EXHIBIT 10.18
CONFIDENTIAL TREATMENT **Confidential treatment has been
HAS BEEN REQUESTED FOR requested with respect to the
CERTAIN PORTIONS OF THIS information contained within the
DOCUMENT "[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
JOINT VENTURE KNOW HOW TECHNOLOGY AND DATABASE LICENSE AGREEMENT
This Joint Venture Know How Technology and Database License Agreement (the
"Agreement") is made and entered into as of February 15, 2000 (the "Effective
Date"), by and among LookSmart, Ltd. ("LOOKSMART USA"), a Delaware corporation
with principal offices at 625 Second Street, San Francisco, California 94107,
USA, and LookSmart (Barbados), Inc. ("LOOKSMART BARBADOS"), a Barbados
corporation with principal offices at Hastings Business Services Limited,
Hastings, Christ Church, Barbados on the one hand, and BT LOOKSMART LTD
("HOLDCO") a Bermuda exempted company whose registered office is at Clarendon
House, 2 Church Street, Hamilton HM CX, Bermuda on the other hand. As used
herein, all references to "LOOKSMART" refer collectively to LOOKSMART USA and
LOOKSMART BARBADOS, except that the license grants to the LOOKSMART Database and
LOOKSMART Technology are made solely by LOOKSMART USA and the license grants to
the Territory Databases are made solely by LOOKSMART BARBADOS, and except as
otherwise expressly set forth in this Agreement. Capitalized terms not otherwise
defined shall have their meaning as set forth in Section 1 below.
RECITALS
WHEREAS, LOOKSMART USA, LOOKSMART BARBADOS, HOLDCO, Transceptgate Limited
and British Telecommunications plc ("BT") have entered into that certain Joint
Venture Agreement dated as of February 15, 2000 (the "JV Agreement") for the
purpose of forming HOLDCO in the Licensed Territory;
WHEREAS, the parties desire that HOLDCO launch and operate the HOLDCO
Portals in the Licensed Territory, which will provide category-based Internet
directory services and associated portal functionality similar to existing
LOOKSMART Web sites and other Web portals but will be targeted at customers
residing in or carrying on business in the Licensed Territory;
WHEREAS, the parties desire that LOOKSMART grant to HOLDCO an exclusive
license to use LOOKSMART Technology and the Licensed Databases in connection
with the operation of such Portal opportunities in the Licensed Territory;
WHEREAS, the parties desire to have HOLDCO use the Licensed Databases,
along with the LOOKSMART Technology, to provide the Portal services for
customers in the Licensed Territory; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereby agree as follows:
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1. DEFINITIONS
-----------
a. "Annual Period" means each successive twelve-month period
commencing on the Effective Date and each successive anniversary thereof.
b. "Branch" shall mean a wholly-owned corporate entity or presence
in a country or jurisdiction in the Licensed Territory.
c. "BTAP" shall mean a company within the Licensed Territory in
which BT holds directly or indirectly an interest in the equity share capital or
with whom BT has a strategic relationship.
d. "Customer" means a customer of the Wholesale Services or an end-
user customer that accesses or uses the Licensed Databases via the HOLDCO
Portals or via the Wholesale Services.
e. "LOOKSMART Documentation" shall mean any technical documentation
associated with or related to the Licensed Databases and delivered to HOLDCO by
LOOKSMART hereunder.
f. "Extension Period" shall mean the period commencing upon 01
April, 2001 and expiring on 31 March, 2002.
g. "Initial Period" shall mean the period commencing on the
Effective Date and expiring on 31 March, 2001.
h. "Intellectual Property Rights" shall mean registered designs,
copyright of any kind, database rights, rights (contractual or otherwise) to
prevent disclosure or use of confidential information, and any other similar
form of intellectual property or proprietary rights, statutory or otherwise,
whether registrable or not and shall include applications for any of them.
i. "JV Services Agreement" means that certain database development
services agreement to be entered into between LOOKSMART and HOLDCO as described
in Schedule 6 of the JV Agreement.
j. "Licensed Databases" shall mean the Territory Databases and the
LOOKSMART Databases collectively.
k. "Licensed Territory" shall mean the countries identified as the
Territory in the JV Agreement as of the Effective Date, and any other countries
added to the Territory of the JV Agreement pursuant to the terms of the JV
Agreement during the period when the LOOKSMART shareholding remains undiluted or
with LOOKSMART's prior written consent.
l. "LoCo" means an operating Subsidiary or Branch of HOLDCO in any
given country in the Licensed Territory.
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m. "LOOKSMART Database" shall mean the web directory databases owned
by LOOKSMART as at the Effective Date that are designed for use by Customers
located in countries and/or languages outside the Licensed Territory, as further
described in Exhibit A.
n. "LOOKSMART Technology" shall mean know how, information,
documentation, software, inventions and technology of any kind owned from time
to time by LOOKSMART or which LOOKSMART is from time to time free to disclose or
license that relates to HOLDCO's business as contemplated by the JV Agreement,
including but not limited to that certain existing technology identified in
Exhibit D, and any updates or new versions of such technology owned by LOOKSMART
during the Term of this Agreement.
o. LOOKSMART Newly Acquired Rights shall mean any intellectual
property rights in LOOKSMART Technology which are acquired or licensed on an
arms length basis by LOOKSMART under an assignment or license agreement executed
subsequent to the Effective Date hereof.
p. "Performance Objectives" shall mean the Performance Objectives to
be attained by BT and/or the BTAPS as set forth in the JV Agreement.
q. "Portal(s)" or "HOLDCO Portal(s)" means one or more Internet Web
sites based on current and future Territory Databases and which aggregate
general content and services designed primarily for use by customers in the
Licensed Territory.
r. "Remainder Period" shall mean the period commencing upon the date
of transfer of the Territory Databases to HOLDCO pursuant to 2(c) of this
Agreement continuing in perpetuity subject to termination in accordance with the
terms of this Agreement.
s. "Royalty Period" shall mean the period commencing upon the date
of expiration of the Extension Period and continuing in perpetuity subject to
termination in accordance with the terms of this Agreement.
t. "Subsidiaries" means all current and future business entities of
which HOLDCO owns, directly or indirectly, more than fifty percent (50%) of the
equity securities or other equity interest granting voting rights exercisable in
electing the management of the entities, for so long as such ownership exists.
u. "Territory Databases" means those certain existing web directory
databases identified in Exhibit B and any web directory databases that
LOOKSMART develops pursuant to the terms of the JV Agreement, which databases
are designed for use primarily by Customers located in one or more of the
countries comprising the Licensed Territory.
v. "Third Party Technology" shall mean know-how, information,
documentation, software, inventions and technology of any kind owned by any
third party and licensed from time to time by LOOKSMART that relates to the
business of HOLDCO as contemplated by the JV Agreement including but not limited
to the technology listed in Exhibit E.
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w. "URL Content" means the words or symbols which together make up
an individual Universal Resource Locator (URL) and the content of any web pages
which a customer may see after clicking on any URL listed in the Licensed
Databases.
x. "Wholesale Services" means any services offered to third parties
by HOLDCO or a LoCo including, without limitation, homepage programming, search,
licensing and syndication.
2. LICENSE OF DATABASES.
--------------------
a. Exclusive License to Databases. LOOKSMART hereby grants to
------------------------------
HOLDCO an exclusive, non-transferable, perpetual (subject to termination as set
forth in this Agreement) license (i) to reproduce, use, modify and display and
exploit (subject to the limitations and restrictions set forth in this Agreement
and the JV Agreement) the LOOKSMART Database and the Territory Databases in
connection with the development and operation of HOLDCO Portal services and
Wholesale Services to Customers in the Licensed Territory; and (ii) to
sublicense the license rights described in this Section 2(a) as set forth in
Section 2(d) below. In the event that during the Initial Period or the Extension
Period, as applicable, BT and/or the BTAPs have met the Performance Objectives,
LOOKSMART's ownership rights to the Territory Databases shall immediately be
transferred to HOLDCO pursuant to the terms of the JV Agreement. The license to
the LOOKSMART Database shall be subject to payment of the license fees and
royalties set forth in Section 4(b) below, and the license to the Territory
Databases shall be royalty-free subject to the provisions of Section 2(b) below.
b. Nonexclusive License to Databases. Notwithstanding Section 2(a)
---------------------------------
above, in the event that upon expiration of the Extension Period BT and/or the
BTAPs have not met the Performance Objectives, the foregoing licenses to the
LOOKSMART Database and the Territory Databases shall be automatically converted
to a nonexclusive basis as of such expiration date and shall continue for the
duration of the Royalty Period, and the license to the Territory Databases shall
automatically convert to a royalty-bearing license as of such expiration date,
subject to agreement of the parties on a royalty as set forth in the following
sentence. In the event that the foregoing licenses are converted to a
nonexclusive basis, HOLDCO shall pay to LOOKSMART BARBADOS an operating royalty
for the Territory Databases pursuant to Section 4(a) (the "Operating Royalty")
which shall be fair and reasonable taking into account that HOLDCO will have
funded the creation and development of the Territory Databases pursuant to the
JV Services Agreement, which royalty rate shall in any event be no greater than
LOOKSMART's Best Market Terms (as defined in the JV Agreement). In the event
that at any time after the expiration of the Extension Period LOOKSMART offers
or agrees a royalty rate to any third party for a comparable license arrangement
which is lower than the Operating Royalty, then LOOKSMART shall inform HOLDCO
promptly and at the option of HOLDCO the Operating Royalty shall be reduced to
such lower royalty rate.
c. License to LOOKSMART Technology. Subject to the terms and
-------------------------------
conditions of this Agreement, LOOKSMART hereby grants to HOLDCO during the term
of this Agreement a non-transferable license to use the LOOKSMART Technology in
the Licensed Territory in
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connection with the development and operation of HOLDCO Portal services and
Wholesale Services to Customers in the Licensed Territory using the Licensed
Databases provided that in respect of LOOKSMART Newly Acquired Rights the
parties shall agree fair and reasonable license fees having regard to the sums
paid or payable by LOOKSMART for the licensing or acquisition of the rights and
the arms-length fair market value of such license to HOLDCO. In the event that
royalty or other third party costs would be incurred by LOOKSMART in connection
with the license granted hereunder to any LOOKSMART Technology, such license
shall only be effective in the event that HOLDCO elects in writing to acquire
such license, and HOLDCO shall undertake to pay such costs. HOLDCO shall have
the right to sublicense the LOOKSMART Technology to LoCos where HOLDCO has the
right to sublicense the Licensed Databases pursuant to Section 2(d) below;
provided that such sublicenses include confidentiality provisions at least as
protective as the provisions of Section 7 hereof. The foregoing license shall be
on an exclusive basis so long as the license to the LOOKSMART Database set forth
above is exclusive and shall automatically convert to a nonexclusive basis at
such time as the license to the LOOKSMART Database converts to a nonexclusive
basis; provided, however, that with respect to the LOOKSMART Technology the
foregoing exclusivity shall in no event subsist for longer than a maximum period
of ten (10) years from the date on which the LOOKSMART Technology is first
utilised to put a service on the market in the European Union, and for all
improvements, updates or subsequent licenses of technology constituting
LOOKSMART Technology or LOOKSMART Newly Acquired Rights under this Section 2(c),
such exclusivity shall in no event subsist for longer than a maximum period of
ten (10) years from the date on which these updates, improvements, or further
licenses are first utilised to put a service on the market in the European
Union. LOOKSMART shall disclose the LOOKSMART Technology and the Third Party
Technology to HOLDCO as and when it is licensed, created or acquired and, in any
event, LOOKSMART shall provide to HOLDCO at the end of each quarter a list of
such LOOKSMART Technology and Third Party Technology which it has licensed,
created or acquired during that quarter. LOOKSMART undertakes on request from
HOLDCO at HOLDCO's expense to use reasonable endeavours to assist HOLDCO to
obtain licenses for any Third Party Technology. Subject to Section 2(e) below,
so long as the foregoing license is exclusive, LOOKSMART shall not for the
period set out in this Section 2(c) exploit the LOOKSMART Technology in the
Licensed Territory nor license any third party or customer to do so; provided,
however, that nothing in this Agreement shall preclude LOOKSMART from using the
LOOKSMART Technology to make the LOOKSMART Database accessible on a worldwide
basis via the Internet. LOOKSMART warrants that the LOOKSMART Technology listed
in Exhibit D is a complete list of LOOKSMART Technology as of the Effective Date
hereof.
d. Sublicenses to LoCos. LOOKSMART agrees that HOLDCO shall have
--------------------
the right to grant sublicenses to LoCos for the purpose of enabling each such
LoCo to exercise the license rights granted to HOLDCO in 2 (a), (b) and (c) in
the country or countries of the Licensed Territory in which such LoCo does
business and also as follows: (1) to use and supply copies and grant sublicenses
in the Territory Databases to HOLDCO Wholesale Services customers (including
LoCos and their Wholesale Services customers) in the Licensed Territory so that
such Wholesale Services customers may offer service to their own end-user
customers in the Licensed Territory; and (2) to license HOLDCO Wholesale
Services customers (including LoCos and their Wholesale Services customers) in
the Licensed Territory to enter into a linking agreement or other similar
5
arrangement to permit a third-party Web site to link to the Licensed Databases
residing at the HOLDCO or LoCo Web site(s), so long as such linking agreement or
other similar arrangement does not grant any sublicense to the Licensed
Databases, and so long as such arrangement is designed for and marketed to end
user customers in the Licensed Territory. The foregoing right to grant
sublicenses is subject to the compliance by HOLDCO with the following
provisions: (i) such LoCo and Wholesale Customer sublicensees are identified in
Exhibit C or HOLDCO provides LOOKSMART with written notice and an updated list
of additional such sublicensees at least once per quarter, (ii) such
sublicensees are contractually obligated to comply with the terms of this
Agreement pursuant to reasonably appropriate written sublicense agreement at
least as protective of the licensed rights as this Agreement, (iii) LOOKSMART is
named as a third-party beneficiary of such written sublicense agreement, and
(iv) with respect to any LoCo sublicensee, such sublicense automatically
terminates in the event that such LoCo at any time ceases to be a Subsidiary or
Branch of HOLDCO except to the extent such cessation is due to compliance with
director qualifying shares requirements or other local law restrictions on
maximum ownership. Notwithstanding the granting of any sublicenses to LoCos or
Wholesale Services customers pursuant to this Section 2(d), LOOKSMART's
affirmative obligations hereunder will be limited to the HOLDCO entity
designated as signatory to this Agreement. HOLDCO hereby guarantees the
performance of its sublicensee LoCos under this Agreement and shall indemnify
and hold LOOKSMART harmless from and against all losses, costs, liabilities and
expenses arising out of or relating to any breach or default by such sublicensee
LoCos of the terms of this Agreement, and HOLDCO will enforce or cause its LoCos
to enforce, the provisions of such sublicense agreements against any Wholesale
Services customer sublicensee.
e. Scope of Exclusive Rights. So long as HOLDCO's license rights
-------------------------
set forth in Section 2(a) remain on an exclusive basis, (i.e., unless and until
such license rights are converted to a nonexclusive basis pursuant to Section
2(b) above or Section 2(g) below), LOOKSMART undertakes that it shall not use
any Licensed Databases or any LOOKSMART Technology or extract any part of any
Licensed Databases for use in the Licensed Territory for any purpose whatsoever
or outside the Licensed Territory for the purpose of offering any service
directed at any Customer located in the Licensed Territory and, in each case,
shall not license any third party to do so; provided however, that nothing in
this Agreement shall preclude LOOKSMART from making the LOOKSMART Database
accessible on a worldwide basis only via the Internet.
f. Limitation on Holdco's Rights. The parties understand and agree
-----------------------------
that any grant of a license to the Licensed Databases hereunder and any transfer
of ownership in any of the Territory Databases pursuant to the terms of the JV
Agreement is subject to those pre-existing obligations of LOOKSMART under its
Agreement dated 04 December, 1998 with Microsoft Corporation, which are
disclosed in Schedule 9 of the JV Agreement.
g. Territorial Changes. In the event that the Territory of the JV
-------------------
Agreement is changed without LOOKSMART's prior written consent at any time when
the LOOKSMART shareholding in the joint venture has become diluted, the licenses
granted by LOOKSMART to HOLDCO under this Section 2 shall automatically convert
to a nonexclusive basis.
6
h. Effect of Transfer of JV Shares. Upon a transfer of LOOKSMART's
-------------------------------
shares in HOLDCO pursuant to Section 20 of the JV Agreement, or at such time as
LOOKSMART disposes of all of its ownership interest in HOLDCO after an initial
public offering of HOLDCO shares, the licenses granted by LOOKSMART to HOLDCO to
use the LOOKSMART Database will extend for 180 days following the transfer and
shall terminate upon the expiration of such 180 day period. Prior to the end
of such period, LOOKSMART shall offer to grant to HOLDCO a non-exclusive license
at a royalty rate that is on Best Market Terms (as defined in the JV Agreement)
to use the LOOKSMART Database for a period of twelve (12) months following such
180 day period. In addition, if BT and/or the BTAPs have failed to meet the
Performance Objectives prior to such transfer of shares, the non-exclusive
license granted by LOOKSMART to HOLDCO to use the Territory Databases referred
to Section 2(b) above shall apply and shall continue in perpetuity subject to
termination in accordance with the terms of this Agreement, and HOLDCO shall pay
the Operating Royalty described in Section 2(b) above.
i. Limitation on License Rights. HOLDCO agrees that it will not
----------------------------
itself, or through any LoCo sublicensee or other third party: (i) encumber the
LOOKSMART Database or, for the term of the license, the Territory Databases (ii)
attempt to decompile, disassemble or reverse engineer the LOOKSMART Technology,
the LOOKSMART Database or, for the term of the license, the Territory Databases
in whole or in part, except and only to the extent that a restriction on any
such actions is expressly prohibited by local law; or except as expressly
permitted under the licenses granted hereunder take any other action that HOLDCO
would reasonably know to be in derogation of LOOKSMART's or its licensors'
intellectual property rights licensed hereunder; (iii) provide, disclose,
divulge or make available to, or permit use of the LOOKSMART Technology by any
party other than HOLDCO or LoCo sublicensees; (iv) modify or alter the editorial
review text of the LOOKSMART Database or, for the term of the license, the
Territory Databases, without LOOKSMART's prior written consent; or (v) remove,
obscure, or alter LOOKSMART's copyright notice, trademarks, or other proprietary
rights notices affixed to or contained within the LOOKSMART Technology, the
LOOKSMART Database or Documentation or, for the term of the license, the
Territory Databases or Documentation. With respect to subpart (ii) above,
information necessary to achieve interoperability of the Licensed Databases with
other programs within the meaning of the EC Directive on the Legal Protection of
Computer Programs will be made available from LOOKSMART upon written request, to
the extent applicable and required by local law.
j. Reservation of Rights; Ownership. All rights not expressly
--------------------------------
granted hereunder are reserved by LOOKSMART. This Agreement does not authorize
or imply any rights of use other than as expressly set forth herein. LOOKSMART
retains ownership of the LOOKSMART Database and the LOOKSMART Technology and all
right, title and interest therein, including without limitation all Intellectual
Property Rights therein, and HOLDCO acknowledges and agrees that it is acquiring
only a limited right to use the LOOKSMART Database and the LOOKSMART Technology
as licensed hereunder. Unless and until transferred to HOLDCO pursuant to the
terms of the JV Agreement, LOOKSMART retains ownership of the Territory
Databases, and all right, title and interest therein, including without
limitation all Intellectual Property Rights therein, and unless and until the
Territory Databases are transferred to HOLDCO, HOLDCO acknowledges and agrees
that it is acquiring only a limited right to use the Territory Databases as
licensed hereunder.
7
k. Delivery of Databases. LOOKSMART shall deliver to HOLDCO within
---------------------
ten (10) business days after the Effective Date, one (1) copy of the LOOKSMART
Database and one (1) copy of the existing Territory Databases identified in B,
along with one (1) copy of any Documentation. LOOKSMART will deliver updates
and new versions of LOOKSMART Databases and LOOKSMART Technology as they are
put into use or issued.
l. HOLDCO License Grant. Subject to the exclusivity provisions of
--------------------
Section 2 hereof, HOLDCO hereby grants to LOOKSMART or a designated wholly-owned
member of the LOOK Group (as defined in the JV Agreement) a non-exclusive,
perpetual, royalty-free right and license to integrate all Territory Databases
now or hereafter licensed or owned by HOLDCO and created or designed pursuant to
LOOKSMART editorial standards, including without limitation the English language
Territory Databases for the United Kingdom, Singapore, Malaysia, and Hong Kong,
into the LOOKSMART Database, and to reproduce, distribute, use, modify, display
and exploit such Territory Databases as part of the LOOKSMART Database,
including without limitation the right to grant sublicenses as part of
sublicensing the LOOKSMART Database; provided, however, that nothing in this
Agreement shall preclude LOOKSMART from making the LOOKSMART Database (including
such Territory Databases as part thereof) accessible on a worldwide basis only
via the Internet. LOOKSMART may not offer, supply or display the Territory
Databases licensed in this Section 2(l) as a stand-alone database; the Territory
Databases are provided on an as is basis with no warranty and HOLDCO shall have
no liability arising from their use by LOOKSMART. LOOKSMART agrees that while
licensed under this section it will not itself or through any third party (i)
encumber the Territory Databases or (ii) attempt to decompile, disassemble or
reverse engineer the Territory Databases in whole or in party, except and only
to the extent that a restriction on any such actions is expressly prohibited by
local law, or except as expressly permitted under the license granted hereunder
take any other action that LOOKSMART would reasonably know to be in derogation
of HOLDCO's or its licensors' intellectual property rights licensed hereunder.
In addition to the license granted to LOOKSMART by HOLDCO above, HOLDCO also
grants LOOKSMART a nonexclusive, perpetual, irrevocable, non-terminable,
royalty-free right and license to supply copies to Microsoft Corporation of any
and all Territory Databases, and all other HOLDCO databases whether created by
or for or owned by or licensed to HOLDCO or its wholly-owned Subsidiaries during
the term of the JV Agreement, for use consistent with Schedule 9 of the JV
Agreement under LOOKSMART's agreement with Microsoft dated 04 December, 1998 and
only to the extent necessary to comply with the said agreement.
3. ADDITIONAL OBLIGATIONS OF HOLDCO AND LOOKSMART.
----------------------------------------------
a. Standard of Business Practices HOLDCO shall comply with all laws
------------------------------
and regulations relating or pertaining to the exercise of the rights licensed
and/or transferred under this Agreement in the Licensed Territory, and shall
comply with the regulations and directives of any regulatory agencies which
shall have jurisdiction over the exercise of the rights licensed and/or
transferred under this Agreement.
b. Representations of HOLDCO and LOOKSMART. Each party represents
---------------------------------------
and warrants on a continuous basis that it is duly organized, validly existing
and in good standing under
8
the laws of the country of organization first set forth above; it has full
right, power and authority to enter into this Agreement and to perform all of
its obligations hereunder; its execution, delivery and performance of this
Agreement have been duly and properly authorized by all necessary actions and
this Agreement constitutes its valid and binding obligation, enforceable against
it in accordance with its terms; and its execution, delivery and performance of
this Agreement will not, with or without the giving of notice or passage of
time, or both, conflict with, or result in a default or loss of rights under,
any provision of or any other material agreement to which it is a party or by
which it or any of its material properties may be bound.
c. Intellectual Property Registrations and Government Approvals.
------------------------------------------------------------
HOLDCO shall give LOOKSMART reasonable assistance with any registrations or
filings required to obtain copyright, or other Intellectual Property Rights
protection, in the Licensed Databases and/or the LOOKSMART Technology, in the
Licensed Territory, and to obtain any necessary government approvals that may be
required with respect to this Agreement. Each party shall be responsible for
all fees or expenses which it incurs in connection with such intellectual
property registrations or filings so long as the licenses granted to HOLDCO
hereunder are exclusive. In addition, HOLDCO shall be responsible for all fees
or expenses incurred in connection with obtaining any necessary government
approvals with respect to this Agreement.
4. ROYALTIES AND PAYMENT TERMS.
---------------------------
a. Territory Database Operating Royalty. During the Royalty Period,
------------------------------------
HOLDCO shall pay LOOKSMART BARBADOS the Operating Royalty pursuant to Section
2(b) above.
b. LOOKSMART Database License Fee. During the term of this
------------------------------
Agreement, HOLDCO shall pay LOOKSMART USA in consideration of the licensing of
the LOOKSMART Database and the LOOKSMART Technology hereunder an annual, non-
refundable license fee ("License Fee"), which shall be payable no later than ten
(10) business days after the Effective Date and each anniversary thereof in a
net amount equal to:
A. [* * *] US Dollars (US$[* * *]) for the initial
Annual Period.
B. [* * *] US Dollars (US$[* * *]) for each subsequent
Annual Period. Notwithstanding the foregoing, the annual US$[* * *]
c. CPM Royalty. In addition to the license fees set forth in
-----------
subpart (b) above, during the term of this Agreement, in consideration of the
licensing of the LOOKSMART Database and the LOOKSMART Technology hereunder,
HOLDCO shall pay LOOKSMART USA a royalty "(CPM Royalty") in an amount equal to a
net payment of US$[* * *] CPM (Cost Per Thousand) for LOOKSMART Database pages
served in the Licensed Territory by or for HOLDCO or any LoCo; provided,
however, that such royalty shall not be payable unless and until the total
LOOKSMART Database pages served in the Licensed Territory equals or exceeds
[* * *] [* * *] pages per month. In any month in which such minimum page view
threshold is not met, there shall be no
9
royalty due. In any month in which such minimum page view threshold is met, the
royalty shall be due on all pages served in such month over [* * *] [* * *]
pages. Notwithstanding the foregoing, in the event that the total number of
Internet users in the Licensed Territory increases or decreases in any month,
then the threshold amount for such month shall increase or decrease
proportionately to reflect the applicable percentage increase or decrease in the
total number of Internet users in the Licensed Territory. For the avoidance of
doubt, by way of an example, if the total number of Internet users in the
Licensed Territory increases by [* * *] in a given month, then the minimum page
view threshold shall be increased to [* * *]. The benchmark date for measurement
of any increase or decrease in the total number of Internet users shall be the
date upon which HOLDCO begins to serve LOOKSMART Database pages via a HOLDCO
URL. The parties will mutually agree upon a third-party research publication
generally accepted as reliable in the Internet industry to be used to determine
the monthly total number of Internet users in the Licensed Territory.
d. Royalty Statements. Within thirty (30) days after the end of
------------------
each calendar quarter during the term of this Agreement, HOLDCO shall deliver to
LOOKSMART a written statement setting forth an itemized report for the preceding
calendar quarter, together with full payment of the applicable Operating
Royalties ("Royalties") shown on such statements to be due in accordance
herewith. A statement shall be issued regardless of whether any Royalties are
then due. Each statement shall contain information on the calculation of the
Royalties accrued with respect to the applicable quarter, which information
shall be categorized by country, by the entity generating the revenue (HOLDCO or
the applicable LoCo) and by revenue source (e.g., advertising, sponsorship,
license, e-commerce revenue, etc.), and shall contain such supporting or
additional information as LOOKSMART may from time to time reasonably request.
All payments required hereunder shall be made in United States Dollars, unless
otherwise designated by LOOKSMART, by wire transfer to the account of LOOKSMART
in accordance with such instructions as LOOKSMART may from time to time provide
to HOLDCO. HOLDCO shall be solely responsible for all costs of any currency
conversion to United States Dollars, and such costs shall not reduce the amounts
due to LOOKSMART hereunder. Acceptance of Royalties by LOOKSMART shall not
preclude LOOKSMART from questioning the correctness of any statement at any time
within two (2) years after the date of the applicable statement. All Royalties
shall be made without set-off of any amount whatsoever, whether based upon any
claimed debt or liability of LOOKSMART to HOLDCO.
e. Accounting and Audit Rights. HOLDCO shall keep and maintain full
---------------------------
and accurate books of account and records covering all transactions relating to
the calculation of the Royalties. LOOKSMART or its designees shall be entitled
to audit and inspect such books and records on a quarterly basis during or after
the term of this Agreement during reasonable business hours and in each case
upon five (5) days prior written notice to HOLDCO, and make copies and summaries
of such books and records. All such books of account and records shall be
retained by HOLDCO for a minimum of two (2) years after expiration or
termination of this Agreement. If LOOKSMART or its duly authorized
representative discovers a deficiency in the Royalties paid to LOOKSMART
pursuant to any Royalty statement in the period under audit (an "Audit
Deficiency"), HOLDCO shall promptly pay such Audit Deficiency to LOOKSMART and,
if such Audit
10
Deficiency is five percent (5%) or more of the Royalties paid to LOOKSMART
pursuant to any Royalty statement in such audit period, HOLDCO shall promptly
pay the reasonable, out-of-pocket costs and expenses incurred by LOOKSMART in
connection with such audit.
f. Late Payments. HOLDCO shall pay interest on any Audit
-------------
Deficiency, as well as on all unpaid and overdue License Fees or Royalty
payments hereunder, at 1.5% per month or the maximum legal rate, whichever is
less, compounded annually at that rate from time to time in effect and
calculated from the date on which such payment was due.
g. Taxes. All payments made by HOLDCO in respect of fees and
-----
royalties hereunder shall be made without any deduction except for any income
tax which HOLDCO is required to withhold at source under HOLDCO's domiciliary
law. Such income tax shall be borne by LOOKSMART, if HOLDCO does all things
necessary (including giving proper evidence as to payment) to enable LOOKSMART
to claim exemption from it under any Treaty between HOLDCO's country of domicile
and LOOKSMART's country of domicile to avoid double taxation. LOOKSMART shall
pay all income taxes imposed on it by its own domestic law.
5. WARRANTY AND DISCLAIMER.
-----------------------
a. LOOKSMART warrants that the LOOKSMART Database and the existing
Territory Databases identified in Exhibit B substantially conform to the
Database Standards set forth in Exhibit F.
b. LOOKSMART warrants that to the best of its knowledge in the
creation of the Licensed Databases it has not infringed and shall not infringe
the Intellectual Property Rights of any third party.
c. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 5(a)and (b) ABOVE, THE
LICENSED DATABASES AND THE LOOKSMART TECHNOLOGY ARE LICENSED ON AN "AS IS" BASIS
WITH ALL FAULTS, AND ANY AND ALL IMPLIED WARRANTIES WITH RESPECT THERETO ARE
HEREBY DISCLAIMED TO THE FULLEST EXTENT PERMITTED BY LAW, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. LOOKSMART DOES NOT WARRANT THAT THE LICENSED DATABASES WILL BE FREE
FROM ERRORS.
6. INDEMNIFICATION OBLIGATIONS
---------------------------
a. Indemnification by LOOKSMART. LOOKSMART will indemnify, defend
----------------------------
and hold harmless HOLDCO, its parents, subsidiaries, affiliates and each of
their respective successors and permitted assigns, directors, officers,
employees, representatives, agents, consultants and contractors (herein "HOLDCO
Indemnitees") in respect of any and all losses, claims, suits, proceedings,
liabilities, causes of action, damages, costs, expenses (including reasonable
attorneys' fees and expenses) to the extent arising out of or relating to any
third-party claim on the issue of infringement or alleged infringement by the
Licensed Databases of such third-party's Intellectual Property Rights, but
excluding any claim arising from or related to any URL Content that is
11
contained in the Licensed Databases, and also excluding the content of any
databases to the extent that such content is supplied to LOOKSMART by HOLDCO or
its designees, and subject to the limitations hereinafter set forth. LOOKSMART
shall have sole control of the defense of any such action and any settlement
negotiations, and LOOKSMART agrees to pay, subject to the limitations
hereinafter set forth, any final judgment entered against HOLDCO on such issue
in any such suit or proceeding. HOLDCO agrees to notify LOOKSMART promptly in
writing of such claim, suit or proceeding and to give LOOKSMART authority to
proceed as contemplated herein, and, at LOOKSMART's expense, give LOOKSMART
information and assistance reasonably necessary to settle and/or defend any such
claim, suit or proceeding. If the Licensed Databases in whole or in part, are,
or in the opinion of LOOKSMART may become, the subject of any claim, suit or
proceeding for infringement of any Intellectual Property Right, LOOKSMART shall
have the right to withdraw the applicable portion of the Licensed Databases that
is the subject of such claim from the scope of the license in the particular
country or countries in which such infringement claim arose. LOOKSMART shall use
reasonable commercial efforts to replace such infringing portion with a
reasonable substitute.
b. Limitation. The provisions of Section 6(a) above shall not apply
----------
to the extent that (i) any infringement arises from any combination, method or
process in which any of the Licensed Databases may be used but not covering the
Licensed Databases when used alone, including without limitation any
infringement arising from the use in combination with software belonging to
third parties, regardless of whether such software may be necessary to the use
or modification of, or compatible with, the Licensed Databases, (ii) any
infringement arises from the modification or servicing of the Licensed
Databases, or any part thereof, unless such modification or servicing was
performed by LOOKSMART, (iii) any infringement arises from the failure of HOLDCO
to implement any changes to the Licensed Databases within a reasonable period,
if the infringement would have been avoided by the use of such changes;
provided, however, that with respect to any changes that LOOKSMART notifies
HOLDCO in writing are made as a result of a potential or existing infringement
claim, such changes shall be implemented on an expedited basis including take-
down of any potentially infringing material from HOLDCO's own servers within 48
hours after written notice from LOOKSMART; (iv) any trademark infringement
arising from any marking or branding included in the Licensed Databases; or (iv)
any infringement arises from uses of the Licensed Databases which do not comply
with the uses permitted under this Agreement.
c. Entire Liability. The foregoing provisions of this Section 6
----------------
state the obligations of LOOKSMART and the exclusive remedy of HOLDCO and its
customers, with respect to any alleged infringement of patents, copyrights,
trademarks or other intellectual property rights by the rights licensed or
granted hereunder or any part thereof.
d. Indemnification by HOLDCO. HOLDCO will indemnify, defend and
-------------------------
hold harmless LOOKSMART, its parents, subsidiaries, affiliates, and each of
their respective successors and permitted assigns, directors, officers,
employees, representatives, agents, consultants, and contractors (herein,
"LOOKSMART Indemnitees") in respect of any and all losses, claims, suits,
proceedings, liabilities, causes of action, damages, costs, expenses (including
reasonable attorneys'
12
fees and expenses) arising out of or relating to any third party claim on the
issue of infringement or alleged infringement of such third-party's Intellectual
Property Rights, to the extent arising out of or relating to any modifications
or developments made by HOLDCO or its customers to the Licensed Databases or the
LOOKSMART Technology ("HOLDCO Modifications"), but excluding any claim arising
from or related to any URL Content that is contained in the HOLDCO
Modifications. HOLDCO shall have sole control of the defense of any such action
and any settlement negotiations, and HOLDCO agrees to pay, subject to the
limitations hereinafter set forth, any final judgment entered against LOOKSMART
Indemnitees on such issue in any such suit or proceeding. LOOKSMART agrees to
notify HOLDCO promptly in writing of such claim, suit or proceeding and to give
HOLDCO authority to proceed as contemplated herein, and, at HOLDCO's expense,
give HOLDCO information and assistance reasonably necessary to settle and/or
defend any such claim, suit or proceeding. The foregoing indemnification
obligations shall not apply to the extent that (i) any infringement arises from
any combination, method or process in which any of the HOLDCO Modifications may
be used but not covering the HOLDCO Modifications when used alone, including
without limitation any infringement arising from the use in combination with
software belonging to third parties, regardless of whether such software may be
necessary to the use or modification of, or compatible with, the HOLDCO
Modifications; and (ii) any infringement arises from the failure of LOOKSMART to
implement any changes to the HOLDCO Modifications within a reasonable period, if
the infringement would have been avoided by the use of such changes; provided,
however, that with respect to any changes that HOLDCO notifies LOOKSMART in
writing are made as a result of a potential or existing infringement claim, such
changes shall be implemented on an expedited basis including take-down of any
potentially infringing material from LOOKSMART's own servers within 48 hours
after written notice from HOLDCO. The foregoing provisions of this Section 6(d)
state the obligations of HOLDCO and the exclusive remedy of LOOKSMART with
respect to any alleged infringement of patents, copyrights, trademarks or other
intellectual property rights by the HOLDCO Modifications.
7. CONFIDENTIAL INFORMATION
------------------------
a. Confidential Information. "LOOKSMART Confidential Information"
------------------------
means this Agreement and its Exhibits, any addenda hereto signed by both
parties, the LOOKSMART Technology, the LOOKSMART Databases, the Territory
Databases (prior to transfer of ownership to HOLDCO), the Documentation, and all
specifications, all knowledge and know-how inherent to the foregoing, as well as
the knowledge and know-how that is applied to the configuration of the
foregoing, and any other proprietary information supplied to HOLDCO by LOOKSMART
hereunder.
b. Nondisclosure Obligations. HOLDCO acknowledges that the
-------------------------
LOOKSMART Confidential Information constitutes valuable trade secrets of
LOOKSMART and HOLDCO agrees that it shall use the Confidential Information
solely in accordance with the provisions of this Agreement and save where
necessary for the exercise of the licenses granted hereunder will not disclose,
or permit to be disclosed, directly or indirectly, to any third party without
LOOKSMART's prior written consent. Any disclosure permitted hereunder shall be
made under the terms of a confidentiality agreement at least as protective of
the confidential information as this Agreement.
13
HOLDCO agrees to exercise the same standard of care in protecting the LOOKSMART
Confidential Information from unauthorized use and disclosure that it uses to
protect its own most valuable confidential information, but in no event less
than reasonable care. However, HOLDCO bears no responsibility for safeguarding
information that is publicly available, already in HOLDCO's possession and not
subject to a confidentiality obligation, obtained by HOLDCO from third parties
without restrictions on disclosure, or required to be disclosed by order of a
court or other governmental entity after opportunity for LOOKSMART to seek
confidential treatment or a protective order.
c. Confidential Information. "HOLDCO Confidential Information"
------------------------
means this Agreement and its Exhibits, any addenda hereto signed by both
parties, the Territory Databases (after transfer of ownership to HOLDCO), the
HOLDCO Documentation, and all specifications, all knowledge and know-how
inherent to the foregoing, as well as the knowledge and know-how that is applied
to the configuration of the foregoing, and any other proprietary information
supplied to LOOKSMART by HOLDCO hereunder.
d. Nondisclosure Obligations. LOOKSMART acknowledges that the HOLDCO
-------------------------
Confidential Information constitutes valuable trade secrets of HOLDCO and
LOOKSMART agrees that it shall use the Confidential Information solely in
accordance with the provisions of this Agreement and save where necessary for
the exercise of the licenses granted hereunder will not disclose, or permit to
be disclosed, directly or indirectly, to any third party without HOLDCO prior
written consent. Any disclosure permitted hereunder shall be made under the
terms of a confidentiality agreement at least as protective of the confidential
information as this Agreement. LOOKSMART agrees to exercise the same standard of
care in protecting the HOLDCO Confidential Information from unauthorized use and
disclosure that it uses to protect its own most valuable confidential
information, but in no event less than reasonable care. However, LOOKSMART bears
no responsibility for safeguarding information that is publicly available,
already in LOOKSMART's possession and not subject to a confidentiality
obligation, obtained by LOOKSMART from third parties without restrictions on
disclosure, or required to be disclosed by order of a court or other
governmental entity after opportunity for HOLDCO to seek confidential treatment
or a protective order. In addition, LOOKSMART agrees to maintain the
confidentiality of the Territory Databases prior to their transfer to HOLDCO so
long as HOLDCO's license thereto remains on an exclusive basis.
8. TERM AND TERMINATION. This Agreement shall commence upon the
--------------------
Effective Date and continue until terminated in accordance with the provisions
of this Agreement.
a. Mutual Agreement. This Agreement may be terminated pursuant to
----------------
the mutual, written agreement of the parties.
b. Termination for Default. If either party defaults in the
-----------------------
performance of any material provision of this Agreement, then the non-defaulting
party may refer the default to non-binding dispute resolution in accordance with
Section 11.6 of the JV Agreement. Notwithstanding the foregoing, in the event
that the parties fail to resolve such dispute within thirty (30) days pursuant
to such dispute resolution procedure, the non-defaulting party may give written
notice to
14
the defaulting party that if the default is not cured within thirty (30) days
the Agreement will be terminated. If the non-defaulting party gives such notice
and the default is not cured during such thirty (30) day period, then the
Agreement shall automatically terminate at the end of that period.
c. Termination for Insolvency of HOLDCO. This Agreement may be
------------------------------------
terminated by LOOKSMART, on written notice, (i) upon the institution by or
against HOLDCO of insolvency, receivership or bankruptcy proceedings or any
other proceedings for the settlement of HOLDCO's debts, (ii) upon HOLDCO's
making an assignment for the benefit of creditors, or (iii) upon HOLDCO's
dissolution, winding up or ceasing to conduct business in the normal course, or
any other termination of the JV Agreement.
d. Return of Materials. Within thirty (30) days after the
-------------------
expiration or termination of this Agreement for any reason whatsoever, HOLDCO
shall de-install all copies of the LOOKSMART Database, Territory Databases
(unless previously transferred to HOLDCO pursuant to the terms of the JV
Agreement), Documentation, and LOOKSMART Technology, and, at LOOKSMART's
election, return or destroy all copies of the foregoing, and any other LOOKSMART
Confidential Information, or other items owned by LOOKSMART in HOLDCO's
possession or control. LOOKSMART shall in the same manner return or destroy all
copies of the HOLDCO Confidential Information (other than the Territory
Databases if owned by HOLDCO), or other items owned by HOLDCO in LOOKSMART's
possession or control. Effective upon the termination of this Agreement, each
party shall cease to use any or all of the foregoing belonging to the other
party, except as permitted by Section 7.6 of the JV Agreement. Each party shall
furnish the other party with a certificate signed by a duly authorized executive
officer of such party verifying that the same has been done and that none of the
foregoing is being used or retained on any computer or storage device.
e. Survival of Certain Terms. The provisions of Sections 1, 2(g),
-------------------------
2(j), 2(l), 4(e), 5, 6, 7, , 8(d), 9(a)--(l), (n) and 10 shall survive the
expiration or termination of this Agreement for any reason. All other rights and
obligations of the parties shall cease upon termination of this Agreement.
9. MISCELLANEOUS PROVISIONS.
------------------------
a. Resolution of Disputes. Any dispute, controversy or claim
----------------------
arising out of or relating to this Agreement or to a breach hereof, including
the interpretation, performance or termination, shall be submitted for non-
binding dispute resolution in accordance with the dispute resolution procedures
set forth in Section 11.6 of the JV Agreement.
b. Injunctive Relief. Notwithstanding Section 9(a) above, each
-----------------
party shall have the right to institute judicial proceedings against the other
party or anyone acting by, through or under such other party in order to seek
injunctive or other equitable relief in order to restrain an actual or
threatened breach of the provisions of Section 2 or 7. The prevailing party in
any such legal action for injunctive or equitable relief shall be entitled, in
addition to any other rights and remedies it may have, to reimbursement for its
expenses, including court costs and reasonable attorneys' fees. With respect to
any such legal action for injunctive or equitable relief, the Courts of
15
England shall have nonexclusive jurisdiction. The service of process or of any
other papers with respect to such proceedings upon either party by certified or
registered mail in accordance with the notice provisions of Section 9(e) below
shall for all purposes constitute good, proper and effective in personam
service.
c. Governing Laws. The validity, construction and enforceability of
--------------
this Agreement shall be governed in all respects by the laws of England, without
reference to conflict of law principles. For the avoidance of doubt, the rights
and obligations of the parties under this Agreement shall not be governed by the
1980 United Nations Convention on Contracts for the International Sale of Goods.
d. Publicity. LOOKSMART and HOLDCO shall consult with each other
---------
before issuing any press releases or otherwise making any public statements with
respect to this Agreement and the transactions contemplated hereby. Neither
LOOKSMART nor HOLDCO shall issue any such press release or make any public
statement without the agreement of the other party, except as may be required by
law.
e. Notices. All notices required hereunder shall be given in
-------
accordance with the terms of Section 35 of the JV Agreement.
f. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or portion of any provision of this
Agreement should be invalid under applicable law, such provision or portion of
such provision shall be ineffective to the extent of such invalidity, without
invalidating the remainder of such provision or remaining provisions of this
Agreement. and the parties shall, in good faith, take all necessary steps to
replace or amend the relevant provision(s) with one which fulfils as closely as
possible the same commercial imperatives as the original clause and/or pursue
any other appropriate routes to secure these original commercial imperatives
while complying with the relevant laws
g. Waiver. A provision of this Agreement may be waived only by a
------
written instrument executed by the party entitled to the benefit of such
provision. The failure of any party at any time to require performance of any
provision of this Agreement shall in no manner affect such party's right at a
later time to enforce the same. A waiver of any breach of any provision of this
Agreement shall not be construed as a continuing waiver of other breaches of the
same or other provisions of this Agreement.
h. Further Assurances. The parties shall each perform such acts,
------------------
execute and deliver such instruments and documents, and do all such other things
as may be reasonably necessary to accomplish the transactions contemplated by
this Agreement.
i. Subject Headings; Interpretation; Counterparts. The subject
----------------------------------------------
headings of the sections of this Agreement are included for the purposes of
convenience only, and shall not affect the construction or interpretation of any
of its provisions. In this Agreement, words and terms shall be read and
construed in accordance with trade, custom and usage in the Internet and e-
commerce
16
business in the United Kingdom. This Agreement may be executed in counterparts.
Each executed counterpart may be delivered to the other party by facsimile and
copies bearing the facsimile signature of a party will constitute a valid and
binding execution and delivery of this Agreement.
j. Entire Agreement. This Agreement, including the Exhibits attached
----------------
hereto, constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, communications and
understandings between them with respect thereto, including without limitation
as set forth in that certain agreement between LOOKSMART and BT dated 08
November 1999. No modification of this Agreement shall be effective without the
mutual written agreement of both parties. No terms or conditions of any
purchase order, acknowledgment or other business form that HOLDCO may use in
connection with the acquisition or licensing of the Licensed Rights will have
any effect on the rights and obligations of the parties hereunder, or otherwise
modify this Agreement, regardless of any failure by LOOKSMART to object to such
terms or conditions.
k. Independent Contractors. The relationship of LOOKSMART and
-----------------------
HOLDCO established by this Agreement is that of independent contractors, and
nothing contained in this Agreement shall be construed to (i) give either party
the power to direct and control the day-to-day activities of the other, (ii)
constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint or common undertaking, or (iii) allow HOLDCO to create
or assume any obligation on behalf of LOOKSMART for any purpose whatsoever. All
financial obligations associated with HOLDCO's business are the sole
responsibility of HOLDCO. All sales and other transactions or agreements between
HOLDCO and its customers are HOLDCO's exclusive responsibility and shall have no
effect on HOLDCO's obligations under this Agreement. Each party (the
"indemnifying party") shall be solely responsible for, and shall indemnify and
hold the other free and harmless from, any and all claims, damages or lawsuits
(including reasonable attorneys' fees) arising out of the negligence or other
tortious conduct of the indemnifying party, its employees or its agents.
l. Nonassignability and Binding Effect. A mutually agreed
-----------------------------------
consideration for LOOKSMART's entering into this Agreement is the reputation,
business standing, and goodwill honored and enjoyed by HOLDCO under its present
ownership, and, accordingly, HOLDCO agrees that its license and other rights and
obligations under this Agreement may not be transferred or assigned, whether by
operation of law or otherwise, without the prior written consent of LOOKSMART;
provided, however that such consent shall not be required in connection with a
transfer or assignment of this Agreement to a wholly-owned Subsidiary of HOLDCO,
or to a company of which HOLDCO is a wholly-owned Subsidiary, provided, that
advance written notice thereof shall be required. Subject to the foregoing
sentence, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
m. Force Majeure. Except for payment obligations hereunder, neither
-------------
party shall incur liability to the other party due to any delay or failure in
performance hereunder caused by reason of any occurrence or contingency beyond
its reasonable control, including but not limited to failure of suppliers,
strikes, lockouts or other labor disputes, riots, acts of war or civil unrest,
17
earthquake, fire, the elements or acts of God, novelty of product manufacture,
unanticipated product development problems, or governmental restrictions or
other legal requirements; provided, that such party notifies the other party in
writing immediately upon commencement of such event and makes diligent efforts
to resume performance immediately upon cessation of such event. In the event
such events continue for a period of one hundred eighty (180) days in the
aggregate, the other party shall have the right to terminate this Agreement upon
written notice to such party.
n. Language. This Agreement is in the English language only, which
--------
language shall be controlling in all respects, and all versions hereof in any
other language shall not be binding on the parties hereto. All communications
and notices to be made or given pursuant to this Agreement shall be in the
English language.
o. Compliance With Laws. HOLDCO shall, at its own expense, pay all
--------------------
import and export licenses and permits, pay customs charges and duty fees, and
take all other actions required to accomplish the export, import and use of the
Licensed Databases in the Licensed Territory. HOLDCO shall ensure compliance
with any applicable laws relating to its activities under the terms of this
Agreement, including, without limitation, any applicable stock exchange or self-
regulatory organization rules and regulations in connection with the brokering
of financial instruments.
p. Government Regulations. The parties acknowledge that either
----------------------
of them may be subject to regulation by agencies of the various sovereign
governments, which may prohibit use, export, re-export or diversion of certain
products and technology to certain countries within the Licensed Territory. Any
and all obligations of the parties to provide the Licensed Databases, LOOKSMART
Technology, Documentation, or any media in which any of the foregoing is
contained, as well as any other technical assistance shall be subject in all
respects to such applicable laws and regulations as shall from time to time
govern the license and delivery of technology and products. The parties agree to
cooperate with each other, including, without limitation, providing required
documentation, in order to obtain any necessary export licenses or exemptions
therefrom. Each party warrants that it will comply with all such applicable laws
and regulations governing use, exportation and reexportation in effect from time
to time.
10. LIMITATION OF LIABILITY. EXCEPT WITH RESPECT TO DAMAGES PAYABLE TO
-----------------------
THIRD PARTIES UNDER INDEMNIFICATION OBLIGATIONS, IN NO EVENT SHALL ANY PARTY BE
LIABLE TO ANY OTHER PARTY OR ANY OTHER ENTITY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL, INDIRECT OR RELIANCE DAMAGES, HOWEVER CAUSED, WHETHER FOR BREACH OF
CONTRACT, NEGLIGENCE OR UNDER ANY OTHER LEGAL THEORY, WHETHER FORESEEABLE OR NOT
AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR LOST DATA, LOST PROFITS,
BUSINESS INTERRUPTION, FAILURE OF THE TECHNOLOGY OR DATABASES, OR COSTS OF
PROCUREMENT OF SUBSTITUTE GOODS BY ANYONE. THE PARTIES
18
AGREE THAT THESE LIMITATIONS OF LIABILITY ARE AGREED ALLOCATIONS OF RISK AND ARE
REFLECTED IN THE CONSIDERATION AGREED UPON BY THE PARTIES.
Remainder of page intentionally left blank.
- ------------------------------------------
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized.
BT LOOKSMART, LTD. LOOKSMART, LTD.
By:________________________________ By:________________________________
(Signature) (Signature)
Name:______________________________ Name:______________________________
(Print or Type) (Print or Type)
Title:_____________________________ Title:_____________________________
LOOKSMART (BARBADOS), INC.
By:________________________________
(Signature)
Name:______________________________
(Print or Type)
Title:_____________________________
20
List of Exhibits:
- ----------------
Exhibit A: LOOKSMART Database
- ------------------------------
Exhibit B: Existing Territory Databases
- ----------------------------------------
Exhibit C: Sublicensees
- ------------------------
Exhibit D: Existing LOOKSMART Technology
- -----------------------------------------
Exhibit E: Existing Third Party Technology
- -------------------------------------------
Exhibit F: Database Standards
- ------------------------------
21
EXHIBIT A
---------
LOOKSMART DATABASE
------------------
LOOKSMART Database means the "World Edition" version of LOOKSMART's directory.
The "World Edition" version is LOOKSMART's primary, English language directory
of worldwide web URL links with editorial descriptions. The LOOKSMART Database
does not include, at present or at any time during the term of this Agreement,
any of LOOKSMART's local editions, any non-United States editions other than
Canada, or any third-party directories.
Documentation means technical documents that define the database table structure
and fields.
22
EXHIBIT B
---------
EXISTING TERRITORY DATABASES
----------------------------
Belgium
Denmark
Netherlands
Finland
France
Italy
Japan
Korea
Malaysia
New Zealand
Norway
Singapore
Spain
Sweden
United Kingdom
23
EXHIBIT C
---------
SUBLICENSEES
------------
None
24
EXHIBIT D
---------
EXISTING LOOKSMART TECHNOLOGY
-----------------------------
Software/Application Functionality Source Department
- ---------------------------------------------------------------------------------------------------------------------------
[* * *]
[* * *] - Confidential Treatment Requested
25
EXHIBIT E
---------
EXISTING THIRD PARTY TECHNOLOGY
-------------------------------
Software/Application Functionality Source Department
- -----------------------------------------------------------------------------------------------------------------------
[* * *]
[* * *] - Confidential Treatment Requested
[* * *]
26
EXHIBIT F
---------
DATABASE STANDARDS
------------------
The following words shall have the following meanings:
"Links": URL links with any accompanying editorial descriptions
"Inactive Link" means a URL included in the Database that does not successfully
return a web page within 60 seconds when requested on three (3) days of five (5)
consecutive days.
"Node" means a category of a web directory taxonomy.
The LOOKSMART Database will contain approximately:
Links 800,000
Unique Nodes 70,000
The LOOKSMART Database shall not contain more than 5% Inactive Links.
The existing Territory Databases identified in Exhibit B in the aggregate will
contain approximately:
Links: 250,000
Unique Nodes 25,000
The Territory Databases shall not contain more than 5% Inactive Links.
27