States ("Foreign Patents") shall, except for
Foreign Patents which are the counterparts of any United States
patents, be limited to *** ******* ******* (**********) during the
Term of this Agreement; (ii) that OMI breached any term or
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representation set forth herein; or (iii) for Personal or bodily
injury or damage to Property arising out of the negligence of OMI.
(b) Time may, at its own expense, assist in such
defense if it so chooses, provided that OMI shall control such
defense and all negotiations relative to the settlement of any
such claim. OMI shall not settle any claim which adversely
affects Time's right to use the System or any component thereof
without the prior approval of Time.
(c) Time shall Promptly provide OMI with written notice
of any claim which Time believes falls within the scope of this
Section 20.1, provided, however, that, except to the extent OMI is
actually prejudiced by Time's failure to provide such prompt
notice, Time's failure to provide such notice hereunder shall not
limit Time's rights under this Article 20.
(d) In the event that the System, the Tax Server
Software or any portion thereof is held to constitute an
infringement of a Third Party Right and its use is enjoined, OMI
shall have the obligation to, at its option: (i) modify or cause
the third party licensor to modify the infringing portion of the
System or the Tax Server Software at its own expense, without
impairing in any respect the functionality or performance of the
System or Tax Server Software, so that it is non-infringing; or
(ii) replace the System and the Tax Server Software with an
equally suitable, non-infringing system, which Time shall have the
right to subject to the acceptance tests set forth in this
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Agreement. If none of the foregoing alternatives are available to
OMI after exercising its best efforts, Time shall receive a
repayment of a fair allocation of all monies paid to OMI pursuant
to this Agreement, and OMI shall accept return of the System and
the Tax Server Software at its expense, once Time has arranged for
the continuation of the functions performed thereby. OMI shall
have no obligations under this Section 20.1 with respect to
infringement or misappropriation of Third Party Rights arising
from (A) modifications to the System and Tax Server Software or
Developments that were made by or on behalf of Time and were not
made or authorized by OMI; (B) use of the System and Tax Server
Software or Developments in combination with products that were
provided by or on behalf of Time and which product OMI did not
provide, authorize or reasonably contemplate to be used in
conjunction with the System and Tax Server Software or
Developments; or (C) implementation of screen displays or of any
Development in compliance with detailed specifications provided by
Time (provided that such obligation does not relate to the
particular way in which OMI chooses to perform such
implementation) With respect to the Tax Server Software, OMI
shall have no obligations under this Section 20.1 with respect to
any claim (except with respect to any claim alleging facts which,
if true, would constitute a breach of OMI's representations,
warranties or agreements as stated herein) arising from the Tax
Server Software to the extent that AVP Systems has limited its
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liability to OMI for such claims, including without limitation,
any claim arising from incorrect tax data provided by the Tax
Server Software and any claim based on infringement or
misappropriation of Third Party Rights (provided, however, that in
the event that AVP Systems (or its successor) provides incorrect
tax data repeatedly, OMI and Time will jointly cooperate in taking
commercially reasonable steps to replace AVP Systems with a new
mutually agreeable vendor and in adapting the System to enable the
System to utilize the tax data provided by the new vendor.)
20.2 Time Indemnification
(a) Time, at its expense, shall indemnify and hold
harmless OMI and defend any action against OMI with respect to any
claim, demand, cause of action, debt, liability or expense,
including attorneys' fees, due to claims: (i) that Time breached
any term or representation set forth herein; (ii) for personal or
bodily injury or damage to property arising out of the negligence
of Time; (iii) arising out of any of the circumstances stated in
the penultimate sentence of Section 20.1(d); or (iv) directly
related to any maintenance of the System made by Time or its
agents, unless authorized, specified, recommended or suggested by
OMI.
(b) OMI may, at own expense, assist in such defense if
it so chooses, provided that Time shall control such defense and
all negotiations relative to the settlement of any such claim. -
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(c) OMI shall promptly provide Time with written notice
of any claim which OMI believes falls within the scope of this
Section 20.2, provided, however, that, except to the extent Time
is actually prejudiced by OMI's failure to provide such prompt
notice, OMI's failure to provide such notice hereunder shall not
limit OMI's rights under this Article 20.
20.3 Limitation. This Article 20 contains the parties' sole
and exclusive obligations and sole and exclusive remedies, with
respect to infringement or misappropriation of Third Party Rights.
20.4 Section 365(n). All rights and licenses granted under
or pursuant to this Agreement by OMI to Time are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code (the "Code"), licenses to rights to
"Intellectual Property" as defined under Section 101(52) of the
Code. The parties agree that Time, as licensee of such rights
under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Code. The parties further
agree that, in the event of the commencement of bankruptcy
proceedings by or against OMI under the Code, Time shall be
entitled to retain all of its rights under this license.
20.5 Publicity. OMI and Time agree that neither will,
without the written consent of the other in each instance:
(i) use in advertising, publicity, or otherwise the name of the
other, or any trade name, trademark, trade device, service mark,
symbol or any abbreviation, contraction or simulation thereof
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owned by the other; or (ii) represent, directly or indirectly,
that any product or any service provided by OMI has been approved
or endorsed by Time.
20.6 Most Favored Customer. During the Term, OMI agrees to
treat Time as a most favored customer. OMI represents that all of
the prices, terms and benefits granted by OMI hereunder are on an
overall basis comparable to or better than the prices, terms and
benefits previously offered by it for comparable services to any
customer of OMI. If, during the Term, OMI shall enter into
arrangements with any other customer providing such customer more
favorable terms, OMI shall notify Time of such terms and this
Agreement shall thereupon be deemed amended to provide the same
terms to Time for any purchases of goods and services by Time from
OMI.
21. LIMITATION OF LIABILITY
21.1 Limitation of Liability for Time. IN NO EVENT SHALL
TIME BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR
INDIRECT DAMAGES, COSTS OR CLAIMS OF ANY NATURE WHATSOEVER ARISING
OUT OF OR RELATING TO THE SUBJECT MATTER HEREOF; AND THE AMOUNT OF
TIME'S LIABILITY TO OMI UNDER ANY CLAIM FOR LOSS OR LIABILITY
BASED UPON, ARISING OUT OF, RESULTING FROM, OR IN ANY WAY
CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT SHALL
IN NO CASE EXCEED UNPAID AMOUNTS ACTUALLY DUE AND OWING TO OMI FOR
ANY EQUIPMENT, PRODUCTS OR SERVICES FURNISHED UNDER THIS
AGREEMENT. THE FOREGOING LIMITATIONS SHALL NOT BE APPLICABLE WITH
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RESPECT TO TIME'S INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTION
20.2 HEREIN OR WITH RESPECT TO TIME'S BREACH OF ARTICLE 4 OR
ARTICLE 19 HEREUNDER OR TIME'S ABANDONMENT OF ITS OBLIGATIONS
HEREUNDER OR TIME'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
21.2 Limitation of Liability for OMI. IN NO EVENT SHALL OMI
BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT
DAMAGES, COSTS OR CLAIMS OF ANY NATURE WHATSOEVER ARISING OUT OF
OR RELATING TO THE SUBJECT MATTER HEREOF; AND THE AMOUNT OF OMI'S
LIABILITY TO TIME OR ANY THIRD PARTY UNDER ANY CLAIM FOR LOSS OR
LIABILITY BASED UPON, ARISING OUT OF, RESULTING FROM, OR IN ANY
WAY CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT
SHALL IN NO CASE EXCEED THE MONEY PAID TO OMI FOR ANY EQUIPMENT,
PRODUCTS OR SERVICES FURNISHED OR TO BE FURNISHED UNDER THIS
AGREEMENT. THE FOREGOING LIMITATIONS SHALL NOT BE APPLICABLE WITH
RESPECT TO OMI'S INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTION
20.1 HEREIN, OR WITH RESPECT TO OMI'S BREACH OF ARTICLE 19
HEREUNDER OR OMI'S ABANDONMENT OF ITS OBLIGATIONS HEREUNDER OR
OMI'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
22. TERMINATION
22.1 Time Termination Without Cause. At any time during the
Term, Time may terminate this Agreement without cause upon at
least ninety (90) days advance written notice to OMI (the "Notice
of Termination Without Cause") specifying a date of termination
(the "Termination Date"). In the event of termination by Time
pursuant to this Section 22.1:
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22.1.1 Time shall pay to OMI: (a) all fees due and
payable for any Server Software or Developments installed and
accepted by Time prior to termination; (b) all fees due and
payable for all other Services performed by OMI in anticipation of
compensation prior to the Notice of Termination Without Cause, as
mutually agreed to by the parties, but in no event on a basis
higher than on an hourly basis at the Discounted Time and
Materials Rates which the parties agree are applicable to the
particular Services; (c) all amounts owed by Time to OMI under the
terms and conditions of Section 4.8 and Exhibit F with respect to
Third Party Transaction Fees then accrued but not yet paid; and
(d) any documented fees committed to third parties of OMI for
goods or Services but only to the extent that: (i) such fees
cannot be reduced or cancelled; (ii) Time has not already paid or
reimbursed OMI for such fees; (iii) such fees are not for human
resources (unless explicitly specified and authorized pursuant to
Article 14 herein, and as a result of which OMI entered into an
arrangement that guaranteed payment upfront and of which Time was
promptly advised by OMI and to which Time agreed, but only to the
extent to which such payment was not already paid by Time);
(iv) such fees were incurred by OMI solely in connection with
OMI's Services to Time hereunder; and (v) such goods and Services
cannot be allocated to other OMI customers.
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22.1.2 Maintenance Services for the System shall
continue to be available to Time at OMI's "most favored customer
rates" pursuant to Section 20.6 herein.
22.1.3 All licenses granted to Time and fully paid for
hereunder survive perpetually, except as terminated by OMI
pursuant to Section 22.5.
22.1.4 Time will have an option to procure up to six
(6) months of transition assistance pursuant to Section 22.7
herein.
22.2 Termination For Cause by Time. Time, at its sole option
shall have the right to terminate this Agreement, in whole or in
part, by giving written notice of termination to OMI of the
occurrence of any of the following:
(a) Slippage of any milestone of the Implementation
Plan by more than sixty (60) days, provided that, Time shall not
have the right to terminate unless the following conditions shall
have been met: (i) such slippage is not due materially to the
fault of Time; (ii) Time shall have given OMI an opportunity to
cure such slippage by providing OMI with at least fifteen (15)
days prior written notice of Time's intention to terminate; and
(iii) OMI shall have failed to cure such slippage within such
fifteen (15) day cure period;
(b) Any material failure of performance by OMI, if:
(i) within thirty (30) days after the giving of written notice to
OMI of such failure of performance, OMI has not cured such
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failure; and (ii) OMI fails to demonstrate to Time the likelihood
of OMI's successfully satisfying its obligations with respect to
Phase 2 or the Maintenance Services in accordance with the terms
and conditions of this Agreement;
(c) OMI becomes insolvent or files for bankruptcy; or
(d) A Change of Control of OMI if: (i) the transferee
does not agree in a written representation to Time that:
(A) Shikhar Ghosh, or a replacement reasonably acceptable to Time,
shall remain in a significant managerial capacity for a period of
at least two (2) years from the effective date of the Change of
Control; and (B) the transferee shall continue to commit adequate
financial resources to continue the business of OMI (as evaluated
based on the financial performance of OMI during the twelve (12)
month period preceding the Change of Control) for a period of at
least two (2) years from the effective date of the Change of
Control); (ii) the transferee does not cause the representations
made pursuant to Time pursuant to Section 22.2(d)(i) to be true;
or (iii) the transferee is a direct competitor of Time Inc. or any
of its subsidiaries.
(e) The System is no longer wholly owned or controlled
by OMI and (i) Time for reasonable cause deems the transferee to
be unacceptable to Time; or (ii) (x) the transferee does not agree
in a written representation to Time to continue to commit adequate
financial resources (as evaluated based on that portion of the
financial performance of OMI related to the System during the
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twelve (12) month period preceding the change in ownership or
control of the System) for at least two (2) years from the date on
which the System is no longer owned or controlled by OMI, to
develop, support and maintain the System; and (y) the
representations made to Time pursuant to Section 22.2(e)(ii)(x)
are not satisfied.
22.3 Time's Rights on Termination for Cause. In the event of
a termination of this Agreement by Time pursuant to Section 22.2,
in addition to any other right or remedy available at law, in
equity, or by agreement:
22.3.1 Time shall have the rights set forth in Sections
22.1.2 and 22.1.4 above.
22.3.2 All rights and licenses granted to Time
hereunder survive perpetually subject to OMI's right to terminate
the License pursuant to Section 22.5.
22.3.3 Upon a termination pursuant to Section 22.2(b),
Section 22.2(c), Section 22.2(d) (provided that, in Time's
reasonable and good faith judgment, the totality of circumstances
set forth above in Section 22.2(d) is likely to have a significant
adverse impact on Time) or Section 22.2(e) (provided that, in
Time's reasonable and good faith judgment, the totality of
circumstances set forth above in Section 22.2(e) is likely to have
a significant adverse impact on Time), Time shall be entitled to a
release of the Deposit from Escrow.
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22.3.4 Except for the Server Software, Time shall have
the right to complete development of any incomplete software which
OMI was obligated to develop hereunder, or any other Development
in progress at the time of Time's termination and, if Time does
not obtain a release of the Deposit from Escrow, OMI shall provide
Time with all software (including source code), Documentation and
other work product which is related to the completed or incomplete
software or Development.
22.3.5 If Time completes development of any incomplete
software or any Development in progress, Time shall own that
portion of the software or Development which is completed by Time
(the "Completed Software" which shall include source code
thereof). At Time's discretion, Time may offer to sell the
Completed Software to OMI and OMI may elect to purchase the
Completed Software. Upon OMI's and Time's mutual agreement as to
a purchase fee to be charged by Time and a maintenance fee to be
charged by OMI to maintain the Completed Software, and upon OMI's
payment to Time of the purchase fee, Time shall assign to OMI all
right, title and interest in and to the Completed Software,
subject to Time's retention of a perpetual, non-exclusive,
royalty-free license to use, modify, maintain, alter and otherwise
exploit the Completed Software. At Time's request, OMI shall
provide to Time Maintenance Services for the Completed Software at
the agreed upon maintenance fee. In the event OMI develops
upgrades to or new releases of the Completed Software, Time shall
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receive a fair licensing royalty based on OMI's use of the
upgrades or new releases for other OMI clients. Time shall have
the right to receive such upgrades or new releases at a cost to
Time no greater than the lowest price at which such upgrades or
new releases are sold by OMI to any other customer of OMI; but in
the event such upgrades or new releases are offered, marketed,
distributed or otherwise made commercially available by OMI as
part of OMI's standard Maintenance Services, Time shall have the
right to receive such upgrades or new releases, at no additional
cost, as part of the Maintenance Services.
22.4 Termination for Cause by OMI. OMI, at its sole Option
shall have the right to terminate this Agreement (excluding the
License which survives perpetually unless terminated by OMI
pursuant to Section 22.5), in whole or in part, by giving written
notice of termination to Time of the occurrence of any of the
following:
(a) Any material breach of this Agreement, if within
thirty (30) days after the giving of written notice to Time of
such failure of performance, Time has not cured such failure; or
(b) Time becomes insolvent or files for bankruptcy.
22.5 Termination of License by OMI. OMI shall have the right
to terminate the License granted pursuant to Section 4.1 herein
if, and only if: (i) Time, in OMI's reasonable and good faith
judgment, wilfully or recklessly and in an egregious manner
violates its obligations with respect to the confidentiality of
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the source code of the Server Software or the trade secrets
embedded in the Server Software; (ii) OMI gives Time an
opportunity to challenge OMI's assertion of a violation, or cure
(if possible) such violation by providing Time with thirty (30)
days written notice of its intention to terminate the License,
specifying any and all instances of Time's alleged violations; and
(iii) Time fails to challenge OMI's assertion of a violation, or
cure (if possible) such alleged violations within thirty (30) days
of receipt of such notice.
22.6 Delivery on Termination. Following termination of this
Agreement for any reason, OMI shall deliver to Time all materials
relating to Time or this Agreement, or obtained or developed in
the course of performance of this Agreement or containing or
derived from all Confidential Information, provided however that
in the case of OMI's termination of this Agreement pursuant to
Section 22.4, OMI shall be obligated to only deliver to Time all
materials relating to Time, all materials containing or derived
from Time Confidential Information, and any Deliverables which
Time has paid for before the time of termination and which OMI had
not already delivered to Time.
22.7 Transition Assistance. OMI agrees that upon the
termination of this Agreement by either party for any reason other
than pursuant to Section 22.4 herein:
(a) Upon Time's written request, OMI shall continue to
provide all or a part of the Services subsequent to the
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Termination Date for a period not to exceed six (6) months, and
Time shall pay for such Services at the rates paid by Time for
such Services immediately prior to the Termination Date; and
(b) OMI shall give full cooperation and assistance to
Time to assure an orderly and efficient transition to whomever
Time elects to use to provide services similar to the Services to
Time. Such assistance shall include, but not be limited to, the
activities defined on Exhibit J. Such assistance shall be
rendered at the Discounted Customized Work Rates, except in the
case of termination of this Agreement by Time pursuant to Section
22.2 herein, in which case this cooperation and assistance shall
be rendered without charge to Time.
22.8 Survival. In the event of the termination of this
Agreement for any reason, the provisions of Articles 1, 3, 4, 7,
8, 12, 17, 18, 19, 20, 21, 22 and 23 shall survive.
23. MISCELLANEOUS
23.1 Insurance. OMI shall purchase and keep in force at its
own cost and expense the following minimum coverages with
reputable commercial insurers:
(a) Worker's Compensation & Employer's Liability
Insurance, Statutory Amounts and coverage as required by law;
(b) Commercial General Liability Insurance, including
Contractual Liability, completed Operations, Personal Injury
Coverage, Broad Form Property Damage with a combined single limit
of at least *** ******* Dollars (**********) on an occurrence
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
basis and at least *** ******* Dollars (**********) on an
aggregate basis;
(c) Insurance, to be effective by January 1, 1996,
which would cover OMI's indemnification obligations as set forth
in Section 20.1 with a limit of at least *** ******* Dollars
(**********) on a per claim basis and *** ******* Dollars
(**********) on an aggregate basis;
(d) Umbrella coverage, to be effective by January 1,
1996 for (a), (b) and (c) above of ***** ******* Dollars
(**********)
Certificates of Insurance acceptable to Time, and with regard
to (b) through (d) above, indicating that Time is an additional
insured, shall be filed with Time prior to commencement of the
work described herein. Each and every policy and certificate
shall contain an endorsement stating that the insurance company
will not, prior to the expiration or termination of this Agreement
or any policy expiration date shown on the policy and certificate,
whichever occurs first, terminate the policy or change any
coverage therein without giving written notice to Time. This
notice shall arrive at least fifteen (15) days prior to the
termination or change.
23.2 Notice. Wherever under this Agreement one party is
required or permitted to give notice to the other, such notice
shall be deemed given when delivered in hand, when telecopied or
faxed and receipt confirmed, when sent by overnight courier
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service to the address specified below, or when mailed by United
States mail, registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:
In the case of Time:
Time Inc. New Media
Time & Life Building
1271 Avenue of the Americas
New York, New York 10020
Attn: General Manager
With a copy to:
Time Inc.
Time & Life Building
1271 Avenue of the Americas
New York, New York 10020
Attn: General Counsel
In the case of OMI:
Open Market, Inc.
245 First Street
Cambridge, Massachusetts 02142
Attn: Legal Counsel
With a copy to:
Lucash, Gesmer & Updegrove
One McKinley Square
Boston, Massachusetts 02109
Attn: Richard M. Lucash, Esq.
Either party hereto may from time to time change its address
for notification purposes by giving the other written notice of
the new address and the date upon which it will become effective.
23.3 Personnel Rules and Regulations. If OMI personnel are
present at Time's facilities, such personnel will comply with
Time's security regulations particular to Time's facilities,
including any procedures which Time personnel and other
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consultants are normally asked to follow. Time will inform OMI of
such regulations or procedures upon OMI's request. Unless
otherwise agreed to by the parties, OMI personnel shall observe
the working hours, working rules and holiday schedules of Time
while working on Time's premises. If Time personnel are present
at OMI's facilities, such personnel will comply with OMI's
security regulations particular to OMI's facilities, including any
procedures which OMI personnel and other consultants are normally
asked to follow. OMI will inform Time of such regulations or
procedures upon Time's request. Unless otherwise agreed to by the
parties, Time personnel shall observe the working hours, working
rules and holiday schedules of OMI while working on OMI's
premises.
23.4 Independent Contractor. In performance of this
Agreement, OMI is acting as an independent contractor. Personnel
supplied by either party hereunder are not the other party's
personnel or agents, and each party assumes full responsibility
for the acts of the personnel they supply. Each party shall be
solely responsible for the payment of compensation to its own
employees and subcontractors assigned to perform services
hereunder, and such employees and subcontractors shall be informed
that they are not entitled to the provision of any employee
benefits of the other party. Each party shall be responsible for
payment of its employees' workers' compensation, disability
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benefits, unemployment insurance or for withholding income taxes
and social security.
23.5 Force Majeure. Except as expressly provided to the
contrary in this Agreement, neither party shall be liable to the
other for any delay or failure to perform due to causes beyond its
reasonable control. Performance times shall be considered
extended for a period of time equivalent to the time lost because
of any such delay.
23.6 No Waiver. No delay or omission by either party hereto
to exercise any right or power hereunder shall impair such right
or power or be construed to be a waiver thereof. A waiver by
either of the parties hereto of any of the covenants to be
performed by the other or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof or of
any other covenant herein contained.
23.7 Severability. In the event any provision hereof shall
be deemed invalid or unenforceable by any court or governmental
agency, such provision shall be deemed severed from this Agreement
and replaced by a valid provision which approximates as closely as
possible the intent of the parties. All remaining provisions
shall be afforded full force and effect.
23.8 Assignment. Time may assign or sublicense this
Agreement, in whole or in part, to any parent, Affiliate or
subsidiary of Time or any successor organization which acquires
Time or any Time parent, Affiliate or subsidiary into which Time
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or any parent, Affiliate or subsidiary or portion thereof is
merged, sold or otherwise transferred, provided however that Time
shall not have the right to assign or sublicense this Agreement to
the Excluded Entities. Any assignment by OMI without Time's prior
written consent shall be null and void. Notwithstanding the
foregoing, OMI may transfer or assign its rights and obligations
hereunder in connection with a sale, transfer, merger or
consolidation of all or substantially all of its assets or
business, provided, however, that Time's prior written consent to
the foregoing shall be required (which consent shall not be
unreasonably withheld).
23.9 Governing Law and Venue. This Agreement shall be
governed by, subject to, and interpreted in accordance with the
laws of the State of New York, without regard to conflicts of
laws. If OMI commences any action related to the subject matter
hereof against Time, such action will be maintained in the courts
of the State of New York, or the Federal District Courts sitting
in New York County, which courts shall have exclusive jurisdiction
for such purposes. If Time commences any action related to the
subject matter hereof against OMI, such action will be maintained
in the courts of the Commonwealth of Massachusetts, or the Federal
District Courts sitting in the city of Boston, Massachusetts,
which courts shall have exclusive jurisdiction for such purposes.
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23.10 Counterparts. This Agreement may be executed in
counterparts, or by facsimile copy followed up by an original,
each, when taken together, shall constitute the entire Agreement.
23.11 Entire Agreement. Each party acknowledges that this
Agreement, including the Exhibits and the Schedules attached
hereto and the documents incorporated by reference herein
constitute the complete and exclusive statement of the terms and
conditions between the parties, which supersedes all prior
proposals, understandings and all other agreements, oral and
written, between the parties relating to the subject matter of
this Agreement. This Agreement may not be modified or altered
except by a written instrument duly executed by both parties.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement the date and year first written above by their fully
authorized representatives.
TIME INC. NEW MEDIA OPEN MARKET, INC.
_________________________ _________________________
By:______________________ By:______________________
Title:___________________ Title:________________
-88-
<PAGE>
SCHEDULE OF EXHIBITS
EXHIBIT A FUNCTIONAL SPECIFICATIONS
EXHIBIT B THIRD PARTY CLAIMS
EXHIBIT C PHASE 2 DELIVERABLES
EXHIBIT D DISCOUNTED TIME AND MATERIAL RATES
EXHIBIT E IMPLEMENTATION PLAN
EXHIBIT F PAYMENT SCHEDULE
EXHIBIT G DOCUMENTATION
EXHIBIT H SUPPORT SERVICES
EXHIBIT I HARDWARE/SOFTWARE/SITE REQUIREMENTS
EXHIBIT J TRANSITION ASSISTANCE
EXHIBIT K ESCROW AGREEMENT
EXHIBIT L ACCEPTANCE TEST PLAN
EXHIBIT M PROJECT RESOURCE PLAN
EXHIBIT N MAINTENANCE SERVICES
EXHIBIT O AVP SYSTEMS LICENSING AGREEMENT
-89-
<PAGE>
EXHIBIT A
FUNCTIONAL SPECIFICATIONS1
Page A-1 to A-22
contains confidential materials
which have been omitted and filed
separately with the Securities
and Exchange Commission
______________________
1 The Functional Specifications as described herein may be
subject to change pursuant to the final version which shall
be delivered in accordance with Section 6.2.
A-1
<PAGE>
EXHIBIT B
THIRD PARTY CLAIMS
Page B-1
contains confidential materials
which have been omitted and
filed separately with the
Securities and Exchange
Commission
B-1
<PAGE>
EXHIBIT C
PHASE 2 DELIVERABLES
Page C-1
contains confidential materials
which have been omitted and
filed separately with the
Securities and Exchange
Commission
C-1
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT D
DISCOUNTED TIME AND MATERIAL RATES
A. Discounted Time and Material Rates:
1. Discounted Customized Work Rates: Applies to work to be
performed by OMI related to developments, modifications,
customizations, enhancements and other customized work:
Resource Discounted Rate
Project Manager ****/hour
Senior Architect/Lead ****/hour
Software Engineer(s) ****/hour
Operations Engineer ****/hour
Technical Writer ****/hour
2. Discounted Standard Work Rates: The Discounted Time and
Material Rates that shall apply to work to be performed
by OMI related to System integration, implementation,
operational matter and other work which is not unique to
Time. These rates shall be based on the aggregate hours
purchased by Time (excluding hours utilized for Phase 2
Resources or Transition Assistance) at the Discounted
Standard Work Rates ("Aggregate Standard Hours") from
the Agreement Date as follows:
Aggregate
Standard
Hours
Type of Less Than **** To More Than
Resource **** Hours **** Hours **** Hours
Project Manager ****/hour ****/hour ****/hour
Senior Architect/Lead ****/hour ****/hour ****/hour
Software Engineer(s) ****/hour ****/hour ****/hour
Operations Engineer ****/hour ****/hour ****/hour
Technical Writer ****/hour ****/hour ****/hour
D-1
<PAGE>
EXHIBIT E
IMPLEMENTATION PLAN
SEE ATTACHED.
E-1
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE
I. License Fees for Server Software:
A. Primary Copies: The following License Fees apply to the
Primary Copies (including one back-up copy) of the
Server Software licensed hereunder.
Server Software Cost Hardware # Copies1
Transaction ******** (Sun SparcStation 1
Server: 1000 or its
substantial
equivalent
Merchant ******** (regardless of 1
Server: hardware
configuration)
B. Additional Copies: The following License Fees represent
the amount payable to OMI for each Additional Copy
(including one Back-up Copy) of the Server Software (or
any component thereof) licensed hereunder to be usable
on the Server Hardware configuration identified below.
Server Software Cost Hardware # Copies
Transaction ******** (Sun SparcStation 0
Server: 1000 or its
substantial
equivalent)
______________________
1 The "# Copies" shall mean the number of copies Time has
elected to license as of the Agreement Date.
F-1
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
Transaction ******** (Sun SparcStation 0
Server: 2000 or its
substantial
equivalent)
Merchant ******** (regardless of 3
Server: hardware
Configuration)
C. Payment Plan:
1. Primary Copies:
a. Paid as of the Agreement Date: ********
b. Remaining balance of ******* will be paid in full
on or before December 31, 1995 (provided that an
invoice is timely delivered by OMI to Time on or
after the Agreement Date).
2. Additional Copies:
a. Paid as of the Agreement Date: ****
b. Remaining balance of ******* will be paid in full
on or before December 31, 1995 (provided that an
invoice is timely delivered by OMI to Time on or
after the Agreement Date).
II. Hardware Upgrades:
A. Sun SparcStation 1000 to Sun SparcStation 2000: The
following additional License Fees apply if: (a) Time has
previously licensed Primary Copies for the Sun
SparcStation 1000 and elects to upgrade to the Sun
SparcStation 2000; or (b) Time has Previously licensed
Additional Copies for the Sun SparcStation 1000 and
elects to upgrade to the Sun SparcStation 2000:
F-2
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
1. Primary Copy of
Transaction Server Software: *******
2. Each Additional Copy of Transaction
Server Software: *******
3. As noted in Sections I.A and II.A of this Exhibit
F, no additional License Fees are due in the event
Time replaces its Server Hardware in connection
with the Primary or Additional Copies of the
Merchant Server Software.
Notwithstanding the foregoing, in the event that OMI's
standard license fees for OMI's products are less than
provided for herein, Time shall have the benefit of the
lowest rates designated as OMI's standard prices.
B. New Generation Hardware Configurations: The increase in
the then-current License Fee associated with Time's
usage of the Transaction Server Software on new
generation hardware configurations (excluding the Sun
SparcStation 2000, which increase is set forth above in
Section II.A.2) shall be calculated in accordance with
the following equation:
1. ("I" shall mean the increase in the then existing
License Fee to be calculated. "C" shall mean the
change in operational capacity which the new
generation hardware configuration represents from
the configuration then in place. (The change in
operational capacity shall be the change in power
and efficiency of the hardware configuration which
change is mutually agreed to by Time and OMI based
F-3
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
on the manufacturer's published benchmark
specifications for that hardware configuration.)
"L" shall mean the then existing License Fee.)
*********************
2. Notwithstanding the foregoing: (i) the maximum
increase to the then existing License Fee for the
utilization of any new hardware configuration of
the Transaction Server shall be *********** *******
(****); and (ii) there shall be no increase in
License Fees associated with the addition of
central processing units to existing hardware
configuration.
III. Tax Server Software License Fees.
A. Time and Affiliates: The following License Fees apply
if the Tax Server Software is being used for Time and/or
its Affiliates:
1. One Time Set-Up Fee: ******
2. Annual Fee: ******
B. Non-Affiliates: The following License Fees apply if the
Tax Server Software is being used for Non-Affiliates:
1. Set-Up Fee Per Merchant: *** per merchant
2. License Fee: *******
3. Annual Fee Per Merchant **** per merchant
per state in which
merchant has a
taxable presence
(nexus)
F-4
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
IV. SIMS. Cost to Time: *******. This will be paid in
full on or before December 31, 1995 (provided
that an invoice is timely delivered by OMI to
Time on or after the Agreement Date).
V. Initial Consulting Services Fee: ********
A. Paid as of Agreement Date: ********
B. Remaining balance (********) will be paid in full on or
before December 31, 1995 (provided that an invoice is
timely delivered by OMI to Time on or after the
Agreement Date).
VI. Phase 2 Resources: The fees for the Phase 2 Resources shall
be paid in accordance with the following payment schedule:
A. Developments:
1. Payments Due in 1995:
a. ******** payable on Time's acceptance of Functional
Specifications (Implementation Plan, ID #10)
b. ******** payable on Time's acceptance of Alpha Test
Plan (Implementation Plan, ID #15)
c. ******** payable on Time's acceptance of the
Operations Plan (Implementation Plan, ID #36) and
Customer Support Plan (Implementation Plan, ID #37)
2. Payments Due in ****:
a. ******** payable on Final Acceptance
(Implementation Plan, ID #49).
F-5
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
b. Time shall make partial payments of these amounts
depending on the severity of errors (as defined in
Exhibit N), if any, in accordance with the
following chart, provided, however, that any
partial payment made hereunder shall not be deemed
to be acceptance or partial acceptance of any
Deliverable.
Type of Payment Severity Severity Severity
Payment Amount Level 1 Level 2 Level 3
Full Payment **** **** **** ****
Partial Payment *** **** **** ***
Partial Payment1 **** **** *** *****2
No Payment *** *** *** ***
B. Reserve Resources:
1. Payments Due in 1995: ********
2. Payments Due in ****: *******
C. Operations:
1. Payments Due in 1995: ********
2. Payments Due in ****: ********
D. Expenses: Time shall pay all reasonable out-of-pocket
expenses approved in writing in advance by Time incurred
______________________
1 Payment shall be made upon Time's receipt of the temporary
fix to be delivered by OMI pursuant to Exhibit N,
paragraph 2.
2 N/A means not applicable.
F-6
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
by OMI in connection with providing the Phase 2
Deliverables, plus an expense fee equal to *** *******
(**) of such reimbursed expenses.
VII. Customer Support Services
A. For Customer Support Services Rendered during February,
1995 through September, 1995:
1. Paid ******** as of the Agreement Date.
2. Remaining balance of ****** will be paid in full on
or before December 31, 1995 (provided that an
invoice is timely delivered by OMI to Time on or
after the Agreement Date).
B. As of the Agreement Date, the Customer Support Service
Fee shall be *******/***** invoiced monthly in arrears.
To the extent that Time requests additional dedicated
Customer Support personnel during the Term, the monthly
fee will be increased by ****** for each additional
person. Annual adjustments to the monthly fee,
effective upon the annual anniversary of Final
Acceptance, may be made to reflect an increase in OMI's
costs in providing such personnel, provided however that
the Customer Support Service Fee shall not increase more
than **** ******* (**) at any one time and shall not
increase more than *** ******* (***) from the initial
Customer Support Service Fee in effect as of the
Effective Date during the Term.
F-7
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
C. Remaining balance due for the Customer Support Services
to be rendered by OMI during October, 1995 until
December 31, 1995 will be paid in full on or before
December 31, 1995 (provided that an invoice is timely
delivered by OMI to Time on or after the Agreement
Date).
VIII. Account Fees:
A. Account Setup Fee: ******** - Paid.
IX. Maintenance Fees:
A. Annual Maintenance Fee:
1. ******* for the Initial Maintenance Period for the
Primary Copies of the Server Software (******* of
which has been paid). Remaining balance of *******
will be paid in full on or before December 31, 1995
(provided that an invoice is timely delivered by
OMI to Time on or after the Agreement Date).
******* due for the Additional Copies of the
Merchant Server Software received on June 1, 1995,
(** of which has been paid).
2. The annual Maintenance Fee payable to maintain a
copy of the Transaction or Merchant Server Software
that Time elects to license after the Agreement
Date (the "Incremental Copy") shall be a percentage
(which percentage will vary as set forth below
depending on the sum of the "Aggregate License
F-8
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
Fees" and the "Incremental License Fee") of the
Incremental License Fee.
a. The "Aggregate License Fees" shall mean all or that
portion of the License Fees which reflects the
amount paid or due for those components of the
Server Software then being used by Time that Time
has elected to have OMI maintain prior to electing
to license the Incremental Copy.
b. The "Incremental License Fee" shall mean the
License Fee due for the Incremental Copy.
Accordingly, Time shall pay the following percentages of
the Incremental License Fee for each Incremental Copy:
Sum of Aggregate License Fees Annual Maintenance Fee Per
and Incremental License Fee Incremental Copy
Less than or equal to *** of Incremental License Fee
********
Greater than ******** *** of Incremental License
but less than or equal Fee
to **********
Greater than ********** *** of Incremental License
less than or equal Fee
to **********
Greater than ********** *** of Incremental License Fee
2. Maintenance Fees shall be payable annually in
advance.
B. Critical Beeper Service (during non-Business Hours on
7 x 24 basis): ***** ******* (**) of the sum of the
F-9
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
Aggregate License Fees and the Incremental License Fee,
payable annually in advance.
C. On-Site Visits: ****** per day per person, plus
reasonable travel and expenses, only if requested by
Time.
D. Returns and rebates:
1. During the first three-month period of Transaction
processing, Time shall withhold ****** *******
(***) of the total Third Party Transaction Fees as
a reserve from which returns or rebates can be
drawn.
2. After the first three-month period, Time shall
withhold a reasonable portion of the total Third
Party Transaction Fees as a reserve, based on the
portion of the reserve actually utilized for
returns and rebates during the prior quarter.
3. If the amount withheld as a reserve during any
three-month exceeds the amounts actually utilized
for rebates and returns during such three-month
period, Time shall credit the difference against
amounts due to OMI with respect to the subsequent
three-month period.
4. If the amount withheld as a reserve during any
three-month period is less than the amounts
utilized for rebates and returns during such
F-10
<PAGE>
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
three-month period, Time shall debit the difference
against amounts due to OMI with respect to the
subsequent three-month period.
5. Time will provide OMI with documentation along with
each payment setting forth Time's calculation of
the amounts to be paid to OMI.
6. Amounts shall be due and payable in arrears within
thirty (30) days following the last day of each
three-month period (with the first such three-month
period to begin as of the commencement of
Transaction processing services by Time and to end
on the last day of the third calendar month
thereafter).
X. Third Party Transaction Fees: The Third Party Transaction
Fees to be paid by Time to OMI shall be as follows:
F-11
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
A. Purchase of Third Party Hard Goods:
One-Time
Number of Third Party $ Cap Fee Per
Qualified Transaction Per Qualified
Non-Affiliates3 Fee Transaction Non-Affiliate
First *** ***** ** ***** ***
Qualified Transaction
Non-Affiliates Value
Next ** ***** ** ***** ******
Qualified Transaction
Non-Affiliates Value
Next ** ***** ** ***** ******
Qualified Transaction
Non-Affiliates Value
All Other **** ** ***** ******
Qualified Transaction
Non-Affiliates Value
B. Purchase of Third Party Soft Goods, Third Party Travel
Goods and Third Party Subscription Goods:
______________________
3 The term "Qualified Non-Affiliates" shall mean Non-Affiliates
who have signed third party content provider agreements with
Time and who are offering Third Party Transactions on
Pathfinder for which Time is obligated by this Agreement to
pay OMI Third Party Transaction Fees. The number of
Qualified Non-Affiliates shall be measured on the first
calendar day of every calendar month.
F-12
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
One-Time
Number of Third Party $ Cap Fee Per
Qualified Transaction Per Qualified
Non-Affiliates Fee Transaction Non-Affiliate
First ** ***** ** ***** ***
Qualified Transaction
Non-Affiliates Value
Next ** ***** ** ***** ******
Qualified Transaction
Non-Affiliates Value
Next ** ***** ** ***** ******
Qualified Transaction
Non-Affiliates Value
All Other ***** ** ***** ******
Qualified Transaction
Non-Affiliates Value
C. The Third Party Transaction Fees and Qualified Non-
Affiliate Fees shall be payable on a quarterly basis.
D. In the event Time pays to OMI the one-time fee
associated with a Particular number of Qualified
Non-Affiliates selling goods through Pathfinder at a
particular time, and subsequently, the number of
Qualified Non-Affiliates decreases, Time shall not
thereafter be required to pay to OMI one-time fees in
connection with any later increase in number of
Qualified Non-Affiliates up to the number of Qualified
Non-Affiliates for which Time has already paid one-time
fees.
XI. Other Fees: All other fees will be payable monthly pursuant
to OMI invoice. All invoices shall be accompanied by
substantiation and documentation as required by Time. Terms
F-13
<PAGE>
EXHIBIT F
PAYMENT SCHEDULE (CONTINUED)
of payment are net thirty-two (32) days.
XII. Expenses: Except as explicitly provided herein, all
reasonable travel and living costs incurred in connection
with the performance of this Agreement and approved in
advance by Time will be reimbursed by Time upon invoicing,
provided such invoices are accompanied by substantiation,
receipts and documentation as required by Time.
F-14
<PAGE>
EXHIBIT G
DOCUMENTATION
[DOCUMENTATION TO BE INCORPORATED INTO BINDERS]
The following materials are incorporated by reference as
Documentation. The documentation for each of these products/
developments will serve as a reference manual which will also
include installation instructions.
- Secure WebServer
- Transaction Management System
- TransactionLink
- StoreBuilder
- WebReporter
- Subscriber Information Management System
- SID Extension
G-1
<PAGE>
EXHIBIT H
CUSTOMER SUPPORT SERVICES
1. Commencing in February, 1995 OMI will provide two (2)
Full-time personnel dedicated to the customer support of
Pathfinder. The customer support personnel will be managed
by OMI. The individuals assigned to provide the Customer
Support Services shall not be the individuals providing other
Services to Time hereunder.
2. The customer support personnel will provide full support for
Pathfinder users, and develop operational scripts and tools
for the improvement of the quality and efficiency of
Pathfinder support. A detailed customer support plan will be
a component of the operational support plan delivered to Time
under the Implementation Plan prior to Final Acceptance.
H-1
<PAGE>
EXHIBIT I
HARDWARE/SOFTWARE/SITE REQUIREMENTS
SEE ATTACHED.
Pages I-2 to 1-4
contains confidential materials
which have been omitted and
filed separately with the
Securities and Exchange
Commission
I-1
<PAGE>
EXHIBIT J
TRANSITION ASSISTANCE
OMI will provide to Time such reasonable transition or termination
assistance as may be requested by Time as set forth herein,
including without limitation the following:
(a) OMI will develop, with the assistance of Time, a plan
for the orderly transition of management of the System's
operations from OMI to Time or to such person or entity
as Time shall name except Excluded Entities.
(b) OMI will, if Time so requests, transition portions of
the Transaction Services then being performed by OMI if
any, on a schedule reasonably designated by Time.
(c) OMI will provide training to individuals designated by
Time in the performance of the services then being
performed by OMI.
(d) OMI will make available to Time, pursuant to mutually
agreeable terms and conditions, any Third Party Software
and services that are then dedicated to the performance
of OMI's services hereunder. These terms and conditions
may include, but are not limited to, providing for Time
to assume responsibility for OMI's rights and
obligations with respect to, or to accept assignment of,
the agreements pursuant to which such Third Party
Software and services are then being provided.
J-1
<PAGE>
EXHIBIT K
ESCROW AGREEMENT
[TO BE COMPLETED WITHIN FIFTEEN DAYS OF THE AGREEMENT DATE]
K-1
<PAGE>
EXHIBIT L
ACCEPTANCE TEST PLAN
The following materials will be incorporated by reference herein
as Acceptance Test Plans when completed as defined in the
Implementation Plan:
- Phase Acceptance Test Plan - Payment Development - To be
completed by November 30, 1995, subject to Time's
approval
- Final Acceptance Test Plan - Payment Beta & Rollout
Phase - To be completed by February 5, 1996, subject to
Time's approval
L-1
<PAGE>
EXHIBIT M
PROJECT RESOURCE PLAN
SEE ATTACHED.
Pages M-2 to M-4
contains confidential materials
which have been omitted and
filed separately with the
Securities and Exchange
Commission
M-1
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT N
WARRANTY AND MAINTENANCE SERVICES
1. Severity Level One - Critical Problems. If, in Time's
reasonable discretion, the System fails in a critical function
whereby Time is unable to use the System or is severely restricted
in an operational environment (a "Critical Problem"), including,
without limitation, where the System threatens to corrupt or
permanently destroy data, repeatedly fails catastrophically, or
requires repeated rebooting, OMI shall, at no additional cost
other than the annual Maintenance Fee, use best efforts to provide
the following responses within the specified times after Time
notifies OMI of the Critical Problem: (i) initially contact Time
within one (1) hour of notice of the Critical Problem; (ii)
commence an initial action plan to cure the Critical Problem
within two (2) hours of notice of the Critical Problem; (iii) if
no resolution has been consummated within six (6) hours after
notice of the Critical Problem, at Time's request, at an
additional cost to Time of ****** per person per day (plus
reasonable travel and expenses), provide on-site support as soon
as possible (using best efforts), but in any event, no later than
twelve (12) hours after initial notice of the Critical Problem and
shall continuously update Time on the action plan at least every
six (6) hours; and (iv) correct the Critical Problem and provide a
fix, using best efforts, within twenty-four (24) hours of notice
of the Critical Problem. Time will provide any additional
information reasonably needed by OMI in order to assist OMI in
correcting the Critical Problem.
2. Severity Level Two - Moderate Problems. If, in Time's
reasonable discretion, the System suffers from a moderate failure
that does not prevent Time from using the System but does restrict
certain functions of the System, including, without limitation,
where the System is usable but inconvenient on occasion (i.e., one
or more documented commands or functions are not available in the
most convenient or expeditious manner), or has failed to be
installed (a "Moderate Problem"), OMI shall, at no additional cost
other than the annual Maintenance Fee, use best efforts to provide
the following responses within the specified times after Time
notifies OMI of the Moderate Problem: (i) initially contact Time
within twenty-four (24) hours of notice of the Moderate Problem;
(ii) commence an initial action plan to cure the Moderate Problem
within twenty four (24) hours of notice of the Moderate Problem;
(iii) update Time with progress on the action plan at least on a
daily basis; (iv) provide a temporary fix of the Moderate Problem,
using best efforts, within two (2) days of notice of the Moderate
Problem; and (v) provide a permanent fix of the Moderate Problem,
N-1
<PAGE>
EXHIBIT N
WARRANTY AND MAINTENANCE SERVICES (CONTINUED)
using best efforts, within thirty (30) days of notice of the
Moderate Problem. Time will provide any additional information
reasonably needed by OMI in order to correct the Moderate
Problem.
3. Severity Level Three - Minor Problems. If, in Time's
reasonable discretion, the System suffers from a minor failure
that does not prevent Time from fully using the System but does
result in some minor deviations from documented practices or
expected operation, including, without limitation, where the
System does not operate strictly according to specifications or
contains one or more errors in the documentation (a "Minor
Problem"), OMI shall, at no additional cost other than the annual
Maintenance Fee, use best efforts to provide the following
responses within the specified times after Time notifies OMI of
the Minor Problem: (i) initially contact Time within twenty-four
(24) hours of notice of the Minor Problem; (ii) commence an
initial action plan to cure the Minor Problem within ten (10) days
of notice of the Minor Problem; (iii) update Time with progress on
the action plan at least on a weekly basis; (iv) work diligently,
using best efforts, to provide a temporary fix of the Minor
Problem within ninety (90) days of notice of the Minor Problem;
and (v) provide a permanent fix of the Minor Problem, using best
efforts, in the next release, but to the extent the Maintenance
Period expires before delivery of the next release by OMI to Time,
OMI shall continue to be obligated to deliver any new release
containing a permanent fix of any Minor Problem identified by Time
during the Maintenance Period. Time will provide any additional
information reasonably needed by OMI in order to correct the Minor
Problem.
4. Hotline Support. During the Maintenance Period(s), OMI
shall, at no additional cost other than the annual Maintenance
Fee, provide Time with a hotline number to allow Time to notify
OMI's technical service representatives, during the hours of 8:00
a.m. through 6:00 p.m., Monday through Friday (Eastern Time) (the
"Business Hours"), of failures, malfunctions, defects or
non-conformities and to request answers by telephone from OMI to
questions concerning the use of the System.
5. Critical Beeper Service. Subject to the payment of the
applicable fees for Critical Beeper Services as set forth in
Exhibit F, outside of the Business Hours, OMI shall make available
to Time access to a pager, which will allow Time to access OMI's
"on-call" technicians on a seven (7) day a week, twenty-four (24)
hour a day basis.
N-2
<PAGE>
EXHIBIT N
WARRANTY AND MAINTENANCE SERVICES (CONTINUED)
6. Notice of Problems. For all purposes of this Agreement, all
good faith efforts on the part of Time to contact OMI by way of
the Hotline Support or the Critical Beeper Service as Specified
herein shall constitute notice of the Critical, Moderate and/or
Minor Problem (as applicable) and thereby shall trigger the
response times on the part of OMI as Specified herein.
N-3
<PAGE>
EXHIBIT O
AVP SYSTEMS LICENSING AGREEMENT
SEE ATTACHED.
AMENDMENT NUMBER 1
This Amendment Number 1 is made and entered into as of
April 25, 1996 by and between Time Inc. New Media, with offices at
Time & Life Building, Rockefeller Center, New York, N.Y. 10020
("Time") and Open Market, Inc., with offices at 245 First Street,
Cambridge, Massachusetts 02142 ("OMI") in order to amend the
Development and Services Agreement between the parties dated as of
January 1, 1995 (the "Development Agreement") pursuant to Section
23.11 thereof. Unless expressly provided herein, the defined
terms in the Development Agreement shall have the same meaning
when used in this Amendment. For purposes of this Amendment only,
Transaction Server Software shall be deemed to include all
Developments relating thereto.
In consideration of the mutual covenants and agreements
contained herein, and other consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree to amend the Development Agreement as follows:
1. Amendments
(a) Delete subsection (ii) of Section 6.5 in its entirety and
replace it with the following:
(ii) terminate the cure and testing period by notifying OMI in
writing in which case Time shall have no further payment
obligations with respect to any Deliverables or Services as of the
date of any such notification and OMI shall promptly refund all
monies paid to OMI up to the date of termination for or relating
to the Transaction Server Software as described in Sections I, II,
V, VI, VII, IX and XII of Exhibit F of this Agreement. The
parties agree that such monies paid by Time as of the date hereof
are set forth in column (1) (OM-Transact) and column (2) (OM-
Transact-related) of Exhibit A attached hereto. Notwithstanding
the foregoing, OMI's refund obligations under this subsection (ii)
shall not apply to the items set forth in column (3) (Non-OM-
Transact) of Exhibit A, which includes the following: (x) the
Merchant Server Software and all related Deliverables, Services
and Expenses that either have achieved Phase Acceptance pursuant
to Section 6.3 of this Agreement or have been delivered, installed
and used in commercial production by Time (or, in the case of
O-1
<PAGE>
EXHIBIT O
AVP SYSTEMS LICENSING AGREEMENT (CONTINUED)
Expenses, have been accrued by OMI), and (y) SIMS. OMI's refund
obligations under this subsection (ii) shall also not apply to any
fees paid in connection with additional Merchant Server Software,
Merchant Server Hardware or other Merchant Server Software-related
Deliverables and related Services and Expenses, ordered and paid
for by Time after the date hereof, provided that such items are
documented by OMI to Time in a supplement to Exhibit A and
mutually agreed upon by the parties. It is acknowledged and
agreed that the Time's refund remedy shall apply solely to the
fees paid for or relating to the Transaction Server Software as
described above during the Final Acceptance Test.
(b) Delete subsection (iii) of Section 6.5 in its entirety and
replace it with the following:
(iii) accept any nonconforming Deliverables subject to a mutually
agreed reduction in unpaid fees (or a refund of amounts already
paid by Time to OMI), which in no case shall exceed the total
amount of the refund of the fees for or relating to the
Transaction Server Software determined in accordance with the
preceding subsection (ii).
(c) Add the following new paragraph (b) to Section 6.5:
Notwithstanding the foregoing, the parties acknowledge the
complexities of this Agreement and the delays, expense and
difficulties that may be involved in proving the damages to Time
in the event of OMI's breach of its obligations with respect to
the Transaction Server Software. Time and OMI agree that in the
event of such breach, Time's damages may exceed the sum of the
refund set forth in subsection (ii) above and the liquidated
damages set forth below. However, to provide certainty to the
parties, in the event that the Transaction Server Software or any
portion thereof continues to fail the Phase Acceptance Tests or
Final Acceptance Test and Time elects to terminate the cure and
testing period pursuant to subsection (ii) above, Time shall
either return to OMI or delete all production and back-up copies
of the Transaction Server Software and, in addition to the refund
due pursuant to subsection (ii) above, OMI shall pay to Time, as
liquidated damages (but not as a penalty) an amount equal to one
million dollars ($1,000,000), which shall be due and payable upon
Times's written certification to OMI as to the return or deletion
of all copies of the Transaction Server Software as set forth
above. It is acknowledged and agreed that the liquidated damages
remedy under this paragraph shall apply only if Time makes the
foregoing election solely with respect to the Transaction Server
Software and in no other case.
O-2
<PAGE>
EXHIBIT O
AVP SYSTEMS LICENSING AGREEMENT (CONTINUED)
(d) Add the following new paragraph (c) to Section 6.5:
Time hereby acknowledges and agrees that the Merchant Server
Software and all related items described in subsection (ii)(x)
above have achieved Phase Acceptance and shall not be subject to
Final Acceptance.
(e) Delete the second clause of the first sentence of Section
21.2 and replace it with the following:
"AND THE AMOUNT OF OMI'S LIABILITY TO TIME OR ANY THIRD PARTY
UNDER ANY CLAIM FOR LOSS OR LIABILITY BASED UPON, ARISING OUT OF,
RESULTING FROM, OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OR
BREACH OF THIS AGREEMENT SHALL IN NO CASE EXCEED THE GREATER OF
THE MONEY PAID TO OMI FOR ANY EQUIPMENT, PRODUCTS OR SERVICES
FURNISHED OR TO BE FURNISHED UNDER THIS AGREEMENT OR THE AMOUNTS
SET FORTH IN SECTION 6.5."
2. Other Provisions Applicable
Except as amended hereby, the Development Agreement is and shall
remain in full force and effect, and the provisions thereof shall
be applicable to this Amendment to the extent that they are
relevant. This Amendment Number 1 contains the entire agreement
of the parties with respect to the subject matter hereof.
[Intentionally Blank]
O-3
<PAGE>
EXHIBIT O
AVP SYSTEMS LICENSING AGREEMENT (CONTINUED)
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their respective authorized representatives as of the
date first written above.
Open Market, Inc. Time Inc. New Media
By: By:
Name: Name:
(Print) (Print)
Title: Title:
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their respective authorized representatives as of the
date first written above.
Open Market, Inc. Time Inc. New Media
By: By:
Name: Name:
(Print) (Print)
Title: Title:
O-4
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT A
Time, Inc.
Contract amounts
April 24, 1996
<TABLE>
<CAPTION>
(1) (2) (3)
Item Description Amount OM-Transact OM-Transact Non-OM-
related Transact
<S> <C> <C> <C> <C>
1. Product license fees ****** ****** - ******
******
2. Initial consulting ****** - ****** ******
3. Phased acceptance ****** - ****** -
4. Final acceptance ****** - ****** -
5. Additional services ****** - ****** ******
6. Customer support ****** - ****** ******
(through March 1996) **************
7. Account setup ****** - - ******
8. Support & maintenance ****** - ****** ******
9. L.C.S. ****** - - ******
10. Reimbursed expenses ****** - ****** ******
2,239,783 ****** ****** ******
******
</TABLE>
O-1
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 10.34
LICENSE
AND
EXCLUSIVE
DISTRIBUTION
AGREEMENT
BY AND BETWEEN
TIME INC. NEW MEDIA
AND
OPEN MARKET, INC.
Dated as of April 10, 1996
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TABLE OF CONTENTS
1. DEFINED TERMS.......................................... 2
1.1 Documentation.................................... 2
1.2 ISP.............................................. 2
1.3 OMI Site......................................... 2
1.4 Payment Date..................................... 2
1.5 Prohibited Entities.............................. 2
1.6 Regulatory Requirements.......................... 2
1.7 Release.......................................... 2
1.8 Software Improvement............................. 3
1.9 Subscriber....................................... 3
1.10 Subscription..................................... 3
1.11 Update........................................... 3
1.12 U.S. Regulatory Requirements..................... 3
2. BETA TESTING........................................... 3
2.1 First Phase Beta Test............................ 4
2.2 Second Phase Beta Test........................... 4
3. LAUNCH, ACCEPTANCE, DISTRIBUTION AND BUNDLING.......... 5
3.1 Launch........................................... 5
3.2 Acceptance by Time and CompuServe................ 5
3.3 Pathfinder Bundling.............................. 7
3.4 Distribution by OMI.............................. 7
3.5 End User License and Other Material.............. 8
3.6 **** Trial Period................................ 8
4. LICENSE AND EXCLUSIVITY................................ 9
4.1 License.......................................... 9
4.2 Exclusivity...................................... 9
4.3 Scope of License................................. 11
4.4 Disclosure to Third Parties...................... 12
5. OM-EXPRESS SOURCE CODE ESCROW.......................... 12
5.1 Delivery......................................... 12
5.2 New Escrow Agreement............................. 12
6. OMI CUSTOMER SUPPORT OBLIGATIONS....................... 13
6.1 Beta Test Period................................. 13
6.2 Post-Launch...................................... 13
6.3 Provisions of Software Improvements.............. 13
6.4 CompuServe Training.............................. 15
6.5 Change in Links.................................. 15
7. TIME PROMOTION......................................... 15
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<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
8. ROYALTIES AND FEES..................................... 16
8.1 License Fee...................................... 16
8.2 OM-Express Royalty............................... 16
8.3 Pathfinder ****** ............................... 16
8.4 Customer Support Fee............................. 16
8.5 Trial Period Fees................................ 17
8.6 Tracking Software................................ 18
8.7 Royalty Advance.................................. 18
8.8 Audit Rights..................................... 18
9. REPRESENTATIONS, WARRANTIES AND COVENANTS.............. 19
9.1 Ownership........................................ 19
9.2 Duly Authorized.................................. 19
9.3 Non-Interference................................. 21
9.4 Specifications................................... 21
9.5 Disclaimer....................................... 21
9.6 Regulatory Requirements Compliance Generally..... 22
9.7 Regulatory Requirements on Use of Software....... 22
10. PROPRIETARY RIGHTS..................................... 23
10.1 Rights to OM-Express............................. 23
10.2 Rights to Pathfinder............................. 23
10.3 OMI Trademarks, Legends and Notices.............. 23
11. PROPRIETARY AND CONFIDENTIAL INFORMATION............... 24
11.1 Pathfinder Information........................... 24
11.2 Confidential Information......................... 24
11.3 Restrictions..................................... 25
11.4 Exceptions....................................... 25
11.5 Return or Destroy................................ 25
11.6 OMI's Duty to Inform............................. 26
12. INDEMNIFICATION........................................ 26
12.1 OMI Indemnification.............................. 26
12.2 Time Indemnification............................. 27
12.3 Limitation....................................... 28
12.4 Section 365(n)................................... 28
12.5 Publicity........................................ 28
12.6 Most Favored Customer............................ 28
13. LIMITATION OF LIABILITY................................ 29
13.1 Limitation of Liability for Time................. 29
13.2 Limitation of Liability for OMI.................. 29
14. TERM AND TERMINATION; RENEWAL.......................... 29
14.1 Term............................................. 29
14.2 Renewals......................................... 29
14.3 Termination For Cause by Time.................... 29
14.4 Time's Rights on Termination for Cause........... 30
14.5 Termination for Cause by OMI..................... 31
- ii -
<PAGE>
14.6 Delivery on Termination.......................... 31
14.7 Survival......................................... 31
15. MISCELLANEOUS.......................................... 31
15.1 Insurance........................................ 31
15.2 Notice........................................... 32
15.3 Personnel Rules and Regulations.................. 33
15.4 Independent Contractor........................... 33
15.5 Force Majeure.................................... 33
15.6 No Waiver........................................ 34
15.7 Severability..................................... 34
15.8 Assignment....................................... 34
15.9 Governing Law and Venue.......................... 34
15.10 Counterparts..................................... 34
15.11 Entire Agreement................................. 35
EXHIBIT A................................................... 37
EXHIBIT B................................................... 43
- iii -
<PAGE>
LICENSE AND EXCLUSIVE DISTRIBUTION AGREEMENT
THIS AGREEMENT made and entered into on this 10th day of
April, 1996 (the "Agreement"), by and between Open Market, Inc.,
a corporation existing under the laws of the State of Delaware
with offices at 245 First Street, Cambridge, Massachusetts 02142
(hereinafter referred to as "OMI") and Time Inc. New Media, a
corporation existing under the laws of the State of Delaware with
offices at Time & Life Building, Rockefeller Center, 1271 Avenue
of the Americas, New York, New York 10020 (hereinafter referred
to as "Time").
WHEREAS, the parties have previously executed a Development
and Services Agreement made and entered into November 14, 1995,
and effective as of January 1, 1995 (the "Development
Agreement");
WHEREAS, OMI is in the business of developing, licensing,
operating and maintaining software in connection with the
Internet's World Wide Web protocol (the "World Wide Web"), and
has developed and owns a certain software product for use by
Internet users currently known as "OM-Express," as more fully
detailed in the specifications attached as Exhibit A hereto (the
"Specifications");
WHEREAS, Time has a site on the World Wide Web currently
known as "Pathfinder" and desires to market and distribute
OM-Express through Pathfinder;
WHEREAS, OMI desires to grant to Time certain exclusive
rights to market and distribute OM-Express through Pathfinder for
a certain period upon the terms and conditions set forth in this
Agreement and provide certain other services related to
OM-Express pursuant to the terms of this Agreement; and
WHEREAS, Time is facilitating the licensing to CompuServe
Incorporated ("CompuServe") of OM-Express for use by subscribers
to CompuServe ("CompuServe Subscribers") upon the terms and
conditions set forth in that certain license and distribution
agreement by and between CompuServe and OMI substantially in the
form of Exhibit B hereto (the "CompuServe/OMI License
Agreement").
NOW, THEREFORE, in consideration of the foregoing and of the
respective agreements and undertakings hereinafter set forth and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
do hereby agree as follows:
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1. DEFINED TERMS
Unless otherwise provided herein, all capitalized terms
shall have the meanings ascribed to them in the Development
Agreement.
1.1 Documentation. The term "Documentation" shall mean
any and all reference manuals, installation instructions or other
materials, in printed or electronic form, relating to or
necessary for the operation of OM-Express that OMI makes
generally available to its customers or licensees of OM-Express
and shall, at a minimum, include such materials that OMI makes
available to ISPs and their customers and subscribers.
1.2 ISP. The term "ISP" shall mean Internet Service
Providers (i.e., entities that offer connectivity to the
Internet, including any on-line service providers such as *******
******* *********** ******* ** ********* ********.
1.3 OMI Site. The term "OMI Site" shall mean a dedicated
site on the World Wide Web that is owned, operated and maintained
by OMI for the sole purpose of (a) downloading OM-Express
(including any Software Improvements) to Subscribers who accept
the offer to license OM-Express from OMI, and (b) performing such
other activities and tasks as may be related to the licensing by
Subscribers of OM-Express and the payment by Time therefor in
accordance with the terms of this Agreement.
1.4 Payment Date. The term "Payment Date" shall mean
March 31, June 30, September 30 or December 31 of a particular
year, as the context may require. The terms of payment of each
invoice shall be net thirty (30) days.
1.5 Prohibited Entities. The term "Prohibited Entities"
shall mean any of the entities having the names or being commonly
referred to as ******** ************** ************ ***********
**** ********* **** ****** ********** ***** *************** *****
****** **** ****** ******* ********* *********** ****** *****
********** **** *** *** *********** ****.
1.6 Regulatory Requirements. The term "Regulatory
Requirements" shall mean any regulation, ordinance or
requirement, including regulations of administrative agencies or
bodies, in whatever form, now existing or to come into existence
during the term of this Agreement.
1.7 Release. The term "Release" shall mean a new version
of OM-Express which consists solely of major functional
enhancements or feature additions to OM-Express; provided,
however, that a Release shall not contain any changes in
-2-
<PAGE>
OM-Express that are more properly classified as an Update, which
changes shall be provided in a separate Update. A new Release is
customarily connoted by a change in the revision number to the
left of the decimal point (ex. 4.00)
1.8 Software Improvements. The term "Software
Improvements" shall mean:
(a) any Updates;
(b) any Releases; or
(c) any other new software OMI or OMI's agents or
subcontractors may market at any time as a full or partial (i.e.,
having substantially similar functionality) alternative or
replacement for OM-Express, even if a user of such new or
improved software is not required to license OM-Express in order
to operate such new or improved software (including any
documentation related thereto).
1.9 Subscriber. The term "Subscriber" shall mean any
person or entity which has paid for a Subscription.
1.10 Subscription. The term "Subscription" shall mean that
paid portion of Pathfinder that includes an offer to license
OM-Express (it being understood that Time, in accordance with the
provisions of Section 3.3, shall have no obligation to offer a
license to OM-Express with every paid product (including, without
limitation, a Subscription)).
1.11 Update. The term "Update" shall mean a new version of
OM-Express that consists solely of (a) minor functional
enhancements or feature additions to OM-Express, or (b) error
corrections and minor additions to OM-Express. An Update is
customarily connoted by a change in the revision number(s) to the
right of the decimal point (ex. 3.10)
1.12 U.S. Regulatory Requirements. The term "U.S.
Regulatory Requirements" shall mean any U.S. Federal, state or
local, regulation, ordinance or requirement, including
regulations of administrative agencies or bodies, in whatever
form, now existing or to come into existence during the term of
this Agreement.
2. BETA TESTING
OMI shall undertake the beta testing of OM-Express as
follows:
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
2.1 First Phase Beta Test.
(a) The first phase of a beta test (the "First Phase
Beta Test") will begin on ***** *** ***** and shall continue for
a period not to exceed ****** **** ***** during which First Phase
Beta Test OMI will make OM-Express available for downloading
through the OMI Site; provided, however, that upon OMI's written
notice, such period may be extended.
(b) OMI agrees to manage, review, create, delete,
edit, or otherwise engineer OM-Express in such a way that, at the
end of the First Phase Beta Test, OM-Express will be
automatically disabled, provided, however, that such disablement
shall in no way impair or adversely impact upon:
(i) the continued functionality or operation of
Pathfinder; provided, however, that the foregoing shall not apply
to the extent that Pathfinder's functionality depends on
OM-Express for its scripts; or
(ii) the functionality of any of Subscriber's other
software or hardware.
(c) Prior to the expiration of the First Phase Beta
Test, each copy of OM-Express made available for the First Phase
Beta Test will automatically display to the user thereof a
message, the wording of which will be subject to the prior
approval of Time, informing such user that such copy will, upon
the expiration of the First Phase Beta Test, become disabled and
unavailable for further use. At the expiration of the First Phase
Beta Test, each copy of OM-Express made available for the First
Phase Beta Test will include (i) a message, the wording of which
will be subject to the prior approval of Time, informing the
OM-Express user that the Second Phase Beta Test version of
OM-Express may be downloaded and (ii) a hypertext link to the OMI
Site from which such other beta version of OM-Express may be
downloaded.
2.2 Second Phase Beta Test.
(a) The second phase of a beta test (the "Second Phase
Beta Test") (the First Phase Beta Test and the Second Phase Beta
Test shall collectively be referred to as the "Beta Test Period")
will begin on or about *** *** **** (or such other date as may be
set forth in OMI's written notice pursuant to Section 2.1(a)
hereof) and will last for a period of approximately ****** ****
****, during which Second Phase Beta Test Time shall begin
marketing of OM-Express and, pursuant to Section 3.4, provide a
link to the OMI Site for distribution of OM-Express through
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<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Pathfinder; provided, however, that upon OMI's written notice,
such period may be extended.
(b) OMI agrees to manage, review, create, delete, edit,
or otherwise engineer OM-Express in such a way that, at the end of
the Second Phase Beta Test, OM-Express will:
(i) incorporate any appropriate modifications to
or corrections to any material defects of OM-Express which were
identified during the First Phase Beta Test or otherwise; and
(ii) be automatically disabled; provided, however,
that such disablement shall in no way impair or adversely impact
upon:
(A) the continued functionality or operation
of Pathfinder; provided, however, that the foregoing shall not
apply to the extent that Pathfinder's functionality depends on
OM-Express for Pathfinder's server-side scripts; or
(B) the functionality of any Subscriber's
other software or hardware.
(c) Prior to the expiration of the Second Phase Beta
Test, each copy of OM-Express made available for the Second Phase
Beta Test will automatically display to the user thereof a
message, the wording of which will be subject to the prior
approval of Time, informing such user that such copy will, upon
expiration of the Second Phase Beta Test, become disabled and
unavailable for further use. At the expiration of the Second
Phase Beta Test, OM-Express will include a message, the wording of
which shall be subject to the prior approval of Time, to the
OM-Express user containing an offer to purchase a Subscription
(including an offer to license OM-Express) and a hypertext link to
a special Uniform Resource Locator ("URL") within Pathfinder (the
"Referral Site").
3. LAUNCH, ACCEPTANCE, DISTRIBUTION AND BUNDLING
3.1 Launch. Commercial launch (the "Launch") of OM-Express
will occur on or about **** *** ***** subject to any extension
pursuant to the terms of Sections 2.1(a) and 2.2(a) hereof;
provided, however, the Launch version will incorporate any and all
appropriate modifications or corrections to any material defects
of OM-Express which are identified during the Second Phase Beta
Test or otherwise.
3.2 Acceptance by Time and CompuServe. (a) OMI shall
provide to each of Time and CompuServe a master copy of the object
code for the Launch version of OM-Express. Upon delivery of the
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Launch version, each of Time and CompuServe shall conduct an
appropriate acceptance test developed by OMI in consultation with
Time and CompuServe (at no additional cost to Time or CompuServe)
(an "Acceptance Test"). Each of the Acceptance Tests will be
sufficient to test the functionality of the Launch version of
OM-Express with respect to its conformance with the
Specifications. At no additional cost to Time or CompuServe, OMI
personnel shall assist Time and CompuServe as reasonably required
during such Acceptance Test as reasonably requested by Time or
CompuServe. In the event that the delivery of the Launch version
of OM-Express to Time and CompuServe occurs after OMI has
commenced to offer for sale licenses for OM-Express in a
commercial release to the general public via Internet downloading
("General Availability"), the Acceptance Test shall be as follows:
the Acceptance Test shall demonstrate that OM-Express performs
substantially in accordance with the Specifications, it being
expressly understood that Acceptance will not be delayed or
withheld due to minor errors or bugs that do not have a material
adverse affect upon the performance of OM-Express. However, if
the delivery of the Launch version to Time and CompuServe occurs
prior to General Availability, the Acceptance Test shall be as
follows: the Acceptance Test shall demonstrate that OM-Express
performs in accordance with the Specifications. In addition,
notwithstanding the fact that Acceptance shall have occurred, OMI
shall have a period of not more than ********** **** days from
Acceptance to make available to Time and CompuServe one or more
Update(s) that are sufficient to make error corrections and/or fix
bugs identified by Time or CompuServe, or otherwise, during the
Acceptance Test process. The Acceptance Test shall demonstrate
that OM-Express performs in accordance with the Specifications.
Each of Time and CompuServe shall have seven (7) days from receipt
of the Launch version of OM-Express to notify OMI in writing
whether it accepts or rejects such version on the basis of its
Acceptance Test. Time and CompuServe will be deemed to accept the
Launch version if: (i) both Time and CompuServe deliver to OMI a
written notice of acceptance of that version; or (ii) within such
seven (7) day period, both Time and CompuServe fail to notify OMI
of its rejection of the Launch version ("Acceptance").
(b) If the Launch version of OM-Express fails to pass
either Acceptance Test, either Time or CompuServe, as the case may
be, shall so notify OMI in writing, specifying the nature of such
failure in reasonable detail. OMI shall have (i) ten (10) days or
(ii) until **** *** ***** whichever is sooner, in which to correct
the cause of such failure, redeliver another master copy of
OM-Express as necessary to correct the failure. After OMI's
redelivery of such master copy of OM-Express, either Time or
CompuServe, as the case may be, shall reconduct the Acceptance
Test within ***** *** business days. In the event that OM-Express
continues to fail the applicable Acceptance Test, then Time and/or
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
CompuServe (as the case may be) may, at its sole discretion and
without limitation of its other rights and remedies (x) give OMI
another seven (7) days (or **** *** ***** whichever is sooner) in
which to cure the problem and recommence the Acceptance Test; (y)
terminate this Agreement and return OM-Express to OMI; or (z)
accept any nonconforming versions of OM-Express.
(c) Time shall have the option to terminate this
Agreement pursuant to Section 14.3 hereof, in the event:
(i) the Launch has not occurred by the close of
business June 30, 1996;
(ii) Acceptance has not occurred by the close of
business June 30, 1996; or
(iii) OMI has failed to deliver by the close of
business June 30, 1996 Transaction Server Software that has
satisfied Final Acceptance by Time pursuant to the Development
Agreement;
In such event, Time shall, pursuant to Section 14.4(b), be
relieved of, and shall not have, either (x) any obligation
hereunder to pay any fees or other monies to OMI or (y) to promote
OM-Express under Section 7, or otherwise.
3.3 Pathfinder Bundling. After Acceptance, Time shall make
available to users of Pathfinder the ability to license OM-Express
by subscribing for a Subscription and receiving the right to
license OM-Express as part of such Subscription at no extra
charge; provided, however, that Time shall have no obligation to
market or sell a license to OM-Express with every paid product
(including, without limitation, any Subscription) offered by
Pathfinder. To the extent that copies of OM-Express shall be
distributed to Subscribers on computer disks, the parties shall
discuss the manner in which such distribution shall be made and
the allocation between the parties of the costs and expenses
associated therewith. With acceptance of each Subscription that
includes an offer to license OM-Express, Time shall include a
hypertext link (prominently displayed on the Pathfinder site) to
the OMI Site for further information on electronic distribution of
OM-Express. The parties shall agree upon the form and content of
the links.
3.4 Distribution by OMI. At Time's option, OMI shall
distribute OM-Express from the OMI Site in accordance with the
provisions of Sections 2 and 3 of this Agreement, the
Specifications and such other terms as the parties may agree. The
parties hereby acknowledge that Time has so exercised this option
and that OMI shall perform the foregoing services until such time,
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if ever during the term of this Agreement, as Time notifies OMI
that it will download OM-Express from a site operated by or on
behalf of Time. In consideration of performing such services,
Time (for so long as OMI shall continue to perform such services)
will pay OMI on a monthly basis in advance, ***** ******** *******
********. The foregoing shall represent all of the costs and
expenses that may be associated with the operation of the OMI Site
for which Time shall compensate OMI, and any other costs and
expenses that may arise in connection therewith shall be borne by
OMI. In addition, Time shall provide to OMI such hardware as is
necessary to operate the OMI Site, which hardware shall be owned
by Time at all times during the term of this Agreement. This
hardware shall be used by OMI solely and exclusively for the
purposes of operating the OMI Site as set forth in the first
sentence of this Section 3.4. OMI shall not operate any other
software on this hardware, nor shall it distribute OM-Express from
this hardware for any person or entity other than Time.
3.5 End User License and Other Material. OMI shall require
each Subscriber to indicate agreement to a click license (the "End
User License") prior to the downloading by the Subscriber of
OM-Express. OMI agrees that the End User License, which shall be
between OMI and the Subscriber, shall include terms customary to
click or shrink wrap licenses in the software industry, including
limitations on liability and disclaimers which shall release Time
and its Affiliates and CompuServe and its Affiliates, as well as
OMI, from any liability arising in connection with the downloading
and/or use of OM-Express. Time shall have the right to approve
the terms of such End User License prior to its first use. In
addition, OMI shall provide each Subscriber with information that
is clear, comprehensible and readily visible, in such places
(including, without limitation, the End User License and
Documentation provided to the Subscriber) that shall be adequate
to explain the appropriate uses of OM-Express and warns the
Subscriber against uses that may be inappropriate (including,
without limitation, those uses that may entail a risk of criminal
liability).
3.6 Free Trial Period.
(a) Following the Launch, at any time and from time to
time, at Time's option OMI will make OM-Express available to users
of Pathfinder for a free limited-time (but not to exceed
thirty-one (31) days) trial period.
(b) OMI agrees to manage, review, create, delete, edit,
or otherwise engineer OM-Express in such a way that, at the end of
the free trial period, OM-Express will be automatically disabled;
provided, however, that such disablement shall in no way impair or
adversely impact upon:
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(i) the continued functionality or operation of
Pathfinder; provided, however, that the foregoing shall not apply
to the extent that Pathfinder's functionality depends on
OM-Express for its scripts; or
(ii) the functionality of any of Subscriber's other
software or hardware.
(c) Prior to expiration of the; trial period, each copy
of OM-Express will automatically display to the user thereof a
message, the wording of which will be subject to the prior
approval of Time, informing such user that such copy will, upon
expiration of the trial period, become disabled and unavailable
for further use. At the expiration of the free trial period,
OM-Express will include a message, the wording of which will be
subject to the prior approval of Time, informing the user of an
offer to purchase a Pathfinder product (including, without
limitation, a Subscription that includes an offer to license
OM-Express) and a hypertext link to the Referral Site.
4. LICENSE AND EXCLUSIVITY
4.1 License. OMI hereby grants to Time a non-transferable,
non-exclusive (except as stated herein) worldwide right and
license (the "License") to market and distribute copies of the
master copy of OM-Express, in object code form only.
4.2 Exclusivity.
(a) During the Beta Test Period and for a period of
********** **** days from the date of Acceptance (the "Exclusivity
Period"), Time shall have the exclusive right to promote, market,
distribute and offer OM-Express for sale over the Internet
(including but not limited to, the World Wide Web); provided,
however, that the foregoing shall not limit OMI's right to:
(i) promote, market, distribute and offer
OM-Express for sale from the OMI Site; provided, however, that
each copy of OM-Express sold and/or distributed during the term of
this Agreement by OMI from the OMI Site shall have included or
embedded within it hypertext links to Pathfinder, preloaded by
OMI, causing OM-Express to access Pathfinder as the first site
(or, if a hypertext link to the OMI Site is included in OM-Express
as the top site, one of the first two (2) sites) as part of its
functionality; provided, however Time may at any time instruct OMI
to no longer include in copies of OM-Express distributed to users
any such hypertext links and OMI shall promptly comply with such
instruction);
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(ii) grant original equipment manufacturers
("OEMs") the right to distribute and/or offer OM-Express for sale
or license pre-loaded on the hard drive of or packaged with newly
manufactured computers;
(iii) grant entities the right to distribute
OM-Express over internal, company-wide networks (i.e., intranets);
(iv) grant entities with sites on the World Wide
Web that are engaged solely in the business of offering for sale
either hard goods (e.g., catalogue direct marketers, Web-based
stores) or software programs or applications the right to
distribute and offer OM-Express for sale as part of their
merchandise selection; or
(v) grant any right to promote, market,
distribute, or offer OM-Express for sale through any ISP in
connection with any on-line service that is designed and intended
for the exclusive use of persons or entities located outside of
the United States; provided that at no time during the Exclusivity
Period shall such on-line service be marketed or offered in the
United States of America or its territories or possessions.
Notwithstanding anything to the contrary in the
foregoing, OMI shall not, during the Exclusivity Period, grant any
right to promote, market, distribute, or offer OM-Express for sale
through any ISP (except, in the case of CompuServe, such
arrangements as are set forth in the CompuServe/OMI License
Agreement).
(b) Beginning after the expiration of the Exclusivity
Period and ending on December 31, 1996 (the "Limited Exclusivity
Period"), OMI may grant to an ISP the right to promote, market,
distribute, or offer OM-Express for sale after the later of:
(i) close of business on September 1, 1996; and
(ii) the expiration of the Exclusivity Period;
provided, however, that OMI hereby represents, warrants and
covenants to Time that in any and all agreements between OMI and
each such ISP, other than the CompuServe/OMI License Agreement,
such agreements shall contain the following contractual
obligations:
(x) the ISP shall not be permitted to advertise,
promote, offer, or otherwise publicly announce the availability or
impending availability of OM-Express on such service prior to
September 2, 1996 or the expiration of the Exclusivity Period,
whichever is later;
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(y) each copy of OM-Express sold and/or
distributed during the Limited Exclusivity Period by such ISP
shall have included or embedded within it hypertext links to
Pathfinder, pre-loaded by OMI, causing OM-Express to access
Pathfinder as one of the first five (5) top-level folders (i.e.,
sites) as part of its functionality; provided, however Time may at
any time instruct OMI to no longer include in copies of OM-Express
distributed to users any such hypertext links and OMI shall
promptly comply with such instruction); and
(z) OMI shall have the obligation to conduct such
review on a regular basis that is adequate to determine such ISP's
compliance with the contractual provisions required by the terms
of Section 4.2(b)(y) hereof and OMI shall terminate any
arrangement for OM-Express with an ISP in the event that the ISP
fails to use any non-compliance within five (5) days' notice
thereof which shall be given by OMI to the ISP immediately upon
OMI's determination of such non-compliance.
(c) After the expiration of the Limited Exclusivity
Period, OMI may grant to an ISP the right to promote, market,
distribute, or offer OM-Express for sale; provided, however, that
OMI hereby represents, warrants and covenants to Time that it will
use reasonable commercial efforts to ensure that, in any agreement
between OMI and such ISP in effect during the term of this
Agreement, such agreement shall contain the following contractual
obligations:
(i) each copy of OM-Express sold and/or
distributed by such ISP shall have included or embedded within it
hypertext links to Pathfinder, pre-loaded by OMI, causing
OM-Express to access Pathfinder as one of the first five (5)
top-level folders (i.e., sites) as part of its functionality;
provided, however Time may at any time instruct OMI to no longer
include in copies of OM-Express distributed to users any such
hypertext links and OMI shall promptly comply with such
instruction);
(ii) OMI shall have the obligation to conduct such
review on a regular basis that is adequate to determine whether
such ISP has complied with the terms of Section 4.2(c)(i); and
(iii) in the event that such ISP is not in
compliance, OMI shall have the obligation to make reasonable
commercial efforts to cause such ISP to comply with its
obligations as set forth in Section 4.2(c)(i).
4.3 Scope of License. Pursuant to the License, Time shall
have the right to perform any activities related to the use,
bundling, marketing and offering for sale (together with
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distribution in the event that Time notifies OMI that it wishes to
distribute OM-Express pursuant to Section 3.4) of OM-Express
subject to the terms and conditions of the License, including such
activities that are or may be necessary or directly related
thereto even though such other activities are not expressly
permitted or otherwise set forth herein.
4.4 Disclosure to Third Parties. Notwithstanding anything
in this Agreement to the contrary, Time shall have the right to
disclose OM-Express (including any Documentation relating thereto)
on a need-to-know basis to any Affiliate or any third party
providing maintenance or development services, disaster recovery
services, or facilities management or outsourcing services to
Time, if such disclosure is made pursuant to an appropriate
written confidentiality agreement and provided that such
disclosure will not be made, either directly or, to Time's
knowledge, indirectly, to Prohibited Entities. Such written
confidentiality agreement shall provide, among other things, that
any entity to which Time discloses OM-Express, either in whole or
in part, shall (a) restrict access to the master copy of
OM-Express (including source code, if any) only to those
employees, agents or representatives who require access to enable
such entity to use OM-Express to the extent required by Time; and
(b) secure and protect OM-Express (including source code, if any)
using at least the same degree of care as such entity uses to
protect its own confidential and proprietary information.
5. OM-EXPRESS SOURCE CODE ESCROW
5.1 Delivery. Upon the execution of the New Escrow
Agreement (as defined in Section 5.2), OMI will deliver to the New
Escrow Agent (as defined in Section 5.2), in escrow pursuant to
the terms hereof and the New Escrow Agreement, the complete source
code for OM-Express, and such additional proprietary information
necessary to compile and execute such source code on the
appropriate hardware (the "OM-Express Deposit").
5.2 New Escrow Agreement. Within thirty (30) days after the
execution of this Agreement, Time, OMI and Data Securities
International, Inc. (the "New Escrow Agent") shall enter into a
New Escrow Agreement with respect to the OM-Express Deposit.
Under the New Escrow Agreement, the only event which will cause
the release of the OM-Express from the New Escrow Agent to Time
shall be if OMI becomes insolvent or files for bankruptcy. Time
shall pay all of the fees charged by the New Escrow Agent for its
services under the New Escrow Agreement.
6. OMI CUSTOMER SUPPORT OBLIGATIONS
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6.1 Beta Test Period. During the Beta Test Period, OMI will
use reasonable efforts to respond in a timely and appropriate
manner to e-mail messages from Subscribers for customer support of
OM-Express.
6.2 Post-Launch. During the period following the Launch,
OMI shall provide to Subscribers who are licensed users of
OM-Express the following:
(a) (i) telephone and e-mail customer support for the
first thirty (30) days of the Subscriber's license;
(ii) e-mail customer support thereafter, unless
Time and OMI agree to suitable terms for additional telephone
customer support;
(iii) telephone customer support for the first
thirty (30) days after the release of a Release pursuant to
Section 6.3 hereof; and
(iv) should Time choose to offer support for a
trial period, telephone customer support during any free limited-
time trial period pursuant to Section 3.6 hereof.
(b) Specifically, OMI shall provide such support as is
set forth on Exhibit E hereto in a manner reasonably acceptable to
Time.
(c) OMI may provide the customer support set forth in
Sections 6.1 and 6.2 and Exhibit E, on its own or hire an
independent contractor to provide such customer support.
6.3 Provision of Software Improvements.
(a) During the term of this Agreement, OMI shall
provide to Time and Subscribers who are licensed users of
OM-Express, at no additional cost to Time or to such users,
Software Improvements to OM-Express, with such frequency and
including such tools and systems as is necessary, (x) in OMI's
reasonable business judgment to maintain the quality of OM-Express
and (y) to otherwise provide that OM-Express contains features
that will maintain OM-Express as a commercially viable product
that is competitive in the market for similar products. Time
shall have the right to refuse (which refusal shall be given in
writing) to make any Software Improvement available to Subscribers
who have licensed OM-Express. Without limitation of the
foregoing, OMI shall make available to Time for its Subscribers:
(i) Software Improvements that are, at a minimum,
equivalent to any Software Improvements provided to any licensed
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user of OM-Express who is not a Subscriber that OMI makes
generally available to its customers or licensees of OM-Express
and shall, at a minimum, include such materials that OMI makes
available to ISPs and their customers and subscribers;
(ii) updated Specifications, and/or product
performance guidelines and Documentation with respect to the
Software Improvements as provided to any licensed user of
OM-Express who is not a Subscriber that OMI makes generally
available to its customers or licensees of OM-Express and shall,
at a minimum, include such materials that OMI makes available to
ISPs and their customers and subscribers;
(iii) a written description as to what additional
third party hardware and/or software would be necessary, if any,
to utilize the Software Improvement as part of OM-Express in
accordance with the Specifications, the Documentation and the
terms and conditions of this Agreement;
(iv) written instructions as to the manner by which
the Software Improvement may be installed; and
(v) a written description of the adverse impact,
if any, which the Software Improvement will have on OM-Express
functionality as it then currently exists.
All Software Improvements, except those provided by computer
disk, shall be available at the OMI Site to Subscribers who are
licensed users of OM-Express.
(b) OMI shall provide to Time Software Improvement
planning in advance of the release of a Software Improvement upon
finalization of such release planning (e.g., informing Time of new
and planned Software Improvements, enhanced functionality
anticipated to be included in the Software Improvements, and any
additional hardware or third party software required to implement
the Software Improvement, etc.) at no additional cost to Time.
Such Software Improvement planning shall include information
regarding any anticipated reimbursement costs payable pursuant to
Section 8.4(e).
(c) OMI shall provide, at no additional cost to Time or
its Subscribers who are licensed users of OM-Express, support for
up to *** *** Releases of OM-Express prior to the then-existing
commercially available Release or for *** *** **** after the last
commercially available Release.
(d) OMI represents, warrants and covenants that it
shall use its commercially reasonable best efforts to provide that
any Updates provided by OMI solely to correct or fix an error or
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nonconformity in the performance of OM-Express in accordance with
the Specifications and the Documentation shall not give rise to
any additional requirements with respect to additional hardware or
third party software.
(e) In the event that OMI develops a version of
OM-Express on Macintosh computers, it shall give Time the right,
but Time shall not have the obligation, to include this version
within the License on the terms and subject to the same conditions
(including payment of fees and royalties, including on behalf of
CompuServe, under Section 8) as set forth in this Agreement.
6.4 CompuServe Training. During the term of this Agreement,
OMI will provide to customer support training supervisors of
CompuServe such reasonable amount of training in customer support
of OM-Express, acceptable to both CompuServe and OMI, as will be
sufficient to ensure that such training supervisors have the
ability to train CompuServe service representatives to provide
support for users of OM-Express at the same or at a better level
of quality that CompuServe provides to all CompuServe subscribers,
such training to include, without limitation, individual and group
training on-site at CompuServe and the development of operational
scripts and tools for use by such training supervisors or customer
support representatives.
6.5 Change in Links. Time shall inform OMI in writing of
any change in the location of any hypertext links to Pathfinder
sites contained in OM-Express during the term of this Agreement as
soon as practicable, and OMI shall incorporate such changes in all
newly distributed copies, master copies and Software Improvements
of OM-Express as soon as practicable, but in no event more than
seven (7) business days thereafter. OMI shall inform Time in
writing of any changes in the form or content of any such links to
the OMI Site contained in Pathfinder as soon as practicable.
7. TIME PROMOTION
Time shall use reasonable efforts to promote Pathfinder and
to promote and market OM-Express on Pathfinder during the term of
this Agreement. Time shall organize and implement a promotional
campaign in connection with OM-Express including promotional
events, press releases, print advertisements (and in connection
therewith, Time will make available advertising availabilities
through it and its affiliates with an open rate value of at least
**** ******* ******* ************) featuring OM-Express and
visibility of OM-Express in Pathfinder and other Time subscription
services, and CompuServe, in accordance with the letter dated
March 15, 1996 from Bruce Judson to Betsy Nugent attached hereto
as Exhibit C. OMI shall provide such assistance to and
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cooperation with Time in connection with organizing and
implementing such campaign as Time shall reasonably request.
8. ROYALTIES AND FEES
In consideration of the performance of OMI's obligations
hereunder, Time shall pay to OMI the following:
8.1 License Fee. Five Hundred Thousand Dollars ($500,000)
(of which **** ******* ***** ******** ******* ********** shall be
in consideration of the license fee and ***** ******** *******
********* shall be in consideration of customer support services)
payable by Time on behalf of CompuServe on or before ten (10) days
after the Acceptance of OM-Express pursuant to Section 3.2 hereof.
8.2 OM-Express Royalty. *** ****** **** for every
Subscription that includes a license of a copy of OM-Express,
which obligation shall accrue upon the downloading by the
Subscriber of a copy of OM-Express, such royalty to be payable by
Time on the first Payment Date after such purchase. An **********
*** ****** **** shall be paid on the first Payment Date after the
first anniversary of each such Subscription and on the first
Payment Date after each subsequent anniversary date during the
term of this Agreement; provided, such Subscription remained
continuously in effect for the preceding twelve (12) month period.
Notwithstanding the foregoing, if OMI makes generally available an
offer to license OM-Express at no charge (or reduces its list
price to zero), Time's obligation to pay any royalty set forth in
this Section 8.2 shall cease.
8.3 Pathfinder ******. *** ****** **** for every new paid
Subscription that results from the hypertext link in OM-Express or
the OMI Site to the Referral Site, such ****** to be payable by
Time on the first Payment Date after such Subscription; provided
that the following two (2) events have occurred: (a) such
Subscription remained continuously in effect for at least one (1)
month and (b) Time has actually received payment from the
Subscriber for such Subscription. ** ********** *** ****** ****
shall be paid on the first Payment Date after the first
anniversary of each such Subscription and on the first Payment
Date after each subsequent anniversary date during the term of
this Agreement; provided, such Subscription remained continuously
in effect for the preceding twelve (12) month period.
8.4 Customer Support Fee. For each license of a copy of
OM-Express purchased by a Subscriber pursuant to a referral from
the Pathfinder site following the Launch, a fee for customer
support provided to such Subscriber (the "Support Fee"), payable
as follows:
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(a) On the first Payment Date after the Subscriber's
purchase of such license, ***** ******* ****; and
(b) On the first Payment Date after the first
anniversary of such Subscriber's purchase of such license, *****
******* **** provided, however, that Time's obligation to pay the
Support Fee will terminate with respect to any Subscriber as of
the time such Subscriber terminates his or her subscription to
Pathfinder; and
(c) In the event that OMI ceases to provide
(i) telephone customer support for users as required herein;
(ii) Software Improvements of OM-Express as required herein; or
(iii) otherwise fails to maintain the customer support standard
set forth in Section 6.2 above, Time's obligation to pay the
Support Fee shall terminate.
(d) OMI shall provide Time with a comprehensive report
covering the period beginning September 1, 1996 relating to the
performance of OMI and its authorized contractor in providing
customer support as set forth in this Agreement, together with the
costs relating thereto. Such report shall be made available to
Time no later than October 1, 1997.
(e) In the event that OMI provides a new Release to
licensed users of OM-Express, which Release contains a functional
enhancement that has been licensed to OMI by a third party and
which requires the payment of a royalty (or other per copy or per
use fee) to such third party, Time shall pay to OMI the actual
incremental cost of such functional enhancement for each license
of OM-Express purchased and downloaded from the OMI Site.
8.5 Trial Period Fees. (a) Time shall have no obligation to
pay any royalty to OMI in connection with the use of a copy of a
trial-period version of OM-Express.
(b) In the event that Time makes OM-Express available
for a free limited-time trial period pursuant to Section 3.6, Time
will ********* OMI on the next Payment Date following the
expiration of such trial period offer for *** ********** ******
************* ***** ******** ** *** in providing telephone
customer support pursuant to Section 6.2 hereof; provided, that
OMI provides to Time at Time's request, prior to the start of the
trial period offer, a good faith comprehensive ******** ** ****
************* *****; and provided, further, that Time shall have
the right to consult with OMI regarding **** *****.
8.6 Tracking Software. OMI shall assist Time in designing,
building and implementing software, including modifications of the
Transaction Server Software, if necessary, enabling Time to
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(a) identify, calculate and monitor all fees and other payments
due OMI under this Article 8 and (b) identify and track all
Subscribers so such persons or entities can be contacted in
connection with Software Improvements. The cost of the foregoing
shall be borne as follows: (i) with respect to any modifications
to the Transaction Server Software that are required to be made
exclusively for Time and its Transaction Server Software (i.e.,
changes that are not required to be made to the commercially
released version of the Transaction Server Software to enable it
to work with OM-Express), Time shall reimburse OMI for the cost of
such work at Time's Discounted Time and Material Rates up to an
aggregate cost of ****** ******** ******* *********, and any costs
in excess of such amount shall be borne by OMI. In the event that
OMI is not able to complete modification of the Transaction Server
Software to accomplish these tasks prior to the time that Time
begins to accept Subscriptions and to offer licenses to
OM-Express, the calculations required to be made under the terms
of this Agreement in order to determine the amount of royalty and
customer support fees that Time would be obligated to pay OMI
shall be based upon Time's good faith calculations until such time
as the modifications to the Transaction Server Software shall have
been successfully completed; and (ii) with respect to any
modifications to the Transaction Server Software or OM-Express
that are required to be made to permit OMI and/or Time to
determine the amount of bounties required to be paid pursuant to
Section 8.3, the parties shall discuss in good faith prior to the
commencement of such work the cost and allocation of
responsibility therefor.
8.7 Royalty Advance. Upon Acceptance, Time will pay to OMI
on the first Payment Date thereafter a non-refundable advance of
***** ******** ******* *********, which sum shall be credited and
recouped against royalties to be paid pursuant to Section 8.2
hereof during the first twelve (12) months following the Launch.
8.8 Audit Rights. OMI shall keep full and complete records
of all customer support costs incurred hereunder and shall keep
full and complete records of all licenses to OM-Express granted
during the term of this Agreement and for a period of two (2)
years after the termination of this Agreement. Time may upon
reasonable advance notice (but not more than once in any calendar
year), audit OMI's records to validate Time's payment to OMI of
any fees paid during the prior two (2) years in accordance with
this Article 8. If any audits by Time of OMI's records should
disclose any overbilling and such results are confirmed by OMI,
OMI shall promptly repay Time such amount, and if the overbilling
exceeds ten percent (10%) of the amount actually due to OMI, then
OMI shall also pay the interest on the excess at the rate of one
and one-half percent (1.5%) per month or the highest interest rate
allowed by law, whichever is lower, from the date on which such
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amount became due to Time from OMI. If the amount overbilled by
OMI is equal to or greater than twenty percent (20%) of the amount
actually due to OMI for the payment period so audited, then the
cost of the audit shall be borne by OMI.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 Ownership. OMI represents, warrants and covenants that
it owns or otherwise has the irrevocable right to license
OM-Express, and that it possesses all right, title and interest in
OM-Express necessary to enter into this Agreement. OMI
represents, warrants and covenants that OM-Express or any
components thereof, and any other software or deliverables
provided by OMI under this Agreement, and the use of any of the
foregoing by Subscribers as set forth in the End User License,
Documentation or otherwise specified in writing by OMI, do not and
shall not infringe, violate or misappropriate in any way the
rights of any third party, including without limitation, the
rights under any United States or foreign patent, copyright,
trademark, trade secret, or any other proprietary rights or other
rights of any third party ("Third Party Rights"). In addition,
OMI represents, warrants and covenants that OM-Express, if used by
a Subscriber in accordance with its intended use as set forth in
the End User License and the Documentation provided by OMI to such
Subscriber, does not and shall not infringe, violate or
misappropriate in any way any Third Party Rights. OMI also
represents, warrants and covenants that as of date hereof, OMI has
no notice of nor knows of any actions, claims, demands, threats or
allegations that OM-Express and any other software or deliverables
developed or to be developed under this Agreement, or the use of
any of the foregoing as intended by OMI, infringes, violates or
misappropriates in any way Third Party Rights; provided, however,
that the foregoing representation, warranty and covenant does not
extend to a use by a Subscriber of OM-Express that does not
comport with the terms of the End User License and the
Documentation given to the Subscribers. OMI shall, throughout the
term set forth in Section 14.1, promptly notify Time in writing of
any such actions, claims, demands, threats or allegations of which
it becomes aware.
9.2 Duly Authorized. (a) OMI makes the following
representations:
(i) OMI is a corporation duly organized and
existing and is in good standing under the laws of the State of
Delaware and is qualified and in good standing as a foreign
corporation under the laws of any jurisdiction where the ownership
of its assets or the conduct of its business require OMI to be so
qualified, or if OMI is not so qualified, the failure to so
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qualify will not have a material adverse effect on the ability of
Time to enforce this Agreement;
(ii) There is no action, suit or proceeding pending
or threatened against or affecting OMI before or by any court,
administrative agency or other governmental authority which in any
way will impair OMI's ability to perform all of its obligations
hereunder, or which otherwise brings into question the
enforceability or validity of the transactions contemplated by the
Agreement;
(iii) OMI's execution, delivery, and performance of
this Agreement has been duly authorized by all appropriate
corporate action on the part of OMI, if any, and this Agreement
constitutes the valid and binding obligations of OMI enforceable
against OMI in accordance with the terms hereof; and
(iv) Neither the execution and delivery by OMI of
this Agreement, nor the consummation by OMI of the transactions
contemplated hereby, nor compliance by OMI with the provisions
hereof, conflicts with or results in a breach of any of the
provisions of the Certificate or Articles of Incorporation or
By-Laws of OMI or any amendments thereto, or any applicable law,
judgment, order, writ, injunction, decree, rule or regulation of
any court, administrative agency or other governmental authority,
or of any agreement or other instrument to which OMI is a party or
by which it is bound, or constitutes a default under any provision
thereof.
(b) Time makes the following representations:
(i) Time is a corporation duly organized and
existing and is in good standing under the laws of the State of
Delaware and is qualified and in good standing as a foreign
corporation under the laws of any jurisdiction where the ownership
of its assets or the conduct of its business require Time to be so
qualified, or if Time is not so qualified, the failure to so
qualify will not have a material adverse effect on the ability of
Time to enforce this Agreement;
(ii) There is no action, suit or proceeding pending
or threatened against or affecting Time before or by any court,
administrative agency or other governmental authority which in any
way will impair Time's ability to perform all of its obligations
hereunder, or which otherwise brings into question the
enforceability or validity of the transactions contemplated by the
Agreement;
(iii) Time's execution, delivery, and performance of
this Agreement has been duly authorized by all appropriate
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corporate action on the part of Time, if any, and this Agreement
constitutes the valid and binding obligations of Time enforceable
against Time in accordance with the terms hereof; and
(iv) Neither the execution and delivery by Time of
this Agreement, nor the consummation by Time of the transactions
contemplated hereby, nor compliance by Time with the provisions
hereof, conflicts with or results in a breach of any of the
provisions of the Certificate or Articles of Incorporation or
By-Laws of Time or any amendments thereto, or any applicable law,
judgment, order, writ, injunction, decree, rule or regulation of
any court, administrative agency or other governmental authority,
or of any agreement or other instrument to which Time is a party
or by which it is bound, or constitutes a default under any
provision thereof.
9.3 Non-Interference. Other than with respect to such
devices as OMI shall cause OM-Express to contain in order to
comply with Sections 2.1, 2.2 and 3.6, OMI represents, warrants
and covenants that each version of OM-Express and each component
thereof shall not, when made available for distribution at the OMI
Site, contain any "viruses" or other such devices that will cause
OM-Express or any component thereof to be erased or become
inoperable or incapable of processing or adversely affect the
operations of any Subscriber hardware or software that is
appropriate to use with OM-Express in accordance with the
Documentation provided to Subscribers. OMI shall retain a copy of
each version of OM-Express under seal, in the forms delivered to
Time or any Subscribers hereunder, in order to determine whether
OMI conformed with this provision.
9.4 Specifications. OMI represents, warrants and covenants
that the Launch version of OM-Express accepted by Time pursuant to
Section 3.2 and any Software Improvements will, when delivered,
function and operate in substantial conformance with the
Specifications (including as such Specifications may be amended in
connection with any Software Improvements) and otherwise in good
working order.
9.5 Disclaimer. EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THIS AGREEMENT, OM-EXPRESS, OR SUPPORT SERVICES
RENDERED HEREUNDER, AND EACH PARTY DISCLAIMS ANY AND ALL
WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT THERETO; INCLUDING
WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
9.6 Regulatory Requirements Compliance Generally. During
the term of this Agreement, OMI represents, warrants and covenants
that, at no additional cost to Time, OMI shall provide that
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OM-Express and the distribution thereof shall comply with the U.S.
Regulatory Requirements which apply to OM-Express, consistent with
the compliance to such U.S. Regulatory Requirements of other
similar commercially available products. OMI shall use reasonable
commercial efforts to implement Software Improvements necessary to
conform with U.S. Regulatory Requirements and in any event, such
Software Improvements shall be made to OM-Express within six (6)
months after the release of such U.S. Regulatory Requirements or
by the effective date of such U.S. Regulatory Requirements,
whichever is later.
9.7 Regulatory Requirements on Use of Software. Without
limitation of the provisions of Section 9.6 hereof, OMI
represents, warrants and covenants that OMI shall be responsible
for the term of this Agreement for complying with all applicable
Regulatory Requirements of the United States and all foreign
countries with respect to the distribution or use (as intended and
authorized by the End User License and Documentation provided by
OMI or as otherwise provided in writing by OMI) of OM-Express
outside of the United States, including without limitation:
(a) import and export restrictions (including without limitation
restrictions imposed under regulations of the U.S. Export
Administration, restrictions imposed by the Office of Foreign
Assets Control, restrictions imposed by the U.S. Department of the
Treasury, or otherwise), (b) laws and regulations regarding
restrictions on trans-border data flow, (c) obtaining any
necessary consents, and (d) registering or filing any documents.
With respect to any such export of OM-Express, OMI shall not
export or reexport directly or indirectly OM-Express (or any
commodity and/or technical data or a system incorporating such
commodity) without first obtaining the written approval or
required export license to do so from the U.S. Department of
Commerce or any other agency of the U.S. Government or of any
foreign government having jurisdiction over such transaction, when
required by an applicable Regulatory Requirement. OMI shall be
solely responsible for all costs associated with such compliance.
It is expressly understood by the parties hereto that the
foregoing shall apply to the U.S. and to all other countries and
territories in which OMI actively promotes, advertises or markets
licenses to OM-Express (whether under such name or another); and,
in addition, the parties agree to work together in good faith to
share information concerning the Regulatory Requirements of
countries or territories in which either party may consider doing
business and that the downloading capabilities of the OMI Site can
be turned off at Time's option (provided that Time has implemented
a commercially reasonable system to determine the country of
origin of any prospective user and informs OMI accordingly) at any
time during the term of this Agreement with respect to any single
country or territory. OMI shall defend, hold harmless and
indemnify Time from and against any and all claims, judgments,
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costs, awards, expenses (including reasonable attorneys' fees) and
liability of any kind arising out of OMI's non-compliance with any
of its obligations under this Section 9.7 or any applicable
Regulatory Requirement with respect to the distribution or use (as
intended and authorized by the End User License and Documentation
provided by OMI to such end user) of OM-Express outside of the
United States. OMI represents, warrants and covenants that it is
not listed on the Table of Denial Orders issued by the U.S.
Department of Commerce and that its U.S. export privileges have
not been revoked or limited in any way.
10. PROPRIETARY RIGHTS.
10.1 Rights to OM-Express. Except as set forth herein, and
subject to the exclusivity provisions set forth in Section 4.2,
OMI shall retain all right, title and interest in and to
OM-Express, including without limitation all patent, copyright,
trademark, trade name, trade secret and other proprietary rights,
provided, however, that Time shall retain all rights to any
content from Pathfinder embedded or otherwise included in
OM-Express, if any.
10.2 Rights to Pathfinder. Without limiting OMI's rights to
OM-Express as set forth in Section 10.1, all programs, documents,
data, inventions, discoveries and improvements to Pathfinder
provided by Time are, and shall remain, the sole and exclusive
property of Time. OMI acknowledges that, as between the parties,
Time is the owner of all other trademarks and trade names
associated with Pathfinder.
10.3 OMI Trademarks, Legends and Notices. OMI grants Time
the right to use the trademarks set forth on Exhibit D (the
"Licensed Marks"), but only in the format and manner approved by
OMI, and only in accordance with the terms of this Agreement. The
Licensed Marks are trademarks of OMI and all right, title and
interest therein and the goodwill pertaining thereto belong
exclusively to them. OMI hereby authorizes Time to use the
Licensed Marks in connection with the promotion and offering of
OM-Express through Pathfinder; provided, that prior to the initial
use and distribution of OM-Express through Pathfinder which
contains the Licensed Marks and prior to the initial release or
distribution of any and all advertising or promotional materials
bearing the Licensed Marks relating to the promotion of OM-Express
through Pathfinder, Time shall submit to OMI, for OMI's approval,
a sample of each such use so that OMI may ascertain the
correctness of all legends, markings and notices in the form and
manner in which the Licensed Marks are displayed, and to determine
whether the art work and plans for advertising are consistent with
the quality and prestige associated with the Licensed Marks. Five
(5) business days shall be allowed for OMI to exercise such
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approval; provided, however, that OMI's failure to exercise such
approval, or to indicate disapproval, within such five (5)
business days shall be deemed to be notification of OMI's
approval. Upon approval by OMI of the sample or samples submitted
in connection with this Section 10.3, Time represents, warrants
and covenants that it shall maintain the quality and appearance of
the submitted materials in all respects at the same level approved
in writing by OMI. All advertisements and promotional materials
relating thereto shall bear the Licensed Marks and shall include
an appropriate legend as reasonably requested by OMI. Time hereby
acknowledges the ownership of the Licensed Marks and agrees not to
contest such ownership. All use of Licensed Marks by Time shall
inure to the benefit of OMI. All the rights in the Licensed Marks
other than those specifically granted in this Agreement are
reserved by OMI.
11. PROPRIETARY AND CONFIDENTIAL INFORMATION
11.1 Pathfinder Information. All data (including without
limitation, information, records or other data) relating to the
use of Pathfinder, content, advertising, promotional material, the
Pathfinder end-user interface (including without limitation,
logos, icons, screen displays, and other graphical or audio/visual
components thereof), information relating to users' names,
identities, addresses, demographic data, financial records,
activity and usage records, credit card data, access logs, billing
data, databases and other information ("Pathfinder Information"),
is the proprietary information of Time. Time shall be the
exclusive owner of all right, title and interest in and to the
Pathfinder Information, and all copies thereof, whether in print
or electronic form (including computer memory) and OMI shall have
no rights whatsoever in such Pathfinder Information.
11.2 Confidential Information. "Confidential Information,"
shall mean: (a) the Pathfinder Information (except aspects of
Pathfinder which, by the nature of their utility, are exposed to
third parties); (b) OM-Express, including without limitation, all
source code and trade secrets embodied therein (except aspects of
OM-Express which, by the nature of their utility, are exposed to
third parties); (c) any information disclosed by OMI or Time in
writing designated as confidential, proprietary or marked with
words of like import; and (d) any information orally conveyed by
OMI or Time if the disclosing party provides specific written
notice that such oral communication shall be considered to be
"Confidential Information" and delivers a confirmation thereof in
writing to the receiving party within ten (10) days of the oral
conveyance. Without limitation of the foregoing, the parties
agree that Confidential Information shall include: (i) this
Agreement and its terms and conditions; and (ii) Time's and OMI's
respective business plans, ideas, projections, forecasts,
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improvements, know how, concepts, future activities and any
information relating to Pathfinder or OM-Express.
11.3 Restrictions. The recipient of Confidential
Information agrees that, absent the prior written consent of the
disclosing party, it shall not reveal or disclose any Confidential
Information for any purpose to any other person, firm, corporation
or other entity, or use any Confidential Information for any
purpose other than as contemplated herein. The recipient shall
keep any copies of the Confidential Information in as secure a
location as the recipient uses for its own similar information,
shall inform the employees, agents or representatives of the
recipient or the recipient's Affiliates of their obligations under
this Agreement, and shall take such steps as may be reasonable in
the circumstances, or as may be reasonably requested by the
disclosing party, to prevent any unauthorized disclosure, copying
or use of the Confidential Information. The recipient shall grant
access to the Confidential Information only to those employees,
agents and representatives of the recipient or the recipient's
Affiliates, who are required to obtain such access to enable the
undersigned to use the Confidential Information for the purposes
permitted by this Agreement.
11.4 Exceptions. Confidential Information shall not include
information which: (a) at or prior to the time of disclosure was
lawfully known to the receiving party; (b) at or after the time of
disclosure becomes generally available to the public other than
through any act or omission of the receiving party; (c) is
developed by the receiving party independent of any Confidential
Information it receives from the disclosing party; (d) is received
from a third party free to make such disclosure without breach of
any legal obligation; or (e) is required to be disclosed pursuant
to any statute, regulation, order, subpoena or document discovery
request; provided, that prior written notice of such disclosure is
furnished to the disclosing party as soon as practicable in order
to afford the disclosing party an opportunity to seek a protective
order (it being agreed that if the disclosing party is unable to
obtain or does not seek a protective order and the receiving party
is legally compelled to disclose such information, disclosure of
such information may be made without liability).
11.5 Return or Destroy. Time and OMI each agree that upon
the termination of this Agreement for any reason, each party shall
promptly return or destroy (as directed by the other party) all
Confidential Information of the other party including all copies
thereof (excluding any Confidential Information which is subject
to a license surviving termination of this Agreement). Upon
request by a party, the other party shall deliver a certificate
signed by a senior executive officer stating that the party has
complied in full with the terms of this Section.
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
11.6 OMI's Duty to Inform. If Time requests that OMI
develop or implement any software pursuant to Time's detailed
instructions or detailed specifications that, to the best of the
knowledge and belief of the individuals assigned by OMI to such
development or implementation, is likely to infringe on any Third
Party Rights, OMI shall promptly so notify Time in reasonable
detail in writing.
12. INDEMNIFICATION
12.1 OMI Indemnification.
(a) OMI, at its own expense, shall indemnify and hold
harmless Time and defend any action brought against Time with
respect to any claim, demand, cause of action, debt, liability or
expense, including attorneys' fees (collectively, a "Loss"), due
to claims brought by a third party: (i) that OM-Express or any
component thereof infringes, violates or misappropriates any Third
Party Rights (provided, however, that OMI's indemnification
obligations with respect to patents issued under the laws of
countries other than the United States ("Foreign Patents") shall,
except for Foreign Patents which are the counterparts of any
United States patents, be limited to *** ******* *******
************ during the term of this Agreement); (ii) that the use
of OM-Express or any component thereof by the end user, in
accordance with the End User License and the Documentation
provided by OMI to such end user results in the infringement,
violation or misappropriation of any Third Party Rights; (iii) OMI
breached any material representation, warranty, covenant or
agreement set forth herein; (iv) for personal or bodily injury or
damage to property arising out of the negligence of OMI, including
without limitation, any damage to property resulting from OMI's
failure to comply with the provisions of Section 9.3 hereof; or
(v) arising out of any act or omission of OMI in connection with
or related to the CompuServe/OMI License Agreement and the
arrangements contemplated thereunder.
(b) Time may, at its own expense, assist in such
defense if it so chooses, provided, that OMI shall control such
defense and all negotiations relative to the settlement of any
such claim. OMI shall not settle any claim which adversely
affects Time's right to use OM-Express or any component thereof or
its rights under the License without the prior written approval of
Time.
(c) Time shall promptly provide OMI with written
notice of any claim which Time believes falls within the scope of
this Section 12.1; provided, however, that, except to the extent
OMI is actually prejudiced by Time's failure to provide such
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prompt notice, Time's failure to provide such notice hereunder
shall not limit Time's rights under this Article 12.
(d) In the event that OM-Express or any portion
thereof is held to constitute an infringement of a Third Party
Right and its use is enjoined, OMI shall have the obligation to,
at its option: (i) modify OM-Express or the infringing portion
thereof at its own expense, without impairing in any respect the
functionality or performance of OM-Express, so that it is
non-infringing and make such modifications available to Time and
CompuServe (for distribution to its subscribers in accordance with
the CompuServe/OMI License Agreement); (i) replace OM-Express with
an equally suitable, non-infringing system, which Time and
CompuServe shall have the right to subject to the Acceptance Tests
set forth in this Agreement and following acceptance thereof,
which OMI shall make available to Time and CompuServe (for
distribution to its subscribers in accordance with the
CompuServe/OMI License Agreement); or (iii) procure for Time and
CompuServe the right to continue distributing and/or offering for
sale licenses to OM-Express as set forth hereunder. If none of
the foregoing alternatives are available to OMI after exercising
its best efforts, Time shall receive a repayment of a fair
allocation of all monies paid to OMI pursuant to this Agreement,
and OMI shall accept return of OM-Express at its expense, once
Time has arranged for the continuation of the functions performed
thereby. OMI shall have no obligations under this Section 12.1
with respect to infringement or misappropriation of Third Party
Rights arising from the use of OM-Express by an end user thereof
other than as specified in the End User License or the applicable
Documentation or as specified in writing by OMI.
12.2 Time Indemnification.
(a) Time, at its expense, shall indemnify and hold
harmless OMI and defend any action against OMI with respect to a
Loss due to claims brought by a third party: (i) that Time
breached any material representation, warranty, covenant or
agreement set forth herein; or (ii) for personal or bodily injury
or damage to property arising out of the negligence of Time.
(b) OMI may, at its own expense, assist in such
defense if it so chooses, provided, that Time shall control such
defense and all negotiations relative to the settlement of any
such claim. Time shall not settle any claim which adversely
affects OMI's right to distribute and/or offer licenses to
OM-Express without the prior approval of OMI.
(c) OMI shall promptly provide Time with written
notice of any claim which OMI believes falls within the scope of
this Section 12.2; provided, however, that, except to the extent
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Time is actually prejudiced by OMI's failure to provide such
prompt notice, OMI's failure to provide such notice hereunder
shall not limit OMI's rights under this Article 12.
12.3 Limitation. Sections 12.1 and 12.2 set forth the
parties' sole and exclusive obligations and sole and exclusive
remedies, with respect to infringement or misappropriation of
Third Party Rights.
12.4 Section 365(n). All rights and licenses granted under
or pursuant to this Agreement by OMI to Time are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code (the "Code"), licenses to rights to
"Intellectual Property" as defined under Section 101(52) of the
Code. The parties agree that Time, as licensee of such rights
under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Code. The parties further
agree that, in the event of the commencement of bankruptcy
proceedings by or against OMI under the Code, Time shall be
entitled to retain all of its rights under this license.
12.5 Publicity. Except as otherwise set forth in Section 7,
neither OMI nor Time will make any public announcements or
disclosure relating to this Agreement or the arrangement
contemplated hereunder without first obtaining the written consent
of the other party. Except as otherwise set forth in Section 7,
OMI and Time agree that neither will, without the written consent
of the other in each instance: (a) use in advertising, publicity,
or otherwise the name of the other, or any trade name, trademark,
trade device, service mark, symbol or any abbreviation,
contraction or simulation thereof owned by the other; or
(b) represent, directly or indirectly, that any product or any
service provided by OMI has been approved or endorsed by Time.
12.6 Most Favored Customer. During the term set forth in
Section 14.1 hereof and any renewal period pursuant to
Section 14.2 hereof, OMI agrees to treat Time as a most favored
customer with respect to OM-Express. OMI represents, warrants and
covenants that all of the prices, terms and benefits granted by
OMI hereunder are on an overall basis comparable to or better than
the prices, terms and benefits previously offered by it for
comparable services to any customer of OMI for OM-Express. If,
after January 1, 1997, OMI shall enter into arrangements with any
other customer providing such customer more favorable terms
(without reference to the provisions of Section 4.2 hereof), OMI
shall notify Time of such terms and this Agreement shall thereupon
be deemed amended to provide the same terms to Time.
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
13. LIMITATION OF LIABILITY
13.1 Limitation of Liability for Time. IN NO EVENT SHALL
TIME BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR
INDIRECT DAMAGES, COSTS OR CLAIMS OF ANY NATURE WHATSOEVER ARISING
OUT OF OR RELATING TO THE SUBJECT MATTER HEREOF; AND THE AMOUNT OF
TIME'S LIABILITY TO OMI UNDER ANY CLAIM FOR LOSS OR LIABILITY
BASED UPON, ARISING OUT OF, RESULTING FROM, OR IN ANY WAY
CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT SHALL
** ** **** ****** ******* ******** **** ** *** *** *** *********,
******** ******** ** ******** ********* ***** **** *********. THE
FOREGOING LIMITATION ON DIRECT DAMAGES SHALL NOT BE APPLICABLE
WITH RESPECT TO TIME'S INDEMNIFICATION OBLIGATIONS PURSUANT TO
SECTION 12.2 HEREIN OR WITH RESPECT TO TIME'S BREACH
OF ARTICLE 4 OR ARTICLE 11 HEREUNDER OR TIME'S ABANDONMENT OF ITS
OBLIGATIONS HEREUNDER OR TIME'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
13.2 Limitation of Liability for OMI. IN NO EVENT SHALL OMI
BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT
DAMAGES, COSTS OR CLAIMS OF ANY NATURE WHATSOEVER ARISING OUT OF
OR RELATING TO THE SUBJECT MATTER HEREOF; AND THE AMOUNT OF OMI'S
LIABILITY TO TIME OR ANY THIRD PARTY UNDER ANY CLAIM FOR LOSS OR
LIABILITY BASED UPON, ARISING OUT OF, RESULTING FROM, OR IN ANY
WAY CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT
SHALL IN NO CASE EXCEED THE AMOUNTS ACTUALLY PAID TO OMI FOR ANY
EQUIPMENT, SOFTWARE PRODUCTS OR SERVICES FURNISHED UNDER THIS
AGREEMENT. THE FOREGOING LIMITATION ON DIRECT DAMAGES SHALL NOT
BE APPLICABLE WITH RESPECT TO OMI'S INDEMNIFICATION OBLIGATIONS
PURSUANT TO SECTION 12.1 HEREIN, OR WITH RESPECT TO OMI'S BREACH
OF ARTICLE 11 HEREUNDER OR OMI'S ABANDONMENT OF ITS OBLIGATIONS
HEREUNDER OR OMI'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
14. TERM AND TERMINATION; RENEWAL
14.1 Term. The initial term of this Agreement will be from
the date hereof through December 31, 1997, subject to termination
by Time pursuant to Section 14.3 and Section 14.4 hereof and
termination by OMI pursuant to Section 14.5.
14.2 Renewals. This Agreement will automatically renew for
successive periods of twelve (12) months unless either party shall
notify the other party thirty (30) days prior to the date of
renewal that it wishes to terminate this Agreement pursuant to
this Article 14; provided, however, that the following terms shall
not automatically apply during any renewal term of this Agreement
14.3 Termination For Cause by Time. Time, at its sole
option shall have the right to terminate this Agreement, in whole
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or in part, by giving written notice of termination to OMI of the
occurrence of any of the following:
(a) Failure of OMI to provide a version of OM-Express
acceptable to Time pursuant to Section 3.2;
(b) Failure of OMI to provide Software Improvements or
to adhere to the requirements for Software Improvements set forth
in Section 6.3(a);
(c) Any material failure of performance by OMI, if
within thirty (30) days after the giving of written notice to OMI
of such failure of performance, OMI has not cured such failure;
(d) OMI becomes insolvent or files for bankruptcy;
(e) a Change of Control of OMI if: (i) the transferee
does not agree in a written representation to Time that:
(A) Shikhar Ghosh and Gary Eichhorn, or replacements reasonably
acceptable to Time, shall remain in a significant managerial
capacity for a period of at least two (2) years from the effective
date of the Change of Control; and (B) the transferee shall
continue to commit adequate financial resources to continue the
business of OMI (as evaluated based on the financial performance
of OMI during the twelve (12) month period preceding the Change of
Control) for a period of at least two (2) years from the effective
date of the Change of Control); (ii) the transferee does not cause
the representations made to Time pursuant to Section 14.3-(a)(i)
to be true; or (iii) the transferee is a direct competitor of Time
Inc. or any of its subsidiaries; or
(f) OM-Express is no longer wholly owned or controlled
by OMI and (i) Time for reasonable cause deems the transferee to
be unacceptable to Time; or (ii) (x) the transferee does not agree
in a written representation to Time to continue to commit adequate
financial resources (as evaluated based on that portion of the
financial performance of OMI related to OM-Express during the
twelve (12) month period preceding the change in ownership or
control of OM-Express) for at least two (2) years from the date on
which OM-Express is no longer owned or controlled by OMI, to
develop, support and maintain OM-Express; and (y) the
representations made to Time pursuant to Section 14.3(f)(ii)(x)
are not satisfied.
14.4 Time's Rights on Termination for Cause. In the event
of a termination of this Agreement by Time pursuant to
Section 14.3, in addition to any other right or remedy available
at law, in equity, or by agreement:
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(a) All rights and licenses granted to Subscribers
hereunder shall survive perpetually, subject to OMI's right to
terminate the End User License pursuant to the terms thereof.
(b) Time shall be relieved of, and shall not have,
either (i) any obligation hereunder to pay any additional fees or
other monies to OMI other than accrued fees due and owing to OMI
pursuant to the terms of Section 8, or (ii) to promote OM-Express
pursuant to the terms of Section 7 or otherwise.
(c) Upon a termination pursuant to Section 14.3(d),
Time shall be entitled to a release of the OM-Express Deposit from
Escrow.
14.5 Termination for Cause by OMI. OMI, at its sole option
shall have the right to terminate this Agreement (excluding the
End User License which survives perpetually, unless terminated by
OMI pursuant to its terms), in whole or in part, by giving written
notice of termination to Time of the occurrence of any of the
following:
(a) Any material breach of this Agreement, if within
thirty (30) days after the giving of written notice to Time of
such failure of performance, Time has not cured such failure; or
(b) Time becomes insolvent or files for bankruptcy.
14.6 Delivery on Termination. Following termination of this
Agreement for any reason, each party shall deliver to the other
party all materials relating to such other party or this
Agreement, or obtained or developed in the course of performance
of this Agreement or containing or derived from all Confidential
Information.
14.7 Survival. In the event of the termination of this
Agreement for any reason, the provisions of Articles 1, 4, 5, 9,
10, 11, 12, 13, 14 and 15 shall survive.
15. MISCELLANEOUS
15.1 Insurance. OMI shall purchase and keep in force at its
own cost and expense the following minimum coverages with
reputable commercial insurers:
(a) Insurance, to be effective by June 1, 1996, which would
cover OMI's indemnification obligations as set forth in
Section 12.1 with a limit of at least *** ******** *******
************ on a per claim basis and *** ******** *******
************ on an aggregate basis; and
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(b) Umbrella coverage, to be effective by June 1, 1996
for (a) above of ***** ******* ******* ************.
Certificates of Insurance acceptable to Time, and indicating
that Time is an additional insured, shall be filed with Time prior
to the start of the First Beta Period. Each and every policy and
certificate shall contain an endorsement stating that the
insurance company will not, prior to the expiration or termination
of this Agreement or any policy expiration date shown on the
policy and certificate, whichever occurs first, terminate the
policy or change any coverage therein without giving written
notice to Time. This notice shall arrive at least fifteen (15)
days prior to the termination or change.
15.2 Notice. Wherever under this Agreement one party is
required or permitted to give notice to the other, such notice
shall be deemed given when delivered in hand, when telecopied or
faxed and receipt confirmed; when sent by overnight courier
service to the address specified below, or when mailed by United
States mail, registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:
In the case of Time:
Time Inc. New Media
Time & Life Building
1271 Avenue of the Americas
New York, New York 10020
Attn: President
With a copy to:
Time Inc.
Time & Life Building
1271 Avenue of the Americas
New York, New York 10020
Attn: General Counsel
In the case of OMI:
Open Market, Inc.
245 First Street
Cambridge, Massachusetts 02142
Attn: Legal Counsel
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<PAGE>
With a copy to:
Lucash, Gesmer & Updegrove
One McKinley Square
Boston, Massachusetts 02109
Attn: Richard N. Lucash, Esq.
Either party hereto may from time to time change its address
for notification purposes by giving the other written notice of
the new address and the date upon which it will become effective.
15.3 Personnel Rules and Regulations. If OMI personnel are
present at Time's facilities, such personnel will comply with
Time's security regulations particular to Time's facilities,
including any procedures which Time personnel and other
consultants are normally asked to follow. Time will inform OMI of
such regulations or procedures upon OMI's request. Unless
otherwise agreed to by the parties, OMI personnel shall observe
the working hours, working rules and holiday schedules of Time
while working on Time's premises. If Time personnel are present
at OMI's facilities, such personnel will comply with OMI's
security regulations particular to OMI's facilities, including any
procedures which OMI personnel and other consultants are normally
asked to follow. OMI will inform Time of such regulations or
procedures upon Time's request. Unless otherwise agreed to by the
parties, Time personnel shall observe the working hours, working
rules and holiday schedules of OMI while working on OMI's
premises.
15.4 Independent Contractor. In performance of this
Agreement, each party is acting as an independent contractor.
Personnel supplied by either party hereunder are not the other
party's personnel or agents, and each party assumes full
responsibility for the acts of the personnel they supply. Each
party shall be solely responsible for the payment of compensation
to its own employees and subcontractors assigned to perform
services hereunder, and such employees and subcontractors shall be
informed that they are not entitled to the provision of any
employee benefits of the other party. Each party shall be
responsible for payment of its employees' workers' compensation,
disability benefits, unemployment insurance or for withholding
income taxes and social security.
15.5 Force Majeure. Except as expressly provided to the
contrary in this Agreement, neither party shall be liable to the
other for any delay or failure to perform due to causes beyond its
reasonable control. Performance times shall be considered
extended for a period of time equivalent to the time lost because
of any such delay.
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15.6 No Waiver. Except as may be provided specifically
herein, no delay or omission by either party hereto to exercise
any right or power hereunder shall impair such right or power or
be construed to be a waiver thereof. A waiver by either of the
parties hereto of any of the covenants to be performed by the
other or any breach thereof shall not be construed to be a waiver
of any succeeding breach thereof or of any other covenant herein
contained.
15.7 Severability. In the event any provision hereof shall
be deemed invalid or unenforceable by any court or governmental
agency, such provision shall be deemed severed from this Agreement
and replaced by a valid provision which approximates as closely as
possible the intent of the parties. All remaining provisions
shall be afforded full force and effect.
15.8 Assignment. Time may assign or sublicense this
Agreement, in whole or in part, to any parent, Affiliate or
subsidiary of Time or any successor organization which acquires
Time or any Time parent, Affiliate or subsidiary into which Time
or any parent, Affiliate or subsidiary or portion thereof is
merged, sold or otherwise transferred, provided, however, that
Time shall not have the right to assign or sublicense this
Agreement to the Prohibited Entities. Any assignment by OMI
without Time's prior written consent shall be null and void.
Notwithstanding the foregoing, OMI may transfer or assign its
rights and obligations hereunder in connection with a sale,
transfer, merger or consolidation of all or substantially all of
its assets or business, provided, however, that Time's prior
written consent to the foregoing shall be required (which consent
shall not be unreasonably withheld).
15.9 Governing Law and Venue. This Agreement shall be
governed by, subject to, and interpreted in accordance with the
laws of the State of New York, without regard to conflicts of
laws. If OMI commences any action related to the subject matter
hereof against Time, such action will be maintained in the courts
of the State of New York, or the Federal District Courts sitting
in New York County, which courts shall have exclusive jurisdiction
for such purposes. If Time commences any action related to the
subject matter hereof against OMI, such action will be maintained
in the courts of the Commonwealth of Massachusetts, or the Federal
District Courts sitting in the city of Boston, Massachusetts,
which courts shall have exclusive jurisdiction for such purposes.
15.10 Counterparts. This Agreement may be executed in
counterparts, or by facsimile copy followed up by an original,
each, when taken together, shall constitute the entire Agreement.
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15.11 Entire Agreement. Each party acknowledges that this
Agreement, including the Exhibits attached hereto and the
documents incorporated by reference herein constitute the complete
and exclusive statement of the terms and conditions between the
parties, which supersedes all prior proposals, understandings and
all other agreements, oral and written, between the parties
relating to the subject matter of this Agreement. This Agreement
may not be modified or altered except by a written instrument duly
executed by both parties.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement the date and year first written above by their fully
authorized representatives.
OPEN MARKET, INC.
By:
Title:
Date:
TIME INC. NEW MEDIA
By:
Title:
Date:
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement the date and year first written above by their fully
authorized representatives.
OPEN MARKET, INC.
By:
Title:
Date:
TIME INC. NEW MEDIA
By:
Title:
Date:
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<PAGE>
EXHIBIT A
Specifications for OM-Express
Page A-1 through Page A-4
contain confidential materials
which have been omitted
and filed separately with
the Securities and Exchange Commission
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<PAGE>
EXHIBIT B
Form of License and Distribution Agreement
By and Between CompuServe Incorporated and Open Market, Inc.
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<PAGE>
LICENSE
AND
DISTRIBUTION
AGREEMENT
BY AND BETWEEN
COMPUSERVE INCORPORATED
AND
OPEN MARKET, INC.
Dated as of April 10, 1996
TABLE OF CONTENTS
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<PAGE>
1. DEFINED TERMS.......................................
1.1 Affiliate.....................................
1.2 CompuServe Network............................
1.3 CompuServe Service............................
1.4 CompuServe Subscribers........................
1.5 Documentation.................................
1.6 Internet......................................
1.7 ISP...........................................
1.8 OMI Site......................................
1.9 Prohibited Entities...........................
1.10 Regulatory Requirements.......................
1.11 Release.......................................
1.12 Software Improvements.........................
1.13 Update........................................
1.14 U.S. Regulatory Requirements..................
2. BETA TESTING........................................
2.1 First Phase Beta Test.........................
2.2 Second Phase Beta Test........................
2.3 Material to be Provided to CompuServe.........
3. LAUNCH, ACCEPTANCE AND DISTRIBUTION.................
3.1 Launch........................................
3.2 Acceptance by CompuServe and Time.............
3.3 Distribution of OM-Express....................
3.4 Branding of OM-Express........................
3.5 End User License and Other Materials..........
4. LICENSE.............................................
4.1 License.......................................
4.2 Scope of License..............................
4.3 Disclosure to Third Parties...................
5. OM-EXPRESS SOURCE CODE ESCROW.......................
5.1 Delivery......................................
5.2 CompuServe Escrow Agreement...................
6. SOFTWARE IMPROVEMENTS; TRAINING FOR CUSTOMER SUPPORT
6.1 Provision of Software Improvements............
6.2 Training for Customer Support.................
6.3 Additional Support............................
7. FEES ..............................................
7.1 License Fee...................................
7.2 Release Fees..................................
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8. REPRESENTATIONS, WARRANTIES AND COVENANTS...........
8.1 Ownership.....................................
8.2 Duly Authorized...............................
8.3 Non-Interference..............................
8.4 Specifications................................
8.5 Disclaimer....................................
8.6 Regulatory Requirements Compliance Generally..
8.7 Regulatory Requirements on Use of Software....
9. PROPRIETARY RIGHTS..................................
9.1 Rights to OM-Express..........................
9.2 Rights to CompuServe..........................
9.3 OMI Trademarks, Legends and Notices...........
10. PROPRIETARY AND CONFIDENTIAL INFORMATION............
10.1 CompuServe Information........................
10.2 Confidential Information......................
10.3 Restrictions..................................
10.4 Exceptions....................................
10.5 Return or Destroy.............................
10.6 OMI's Duty to Inform..........................
11. INDEMNIFICATION.....................................
11.1 OMI Indemnification...........................
11.2 CompuServe Indemnification....................
11.3 Limitation....................................
11.4 Section 365(n)................................
11.5 Publicity.....................................
12. LIMITATION OF LIABILITY.............................
12.1 Limitation of Liability for CompuServe........
12.2 Limitation of Liability for OMI...............
13. TERM AND TERMINATION; RENEWAL.......................
13.1 Term..........................................
13.2 Renewals......................................
13.3 Termination For Cause by CompuServe...........
13.4 CompuServe's Rights on Termination for Cause..
13.5 Termination for Cause by OMI..................
13.6 Delivery on Termination.......................
13.7 Survival......................................
14. MISCELLANEOUS.......................................
14.1 Insurance.....................................
14.2 Notice........................................
14.3 Personnel Rules and Regulations...............
14.4 Independent Contractor........................
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14.5 Force Majeure.................................
14.6 No Waiver.....................................
14.7 Severability..................................
14.8 Assignment....................................
14.9 Governing Law and Venue.......................
14.10 Counterparts..................................
14.11 Entire Agreement..............................
EXHIBIT A ..............................................
EXHIBIT B ..............................................
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<PAGE>
LICENSE AND DISTRIBUTION AGREEMENT
THIS AGREEMENT made and entered into on this 10th day of
April, 1996 (the "Agreement"), by and between Open Market, Inc., a
corporation existing under the laws of the State of Delaware with
offices at 245 First Street, Cambridge, Massachusetts 02142
(hereinafter referred to as "OMI") and CompuServe Incorporated, a
corporation existing under the laws of the State of Ohio with
offices at 5000 Arlington Centre Boulevard, Columbus, Ohio 43220
(hereinafter referred to as "CompuServe").
WHEREAS, OMI is in the business of developing,
licensing, operating and maintaining software in connection with
the Internet's World Wide Web protocol (the "World Wide Web"), and
has developed and owns a certain software product for use by
Internet users currently known as "OM-Express", as more fully
detailed in the specifications attached as Exhibit A hereto (the
"Specifications");
WHEREAS, CompuServe desires to market and distribute
OM-Express; and
WHEREAS, OMI desires to grant to CompuServe certain
rights to market and distribute OM-Express for a certain period of
time upon the terms and conditions set forth in this Agreement and
provide certain other services related to OM-Express pursuant to
the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of
the respective agreements and undertakings hereinafter set forth
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
1. DEFINED TERMS
1.1 Affiliate. "Affiliate" of a party shall mean a
person or entity that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common
control with, such party. The term "control" (including the terms
"controlling," "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a person
or entity, whether through the ownership of voting securities, by
contract, or otherwise.
1.2 CompuServe Network. "CompuServe Network" shall
mean the computer communications network which is owned and
operated by, for or on behalf of CompuServe and/or any of its
Affiliates and which enables CompuServe Subscribers to gain access
to the Internet.
1.3 CompuServe Service. "CompuServe Service" shall
mean the service through which CompuServe provides CompuServe
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<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Subscribers with access to the Internet through the CompuServe
Network. CompuServe Service includes CompuServe Information
Service, WOW and Spry Net.
1.4 CompuServe Subscribers. "CompuServe Subscribers"
shall mean individuals or entities who use the CompuServe Network
through any program or service, offered or provided by CompuServe
or any Affiliate thereof.
1.5 Documentation. The term "Documentation" shall mean
any and all reference manuals, installation instructions or other
materials, in printed or electronic form, relating to or necessary
for the operation of OM-Express that OMI makes generally available
to its customers or licensees of OM-Express and shall, at a
minimum, include such materials that OMI makes available to other
ISPs and their customers and subscribers.
1.6 Internet. "Internet" shall mean the wide area
cooperative network of university, corporate, government and
private computer networks communicating through Transmission
Control Protocol/Internet Protocol which is commonly referred to
as the Internet.
1.7 ISP. The term "ISP" shall mean Internet Service
Providers (i.e., entities that offer connectivity to the Internet,
including any on-line service providers such as ***********
******* ******* ******* ** ********* *******.
1.8 OMI Site. The "OMI Site" shall mean a site or
sites on the World Wide Web, each of which is operated and
maintained by OMI for the purpose of downloading OM-Express to
licensees thereof.
1.9 Prohibited Entities. The term "Prohibited
Entities" shall mean any of the entities having the names or being
commonly referred to as ******** ************** ************
*********** **** ********* **** ****** ********** *****
*************** ***** ****** **** ****** ******* *********
*********** ****** ***** ********** **** *** *** ********* *****
1.10 Regulatory Requirements. The term "Regulatory
Requirements" shall mean any regulation, ordinance or requirement,
including regulations of administrative agencies or bodies, in
whatever form, now existing or to come into existence during the
term of this Agreement.
1.11 Release. The term "Release" shall mean a new
version of OM-Express which consists solely of major functional
enhancements or feature additions to OM-Express; provided,
however, that a Release shall not contain any changes in
OM-Express that are more properly classified as an Update, which
changes shall be provided in a separate Update. A new Release is
customarily connoted by a change in the revision number to the
left of the decimal point (ex. 4.00)
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<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1.12 Software Improvements. The term "Software
Improvements" shall mean:
(a) any Updates;
(b) any Releases; or
(c) any other new software OMI or OMI's agents or
subcontractors may market at any time as a full or partial (i.e.,
having substantially similar functionality) alternative or
replacement for OM-Express, even if a user of such new or improved
software is not required to license OM-Express in order to operate
such new or improved software (including any documentation related
thereto).
1.13 Update. The term "Update" shall mean a new version
of OM-Express that consists solely of (a) minor functional
enhancements or feature additions to OM-Express, or (b) error
corrections and minor additions to OM-Express. An Update is
customarily connoted by a change in the revision number(s) to the
right of the decimal point (ex. 3.10)
1.14 U.S. Regulatory Requirements. The term "U.S.
Regulatory Requirements" shall mean any U.S. Federal, state or
local, regulation, ordinance or requirement, including regulations
of administrative agencies or bodies, in whatever form, now
existing or to come into existence during the term of this
Agreement.
2. BETA TESTING
OMI shall undertake the beta testing of OM-Express as
follows:
2.1 First Phase Beta Test. The first phase of a beta
test (the "First Phase Beta Test") will begin on ***** *** *****
and shall continue for a period not to exceed ****** **** days;
provided, however, that upon OMI's written notice, such period may
be extended.
2.2 Second Phase Beta Test. The second phase of a beta
test (the "Second Phase Beta Test") (the First Phase Beta Test and
the Second Phase Beta Test shall collectively be referred to as
the "Beta Test Period") will begin on or about *** *** **** (or
such other date as may be set forth in OMI's written notice
pursuant to Section 2.1 hereof) and will last for a period of
approximately ****** **** ****; provided, however, that upon OMI's
written notice, such period may be extended; and provided further,
that, at the end of the Second Phase Beta Test, OM-Express will
incorporate any appropriate modifications or corrections to any
material defects of OM-Express which were identified during the
First Phase Beta Test or otherwise.
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<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
2.3 Material to be Provided to CompuServe. OMI shall
provide CompuServe with a copy of the First Phase Beta Test and
the Second Phase Beta Test versions of OM-Express no later than
three (3) business days after such the start of each such Beta
Test Period. In addition, OMI shall provide CompuServe with
regular, frequent information as available as to the performance
of the then current version of OM-Express during each phase of the
Beta Test Period, together with such other relevant information
concerning the development, use and implementation of OM-Express
that CompuServe may reasonably request.
3. LAUNCH, ACCEPTANCE AND DISTRIBUTION
3.1 Launch. Commercial launch (the "Launch") of
OM-Express will occur on or about **** *** ***** subject to any
extension pursuant to the terms of Sections 2.1(a) and 2.2(a)
hereof; provided, however, the Launch version will incorporate any
and all appropriate modifications or corrections to any material
defects of OM-Express which are identified during the Second Phase
Beta Test or otherwise.
3.2 Acceptance by CompuServe and Time.
(a) OMI shall provide to each of CompuServe and
Time Inc. New Media ("Time") a master copy of the object code for
the Launch version of OM-Express. Upon delivery of the Launch
version, each of CompuServe and Time shall conduct appropriate
acceptance tests developed by OMI in consultation with CompuServe
and Time (at no additional cost to CompuServe or Time) (an
"Acceptance Test"). Each of the Acceptance Tests will be
sufficient to test the functionality of the Launch version of
OM-Express with respect to its conformance with the
Specifications. At no additional cost to CompuServe or Time, OMI
personnel shall assist CompuServe and Time as reasonably required
during such Acceptance Tests as reasonably requested by CompuServe
or Time. In the event that the delivery of the Launch version of
OM-Express to CompuServe and Time occurs after OMI has commenced
to offer for sale licenses for OM-Express in a commercial release
to the general public via Internet downloading ("General
Availability"), the Acceptance Test shall be as follows: the
Acceptance Test shall demonstrate that OM-Express performs
substantially in accordance with the Specifications, it being
expressly understood that Acceptance will not be delayed or
withheld due to minor errors or bugs that do not have a material
adverse affect upon the performance of OM-Express. However, if
the delivery of the Launch version to CompuServe and Time occurs
prior to General Availability, the Acceptance Test shall be as
follows: the Acceptance Test shall demonstrate that OM-Express
performs in accordance with the Specifications. In addition,
notwithstanding the fact that Acceptance shall have occurred, OMI
shall have a period of not more than ********** **** days from
Acceptance to make available to CompuServe and Time one or more
Update(s) that are sufficient to make error corrections and/or fix
bugs identified by CompuServe or Time, or otherwise, during the
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Acceptance Test process. The Acceptance Test shall demonstrate
that OM-Express performs in accordance with the Specifications.
Each of CompuServe and Time shall have seven (7) days from receipt
of the Launch version of OM-Express to notify OMI in writing
whether it accepts or rejects such version on the basis of its
Acceptance Tests. CompuServe and Time will be deemed to accept
the Launch version if: (i) both CompuServe and Time deliver to OMI
a written notice of acceptance of that version; or (ii) within
such seven (7) day period, both CompuServe and Time fail to notify
OMI of its rejection of the Launch version ("Acceptance").
(b) If the Launch version of OM-Express fails to
pass either Acceptance Test, either CompuServe or Time, as the
case may be, shall so notify OMI in writing, specifying the nature
of such failure in reasonable detail. OMI shall have (i) ten (10)
days or (ii) until **** *** ***** whichever is sooner, in which to
correct the cause of such failure and redeliver another master
copy of OM-Express as necessary to correct the failure. After
OMI's redelivery of such master copy of OM-Express, either
CompuServe or Time, as the case may be, shall reconduct the
Acceptance Test within ***** *** business days. In the event that
OM-Express continues to fail the applicable Acceptance Test, then
CompuServe and/or Time (as the case may be) may, at its sole
discretion and without limitation of its other rights and remedies
(x) give OMI another seven (7) calendar days (or **** *** *****
whichever is sooner) in which to cure the problem and recommence
the Acceptance Test; (y) terminate this Agreement and return
OM-Express to OMI; or (z) accept any nonconforming versions of
OM-Express.
(c) CompuServe shall have the option to terminate
this Agreement pursuant to Section 13.3 hereof, in the event:
(i) the Launch has not occurred by the close
of business June 30, 1996; or
(ii) Acceptance has not occurred by the close
of business June 30, 1996.
3.3 Distribution of OM-Express. Compuserve will have
the option to distribute OM-Express to CompuServe Subscribers on
such terms (including a limited free trial period) as CompuServe
makes the CompuServe Service available to the public; provided,
however, that CompuServe has the right to notify OMI that
Compuserve has elected to: (i) offer such other software program
with the same or substantially similar functionality as OM-Express
in addition to, or instead of, OM-Express after ********* ** *****
provided, however, that any such election by CompuServe prior to
********* ** **** shall immediately terminate any exclusivity
obligations of OMI; or (ii) not offer OM-Express. In the event
that CompuServe offers OM-Express to the CompuServe Subscribers,
CompuServe will distribute OM-Express by such means as it shall
deem appropriate (e.g., creating a downloading site; including
OM-Express in its Internet browser) and OMI shall provide limited
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telephone and/or e-mail technical assistance to CompuServe, at no
cost to CompuServe, as CompuServe may reasonably request to
facilitate CompuServe's distribution of OM-Express.
3.4 Branding of OM-Express. CompuServe shall (a) use
the OM-Express Brand (as defined below) at its downloading site
for OM-Express, or, if CompuServe chooses to place OM-Express on
its Internet browser, to place the OM-Express Brand thereon and
(b) include the OM-Express Brand on all copies of OM-Express it
distributes. The term "OM-Express Brand" shall mean any trademark
or service mark used by OMI in connection with OM-Express, a copy
of which shall be provided by OMI to CompuServe.
3.5 End User License and Other Material. Each
CompuServe Subscriber who downloads OM-Express will be required to
indicate agreement to a click license (the "End User License")
prior to the downloading by the CompuServe Subscriber of
OM-Express. OMI agrees that the End User License, which shall be
between OMI and the CompuServe Subscriber, shall include terms
customary to click or shrink wrap licenses in the software
industry, including limitations on liability and disclaimers which
shall release CompuServe and its Affiliates and Time and its
Affiliates, as well as OMI, from any liability arising in
connection with the downloading and/or use of OM-Express.
CompuServe shall have the right to approve the terms of such End
User License prior to its first use. In addition, OMI shall
provide each CompuServe Subscriber with information that is clear,
comprehensible and readily visible, in such places (including,
without limitation, the End User License and Documentation
provided to the Compuserve Subscriber) that, shall be adequate to
explain the appropriate uses of OM-Express and warns the
CompuServe Subscriber against uses that may be inappropriate
(including, without limitation, those uses that may entail a risk
of criminal liability).
4. LICENSE
4.1 License. OMI hereby grants to CompuServe a
non-transferable, non-exclusive (except as stated herein)
worldwide right and license (the "License") to promote, market,
distribute and offer for sale copies of the master copy of
OM-Express, in object code form only.
4.2 Scope of License. Pursuant to the License,
CompuServe is authorized to promote, market, distribute and offer
for sale OM-Express. CompuServe shall have the right to reproduce
OM-Express (or any component thereof) as required for CompuServe's
use in accordance with the terms of this Agreement, and to perform
any activities related to the use of OM-Express subject only to
the terms and the conditions hereof.
4.3 Disclosure to Third Parties. Notwithstanding
anything in this Agreement to the contrary, CompuServe shall have
the right to disclose OM-Express (including any Documentation
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relating thereto) on a need-to-know basis to any Affiliate or any
third party providing maintenance or development services,
disaster recovery services, or facilities management or
outsourcing services to CompuServe, if such disclosure is made
pursuant to an appropriate written confidentiality agreement and
provided that such disclosure will not be made, either directly
or, to CompuServe's knowledge, indirectly, to Prohibited Entities.
Such written confidentiality agreement shall provide, among other
things, that any entity to which CompuServe discloses OM-Express,
either in whole or in part, shall (a) restrict access to the
master copy of OM-Express (including source code, if any) only to
those employees, agents or representatives who require access to
enable such entity to use OM-Express to the extent required by
CompuServe; and (b) secure and protect OM-Express (including
source code, if any) using at least the same degree of care as
such entity uses to protect its own confidential and proprietary
information.
5. OM-EXPRESS SOURCE CODE ESCROW
5.1 Delivery. Upon the execution of the CompuServe
Escrow Agreement (as defined in Section 5.2), OMI will deliver to
the CompuServe Escrow Agent (as defined in Section 5.2), in escrow
pursuant to the terms hereof and the CompuServe Escrow Agreement,
the complete source code for OM-Express, and such additional
proprietary information necessary to compile and execute such
source code on the appropriate hardware (the "OM-Express
CompuServe Deposit").
5.2 CompuServe Escrow Agreement. Within thirty (30)
days after the execution of this Agreement, CompuServe, OMI and
Data Securities International, Inc. (the "CompuServe Escrow
Agent") shall enter into the CompuServe Escrow Agreement with
respect to the OM-Express CompuServe Deposit. Under the
CompuServe Escrow Agreement, the only event which will cause the
release of the OM-Express from the CompuServe Escrow Agent to
CompuServe shall be if OMI becomes insolvent or files for
bankruptcy. CompuServe shall pay all of the fees charged by the
CompuServe Escrow Agent for its services under the CompuServe
Escrow Agreement.
6. SOFTWARE IMPROVEMENTS; TRAINING FOR CUSTOMER SUPPORT
6.1 Provision of Software Improvements.
(a) During the term of this Agreement, OMI shall
provide to CompuServe and CompuServe Subscribers who are licensed
users of OM-Express, at no cost to CompuServe or such CompuServe
Subscribers, Software Improvements to OM-Express, with such
frequency and including such tools and systems as is necessary,
(x) in OMI's reasonable business judgment to maintain the quality
of OM-Express and (y) to otherwise provide that OM-Express
contains features that will maintain OM-Express as a commercially
viable product that is competitive in the market for similar
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COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
products. CompuServe shall have the right to refuse (which
refusal shall be given in writing) to make any Software
Improvement available to CompuServe Subscribers who have licensed
OM-Express. Without limitation of the foregoing, OMI shall make
available to CompuServe for CompuServe Subscribers:
(i) Software Improvements that are, at a
minimum, equivalent to any Software Improvements provided to any
licensed user of OM-Express who is not a CompuServe Subscriber
that OMI makes generally available to its customers or licensees
of OM-Express and shall, at a minimum, include such materials that
OMI makes available to ISPs other than CompuServe and their
customers and subscribers;
(ii) updated Specifications, and/or product
performance guidelines and Documentation with respect to the
Software Improvements as provided to any licensed user of
OM-Express who is not a CompuServe Subscriber that OMI makes
generally available to its customers or licensees of OM-Express
and shall, at a minimum, include such materials that OMI makes
available to ISPs other than CompuServe and their customers and
subscribers;
(iii) a written description as to what
additional third party hardware and/or software would be
necessary, if any, to utilize the Software Improvement as part of
OM-Express in accordance with the Specifications, the
Documentation and the terms and conditions of this Agreement;
(iv) written instructions as to the manner by
which the Software Improvement may be installed; and
(v) a written description of the adverse
impact, if any, which the Software Improvement will have on
OM-Express functionality as it then currently exists.
(b) OMI shall provide to CompuServe Software
Improvement planning in advance of the release of a Software
Improvement upon finalization of such release planning (e.g.,
informing CompuServe of new and planned Software Improvements,
enhanced functionality anticipated to be included in the Software
Improvements, and any additional hardware or third party software
required to implement the Software Improvement, etc.) at no
additional cost to CompuServe. Such Software Improvement planning
shall include information regarding any anticipated payments
payable pursuant to Section 7.2.
(c) OMI shall provide, at no additional cost to
CompuServe or CompuServe Subscribers who are licensed users of
OM-Express, support for up to *** *** Releases of OM-Express prior
to the then-existing commercially available Release or for *** ***
**** after the last commercially available Release.
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SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(d) OMI represents, warrants and covenants that it
shall use its commercially reasonable best efforts to provide that
any Updates provided by OMI solely to correct or fix an error or
nonconformity in the performance of OM-Express in accordance with
the Specifications and the Documentation shall not give rise to
any additional requirements with respect to additional hardware or
third party software.
(e) In the event that OMI develops a version of
OM-Express for use on Macintosh computers, it shall give
CompuServe the right, but CompuServe shall not have the
obligation, to include this version within the License on the
terms and subject to the same conditions (including payment of
fees under Section 7) as set forth in this Agreement.
6.2 Training for Customer Support. During the term of
this Agreement, OMI will provide to customer support training
supervisors of CompuServe such reasonable amount of training in
customer support of OM-Express, acceptable to both CompuServe and
OMI, as will be sufficient to ensure that such training
supervisors will have the ability to train CompuServe service
representatives to provide support for users of OM-Express at the
same or at a better level of quality that CompuServe provides to
all CompuServe Subscribers, such training to include, without
limitation, individual and group training on-site at CompuServe
and the development of operational scripts and tools for use by
such training supervisors or service representatives. The
foregoing obligation shall relate to the Launch version of
OM-Express that has been Accepted as well as to all Updates and
Releases made available by OMI to CompuServe.
6.3 Additional Support. In the event that CompuServe,
at any time during the term of this Agreement, requests OMI to
make available to it technical assistance or enhanced customer
support (e.g., a list of designated OMI personnel to contact for
other than customer support representative training) in addition
to the training services to be provided by OMI in accordance with
the terms of Section 6.2, CompuServe and OMI shall negotiate in
good faith the terms under which OMI shall make such assistance
available, including but not limited to the fees, if any, that
CompuServe shall have to pay therefor.
7. FEES
7.1 License Fee. On or before ten (10) days after the
Acceptance of OM-Express pursuant to Section 3.2 hereof, Time Inc.
New Media shall pay, on behalf of CompuServe, **** *******
******** ******* ********** (of which **** ******* ***** ********
******* ********** shall be in consideration of the License being
granted hereunder and ***** ******** ******* ********* shall be in
consideration of customer support services provided hereunder).
7.2 Release Fees. In the event that OMI provides a new
Release to licensed users of OM-Express, which Release contains a
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COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
functional enhancement that has been licensed to OMI by a third
party and which requires the payment of a royalty (or other per
copy or per use fee) to such third party, CompuServe shall pay to
OMI *** ****** *********** **** ** **** ********** ********** for
each license of OM-Express purchased by a CompuServe Subscriber
through CompuServe.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Ownership. OMI represents, warrants and covenants
that it owns or otherwise has the irrevocable right to license
OM-Express, that it possesses all right, title and interest in
OM-Express necessary to enter into this Agreement. OMI
represents, warrants and covenants that OM-Express or any
components thereof, and any other software or deliverables
provided by OMI under this Agreement, and the use of any of the
foregoing by CompuServe Subscribers as set forth in the End User
License, Documentation or otherwise specified in writing by OMI,
do not and shall not infringe, violate or misappropriate in any
way the rights of any third party, including without limitation,
the rights under any United States or foreign patent, copyright,
trademark, trade secret, or any other proprietary rights or other
rights of any third party ("Third Party Rights"). In addition,
OMI represents, warrants and covenants that OM-Express if used by
a CompuServe Subscriber in accordance with its intended use as set
forth in the End User License and the Documentation provided by
OMI to such CompuServe Subscriber, does not and shall not
infringe, violate or misappropriate in any way any Third Party
Rights. OMI also represents, warrants and covenants that as of
date hereof, OMI has no notice of nor knows of any actions,
claims, demands, threats or allegations that OM-Express and any
other software or deliverables developed or to be developed under
this Agreement, or the use of any of the foregoing as intended by
OMI, infringes, violates or misappropriates in any way Third Party
Rights; provided, however, that the foregoing representation,
warranty and covenant does not extend to a use by a CompuServe
Subscriber of OM-Express that does not comport with the terms of
the End User License and the Documentation given to the
Subscribers. OMI shall, throughout the term set forth in
Section 13.1, promptly notify CompuServe in writing of any such
actions, claims, demands, threats or allegations of which it
becomes aware.
8.2 Duly Authorized.
(a) OMI makes the following representations:
(i) OMI is a corporation duly organized and
existing and is in good standing under the laws of the State of
Delaware and is qualified and in good standing as a foreign
corporation under the laws of any jurisdiction where the ownership
of its assets or the conduct of its business require OMI to be so
qualified, or if OMI is not so qualified, the failure to so
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qualify will not have a material adverse effect on the ability of
CompuServe to enforce this Agreement;
(ii) There is no action, suit or proceeding
pending or threatened against or affecting OMI before or by any
court, administrative agency or other governmental authority which
in any way will impair OMI's ability to perform all of its
obligations hereunder, or which otherwise brings into question the
enforceability or validity of the transactions contemplated by the
Agreement;
(iii) OMI's execution, delivery, and
performance of this Agreement has been duly authorized by all
appropriate corporate action on the part of OMI, if any, and this
Agreement constitutes the valid and binding obligations of OMI
enforceable against OMI in accordance with the terms hereof; and
(iv) Neither the execution and delivery by OMI
of this Agreement, nor the consummation by OMI of the transactions
contemplated hereby, nor compliance by OMI with the provisions
hereof, conflicts with or results in a breach of any of the
provisions of the Certificate or Articles of Incorporation or
By-Laws of OMI or any amendments thereto, or any applicable law,
judgment, order, writ, injunction, decree, rule or regulation of
any court, administrative agency or other governmental authority,
or of any agreement or other instrument to which OMI is a party or
by which it is bound, or constitutes a default under any provision
thereof.
(b) CompuServe makes the following
representations:
(i) CompuServe is a corporation duly
organized and existing and is in good standing under the laws of
the State of Ohio and is qualified and in good standing as a
foreign corporation under the laws of any jurisdiction where the
ownership of its assets or the conduct of its business require
CompuServe to be so qualified, or if CompuServe is not so
qualified, the failure to so qualify will not have a material
adverse effect on the ability of CompuServe to enforce this
Agreement;
(ii) There is no action, suit or proceeding
pending or threatened against or affecting CompuServe before or by
any court, administrative agency or other governmental authority
which in any way will impair CompuServe's ability to perform all
of its obligations hereunder, or which otherwise brings into
question the enforceability or validity of the transactions
contemplated by the Agreement;
(iii) CompuServe's execution, delivery, and
performance of this Agreement has been duly authorized by all
appropriate corporate action on the part of CompuServe, if any,
and this Agreement constitutes the valid and binding obligations
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of CompuServe enforceable against CompuServe in accordance with
the terms hereof; and
(iv) Neither the execution and delivery by
CompuServe of this Agreement, nor the consummation by CompuServe
of the transactions contemplated hereby, nor compliance by
CompuServe with the provisions hereof, conflicts with or results
in a breach of any of the provisions of the Certificate or
Articles of Incorporation or By-Laws of CompuServe or any
amendments thereto, or any applicable law, judgment, order, writ,
injunction, decree, rule or regulation of any court,
administrative agency or other governmental authority, or of any
agreement or other instrument to which CompuServe is a party or by
which it is bound, or constitutes a default under any provision
thereof.
8.3 Non-Interference. OMI represents, warrants and
covenants that each version of OM-Express accepted by CompuServe
pursuant to Section 3.2 and any Software Improvements and each
component thereof shall not, when delivered to CompuServe for
distribution, contain any "viruses" or other such devices that
will cause OM-Express or any component thereof to be erased or
become inoperable or incapable of processing or adversely affect
the operations of any CompuServe Subscriber hardware or software
that is appropriate to use with OM-Express in accordance with the
Documentation provided to CompuServe Subscribers. OMI shall
retain a copy of each version of OM-Express as Accepted and each
Software Improvement, under seal, in the forms delivered to
CompuServe, in order to determine whether OMI conformed with this
provision.
8.4 Specifications. OMI represents, warrants and
covenants that the Launch version of OM-Express accepted by
CompuServe pursuant to Section 3.2, and any Software Improvements,
will, when delivered, function and operate in substantial
conformance with the Specifications (including as such
Specifications may be amended in connection with any Software
Improvements) and otherwise in good working order.
8.5 Disclaimer. EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THIS AGREEMENT, OM-EXPRESS, OR SUPPORT TRAINING
SERVICES RENDERED HEREUNDER, AND EACH PARTY DISCLAIMS ANY AND ALL
WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT THERETO, INCLUDING
WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
8.6 Regulatory Requirements Compliance Generally.
(a) During the term of this Agreement, OMI
represents, warrants and covenants that, at no additional cost to
CompuServe, OMI shall provide that OM-Express and the distribution
thereof shall comply with the U.S. Regulatory Requirements which
apply thereto, consistent with the compliance to such U.S.
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Regulatory Requirements of other similar commercially available
products. OMI shall use reasonable commercial efforts to
implement Software Improvements necessary to conform with U.S.
Regulatory Requirements and in any event, such Software
Improvements shall be made to OM-Express within six (6) months
after the release of such U.S. Regulatory Requirements or by the
effective date of such U.S. Regulatory Requirements, whichever is
later.
(b) During the term of this Agreement, CompuServe
represents, warrants and covenants that, at no additional cost to
OMI, CompuServe shall provide that the distribution of OM-Express
by CompuServe shall comply with the U.S. Regulatory Requirements
that apply thereto, consistent with the compliance to such U.S.
Regulatory Requirements of the distribution of other similar
commercially available products.
8.7 Regulatory Requirements on Use of Software.
(a) Without limitation of the provisions of
Section 8.6 hereof, OMI represents, warrants and covenants that
OMI shall be responsible for the term of this Agreement for
complying with all applicable Regulatory Requirements of the
United States and all foreign countries with respect to the use
(as intended and authorized by the End User License and
Documentation provided by OMI or as otherwise provided in writing
by OMI) of OM-Express outside of the United States, including
without limitation, as may be applicable to such use of
OM-Express: (a) import and export restrictions (including without
limitation restrictions imposed under regulations of the U.S.
Export Administration, restrictions imposed by the Office of
Foreign Assets Control, restrictions imposed by the U.S.
Department of the Treasury, or otherwise), (b) laws and
regulations regarding restrictions on trans-border data flow,
(c) obtaining any necessary consents, and (d) registering or
filing any documents. It is expressly understood by the parties
hereto that the foregoing shall apply to the U.S. and to all other
countries and territories in which OMI actively promotes,
advertises or markets licenses to OM-Express (whether under such
name or another); and, in addition, the parties agree to work
together in good faith to share information concerning the
Regulatory Requirements of countries or territories in which
either party may consider doing business. OMI shall defend, hold
harmless and indemnify CompuServe from and against any and all
claims, judgments, costs, awards, expenses (including reasonable
attorneys' fees) and liability of any kind arising out of OMI's
non-compliance with any of its obligations under this
Section 8.7(a) or any applicable Regulatory Requirement with
respect to the use (as intended and authorized by the End User
License and Documentation provided by OMI to such end user) of
OM-Express outside of the United States.
(b) Without limitation of the provisions of
Section 8.6 hereof, CompuServe represents, warrants and covenants
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that CompuServe shall be responsible for the term of this
Agreement for complying with all applicable Regulatory
Requirements of the United States and all foreign countries with
respect to the distribution of OM-Express outside of the United
States, including without limitation: (a) import and export
restrictions (including without limitation restrictions imposed
under regulations of the U.S. Export Administration, restrictions
imposed by the Office of Foreign Assets Control, restrictions
imposed by the U.S. Department of the Treasury, or otherwise),
(b) laws and regulations regarding restrictions on trans-border
data flow, (c) obtaining any necessary consents, and
(d) registering or filing any documents. With respect to any such
export of OM-Express, CompuServe shall not export or reexport
directly or indirectly OM-Express (or any commodity and/or
technical data or a system incorporating such commodity) without
first obtaining the written approval or required export license to
do so from the U.S. Department of Commerce or any other agency of
the U.S. Government or of any foreign government having
jurisdiction over such transaction, when required by an applicable
Regulatory Requirement. CompuServe shall be solely responsible
for all costs associated with such compliance. CompuServe shall
defend, hold harmless and indemnify OMI from and against any and
all claims, judgments, costs, awards, expenses (including
reasonable attorneys' fees) and liability of any kind arising out
of CompuServe's non-compliance with any of its obligations under
this Section 8.7(b) or any applicable Regulatory Requirement with
respect to the distribution of OM-Express outside of the United
States. CompuServe represents, warrants and covenants that it is
not listed on the Table of Denial Orders issued by the U.S.
Department of Commerce and that its U.S. export privileges have
not been revoked or limited in any way.
9. PROPRIETARY RIGHTS
9.1 Rights to OM-Express. Except as set forth herein,
OMI shall retain all right, title and interest in and to
OM-Express, including without limitation all patent, copyright,
trademark, trade name, trade secret and other proprietary rights.
9.2 Rights to CompuServe. Without limiting OMI's
rights to OM-Express as set forth in Section 9.1, all programs,
documents, data, inventions, discoveries and improvements to the
CompuServe Network or CompuServe Service provided by CompuServe
are, and shall remain the sole and exclusive property of
CompuServe. OMI acknowledges that, as between the parties,
CompuServe is the owner of all other trademarks and trade names
associated with CompuServe Network or CompuServe Service.
9.3 OMI Trademarks, Legends and Notices. OMI grants
CompuServe the right to use the trademarks set forth on Exhibit B
(the "Licensed Marks"), but only in the format and manner approved
by OMI, and only in accordance with the terms of this Agreement.
The Licensed Marks are trademarks of OMI and all right, title and
interest therein and the goodwill pertaining thereto belong
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exclusively to them. OMI hereby authorizes CompuServe to use the
Licensed Marks in connection with the promotion and offering of
OM-Express through the CompuServe Service; provided, that prior to
the initial use and distribution of OM-Express through the
CompuServe Service which contains the Licensed Marks and prior to
the initial release or distribution of any and all advertising or
promotional materials bearing the Licensed Marks relating to the
promotion of OM-Express through the CompuServe Service, CompuServe
shall submit to OMI, for OMI's approval, a sample of each such use
so that OMI may ascertain the correctness of all legends, markings
and notices in the form and manner in which the Licensed Marks are
displayed, and to determine whether the art work and plans for
advertising are consistent with the quality and prestige
associated with the Licensed Marks. Five (5) business days shall
be allowed for OMI to exercise such approval; provided, however,
that OMI's failure to exercise such approval, or to indicate
disapproval, within such five (5) business days shall be deemed to
be notification of OMI's approval. Upon approval by OMI of the
sample or samples submitted in connection with this Section 9.3,
CompuServe represents, warrants and covenants that it shall
maintain the quality and appearance of the submitted materials in
all respects at the same level approved in writing by OMI. All
advertisements and promotional materials relating thereto shall
bear the Licensed Marks and shall include an appropriate legend as
reasonably requested by OMI. CompuServe hereby acknowledges the
ownership of the Licensed Marks and agrees not to contest such
ownership. All use of Licensed Marks by CompuServe shall inure to
the benefit of OMI. All the rights in the Licensed Marks other
than those specifically granted in this Agreement are reserved by
OMI. The foregoing provisions shall also govern the use by
CompuServe of the OM-Express Brand.
10. PROPRIETARY AND CONFIDENTIAL INFORMATION
10.1 CompuServe Information. All data (including
without limitation, information, records or other data) relating
to the use of the CompuServe Service, content, advertising,
promotional material, the CompuServe end-user interface (including
without limitation, logos, icons, screen displays, and other
graphical or audio/visual components thereof), information
relating to users' names, identities, addresses, demographic data,
financial records, activity and usage records, credit card data,
access logs, billing data, databases and other information
("CompuServe Information"), is the proprietary information of
CompuServe. CompuServe shall be the exclusive owner of all right,
title and interest in and to the CompuServe Information, and all
copies thereof, whether in print or electronic form (including
computer memory) and OMI shall have no rights whatsoever in such
CompuServe Information.
10.2 Confidential Information. "Confidential
Information", shall mean: (a) the CompuServe Information (except
aspects of the CompuServe Network and the CompuServe Service which
by the nature of their utility are exposed to third parties);
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(b) OM-Express, including without limitation, all source code and
trade secrets embodied therein (except aspects of OM-Express,
which by the nature of their utility, are exposed to third
parties); (c) any information disclosed by OMI or CompuServe in
writing designated as confidential, proprietary or marked with
words of like import; and (d) any information orally conveyed by
OMI or CompuServe if the disclosing party provides specific
written notice that such oral communication shall be considered to
be "Confidential Information" and delivers a confirmation thereof
in writing to the receiving party within ten (10) days of the oral
conveyance. Without limitation of the foregoing, the parties
agree that Confidential Information shall include: (i) this
Agreement and its terms and conditions; and (ii) CompuServe's and
OMI's respective business plans, ideas, projections, forecasts,
improvements, know how, concepts, future activities and any
information relating to the CompuServe Network, the CompuServe
Service or OM-Express.
10.3 Restrictions. The recipient of Confidential
Information agrees that, absent the prior written consent of the
disclosing party, it shall not reveal or disclose any Confidential
Information for any purpose to any other person, firm, corporation
or other entity, or use any Confidential Information for any
purpose other than as contemplated herein. The recipient shall
keep any copies of the Confidential Information in as secure a
location as the recipient uses for its own similar information,
shall inform the employees, agents or representatives of the
recipient or the recipient's Affiliates of their obligations under
this Agreement, and shall take such steps as may be reasonable in
the circumstances, or as may be reasonably requested by the
disclosing party, to prevent any unauthorized disclosure, copying
or use of the Confidential Information. The recipient shall grant
access to the Confidential Information only to those employees,
agents and representatives of the recipient or the recipient's
Affiliates, who are required to obtain such access to enable the
undersigned to use the Confidential Information for the purposes
permitted by this Agreement.
10.4 Exceptions. Confidential Information shall not
include information which: (a) at or prior to the time of
disclosure was lawfully known to the receiving party; (b) at or
after the time of disclosure becomes generally available to the
public other than through any act or omission of the receiving
party; (c) is developed by the receiving party independent of any
Confidential Information it receives from the disclosing party;
(d) is received from a third party free to make such disclosure
without breach of any legal obligation; or (e) is required to be
disclosed pursuant to any statute, regulation, order, subpoena or
document discovery request, provided, that prior written notice of
such disclosure is furnished to the disclosing party as soon as
practicable in order to afford the disclosing party an opportunity
to seek a protective order (it being agreed that if the disclosing
party is unable to obtain or does not seek a protective order and
the receiving party is legally compelled to disclose such
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
information, disclosure of such information may be made without
liability).
10.5 Return or Destroy. CompuServe and OMI each agree
that upon the termination of this Agreement for any reason, each
party shall promptly return or destroy (as directed by the other
party) all Confidential Information of the other party including
all copies thereof (excluding any Confidential Information which
is subject to a license surviving termination of this Agreement).
Upon request by a party, the other party shall deliver a
certificate signed by a senior executive officer stating that the
party has complied in full with the terms of this Section.
10.6 OMI's Duty to Inform. If CompuServe requests that
OMI develop or implement any software pursuant to CompuServe's
detailed instructions or detailed specifications that, to the best
of the knowledge and belief of the individuals assigned by OMI to
such development or implementation, is likely to infringe on any
Third Party Rights, OMI shall promptly so notify CompuServe in
reasonable detail in writing.
11. INDEMNIFICATION
11.1 OMI Indemnification.
(a) OMI, at its own expense, shall indemnify and
hold harmless CompuServe and defend any action brought against
CompuServe with respect to any claim, demand, cause of action,
debt, liability or expense, including attorneys' fees
(collectively, a "Loss"), due to claims brought by a third party:
(i) that OM-Express or any component thereof infringes, violates
or misappropriates any Third Party Rights (provided, however, that
OMI's indemnification obligations with respect to patents issued
under the laws of countries other than the United States ("Foreign
Patents") shall, except for Foreign Patents which are the
counterparts of any United States patents, be limited to ***
******* ******* ************ during the Term of this Agreement);
(ii) that the use of OM-Express or any component thereof by the
end user, in accordance with the End User License and the
Documentation provided by OMI to such end user results in the
infringement, violation or misappropriation of any Third Party
Rights; (iii) OMI breached any term or representation set forth
herein; (iv) for personal or bodily injury or damage to property
arising out of the negligence of OMI, including without
limitation, any damage to property resulting from OMI's failure to
comply with the provisions of Section 8.3 hereof; or (v) arising
out of any act or omission of Time in connection with or related
to the License and Exclusive Distribution Agreement, dated as of
April 10, 1996, by and between OMI and Time, and the arrangements
contemplated thereunder.
(b) CompuServe may, at its own expense, assist in
such defense if it so chooses, provided, that OMI shall control
such defense and all negotiations relative to the settlement of
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any such claim. OMI shall not settle any claim which adversely
affects CompuServe's right to use OM-Express or any component
thereof or its rights under the License without the prior approval
of CompuServe.
(c) CompuServe shall promptly provide OMI with
written notice of any claim which CompuServe believes falls within
the scope of this Section 11.1, provided, however, that, except to
the extent OMI is actually prejudiced by CompuServe's failure to
provide such prompt notice, CompuServe's failure to provide such
notice hereunder shall not limit CompuServe's rights under this
Article 11.
(d) In the event that OM-Express or any portion
thereof is held to constitute an infringement of a Third Party
Right and its use is enjoined, OMI shall have the obligation to,
at its option: (i) modify OM-Express or the infringing portion
thereof at its own expense, without impairing in any respect the
functionality or performance of OM-Express, so that it is
non-infringing and make such modifications available to CompuServe
(for distribution to CompuServe Subscribers in accordance with
this Agreement); (ii) replace OM-Express with an equally suitable,
non-infringing system, which CompuServe shall have the right to
subject to the Acceptance Test set forth in this Agreement and
following acceptance thereof, which OMI shall make available to
CompuServe (for distribution to CompuServe Subscribers in
accordance with this Agreement); or (iii) procure for CompuServe
the right to continue distributing and/or offering for sale
licenses to OM-Express as set forth hereunder. If none of the
foregoing alternatives are available to OMI after exercising its
best efforts, OMI shall accept return of OM-Express at its
expense, once CompuServe (on behalf of the CompuServe Subscribers
licensed OM-Express) has arranged for the continuation of the
functions performed thereby. OMI shall have no obligations under
this Section 11.1 with respect to infringement or misappropriation
of Third Party Rights arising from the use of OM-Express by an end
user thereof other than as specified in the End User License or
the applicable Documentation or as specified in writing by OMI.
11.2 CompuServe Indemnification.
(a) CompuServe, at its expense, shall indemnify
and hold harmless OMI and defend any action against OMI with
respect to a Loss due to claims brought by a third party:
(i) that CompuServe breached any material representation,
warranty, covenant or agreement set forth herein; or (ii) for
damage to property arising out of the negligence of CompuServe.
(b) OMI may, at own expense, assist in such
defense if it so chooses, provided, that CompuServe shall control
such defense and all negotiations relative to the settlement of
any such claim. CompuServe shall not settle any claim which
adversely affects OMI's right to distribute and/or offer licenses
to OM-Express without the prior approval of OMI.
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(c) OMI shall promptly provide CompuServe with
written notice of any claim which OMI believes falls within the
scope of this Section 11.2; provided, however, that, except to the
extent CompuServe is actually prejudiced by OMI's failure to
provide such prompt notice, OMI's failure to provide such notice
hereunder shall not limit OMI's rights under this Article 11.
11.3 Limitation. This Article 11 contains the parties'
sole and exclusive obligations and sole and exclusive remedies,
with respect to infringement or misappropriation of Third Party
Rights.
11.4 Section 365(n). All rights and licenses granted
under or pursuant to this Agreement by OMI to CompuServe are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of
the United States Bankruptcy Code (the "Code"), licenses to rights
to "Intellectual Property" as defined under Section 101(52) of the
Code. The parties agree that CompuServe, as licensee of such
rights under this Agreement, shall retain and may fully exercise
all of its rights and elections under the Code. The parties
further agree that, in the event of the commencement of bankruptcy
proceedings by or against OMI under the Code, CompuServe shall be
entitled to retain all of its rights under this license.
11.5 Publicity. Except as required by law or regulation
(including the rules and regulations of a securities exchange upon
which the shares of a party are traded), neither party hereto will
make any public announcements or disclosure relating to this
Agreement or the arrangement contemplated hereunder without first
obtaining the written consent of the other party. Each party
hereto agrees that neither will, without the written consent of
the other in each instance: (a) use in advertising, publicity, or
otherwise the name of the other, or any trade name, trademark,
trade device, service mark, symbol or any abbreviation,
contraction or simulation thereof owned by the other; or
(b) represent, directly or indirectly, that any product or any
service provided by OMI has been approved or endorsed by
CompuServe.
12. LIMITATION OF LIABILITY
12.1 Limitation of Liability for CompuServe. IN NO
EVENT SHALL COMPUSERVE BE LIABLE FOR ANY CONSEQUENTIAL,
INCIDENTAL, SPECIAL OR INDIRECT DAMAGES, COSTS OR CLAIMS OF ANY
NATURE WHATSOEVER ARISING OUT OF OR RELATING TO THE SUBJECT MATTER
HEREOF; AND THE AMOUNT OF COMPUSERVE'S LIABILITY TO OMI UNDER ANY
CLAIM FOR LOSS OR LIABILITY BASED UPON, ARISING OUT OF, RESULTING
FROM, OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OR BREACH OF
THIS AGREEMENT SHALL IN NO CASE EXCEED **** ******* ********
******* ********** AND ******* ******** **** ** **** ** **********
IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT *** *** *********
******** ******** ** ******** ********* ***** **** *********. THE
FOREGOING LIMITATION ON DIRECT DAMAGES SHALL NOT BE APPLICABLE
WITH RESPECT TO COMPUSERVE'S INDEMNIFICATION OBLIGATIONS PURSUANT
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TO SECTION 11.2 HEREIN OR WITH RESPECT TO COMPUSERVE'S BREACH OF
ARTICLE 4 OR ARTICLE 10 HEREUNDER OR COMPUSERVE'S ABANDONMENT OF
ITS OBLIGATIONS HEREUNDER OR COMPUSERVE'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
12.2 Limitation of Liability for OMI. IN NO EVENT SHALL
OMI BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR
INDIRECT DAMAGES, COSTS OR CLAIMS OF ANY NATURE WHATSOEVER ARISING
OUT OF OR RELATING TO THE SUBJECT MATTER HEREOF; AND THE AMOUNT OF
OMI'S LIABILITY TO COMPUSERVE OR ANY THIRD PARTY UNDER ANY CLAIM
FOR LOSS OR LIABILITY BASED UPON, ARISING OUT OF, RESULTING FROM,
OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS
AGREEMENT SHALL IN NO CASE EXCEED **** ******* ******** *******
********** AND THE ******* ******** **** ** ********** IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT *** *** **********
******** ******** ** ******** ********* ***** **** *********. THE
FOREGOING LIMITATION ON DIRECT DAMAGES SHALL NOT BE APPLICABLE
WITH RESPECT TO OMI'S INDEMNIFICATION OBLIGATIONS PURSUANT TO
SECTION 11.1 HEREIN, OR WITH RESPECT TO OMI'S BREACH OF ARTICLE 10
HEREUNDER OR OMI'S ABANDONMENT OF ITS OBLIGATIONS HEREUNDER OF
OMI'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
13. TERM AND TERMINATION; RENEWAL
13.1 Term. The initial term of this Agreement (the
"Term") will be from the date hereof through December 31, 1997,
subject to termination by CompuServe pursuant to Section 13.3 and
Section 13.4 hereof and termination by OMI pursuant to
Section 13.5 hereof.
13.2 Renewals. The parties shall negotiate in good
faith the terms and conditions upon which this Agreement may be
renewed, including without limitation, the period of such renewal
and the fees to be paid by CompuServe during the term of such
renewal.
13.3 Termination For Cause by CompuServe. CompuServe,
at its sole option shall have the right to terminate this
Agreement, in whole or in part, by giving written notice of
termination to OMI of the occurrence of any of the following:
(a) Failure of OMI to provide a version of
OM-Express acceptable to CompuServe pursuant to Section 3.2;
(b) Failure of OMI to provide Software
Improvements or to adhere to the requirements for Software
Improvements set forth in Section 6.1(a);
(c) Any material failure of performance by OMI, if
within thirty (30) days after the giving of written notice to OMI
of such failure of performance, OMI has not cured such failure; or
(d) OMI becomes insolvent or files for bankruptcy.
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13.4 CompuServe's Rights on Termination for Cause. In
the event of a termination of this Agreement by CompuServe
pursuant to Section 13.3, in addition to any other right or remedy
available at law, in equity, or by agreement:
(a) All rights and licenses granted to CompuServe
Subscribers hereunder shall survive perpetually, subject to OMI's
right to terminate the End User License pursuant to the terms
thereof.
(b) CompuServe shall be relieved of, and shall not
have, any obligation hereunder to pay any additional fees or other
monies other than any accrued fees that may be due and owing to
OMI hereunder.
(c) Upon a termination pursuant to
Section 13.3(d), Compuserve shall be entitled to a release of the
OM-Express CompuServe Deposit from Escrow.
13.5 Termination for Cause by OMI. OMI, at its sole
option shall have the right to terminate this Agreement excluding
the End User Licenses granted to CompuServe Subscribers which
shall survive perpetually (subject to OMI's right to terminate the
End User License pursuant to the terms thereof), in whole or in
part, by giving written notice of termination to CompuServe of the
occurrence of any of the following:
(a) Any material breach of this Agreement, if
within thirty (30) days after the giving of written notice to
CompuServe of such failure of performance, CompuServe has not
cured such failure; or
(b) CompuServe becomes insolvent or files for
bankruptcy.
13.6 Delivery on Termination. Following termination of
this Agreement for any reason, each party shall deliver to the
other party all materials relating to such other party or this
Agreement, or obtained or developed in the course of performance
of this Agreement or containing or derived from all Confidential
Information.
13.7 Survival. In the event of the termination of this
Agreement for any reason, the provisions of Articles 1, 5, 9, 10,
11, 12, 13 and 14 shall survive.
14. MISCELLANEOUS
14.1 Insurance. OMI shall purchase and keep in force at
its own cost and expense the following minimum coverages with
reputable commercial insurers:
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(a) Insurance, to be effective by June 1, 1996,
which would cover OMI's indemnification obligations as set forth
in Section 11.1 with a limit of at least *** ******* *******
************ on a per claim basis and *** ******* *******
************ on an aggregate basis; and
(b) Umbrella coverage, to be effective by June 1,
1996 for (a) above of ***** ******** ******* ************.
Certificates of Insurance acceptable to CompuServe, and
indicating that CompuServe is an additional insured, shall be
filed with CompuServe prior to the start of the First Beta Period.
Each and every policy and certificate shall contain an endorsement
stating that the insurance company will not, prior to the
expiration or termination of this Agreement or any policy
expiration date shown on the policy and certificate, whichever
occurs first, terminate the policy or change any coverage therein
without giving written notice to CompuServe. This notice shall
arrive at least fifteen (15) days prior to the termination or
change.
14.2 Notice. Wherever under this Agreement one party is
required or permitted to give notice to the other, such notice
shall be deemed given when delivered in hand, when telecopied or
faxed and receipt confirmed, when sent by overnight courier
service to the address specified below, or when mailed by United
States mail, registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:
In the case of CompuServe:
CompuServe Incorporated
5000 Arlington Centre Boulevard
Columbus, Ohio 43220
Attn: President
With a copy to:
CompuServe Incorporated
5000 Arlington Centre Boulevard
Columbus, Ohio 43220
Attn: General Counsel
In the case of OMI:
Open Market, Inc.
245 First Street
Cambridge, Massachusetts 02142
Attn: Legal Counsel
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With a copy to:
Lucash, Gesmer & Updegrove
One McKinley Square
Boston, Massachusetts 02109
Attn: Richard M. Lucash, Esq.
Either party hereto may from time to time change its
address for notification purposes by giving the other written
notice of the new address and the date upon which it will become
effective.
14.3 Personnel Rules and Regulations. If OMI personnel
are present at CompuServe's facilities, such personnel will comply
with CompuServe's security regulations particular to CompuServe's
facilities, including any procedures which CompuServe personnel
and other consultants are normally asked to follow. CompuServe
will inform OMI of such regulations or procedures upon OMI's
request. Unless otherwise agreed to by the parties, OMI personnel
shall observe the working hours, working rules and holiday
schedules of CompuServe while working on CompuServe's premises.
If CompuServe personnel are present at OMI's facilities, such
personnel will comply with OMI's security regulations particular
to OMI's facilities, including any procedures which OMI personnel
and other consultants are normally asked to follow. OMI will
inform CompuServe of such regulations or procedures upon
CompuServe's request. Unless otherwise agreed to by the parties,
CompuServe personnel shall observe the working hours, working
rules and holiday schedules of OMI while working on OMI's
premises.
14.4 Independent Contractor. In performance of this
Agreement, each party is acting as an independent contractor.
Personnel supplied by either party hereunder are not the other
party's personnel or agents, and each party assumes full
responsibility for the acts of the personnel they supply. Each
party shall be solely responsible for the payment of compensation
to its own employees and subcontractors assigned to perform
services hereunder, and such employees and subcontractors shall be
informed that they are not entitled to the provision of any
employee benefits of the other party. Each party shall be
responsible for payment of its employees' workers' compensation,
disability benefits, unemployment insurance or for withholding
income taxes and social security.
14.5 Force Majeure. Except as expressly provided to the
contrary in this Agreement, neither party shall be liable to the
other for any delay or failure to perform due to causes beyond its
reasonable control. Performance times shall be considered
extended for a period of time equivalent to the time lost because
of any such delay.
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14.6 No Waiver. Except as may be provided specifically
herein, no delay or omission by either party hereto to exercise
any right or power hereunder shall impair such right or power or
be construed to be a waiver thereof. A waiver by either of the
parties hereto of any of the covenants to be performed by the
other or any breach thereof shall not be construed to be a waiver
of any succeeding breach thereof or of any other covenant herein
contained.
14.7 Severability. In the event any provision hereof
shall be deemed invalid or unenforceable by any court or
governmental agency, such provision shall be deemed severed from
this Agreement and replaced by a valid provision which
approximates as closely as possible the intent of the parties.
All remaining provisions shall be afforded full force and effect.
14.8 Assignment. CompuServe may assign or sublicense
this Agreement, in whole or in part, to any parent, Affiliate or
subsidiary of CompuServe or any successor organization which
acquires CompuServe or any CompuServe parent, Affiliate or
subsidiary into which CompuServe or any parent, Affiliate or
subsidiary or portion thereof is merged, sold or otherwise
transferred; provided, however, that CompuServe shall not have the
right to assign or sublicense this Agreement to any Prohibited
Entity. Any assignment by OMI without CompuServe's prior written
consent shall be null and void. Notwithstanding the foregoing,
OMI may transfer or assign its rights and obligations hereunder in
connection with a sale, transfer, merger or consolidation of all
or substantially all of its assets or business, provided, however,
that CompuServe's prior written consent to the foregoing shall be
required (which consent shall not be unreasonably withheld).
14.9 Governing Law and Venue. This Agreement shall be
governed by, subject to, and interpreted in accordance with the
laws of the Commonwealth of Massachusetts, without regard to
conflicts of laws. If OMI commences any action related to the
subject matter hereof against CompuServe, such action will be
maintained in the courts of the State of Ohio, or the Federal
District Courts sitting in Franklin County, which courts shall
have exclusive jurisdiction for such purposes. If CompuServe
commences any action related to the subject matter hereof against
OMI, such action will be maintained in the courts of the
Commonwealth of Massachusetts or the Federal District Courts
sitting in the City of Boston, Massachusetts, which courts shall
have exclusive jurisdiction for such purposes.
14.10 Counterparts. This Agreement may be executed in
counterparts, or by facsimile copy followed up by an original,
each, when taken together, shall constitute the entire Agreement.
14.11 Entire Agreement. Each party acknowledges that
this Agreement, including the Exhibits attached hereto and the
documents incorporated by reference herein constitute the complete
and exclusive statement of the terms and conditions between the
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parties, which supersedes all prior proposals, understandings and
all other agreements, oral and written, between the parties
relating to the subject matter of this Agreement. This Agreement
may not be modified or altered except by a written instrument duly
executed by both parties.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement the date and year first written above by their fully
authorized representatives.
OPEN MARKET, INC.
By: ________________________
Title: _____________________
Date: ______________________
COMPUSERVE INCORPORATED
By: ________________________
Title: _____________________
Date: ______________________
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EXHIBIT C
March 15, 1995 Letter
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<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Time Inc.
Time & Life Building
Rockefeller Center
New York, NY 10020-1393
Bruce Judson 212-522-4370
General Manager 212-522-3398 Fax
Time Inc. New Media [email protected]
To: Betsy Nugent cc: Paul Esdale
Gary Eichhorn
From: Bruce Judson
Re: Organizer Launch
Date: As of March 15, 1996
As we discussed, the following is our proposed plan for
publicizing the initial launch of the Organizer.
In the first week in April, Time Inc. New Media will
host a press conference announcing the launch of the Organizer on
Pathfinder. Our Communications Department will work with Open
Market Public Relations in arranging and promoting the event in an
effort to make sure that the top media in the industry will attend
and cover the announcement.
As part of the press conference, we will set up a
computer demonstration area in the Time & Life Building to give
members of the media the Opportunity to see and interact with the
Organizer. Time Inc. New Media and Open Market personnel will be
on-hand to explain the many benefits of the Organizer and to walk
people through the program, demonstrating how it will improve the
consumer's experience on Pathfinder as well as the overall
Internet.
Time Inc. New Media Communications will blanket the
media with a press release announcing the launch of the Organizer
on Pathfinder. PR will cover national magazines and newspapers,
trades (both mainstream and interactive) and all computer
magazines. We will conduct extensive follow-up to ensure maximum
coverage.
The Organizer will be prominently featured on highly
trafficked sites on Pathfinder, providing a high level of
visibility -- and discussion within the online community.
We will guarantee to provide a minimum of ** ******* in
open rate media value in the marketing support that we will put
behind ads promoting Pathfinder with the Organizer during the term
of this agreement. This advertising support shall consist of
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media such as magazines owned and operated by Time Inc., other
appropriate publications, cable television and online services.
I look forward to discussing this with you.
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<PAGE>
EXHIBIT D
Licensed Marks
Open Market
OM-Express
OM-Transact
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EXHIBIT E
Customer Support
Support Delivery Methods:
1. Telephone Support
2. E-mail Support
3. World Wide Web
Hours of Operations:
1. Monday through Friday, 9 AM - 9 PM EST
2. Saturday, 9 AM - 5 PM EST
Service Level Goals:
1. Telephone Support - 75% of calls answered within 4
minutes; the remainder must be answered within 8
minutes.
2. E-mail - E-mail will be responded to within 8 business
hours.
Support Activities:
1. Provide Initial Customer Contact
2. Maintain Problem Log
3. Provide Problem Description and Definition
4. Address Software Installation Inquiries and Problems
remotely
5. Provide Remote System Administration and Configuration
Assistance
6. Attempt Problem Reproduction
7. Provide Problem Determination and Verification
Quality Metrics and Methods:
The following items will be tracked and measured using a call
tracking application:
1. Average Response Time
2. Average resolution time
3. Average Call Back Time
4. Periodic Customer Surveys
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