EXHIBIT 10.23
SUBJECT TO CONFIDENTIALITY AGREEMENT
DO NOT DISTRIBUTE
CLASSIFIED VENTURES - CITYSEARCH
LICENSE AND SERVICES AGREEMENT
INTRODUCTION CitySearch, Inc. ("CitySearch") and Classified
Ventures, L.L.C. ("CV") hereby enter into a
multiyear strategic relationship, in which
CitySearch will help CV to develop quickly its
vertical businesses in auto, new homes, apartments
and resale real estate (collectively, the "CV
Businesses"). CV will consider using CitySearch
services if CV expands its classified business into
other categories.
LICENSE AND SERVICES CitySearch grants to CV the following:
(i) A non-transferable (subject to the Assignment
section below), exclusive (as described below)
license to use the CitySearch Technology and
Business Systems, as defined in Exhibit A, solely
for use within the CV Businesses in the CV Territory
(defined to be North America subject to the
exclusions contained in the Competition section
below).
(ii) The right to license the CitySearch Technology
and Business Systems in the additional classified
categories of employment, personals and general
merchandise (the "Additional Categories") [**],
subject to the following: (a) if CV provides written
notice to CitySearch of its intent to license the
CitySearch Technology and Business Systems for use
in connection with one or more of the Additional
Categories, CitySearch agrees to license the
CitySearch Technology and Business Systems for use
in that Additional Category or Categories [**]
according to other terms to be agreed in the future,
none of which shall conflict with the terms
contained in this section (ii), (b) if CitySearch
intends to license the CitySearch Technology and
Business Systems to a third party for national
application after
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July 2, 1999 and before expiration of [**],
CitySearch will provide CV with written notice of
its intent to license. If CV declines within 60
days to license the CitySearch Technology and
Business Systems subject to the terms of this
section (ii) or fails to respond, CitySearch may
license the CitySearch Technology and Business
Systems to any third party. If, on the other hand,
CV responds in writing within 30 days with a
project plan detailing resources committed to
launch one or more of the Additional Categories
and project milestones necessary to launch at
least one of the Additional Categories publicly
online within five months of CV's response to
CitySearch ("Project Plan"), then CitySearch will
license the CitySearch Technology and Business
Systems to CV in the Additional Category or
Categories for which Project Plans exist [**]
according to other terms to be agreed in the
future, none of which shall conflict with the
terms contained in this section (ii). If CV has
not launched at least one of the Additional
Categories within five months, or if CV does not
roll out the Additional Categories to at least 10
of the top 30 markets, ranked by MSA, within one
year, then the [**].
(iii) CitySearch will also provide CV with the
services set forth on Exhibit A attached hereto.
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(iv) CitySearch will also assist CV, at CV's
direction, in compilation of data utilized in the CV
billing process.
Subject to execution of customary sublicense
documents, the CitySearch Technology and Business
Systems, and services provided by CitySearch, shall
be available to CV for application in CV affiliate
markets, CV's headquarters and/or other regional
production centers.
EXCLUSIVITY With respect to the CV Businesses in the CV
Territories, CV shall have exclusive access to the
CitySearch Technology and Business Systems,
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provided that the license granted to CV hereunder
does not violate other CitySearch city guide
agreements, and that CV does not engage in elements
of CitySearch's city guide business in the markets
in which CitySearch or its partners operate. CV
shall make reasonable efforts to utilize CitySearch
as its sole provider of CV's customer service and
site production services in each of the individual
verticals according to the milestones set forth in
Exhibit D. In the event that CV does not utilize
CitySearch as the sole provider in a given vertical,
CitySearch shall not be subject to the non-
competition covenants contained herein with respect
to that vertical. [**]
AFFILIATE STATUS CitySearch will have the option to become CV's
affiliate in [**], and [**]. With respect to
[**], CitySearch agrees to make reasonable
efforts to negotiate a joint offering with [**].
CV will consider making CitySearch its affiliate
in other markets where CV presently does not have
an affiliate. In any market where CitySearch
desires to become a CV affiliate, CitySearch
agrees to sign CV's standard affiliate agreement
and comply with the terms thereof including
promotional requirements as modified for non-
newspaper affiliates. In each such market, CV
agrees to (i) deliver a draft affiliate agreement
containing all material terms for each market on
or before September 1, 1998, (ii) charge
CitySearch [**] (taking into consideration the
market size and other reasonable, objective
criteria that CV applies to a majority of its
affiliates), and (iii) publicly launch online each
such CitySearch affiliate on a timely basis such
that each affiliate is among the [**] of CV
affiliates launched among the CitySearch
affiliate's decile, ranked by MSA (for example,
assuming [**] is the 63rd largest market by MSA,
CV agrees to launch CitySearch's [**]service among
the first five of the
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ten markets ranked 60-69 by MSA).
FEES CV will pay CitySearch (i) an initial, non-
refundable license fee of [**] payable in two
installments, the first payment of [**] payable
upon execution of the agreement, the second
payment of [**] payable pursuant to the payment
milestones set forth in Exhibit D and (ii) an
annual license fee paid quarterly in arrears,
equal to the greater of [**] of CV's gross
revenues generated in said year during years [**]
of the agreement. In years [**] and [**] of the
agreement, CV shall pay to CitySearch an annual
license fee paid quarterly in arrears, equal to
the greater of [**] of CV's gross revenues
generated in said year. In years [**] and [**], CV
shall pay to CitySearch an annual license fee paid
quarterly in arrears, equal to the greater of [**]
of CV's gross revenues generated in said year. CV
will also pay CitySearch the fees set forth in
Exhibit A and B for services monthly in arrears.
In the event CV acquires CitySearch during the
term of the agreement, all license fees paid or
due by CV to CitySearch shall be taken into
account in determining the value of CitySearch.
AUDIT Either party shall permit the other party and its
agents and accountants, on reasonable notice and at
reasonable times during normal business hours, to
audit, at the auditing party's expense, the books
and records of the other party relating to the
subject matter of this agreement. In the event that
an audit discloses any error in payment, appropriate
adjustments shall be paid immediately. In the
further event that an error is favorable to the
auditing party in an amount equal to or in excess of
fifteen (15) percent of the amount reported, then
the audited party shall reimburse the reasonable
costs of the audit and pay liquidated damages in the
amount of fifty (50) percent of the error.
DEFAULTS & REMEDIES By CitySearch. In the event CV believes CitySearch
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is in default of any of its obligations hereunder
including performance standards or milestones set
forth in the
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exhibits, and provided CV is not in default of any
of its obligations hereunder, CV shall give
CitySearch specific written notice of the default
and the parties agree to meet and confer (by
telephone or in person) in good faith within 5
business days of receipt of notice. If, at the
conclusion of the meet and confer process, which
shall not be longer than 10 additional business days
or such longer period as the parties mutually agree,
CV continues to believe CitySearch is in default, CV
shall provide written notice of the issues
remaining. Provided CV is not in default of any of
its obligations hereunder, if CitySearch has not
cured the default within 15 business days, or in the
case of a default that is not susceptible of cure
within 15 days, if CitySearch has not taken diligent
steps to commence cure of the default within 15
business days and completed such cure within three
months, CV may request arbitration to be conducted
by a mutually agreed disinterested third party
arbitrator, who shall be authorized to award damages
based on CitySearch's default (excluding
consequential or punitive damages), which damages
may be set-off against future service fees owed to
CitySearch, and which shall not in any event exceed
the total amount of fees paid to CitySearch. This
section describes CV's sole remedy in the event of a
default by CitySearch.
By CV. In the event CitySearch believes CV is in
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default of any of its obligations hereunder,
CitySearch shall give CV specific written notice of
the default and the parties agree to meet and confer
(by telephone or in person) in good faith within 15
days of receipt of notice.
TERM Two year [**] (the last day of the last term of
which shall be the "Unwind Commencement Date") which
may be extended at CV's sole option for [**]
additional [**] terms. CV may give written notice to
unwind the agreement no sooner than seven months but
no later than six months before expiration of the
current term. The provisions contained within the
Exclusivity and Competition sections shall terminate
on the
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Unwind Commencement Date. For the one year period
following the Unwind Commencement Date, the parties
agree to continue all terms of this agreement,
except for the terms contained in the Exclusivity
and Competition sections. Absent notice to unwind,
the agreement shall renew for an additional [**]
term.
COMPETITION CitySearch will not offer, in its own markets or to
its licensees, online classified products in a
searchable database format or under a national brand
in the CV Businesses, except that CitySearch may
develop and market its own classified product [**]
(iii) in its owned and operated markets where there
is a CV affiliate, provided that (a) CitySearch
receives written approval from the CV affiliate in
the respective city and, [**] In markets where
CitySearch operates owned and operated markets and
currently offers products in the CV Businesses under
a national brand or in a searchable database format,
CitySearch agrees to [**]. Provided that CitySearch
complies with the obligations set forth in
subsection (iv) of this Competition section,
subsection (iv) shall not be construed to prevent
CitySearch from selling web sites to individuals or
businesses engaged in real estate or automobile-
related businesses or limit the content thereof.
NON-SOLICITATION During the term of the agreement and for a period of
[**] after the Unwind Commencement Date, (i)
CitySearch shall not solicit CV's affiliates or
customers with respect to the CV Businesses or an
Additional Category or Categories (to the extent CV
has launched an Additional Category or Categories
pursuant to this
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Agreement), and (ii) neither party shall, directly
or indirectly, solicit or hire, except for general
commercial solicitations, any employee or
independent contractor of the other party without
prior written approval.
REPORTING Given the rapidly evolving nature of CV's business,
the parties agree to meet periodically to review
CV's satisfaction with CitySearch's products and
services, and to outline action plans for the next
period. The parties agree to make commercially
reasonable efforts to hold status meetings daily. In
addition, the parties will conduct periodic service
reviews. These reviews shall take place at CV's
request, but no more frequently than monthly. At
each review meeting, the parties shall ensure that
each party is in compliance with the performance
standards and milestones contained in the exhibits
attached to this agreement.
REPRESENTATIVE CV will consider making CitySearch its
RELATIONSHIP representative for selling classified solutions to
(i) affiliates in smaller North American markets;
and (ii) outside of North America.
INVESTMENT Subject to advice from underwriters and auditors,
CitySearch will make reasonable efforts to accept an
equity investment from CV for a period of 90 days or
until CitySearch is a public company, whichever is
shorter.
ASSIGNMENT Either party may assign this agreement to an entity
acquiring all, or substantially all, of the party's
assets, or to an entity that the party wholly owns.
CONFIDENTIALITY The parties agree to execute the mutual
confidentiality agreement attached as Exhibit C
simultaneously with this agreement.
OWNERSHIP OF INTELLECTUAL Except as otherwise provided in this agreement or
PROPERTY the attachments, CitySearch and CV will retain
ownership to the intellectual property provided by
one to the other.
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Any and all non-public information CitySearch
obtains about the customers of CV affiliates, in the
course of serving such affiliates in the CV
Businesses, shall be considered the property of
CV. Other information about the CV Businesses will
be governed by the mutual confidentiality
agreement. With regard to software developed by
CitySearch at CV's request and wholly paid for by
CV, CV shall own the software, and grants to
CitySearch a perpetual, royalty-free license to use
the software in applications [**]
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This license and services agreement constitutes a contractual commitment that is
legally binding upon the parties, their successors, and assigns.
ACCEPTED AND AGREED:
CITYSEARCH, INC. CLASSIFIED VENTURES, L.L.C.
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx Xxxxxx
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Its: CEO Its: Chief Executive Officer
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7/17/98 July 16, 1998
Date:_________________________ Date:__________________________
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EXHIBIT A
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CITYSEARCH TECHNOLOGY AND BUSINESS SYSTEMS
CitySearch will license the following to CV for use in the CV Businesses:
. TECHNOLOGY SYSTEMS
Throughout the term of the agreement, CitySearch will license and/or provide
licenses to Classified Ventures for technology in the following areas: [**]
("Technology Systems"). While CitySearch may change technologies to meet future
requirements, these technologies are expected to include [**] CitySearch will
provide CV [**] seats (one machine on which the software application is
installed) for use at its headquarters facilities, and up to [**] seats per
application for each affiliate. Affiliates may add seats at CitySearch's
incremental cost plus [**], subject to a maximum of [**] per seat. On at least a
quarterly basis, CitySearch shall present to a designated Classified Ventures
contact any new products or enhancements to Technology Systems for Classified
Ventures to incorporate in its own product offerings. CitySearch shall also
consult with Classified Ventures on its development plans with respect to the
Technology Systems.
In addition, CitySearch shall present to CV any other software products released
within the previous quarter that may have application to the CV Businesses.
Payment terms for products falling outside the scope of the Technology Systems
will be negotiated separately.
. BUSINESS SYSTEMS
In the course of launching 7 owned and operated markets and 8 partner markets,
CitySearch has developed a substantial set of intellectual property for
launching and operating local online information businesses, particularly city
guide-related businesses. This intellectual property includes [**] CitySearch
will leverage this material in the creation of rollout programs for CV, so that
the time required to develop business processes for the CV Businesses can be
substantially shortened.
STAFFING AND SERVICES
In order to provide CV with Affiliate Rollout and Back Office services,
CitySearch will provide CV with [**] staffing on a consulting basis. Many such
individuals have been identified and are named herein; others are to be
determined. CitySearch retains the right to replace any individual at any time
and for any reason, except that CitySearch shall use commercially reasonable
efforts to ensure continuity of service where possible.
In addition to providing staff for Affiliate Rollout and Back Office services,
CV has indicated an interest in retaining CitySearch staff for other purposes,
including temporary general management roles and product
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development. Unless such appointments become the subject of a separate
agreement, rates and conditions will be governed by this agreement.
. Overall Direction
Xxxxxxxxx Xxxxxx currently will provide day-to-day direction for CitySearch's
efforts under this agreement, and will be based, as appropriate, in Chicago.
Xxxxxxxxx will be dedicated 100% to this project. Xxx Xxxxxx, Vice President,
Products & Technologies Group, Xxxx Xxxxxxxxx, General Manager, Rollout, and Xxx
XxXxxxxx, Vice President Operations, will provide overall direction for the
effort.
. Enable Affiliate Rollout/Operations; Affiliate Training
CitySearch employees will assist CV employees in the development and planning of
the affiliate rollout process, including the affiliate training program for
xxxx.xxx and xxxxxxxxxxxxxx.xxx. The milestones associated with this activity
are attached as Exhibit D.
Initially, CitySearch plans to staff this activity with the following
individuals.
. Xxxx Xxxxxxxxxx
. Xxxxx Xxxxxxx
. Xxxx Xxxxxx (rollout Program Manager)
. Xxxxxxx Xxxxxx (rollout Sales Trainer)
. Xxx Xxxxxx (rollout Operations Trainer)
. Enable Back Office [**] Operations
CitySearch employees will work with Classified Ventures' employees to
establish back office operations for each of the CV Businesses per Exhibit D.
Based on requirements analysis recently completed for xxxx.xxx by a CitySearch
team, CitySearch staff will develop and implement a plan to quickly establish
back office operations for xxxx.xxx in [**]. Building on that work, CitySearch
staff will work with CV staff to analyze the back office requirements for
newhomesnetwork and to establish operations in [**]. Back Office Operations
for resale real estate and apartments will follow. Other employees will assist
in building Classified Ventures' customer service operations and assist with
Classified Ventures' wholesale billing services.
The following staff from CitySearch will participate in the requirements
analysis and implementation phase:
. Xxxxx Xx (Director of Market Operations)
. Xxxxx Xxxxxx (Director, Home Office Operations)
. Xxxx Xxxxxx (Director, Customer Service)
. Xxxx Grammatke (Professional Services Associate)
. Xxxxxxxxxxx Xxxxxx (Classified Ventures Back Office Manager)
. Xxxxx Xxxxxxxx (Operations Associate)
. Xxxx Xxxxx (Operations Manager)
. Xxxxxxxx Xxxxxx (Project Manager)
. 2 designers and 2 customer service reps. (plus others, ramping up as
appropriate)
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In addition to staff, CitySearch may need to obtain capital equipment to serve
CV. For example, CitySearch will need to purchase [**]. CitySearch will seek
written approval from CV for all such expenditures in excess of $5,000; CV
agrees not to unreasonably withhold approval beyond deadlines necessary to meet
milestones described elsewhere in this agreement.
. Rollout Team ([**] units)
CitySearch will staff a minimum of [**] rollout units, expected to consist of 3
members each, for the initial contract term. The rollout units will train
affiliates in [**] and best practices. These teams will be deployed as directed
by Classified Ventures. The deployment of these teams would be staged so that
divergent processes are not developed from the beginning. At CV's request,
CitySearch will provide additional teams subject to a minimum commitment of
[**]. At CV's request, CitySearch will extend the service of existing teams
beyond the initial contract term, subject to a minimum extension of [**].
It has been CitySearch's experience that the heavy travel demands of the
rollout process require special policies in order to attract and retain team
members, including policies regarding travel and expenses, time off the road,
and others. For example, it may be necessary to staff a rollout team with [**]
members in order to rotate the demands of travel and rollout commitments. CV
agrees to reimburse CitySearch pursuant to policies equal to the greater of 1)
CitySearch's rollout team policies as modified from time to time, and 2) CV's
rollout team policies to be established.
In addition, the roll out teams will require administrative support (for
example, to forward mail to team members based at CV's offices, and to assist
with travel arrangements). CV agrees to either (i) provide such support, or
(ii) reimburse CitySearch for its reasonable costs incurred in providing such
support.
. Classified Ventures [**] Service
CitySearch will produce [**]. Initially, CitySearch will build a team to provide
these services to xxxx.xxx and xxxxxxxxxxxxxx.xxx (see Exhibit D). CitySearch
also expects to provide these services to xxxxxxxxxx.xxx and resale real estate
as noted in Exhibit D.
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EXHIBIT B
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CITYSEARCH BILLING RATES
Rates are calculated as follows:
1. Establish average salary per employee category
2. Multiply salary by related costs
. [**] for benefits and taxes
. [**] for recruiting and training
. [**] to adjust for cost of stock options (estimated as average increment
required to bring compensation to market)
. [**] for administration and management
3. Add overhead per employee
. $[**]/hr for technical staff
. $[**]/hr all other
4. Add [**] to total for CitySearch margin
Rates are subject to change in the event that CitySearch's costs change.
Individuals who are assigned to Classified Ventures for at least one month will
be billed at a maximum of 8 hours per day. Weekend hours will also be charged
at a maximum of 8 hours per day. Individuals who are assigned to Classified
Ventures for less than one month will be billed at actual hours worked, both
business and weekend days.
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ROLE HOURLY
RATE
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CV Rollout Team Positions (subject to change
based on pilot team experience)
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Program Manager $[**]
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Operations Trainer $[**]
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Sales Trainer $[**]
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Marketing Advisor $[**]
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Field Producer $[**]
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Other CitySearch Positions*
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Functional Vice President (e.g., marketing, sales) $[**]
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General Manager $[**]
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Functional Director $[**]
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Functional Manager $[**]
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Functional Supervisor $[**]
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Functional Associate $[**]
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Customer Service Representative $[**]
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Infosite Designer $[**]
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Data Entry Clerk $[**]
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CitySearch Professional Services Support*
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Senior Software Engineer $[**]
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ROLE HOURLY
RATE
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Software Engineer $[**]
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Senior Project Manager/Director/Producer $[**]
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Project Coordinator/Manager/Producer $[**]
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Senior Graphic/Interface Designer $[**]
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Graphic/Interface Designer $[**]
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QA Engineer $[**]
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Technical Support Analyst $[**]
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CV agrees to reimburse CitySearch for reasonable travel expenses incurred by
CitySearch staff, subject to customary documentation.
*If needed; other positions quoted as requested.
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EXHIBIT C
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MUTUAL CONFIDENTIALITY AGREEMENT
In connection with license and services agreement dated July 16, 1998 (the
"Engagement") between Classified Ventures, L.L.C. ("CV") and CitySearch, Inc.
(the "Company"), the Company and CV expect to make available to one another
certain nonpublic information concerning their respective business, financial
condition, operations, assets and liabilities. As a condition to such
information being furnished to each party and, when appropriate and in
accordance with the terms of this agreement, its directors, officers, employees,
agents or advisors (including, without limitation, attorneys, accountants,
consultants, bankers and financial advisors) (collectively, "Representatives"),
each party agrees to treat any nonpublic information concerning the other party
(whether prepared by the disclosing party, its advisors or otherwise and
irrespective of the form of communication) which is furnished hereunder to a
party or to its Representatives now or in the future by or on behalf of the
disclosing party (herein collectively referred to as the "Engagement Material")
in accordance with the provisions of this agreement, and to take or abstain from
taking certain other actions hereinafter set forth.
(1) ENGAGEMENT MATERIAL. The term "Engagement Material" also shall be
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deemed to include all notes, analyses, compilations, studies, interpretations or
other documents prepared by each party or its Representatives which contain,
reflect or are based upon, in whole or in part, the information furnished to
such party or its Representatives pursuant hereto which is not available to the
general public. The term "Engagement Material" does not include information
which (i) is or becomes generally available to the public other than as a result
of a breach of this Agreement by the receiving party or its Representatives,
(ii) was within the receiving party's possession prior to its being furnished to
the receiving party by or on behalf of the disclosing party, provided that the
source of such information was not known by the receiving party to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the disclosing party, (iii) is or becomes
available to the receiving party on a non-confidential basis from a source other
than the disclosing party or any of its Representatives, provided that such
source was not known by the receiving party to be bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the disclosing party or any other party with respect to such
information, (iv) is independently developed by the recipient without use of
Engagement Material, (v) is disclosed under requirements of law provided the
disclosing party complies with Section 5 hereof, or (vi) is disclosed by the
recipient or its Representatives with the discloser's prior written approval.
(2) PURPOSE OF DISCLOSURE OF ENGAGEMENT MATERIAL. It is understood and
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agreed to by each party that any exchange of information under this agreement
shall be solely for the purpose of the Engagement between the parties.
Competitively sensitive information such as information concerning product
development or marketing plans, product prices or pricing plans, cost data,
customers or similar information the disclosure of which has been determined to
be reasonably necessary to the Engagement, shall be limited only to those
employees and Representatives who are directly involved in the Engagement.
(3) USE OF ENGAGEMENT MATERIAL. Each party hereby agrees that it and its
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Representatives shall use the other's Engagement Material solely for the purpose
of the Engagement, and that the disclosing party's Engagement Material will be
kept confidential and each party and its Representatives will not disclose or
use for purposes other than the Engagement; provided, however, that (i) the
receiving party may make any disclosure of such information to which the
disclosing party gives its prior written consent and (ii) any of such
information may be disclosed to the receiving party's Representatives who need
to know such information for the sole purpose of accomplishing the Engagement.
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(4) NON-DISCLOSURE. In addition and subject to Section 5, each party
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agrees that, without the prior written consent of the other party, its
Representatives will not disclose to any other person the license fees, term,
royalties, or exclusivity or competition provisions of the Engagement.
(5) REQUIRED DISCLOSURE. In the event that a party or its Representatives
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are requested or required (by oral questions, interrogatories, requests for
information or documents in legal filings or proceedings, subpoena, civil
investigative demand or other similar process) to disclose any of the other
party's Engagement Material, the party requested or required to make the
disclosure shall provide the other party with prompt notice of any such request
or requirement so that the other party may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by such other party, the party requested or required to make
the disclosure or any of its Representatives are nonetheless, in the opinion of
counsel, legally compelled to disclose the other party's Engagement Material,
the party requested or required to make the disclosure or its Representative
may, without liability hereunder, disclose only that portion of the other
party's Engagement Material which such counsel advises is legally required to be
disclosed, provided that the party requested or required to make the disclosure
exercises its reasonable efforts to preserve the confidentiality of the other
party's Engagement Material, including, without limitation, by cooperating with
the other party to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the other party's
Engagement Material.
(6) TERMINATION OF ENGAGEMENT. Upon termination of the Engagement for any
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reason, each receiving party will promptly cease use of the Engagement Materials
and deliver to the disclosing party or destroy (with such destruction to be
certified in writing by the receiving party) all written Engagement Material
(and all copies thereof and extracts therefrom) furnished to the receiving party
or its Representatives by or on behalf of the disclosing party pursuant hereto
other than those materials modified for, or created expressly for, CV.
Notwithstanding the return or destruction of the Engagement Material, each party
and its Representatives will continue to be bound by its obligations of
confidentiality, non-use and other obligations hereunder.
(7) NO REPRESENTATION OF ACCURACY. Each party understands and
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acknowledges that neither party nor any of its Representatives makes any
representation or warranty, express or implied, as to the accuracy or
completeness of the Engagement Material made available by it or to it. Each
party agrees that neither the disclosing party nor any of its Representatives
shall have any liability to the receiving party or to any of its Representatives
relating to or resulting from the use of or reliance upon such disclosing
party's Engagement Material or any errors therein or omissions therefrom. Only
those representations or warranties which are made in a final definitive
agreement regarding the Transaction, when, as and if executed, and subject to
such limitations and restrictions as may be specified therein, will have any
legal effect.
(8) MISCELLANEOUS. Each party agrees to be responsible for any breach of
-------------
this agreement by any of its Representatives. No failure or delay by either
party or any of its Representatives in exercising any right, power or privileges
under this agreement shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege hereunder. In case any provision of this agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of the agreement shall not in any way be affected or
impaired thereby.
(10) INJUNCTIVE RELIEF. It is further understood and agreed that money
-----------------
damages would not be a sufficient remedy for any breach of this agreement by
either party or any of its Representatives and that the non-breaching party
shall be entitled to equitable relief, including injunction and specific
performance, as a remedy for any such breach. Such remedies shall not be deemed
to be the exclusive remedies for a breach of this agreement but shall be in
addition to all other remedies available at law or equity. In the event of
litigation relating to this agreement, if a court of competent jurisdiction
determines that either party or any of its
-16-
Representatives have breached this agreement, then the breaching party shall be
liable and pay to the non-breaching party the reasonable legal fees incurred in
connection with such litigation, including an appeal therefrom.
(11) NO LICENSE. Nothing in this agreement is intended to grant any rights
----------
to either party under any patent or copyright of the other party, nor shall this
agreement grant any party any rights in or to the Engagement Material of the
other party except as expressly set forth herein.
(12) TERM. The obligations of each receiving party hereunder shall survive
----
for two (2) years from the date of termination of the Engagement.
(13) GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of California applicable to agreements
made and to be performed within such State.
ACCEPTED AND AGREED:
CITYSEARCH, INC. CLASSIFIED VENTURES, L.L.C.
By:_________________________________ By:_________________________________
Its:________________________________ Its:________________________________
Date: ______________________________ Date: ______________________________
-17-
EXHIBIT D: MILESTONES
---------------------
[**] CitySearch and CV have agreed to condition a portion of the license fees to
be paid from CV to CitySearch upon the achievement of certain milestones,
spelled out in Exhibit D1. Even after CitySearch has met the criteria for a
given milestone, it is the parties' expectation that CV's needs will continue to
evolve, requiring CitySearch to be responsive to those needs. Nothing in the
Milestones process is intended to convey that CitySearch's obligations end upon
completion of Milestones. Rather, it is the parties' intention that the formal
process established herein will create a disciplined mechanism to xxxxxx a
strong working relationship between CitySearch and CV.
This introduction is intended to provide definitions governing the Milestones
payment schedule.
COMPLETION OF MILESTONES
CitySearch and CV expect the operating plans for the CV Businesses to undergo
frequent change for the foreseeable future. In order to meet CV's need for
rapid implementation and accountability, and CitySearch's need for clear
definition and milestones within its control, each milestone will be controlled
by some variation of the following process:
1. CitySearch and CV develop objectives and plans for meeting the milestone by
a specified date. CitySearch will take the lead in developing such plans
when requested to do so by CV.
2. CV reviews the plans by a specified date and approves them or provides
specific, written feedback.
3. Steps 1 and 2 are repeated if necessary, but it is the parties' intention
that up to one iteration shall be the norm, given the tight time frames.
4. CitySearch implements the agreed-upon plans, and applies for the Milestone
payment.
5. CV shall honor the payment as long as CitySearch has implemented the plan
agreed upon for certification of the milestones.
CV agrees that for the purposes of Milestone Payments, CitySearch will have met
a given milestone once it has achieved implementation of the plan(s) agreed to
by the dates specified, unless (i) CV and CitySearch agree on a modified plan in
writing, or (ii) some other criteria is described in writing. In the case of a
modified plan, the milestone will be considered complete when CitySearch has
reached substantially the same achievements (e.g., hired the 15 people called
for in the original hiring plan, even though the revised plan calls for 20
people with somewhat different skills).
APPROVALS
Where approvals are required for operating plans or standards, CV and CitySearch
expect that the General Manager or Acting General Manager of a given vertical
shall review and sign the document in a timely manner. The GM's signature shall
indicate CV's agreement to the plans and standards contained therein for the
purpose of milestone criteria. In addition, the CEO and/or COO may agree in
place of any of the vertical General Managers.
SINGLE POINT OF CONTACT
For each vertical, CV shall designate a single point of contact to facilitate
the resolution of open issues in an expeditious manner. Where appropriate, CV
shall also designate individuals to assist CitySearch in the development of
plans and completion of particular tasks and activities as called for by project
workplans.
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EXHIBIT D1
PAYMENT SCHEDULE FOR BUSINESS AND TECHNOLOGY SYSTEMS
TARGET
MILESTONE START DATE COMPLETION
KEY MILESTONES PAYMENT DATE CITYSEARCH OBLIGATIONS
------------------------------------------------------------------------------------------------------------------------------------
1 Staff and Train HQ [**] 7/6/98 [**] [**]
support team
------------------------------------------------------------------------------------------------------------------------------------
2 Cars Rollout program [**] 6/15/98 [**] [**]
complete and revised
------------------------------------------------------------------------------------------------------------------------------------
3 Cars Rollout teams [**] 6/29/98 [**] [**]
deployed
------------------------------------------------------------------------------------------------------------------------------------
KEY MILESTONES CV OBLIGATIONS CRITERIA FOR MILESTONE COMPLETE
------------------------------------------------------------------------------------------------------------------------------------
1 Staff and Train HQ [**] . Hiring and training of team as
support team defined by Support Team Plan
. Milestone will be considered
complete even if Director of Affiliate
Rollout is not yet hired
------------------------------------------------------------------------------------------------------------------------------------
2 Cars Rollout program [**] . All Program Modules revised and
complete and revised approved as specified in Rollout
Lesson Learned
. As long as CitySearch has made
good faith efforts and have demonstrated an
acceptable level of effectiveness,
this milestone shall be considered
complete no later than [**]
------------------------------------------------------------------------------------------------------------------------------------
3 Cars Rollout teams [**] . Team members recruited and trained
deployed as agreed to in the Plan, but not to
exceed 8 people for purposes of this
Milestone
. Once an individual commences
rollout, he/she can no longer be
deemed inadequate for rollout purposes
. Target date contingent on
CitySearch's ability to use existing
resources; redefinition of skills
would significantly affect completion
------------------------------------------------------------------------------------------------------------------------------------
_______________________________
* Individuals must have an acceptable level of knowledge and skill to
adequately roll out a vertical. Acceptable level of knowledge shall be
defined as the ability to deliver a given set of rollout Modules and to
field Frequently-asked questions as defined by the vertical.
-------------
[**] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
TARGET
MILESTONE START DATE COMPLETION
KEY MILESTONES PAYMENT DATE CITYSEARCH OBLIGATIONS
------------------------------------------------------------------------------------------------------------------------------------
4 Cars Back-Office [**] 6/29/98 [**] [**]
infrastructure enabled
------------------------------------------------------------------------------------------------------------------------------------
5 Cars Back-office [**] 6/8/98 [**] [**]
infrastructure complete
------------------------------------------------------------------------------------------------------------------------------------
6 Homes rollout program [**] 7/9/98 [**] [**]
complete and revised
------------------------------------------------------------------------------------------------------------------------------------
KEY MILESTONES CV OBLIGATIONS CRITERIA FOR MILESTONE COMPLETE
------------------------------------------------------------------------------------------------------------------------------------
4 Cars Back-Office [**] . CS has implemented Staffing
infrastructure enabled Plan and has demonstrated
ability to produce sites and serve
customer in accordance with
approved PRGs and OM
------------------------------------------------------------------------------------------------------------------------------------
5 Cars Back-office [**] Implementation of BOSP-Cars, including,
infrastructure complete but not limited to:
. Customer service information
tracked in CS Support Trak
. Packets processed using
modified CS PTB system
. Basic reports avaliable on a timely
basis
. System accessible from Chicago
and Pasadena, subject to order
and delivery of WAN connection
. Requests for significant
deviations from 5/22/96
Requirements document will not
be considered in evaluating the
completion of this milestone
------------------------------------------------------------------------------------------------------------------------------------
6 Homes rollout program [**] . All Program Modules revised and
complete and revised approved as specified in Rollout
Lessons Learned
. As long as CitySearch has made
good faith efforts and has
demonstrated an acceptable
level of effectiveness, this
milestone shall be considered
complete no later than [**]
------------------------------------------------------------------------------------------------------------------------------------
-20-
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[**] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
TARGET
MILESTONE START DATE COMPLETION
KEY MILESTONES PAYMENT DATE CITYSEARCH OBLIGATIONS
-----------------------------------------------------------------------------------------------------------------------------------
7 Homes Rollout teams [**] 6/29/98 [**] [**]
deployed - [**]
-----------------------------------------------------------------------------------------------------------------------------------
8 Homes back-office [**] 7/9/98 [**]
infrastructure functional [**]
-----------------------------------------------------------------------------------------------------------------------------------
9 Homes back-office [**] 7/9/98 [**] [**]
infrastructure integrated
-----------------------------------------------------------------------------------------------------------------------------------
CRITERIA FOR MILESTONE COMPLETE
KEY MILESTONES CV OBLIGATIONS
-----------------------------------------------------------------------------------------------------------------------------------
7 Homes Rollout teams [**] . Team members recruited and trained
deployed as agreed to in the Plan, but not to
exceed 8 people for purposes of this
Milestone
. Once an individual commences
rollout, he/she can no longer be
deemed inadequate for rollout purposes
. Target date within the range
subject to (a) CitySearch's ability to
use existing resources; redefinition
of skills would significantly affect
completion date; (b) team size
remaining small (i.e., 2 or fewer
members would push toward beginning of
range)
-----------------------------------------------------------------------------------------------------------------------------------
8 Homes back-office [**] . CS has implemented Staffing Plan
infrastructure functional and has demonstrated ability to
produce sites and serve customers in
accordance with approved PRGs and OM
. Target date is contingent on
requirements analysis, PRGs, and OM
findings consistent with current view
that implementation of Homes back
office will be similar to and no more
difficult than that for xxxx.xxx
.
-----------------------------------------------------------------------------------------------------------------------------------
9 Homes back-office [**] Implementation of BOSP-Homes,
infrastructure integrated including, but not limited to:
. Customer service information
tracked in CS SupportTrak
. Packets processed using modified CS
PTB system
. Basic reports available on a timely
basis
. System accessible from Chicago and
Pasadena
-----------------------------------------------------------------------------------------------------------------------------------
-------------
[**] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-21-
TARGET
MILESTONE START DATE COMPLETION
KEY MILESTONES PAYMENT DATE CITYSEARCH OBLIGATIONS
----------------------------------------------------------------------------------------------------------------------------------
10 Apartments rollout [**] No sooner TBD [**]
program complete than
[**] and
currently
planned to
be [**]
-----------------------------------------------------------------------------------------------------------------------------------
11 Xxxx.xxx Rollout teams [**] No sooner [**] [**]
deployed, if CV elects to than [**],
utilize CitySearch based on
assistance for Workplan
Xxxxxxxxxx.xxx (See 10 Program
above)
-----------------------------------------------------------------------------------------------------------------------------------
12 Apartments back-office [**] No sooner TBD [**]
infrastructure than [**]
-----------------------------------------------------------------------------------------------------------------------------------
CRITERIA FOR MILESTONE COMPLETE
KEY MILESTONES CV OBLIGATIONS
--------------------------------------------------------------------------------------------------------------------------------
10 Apartment rollout [**] Either:
program complete . All Program Modules revised and approved
as specified in Rollout Lessons Learned
no later than date to be determined in
workplan when developed
[**]
--------------------------------------------------------------------------------------------------------------------------------
11 Xxxx.xxx Rollout teams [**] . Fulfillment of Apartments Rollout
deployed, if CV elects to Organization Plan within 8 weeks of
utilize CitySearch submission, no later than [**]
assistance for . Once an individual commences
Xxxxxxxxxx.xxx (See 10 rollout, he/she can no longer be
above) deemed inadequate for rollout purposes
[**]
-------------------------------------------------------------------------------------------------------------------------------
12 Apartments back-office [**] . CS has implemented Staffing Plan
infrastructure and has demonstrated ability to
produce sites and serve customers in
accordance with approved PRGs and OM
. Implementation of BOSP-Apts
. System accessible from Chicago and
Pasadena
[**]
-------------------------------------------------------------------------------------------------------------------------------
-------------
[**] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-22-
TARGET
MILESTONE START DATE COMPLETION
KEY MILESTONES PAYMENT DATE CITYSEARCH OBLIGATIONS
----------------------------------------------------------------------------------------------------------------------------
[**]
----------------------------------------------------------------------------------------------------------------------------
13 Resale RE rollout program [**] No sooner TBD [**]
complete than
[**]
----------------------------------------------------------------------------------------------------------------------------
14 Resale RE RO teams [**] No sooner [**]
deployed than TBD
[**]
----------------------------------------------------------------------------------------------------------------------------
CRITERIA FOR MILESTONE COMPLETE
KEY MILESTONES CV OBLIGATIONS
---------------------------------------------------------------------------------------------------------------------------------
[**] [**]
---------------------------------------------------------------------------------------------------------------------------------
13 Resale RE rollout program [**] If CV has communicated intent to
complete engage CitySearch in this program:
. All Program Modules revised and
approved as specified in Rollout
Lessons Learned
. In any event, no later than [**],
assuming CitySearch has made good
faith efforts
[**]
---------------------------------------------------------------------------------------------------------------------------------
14 Resale RE RO teams [**] If CV has communicated intent to
deployed engage CitySearch in this program:
. Team members recruited and trained
as agreed to in the plan
[**]
---------------------------------------------------------------------------------------------------------------------------------
-------------
[**] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-23-
TARGET
MILESTONE START DATE COMPLETION
KEY MILESTONES PAYMENT DATE CITYSEARCH OBLIGATIONS
------------------------------------------------------------------------------------------------------------------------------------
15 Resale RE back-office [**] 30 days [**]
infrastructure integrated after notice, 6 weeks after
but not start date
before
[**]
-----------------------------------------------------------------------------------------------------------------------------------
16 Implementation [**] 6/15/98 [**]
Completed TBD
-----------------------------------------------------------------------------------------------------------------------------------
Total [**] .
-----------------------------------------------------------------------------------------------------------------------------------
CRITERIA FOR MILESTONE COMPLETE
KEY MILESTONES CV OBLIGATIONS
---------------------------------------------------------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------------------------------------------------------
15 Resale RE back-office [**] Either
. CS has implemented Staffing Plan
and has demonstrated ability to
produce sites and serve customers in
accordance with approved PRGs and OM
[**]
---------------------------------------------------------------------------------------------------------------------------------
16 Implementation Completed [**] . Completion of previous milestones
that have not been waived, but no
later than [**] assuming CS has
demonstrated good faith to achieve all
milestones
---------------------------------------------------------------------------------------------------------------------------------
Total [**] .
---------------------------------------------------------------------------------------------------------------------------------
-------------
[**] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-24-
