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EXHIBIT 10.26
DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement") is entered into by and between LA
Times ("Provider"), a division of The Times Mirror Company, a Delaware
Corporation with its principle offices at Times Mirror Square, Los Angeles, CA
90053 and Intelligent Information Incorporated (the Distributor"), a Delaware
corporation with its principle offices at One Dock Street, Suite 500, Stamford,
CT 06902.
1. Definitions
a. Information Providers. The term "Information Providers" means third
parties from whom the Distributor acquires the right to distribute Content
provided or made available as part of the Service for use solely in connection
with the Product as described below.
b. Service. The term "Service" refers to the act of parsing, formatting
and delivering the Content, as defined below and other information provided by
approved third party content providers, to Users.
c. Content. The term "Content" means all material, whether or not
protected by copyright, including but not limited to text, images, and other
multimedia data, delivered by Provider as part of the Service and as further
defined in Exhibit A.
d. Business Partners. The term "Business Partners" means third parties
through which Distributor distributes the Services to Users, subject to the
terms of this Agreement.
e. Users. The term "Users" sometimes referred to as subscribers, means
those consumers who purchase the Service or use the Product.
f. Product. The term "Product" means the Service as packaged with and
delivered to a device distributed by the Distributor and its' Business Partners.
g. Trademark. The term "Trademark" means the LA Times name and logo as
such logo appears on its Web site, marketing materials and in advertising by the
Provider.
h. Wireless. The term "Wireless" means public networks including paging,
narrowband PCS, broadband PCS, specialized mobile radio, cellular.
2. DISTRIBUTION
a. Grant of Rights. Subject to the terms and conditions of this
Agreement, Provider grants Distributor a nonexclusive license, except as
provided for in this Agreement, and right to, (i) distribute the Content in
connection with the Service for use with the Product; and (ii) license the use
of the Trademark solely for marketing the Service as part of the Product,
subject to Providers' review and approval of each such marketing use as set
forth in Section 3.c. below Business Partners shall have the right to market the
Service and distribute the Service to Users and to use the Service for their
internal use subject to the terms of this Agreement.
b. User Agreements. Distributor shall require that each Business Partner
enter into an agreement prior to utilizing content or Trademarks.
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c. Reservation. Provider reserves the right to add or withdraw portions
of Content with ten (10) days notice to Distributor or immediately if Provider
has good cause.
3. MARKETING
a. Expenses. Distributor shall be responsible for all expenses incurred
by Distributor in promoting and marketing the Service, unless such expenses have
been agreed to be paid by the Provider or a third party advertiser in advance.
b. Use of Trademark. Distributor acknowledges that Provider trademarks
are claimed to be the sole and exclusive property of Provider. Distributor shall
use Provider's name as one of its information services in its formal promotional
and marketing materials relating to the Service. Provider agrees that
Distributor and its Business Partners have the right to use the Trademark as set
forth in Section 2a above and subject to the terms of this Agreement, provided
Distributor and its Business Partners include notice that the Trademark are
registered trademarks of Provider.
c. Prior Approval. Distributor agrees to submit to Provider for prior
written approval all press releases, advertising or other promotional materials
that use Service names or a party's company name not less than fifteen (15) days
before the proposed use. Provider shall not unreasonably withhold its approval.
Unless notice of approval or disapproval is received within (10) days of receipt
of promotional materials, approval shall be deemed granted. Distributor shall be
solely responsible for insuring that Business Partner use the Trademark solely
in such form as has been previously approved by Provider.
d. Referral. Distributor agrees to provide Users with periodic references
back to specific publications or websites for additional information on a
subject delivered to a User based upon Content from the Provider.
e. Cross Promotion. Distributor will use reasonable efforts to "push"
Users to the Provider's publications for more information or the "rest of the
story".
4. DELIVERY OF THE CONTENT AND DISTRIBUTION OF SERVICE
a. Provision of the Content. Subject to the terms and conditions of this
Agreement, Provider shall provide the Content to Distributor and Distributor
shall receive the Content from Provider in conformance with the Technical
Specifications set forth in Exhibit C.
b. Timeliness. Provider shall use commercially reasonable efforts to
maintain the timeliness of the Content. Distributor acknowledges that, in part.
Provider relies on the performance of Information Providers outside the control
of Provider in order to provide the Content.
c. Modifications. Distributor shall not rewrite or alter the Content of
the Service or create any work derived from the Content of the Service, without
the prior written approval of Provider. Provider agrees that Distributor may
make changes to the format of the Content in order to comply with wireless
display equipment formats.
d. Review by Provider. Throughout the term of this Agreement. Distributor
shall provide Provider reasonable access, during normal business hours, to
Distributor's system of distribution of the Service to Users for the sole
purpose of reviewing Distributor's implementation of the Service.
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5. REPORTING AND FEES
a. Reporting. Distributor shall provide to Provider by the 15th of each
month a report indicating the number of Users of the Service for the prior
calendar month and any such additional information as may and reasonably be
requested by Provider, including the defined Service packages purchased and the
number of impressions generated.
b. Monthly Fees. Provider shall pay Distributor the Monthly Fees set
forth in the Fee Schedule in Exhibit B.
6. TERM AND TERMINATION
a. Term. This Agreement shall commence on the date last signed by the
Parties (the "Effective Date"), and shall remain in effect for an Initial term
of one (1) year.
b. Termination. Provider may terminate this Agreement at any time
upon ninety (90) days prior written notice to Distributor. Either party may
terminate this Agreement at any time if the other party materially breaches any
provision of this Agreement. Such termination shall take effect (i) if the
breach is incapable of cure, then immediately upon the breaching party's receipt
of a written notice of termination which identifies the breach, or (ii) if the
breach is capable of being cured buthas not been cured within thirty (30) days
after receipt of written notice form the non-breaching party identifying the
breach, then immediately upon receipt of a written notice of termination
received within ten (10) days of the end or such thirty (30) day period.
c. Insolvency. The solvent party may terminate this Agreement by written
notice to the other if the other party becomes insolvent, makes a general
assignment for the benefit of creditors, permits the appointment of a receiver
for its business or assets, or takes steps to wind up or terminate its business.
7. CONTENT
a. Ownership. Distributor acknowledges that Provider claims to be
the sole copyright owner of the Content and that this Agreement does not
transfer to Distributor, Business Partners or Users any or is clearly authorized
to relicense the Content right, title or interest, including copyright, in the
Content made available as part of the terms of this Agreement..
8. LIMITED WARRANTIES OF PROVIDER AND DISTRIBUTOR
a. Distributor acknowledges that Provider trademarks are claimed to be
the sole and exclusive property of Provider. Pursuant to Paragraph 3.d.,
Provider shall have the right to approve in writing in advance the use of its
trademarks by Distributor to identify and promote use of the Service. Upon
compliance with this provision and Paragraph 3d. use of such marks by
Distributor for such purposes shall be deemed approved during the term of this
Agreement unless Provider specifically notifies Distributor to the contrary.
b. Agreement. Both the Provider and Distributor warrants that its entry
into this Agreement does not violate any agreement between it and any third
party.
c. Laws and Regulations. Provider warrants that its performance under
this Agreement and the use of the Content conforms to all applicable laws and
government rules and regulations, subject to the
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terms of this Agreement.
d. The Content. Distributor agrees that the Content is provided by
Provider "AS IS". Provider does not warrant the accuracy, completeness or
timeliness of the Content. Provider warrants that it has the right to provide
the Content to Distributor.
9. LIMITATION OF LIABILITY
IN NO EVENT SHALL ONE PARTY BE LIABLE THE OTHER FOR ANY, INDIRECT,
INCIDENTAL SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS
OR LOST SAVINGS, WHETHER OR NOT FORESEEABLE.
10. INDEMNIFICATION
Distributor shall indemnify, defend and hold harmless Provider and its
i.e. third party Information providers from and against any claims, losses,
expenses, liabilities, and damages, including reasonable legal fees and
expenses, arising out of Distributor's, Business Partners' or Users' breach of
any provision of this Agreement. Provider agrees to notify Distributor of any
such claim promptly in writing. The parties agree to cooperate fully during such
proceedings. Distributor shall defend and settle at its sole expense all
proceedings arising out of the foregoing.
11. FORCE MAJEURE
Neither party shall be liable for any delay or failure to perform under
this Agreement if caused by conditions beyond its control, including but not
limited to fire, flood, accident, storm. acts of war, riot, government
interference, strikes or walkouts; provided, however, no such event shall excuse
any delay or failure to perform by Provider of its obligations to make payment
to Distributor under Paragraph 5 of this Agreement. The affected performing
party shall promptly notify the other party of the nature and anticipated length
of continuance of such force majeure. Should any such failure or suspension of
performance by Provider continue for more than one (1) month, then either party
shall have the right to terminate this Agreement without further liability or
obligation on the part of either party.
12. NOTICES
All notices and demands hereunder shall be in writing and delivered by
hand delivery, certified or registered mail, return receipt requested, or
confirmed facsimile transmission at the addresses set forth below (or at such
different address as may be designated by either party by written notice to the
other party). Delivery shall be deemed to occur (i) if by hand deliver, upon
such delivery, (ii) if by mail, four (4) days after deposit with the U.S. Postal
Service, and (iii) if by facsimile transmission, upon receipt of confirmation.
If to Provider: If to Distributor:
LA Times Intelligent Information Incorporated
Times Mirror Plaza One Dock Street, Suite 500
Los Angeles, CA 90053 Stamford, CT 06902
Attn: Harry Chandler Attn: Robert Coletti, Controller
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13. GENERAL TERMS AND CONDITIONS
a. Not Agent. Neither party shall be considered an agent of the other
party not shall either party have the authority to bind the other party.
b. No Assignment. Neither party may assign this Agreement without the
prior written consent of the other party; provided, however, that either party
may assign this Agreement as part of a transaction in which substantially all of
the assets of such party are assigned to a third party.
c. Governing Law. This Agreement and performance hereunder shall be
construed and governed by the laws of the State of New York.
d. Severability. In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, and this Agreement shall be construed as
if such provision(s) had never been contained herein, provided that such
provision(s) shall be curtailed, limited or eliminated only to the extent
necessary to remove the invalidity, illegality or unenforceability.
e. Waiver. No waiver of any breach of any of the provisions of this
Agreement shall be deemed a waiver of any preceding or succeeding breach of the
same or any other provisions hereof. No such waiver shall be effective unless in
writing and then only to the extent expressly set forth in writing.
f. Complete Agreement. The parties agree that this Agreement is the
complete and exclusive statement of the agreement between the parties, which
supersedes and merges all prior proposals, understandings and other agreements,
oral or written, between the parties relating to this Agreement.
g. Amendment. This Agreement may not be modified, altered or amended
except by written instrument duly executed by both parties.
h. Headings. The headings used in this Agreement are for convenience only
and are not to be construed to have a legal significance.
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i. Read and Understood. Each party acknowledges that it has read and
understands this Agreement and agrees to be bound by its terms.
AGREED:
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Distributor, by: Provider, by:
/s/ R. M. Unnold /s/ Harry Chandler
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Signature Signature
R. M. Unnold Harry Chandler
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Printed Name Printed Name
CEO Dir. New Bus. Devel.
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Title Title
Date: 8/12/97 Date: 7/29/97
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EXHIBIT A
Description of Content, Brand and Distributor use of Service
a. Content shall be determined by mutual agreement of Provider and Distributor.
It will be comprised of electronic information from various news categories such
as business, general local, entertainment etc. from Provider's Internet Site.
b. The purpose of the Service will be to bundle the Content (if and when
provided) with information provided by Distributor from third parties so as to
provide, to the User a Product containing condensed or summarized information
from Provider and other third party Information Providers (e.g., weather,
traffic and sports).
c. Distributor will include the Provider on all Product sold with its brand and
will include the Provider's world wide web address (URL) or specific publication
as depicted by the Provider.
d. Provider acknowledges that the Distributor will be entitled to use the
Trademark and associated brands to market and differentiate the Service in the
wireless market.
EXHIBIT B
Fee Schedule
a. Fees. Distributor shall pay Provider according to the following fee schedule:
- - Use of the Trademark and Brand only, will be at no cost to the
Distributor.
- - Use of the Trademark, Brand and Provider Content consisting of headlines
(approximately 120 characters), will be at a forty percent (40%) royalty
on monthly gross revenues received by the Distributor from any Service
using Content from the Provider; or proportional use if, the Content is
bundled with content from other Information Providers.
- - Use of the Trademark, Brand and Provider Content consisting of summaries
or briefs (approximately 240 characters), will be at a forty percent
(40%) royalty on monthly gross revenues received by the Distributor from
the sales of any Service that Includes Content from the Provider; or
proportional use if, the Content is bundled with content from other
Information Providers
- - Use of full text article, will be at a forty percent (40%) royalty on
gross revenues received by the Distributor from any Service using such
articles.
- - Proportional Use example: User purchase service that contains sports
information from an Information Provider via the Distributor as well as
Content from the Provider. The Distributor receives $3.00(U.S) for that
User from a Business Partner. The proportion of content used is equal
between the Information Provider (sports) and the Provider (news); the
Distributor would pay Provider fees of twenty percent, in the case of
summaries being used, of $1.50 or $.30 per User. [(Total Fee Paid by
Business Partner) divided by (# of Providers) = A. Ax (Provider's Royalty
%) = Provider's Actual Fee.
b. Demo Units. Distributor may set up free demonstration accounts for sales and
marketing purposes, but will use its best efforts to minimize the number and
duration of such accounts.
c. Payment. Provider will receive applicable payment, by check monthly, by the
15th day of the following month.
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