Exhibit 10.14
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
GEOCITIES AFFILIATES PROGRAM
LICENSE AND SERVICES AGREEMENT
This License and Services Agreement ("Agreement") is entered into by and between
GeoCities ("GeoCities"), located at 0000 Xxxxxxx Xxxxxx, Xxxxxx xxx Xxx, XX
00000, and Be Free, Inc. ("Be Free"), located at 000 Xxxxxx Xxxx Xxxx Xxxx,
Xxxxxxxxxxx, XX 00000, effective as of January 13, 1999 ("Effective Date").
1. CERTAIN DEFINITIONS.
"Affiliate(s)" means an individual or legal entity that (a) has a personal Web
site hosted by any Web-based community, Internet service provider or Web hosting
service provider either at no charge or for a nominal fee, and (b) has entered
into an agreement pertaining to membership in the GeoCities Affiliates Program.
"Be Free Behavioral Targeting Technology" means Be Free's proprietary technology
for compiling Visitors' historical behavioral profiles, which profiles may be
used in selecting advertising or promotion strategies designed to maximize
Visitor purchases on the Internet.
"GeoCities Affiliates Program" means a network of participating Affiliates and
Merchants which: (a) enables Affiliates to generate hypertext links ("Affiliate
Links") from such Affiliate's Web pages (each, an "Affiliate Page") to
participating Merchant Sites, (b) encourages Visitors to interact with such
Merchant Sites including, without limitation, making purchases and accessing
content on the Merchant Sites, and (c) enables Affiliates to receive
compensation.
"GeoCities Data" means any and all information or data delivered to Be Free by
GeoCities in connection with the GeoCities Affiliates Program concerning
GeoCities members, Affiliates and/or Merchants.
"Deliverable(s)" means the Licensed Materials and the elements or functionality
described in Exhibit A.
----------
"Existing Program" means an affiliates program (other than the GeoCities
Affiliates Program): established and operated by or on behalf of a merchant
prior to integration of the merchant into the GeoCities Affiliates Program.
1
"Exclusive Features" means any of the following functions: (a) the multi-
merchant aggregation features of the products and Deliverables described in
Exhibit A including, without limitation, Hot Swapping and, (b) Multi-Level
Marketing.
"FTC Order" means that certain "Agreement containing a Consent Order" issued by
the U.S. Federal Trade Commission on June 11, 1998 as well as any and all
modifications, restatements, amendments, supplements, addenda and extensions
thereof.
"GeoCities Competitors" means any entity or person involved directly in
providing on-line and/or Web-based community products or services to its
customers, subscribers, members or other users including, without limitation,
services known as Lycos, Yahoo, American On-Line, Infoseek, Excite, Xoom,
xxxxxxxx.xxx or any other entity or person controlling, controlled by
or under common control with company operating any of the foregoing.
"Hot Swapping" means flexibly and dynamically substituting Affiliate Links with
one or more Merchant Sites.
"Impression" means each serving of an Affiliate Link to a Visitor through the
GeoCities Affiliates Program.
"Licensed Materials" means (i) Be Free's proprietary BFAST Windows 95 graphical
user interface for use by Merchants to participate in the GeoCities Affiliates
Program as contemplated by this Agreement, and (ii) any and all updates thereto
which may be developed by or on behalf of Be Free during the term of this
Agreement.
"Merchant" means a commercial entity which: (a) has entered in to a Merchant
Agreement and (b) operates a Web site ("Merchant Site") to which Affiliates may
generate Affiliate Links.
"Merchant Agreement" means an agreement entered into by GeoCities a Merchant
participating in the GeoCities Affiliates Program setting forth (a) the
characteristics of Qualifying Activity and the method of recording Qualifying
Activity and, (b) the rates and calculation methods of Affiliate compensation.
"Net Shipped Sales" means, with respect to a given period, the aggregate actual
sales price of goods and services less the value of the aggregated actual sales
prices of goods and services returned within such period (whether or not related
to goods and services provided during such period).
2
"Multi-Level Marketing" means (with respect any program or any entity) services
described in Exhibit C.
----------
"Exclusive Feature Launch" means, with respect to an Exclusive Feature, making
the GeoCities Affiliates Program widely available to actual and potential
Affiliates including GeoCities Community Leaders.
"Qualifying Activity" means Visitor interaction with a Merchant Site to be
tracked by Be Free and, with respect to which an Affiliate is entitled to
receive compensation pursuant to the terms of the applicable Merchant
Agreement(s).
"Specifications" means the set of technical functionalities and feature
descriptions set forth in Exhibit A.
----------
"Visitor(s)" means a third party Internet user who receives an Impression.
2. BE FREE SERVICES.
2.1 Core Be Free Services. During the term of this Agreement, Be Free
shall perform (i) the services described in Exhibit A in accordance with the
schedule set forth in Exhibit B, and (ii) the Merchant integration services
described in Paragraph E.2. of Exhibit A.
2.2 Multi-Level Marketing. During the term of this agreement, Be Free
shall perform the services relating to Multi-Level Marketing described, and in
accordance with the schedule set forth in Exhibit C.
2.3 Additional Be Free Services.
---------------------------
2.3.1 Check Writing Services. Upon GeoCities' request, Be Free shall
perform its customary check writing services (described below) in connection
with the GeoCities Affiliates Program, provided that (i) each check generated by
Be Free shall reflect aggregate amounts payable by one or more Merchants and
(ii) the documentation delivered to each Affiliate with such check shall contain
a break-down of the individual Merchant payments comprising the aggregate amount
of such check. BFAST will provide a complete and seamless affiliate payment
system. Payments will be consolidated across all Merchants. Be Free manages all
financial data internally including a full CFO-style voucher-based interface.
GeoCities will define a minimum-payment threshold. For all Affiliates whose
consolidated payment exceeds the minimum threshold, a check will be printed and
posted. For all Affiliates who do not exceed the threshold, a commission will
be carried over into the next payment period. Affiliates centers will receive
payments quarterly. The months in which the Affiliates receive a check will be
based on the month in which the Affiliate originally enrolled in the GeoCities
Affiliates Program. Accordingly, at the end of
3
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
each month GeoCities will use the financial interface to accept all Affiliate
vouchers. Upon acceptance of a voucher batch, BFAST will generate a report for
GeoCities. GeoCities will deposit into the Be Free transfer account the amount
indicated on the voucher report. BFAST will convert the approved vouchers into
check-printing instructions. The check verification file will be reconciled with
the voucher batch.
2.3.2 Affiliate Management Services. Upon GeoCities' request, Be Free
shall perform its customary affiliate management services in connection with the
GeoCities Affiliates Program, provided that the fees payable by GeoCities for
such services shall be [**]as approved by GeoCities, such approval not to be
unreasonably withheld.
2.3.3 Be Free Behavioral Targeting Technology. Be Free shall provide to
GeoCities, [**], any and all products derived from, and services using, the Be
Free Behavioral Targeting Technology.
2.3.4 Option to Cancel or Modify Be Free Services. GeoCities may elect
to cancel or modify the scope of any of the additional services to be provided
by Be Free pursuant to this Section 2.3 upon reasonable notice. Be Free shall
assist GeoCities with any transition and Be Free shall use its commercially
reasonable efforts to minimize disruption to the GeoCities Affiliates Program
and to be transparent to Merchants and Affiliates. GeoCities shall pay Be Free
for such assistance at [**].
2.4 Service Level Agreement. Be Free shall perform the services required
herein in a professional and xxxxxxx-like manner and in accordance with current
standard industry practice. The parties shall negotiate in good faith mutually
acceptable terms of a service level agreement, to be entered into no later than
January 17, 1999, ("Service Level Agreement") relating to Be Free's standards of
performance of the services described in this Section 2 and GeoCities remedies
for Be Free's failure to achieve and maintain such standards.
3. LICENSES.
3.1 Grant to GeoCities. Be Free hereby grants GeoCities a worldwide,
nontransferable, nonexclusive, right and license, including the right to
sublicense to Merchants, to use and copy the Licensed Materials for the purpose
of conducting the GeoCities Affiliates Program during the term of this
Agreement. All copyright notices, trademarks and other proprietary legends
contained in the Licensed Materials
4
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
shall be reproduced in any copies GeoCities makes of the Licensed Materials. Be
Free reserves all rights not expressly granted in this Agreement.
3.2 Limitations. GeoCities may not modify, reverse engineer, or otherwise
reduce the Licensed Materials to human readable form. GeoCities may not use, or
allow any others to use, any component of the Licensed Materials as a stand-
alone program or in any other way separate from other software constituting the
Licensed Materials.
3.3 Grant to Be Free. GeoCities hereby grants Be Free a worldwide,
nontransferable, nonsublicensable, nonexclusive, fully paid-up right and license
to use the GeoCities Data for the purpose of fulfilling its obligations under
this Agreement and otherwise, provided that all such use shall be strictly in
accordance with the FTC Order, All identifying notices or other proprietary
legends contained in the GeoCities Data shall be reproduced in any copies Be
Free makes of the GeoCities Data. GeoCities reserves all rights not expressly
granted in this Agreement.
4. Exclusivity
4.1 Exclusive Features. Be Free shall not provide an Exclusive Feature to
any third party for a period of twelve (12) months following the date of the
Exclusive Feature Launch thereof, Be Free shall be the exclusive provider of the
primary affiliate network services to GeoCities in connection with the GeoCities
Affiliates Program.
4.2 Be Free Behavioral Targeting Technology. Be Free shall not make
available, in a disaggregated format, any data it derives from use of Be Free
Behavioral Targeting Technology. Be Free shall not develop or have developed
the capability to measure, track, or identify the relative composition of
individual contributors of data derived by the Be Free Behavioral Targeting
Technology nor shall Be Free disseminate such relative composition of data to
any third party.
5. CONSIDERATION; PAYMENT TERMS.
5.1 Pre-Payment. GeoCities has previously paid Be Free, and Be Free hereby
acknowledges receipt of, $[**]. Such amount shall be an advance creditable
against payments otherwise due in the first year of the Agreement under Sections
5.2 and 5.3 below. Accordingly, the amount due for each of the first 12 months
of this Agreement shall first be calculated under Sections 5.2 and/or 5.3, and
shall then be reduced by a fraction of the $[**] advance, the numerator of which
shall be the minimum payment for that month under Section 5.2, and the
denominator of which shall be $[**] (the total of all such minimum payments).
5
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
5.2 Monthly Minimums. During the term of this Agreement, GeoCities agrees
to pay to Be Free the following monthly minimum amounts:
Each of the first full three (3) calendar months
(prorated for the first month): $[**]
Each of the fourth (4th) through sixth (6/th/) months: $[**]
Each of the seventh (7/th/) through ninth (9/th/) months: $[**]
The tenth (10/th/) month and each month thereafter: $[**]
"Months" are calculated from the first complete calendar month (i.e., commencing
on the first day of such calendar month).
5.3 Operational Services and Support Fees. GeoCities shall pay Be Free, to
the extent such amount exceeds the applicable monthly minimum payment pursuant
to Section 5.2 the lesser of:
A. [**] of the aggregate value of Net Shipped Sales generated through the
GeoCities Affiliates Program.
or
B. [**] Impressions.
5.4 Payment Terms. Within 30 days after each calendar month, Be Free shall
prepare and deliver an invoice of the amount, if any, due under Section 5.3 with
respect to that month, including documentation that reasonably explains its
calculation of the amount then due. Amounts due under Section 5.2 shall be paid
on the last day of each applicable Month.
5.5 Check Writing Service Fees. In consideration of the check writing
services, GeoCities shall pay Be Free, on a monthly basis,[**]per check for the
first [**] checks issued in each calendar quarter and [**] for each additional
check issued in the same calendar quarter.
5.6 Referral Fees. The parties acknowledge that Be Free may, from time to
time, enter into agreements with Merchants that are outside the scope of the
GeoCities Affiliates Program, and the parties agree that GeoCities shall be
entitled to a referral fee with respect to revenues to Be Free from such
Merchants. The parties agree to negotiate in good faith the terms of such
referral fees.
6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
6. OWNERSHIP.
6.1 Be Free. Subject to the licenses granted to GeoCities in Section 3, as
between the parties, Be Free (and, to the extent applicable, its suppliers)
shall own all right, title and interest, including all patent rights,
copyrights, trade secret rights, mask work rights and other intellectual
property rights throughout the world (collectively, "Intellectual Property
Rights") in and to the Licensed Materials. GeoCities agrees not to take any
action inconsistent with Be Free's ownership of the Licensed Material as
described herein.
6.2 GeoCities. Subject to the licenses granted to Be Free in Section 3, as
between the parties, GeoCities shall own all Intellectual Property Rights in and
to the GeoCities Data. Be Free agrees not to take any action inconsistent with
GeoCities' ownership of the GeoCities Data as described herein.
7. DEDICATED DEVELOPMENT TEAM.
Be Free shall establish a dedicated development team to perform the services
required for the development of Multi-Level Marketing and ongoing developments
by GeoCities ("Development Team"). These services shall be the highest priority
of the Development Team.
The first $[**] of Multi-Level Marketing and subsequent development shall be
billed [**]. After exhaustion of the $[**],GeoCities and Be Free will mutually
determine a billing rate for development which shall be no higher that the
lowest rate Be Free charges for similar development work. GeoCities will
receive a credit when the Development Team is billed out on other projects. The
rate of credit will be the billing rate.
8. CONFIDENTIALITY.
8.1 Obligations. Each party agrees that all code, inventions, algorithms,
know-how and ideas and all other business, technical and financial information
which is obtained from the other party, including, without limitation,
information contained in any reports generated hereunder, GeoCities Data,
aggregated information relating to traffic, Merchants, GeoCities members,
Visitors, transactions and customer/advertiser lists, shall be the confidential
property of the disclosing party ("Proprietary Information" of the disclosing
party). Except as provided herein,
7
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
the receiving party will hold in confidence and not use or disclose any
Proprietary Information of the disclosing party and shall similarly bind its
employees in writing.
8.2 Exceptions. The receiving party shall not be obligated under this
Section 9 with respect to information the receiving party can document: (a) is
or has become readily publicly available without restriction through no fault of
the receiving party or its employees or agents; or (b) is received without
restriction from a third party lawfully in possession of such information and
under no confidentiality obligation to the disclosing party; or (c) was
rightfully in the possession of the receiving party without restriction prior to
its disclosure by the other party; or (d) was independently developed by
employees or consultants of the receiving party without access to such
Proprietary Information.
9. LIMITATION OF LIABILITY.
EXCEPT WITH RESPECT TO SECTION 11.2 OF THIS AGREEMENT, NEITHER PARTY SHALL BE
LIABLE FOR CONSEQUENTIAL OR SPECIAL DAMAGES ARISING UNDER THIS AGREEMENT.
EXCEPT WITH RESPECT TO SECTIONS 8, 11, OR 13 OF THIS AGREEMENT, NEITHER PARTY
SHALL BE LIABLE OR UNDER THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY AMOUNTS IN EXCESS IN
THE AGGREGATE OF THE GREATER OF [**] OR THE AGGREGATE AMOUNT PAID BY GEOCITIES
UNDER THIS AGREEMENT.
10. REPRESENTATIONS AND WARRANTIES.
10.1 GeoCities and Be Free. Each party represents and warrants to the other
party that (i) it has the full power and authority to enter into and perform its
obligations under this Agreement, (ii) that entering into and performing its
obligations under this Agreement does not violate any right of, nor breach any
obligation to, any third party under any agreement or arrangement with such
third party, and (iii) other than as set forth in this Agreement, no licenses,
waivers, assignments or releases of any third-party rights are necessary in
order for it to perform its obligations under this Agreement.
10.2 Be Free. Be Free represents and warrants that (i) it has sufficient
rights in and to the Licensed Materials to grant the licenses contained in this
Agreement; (ii) to its knowledge, the use of the Licensed Materials, the
Deliverables and any other technology or other intellectual property that is
required for Be Free to perform the services contemplated in this Agreement will
not violate, infringe or misappropriate
8
any third party's intellectual property or other rights, domestic or foreign;
(iii) the Licensed Materials are free from material defects and the GeoCities
Affiliates Program shall, in all material respects, perform in accordance with
the Specifications; and (iv) the Deliverables, the Licensed Materials and any
software used by Be Free to perform its obligations hereunder shall record,
store, process and present calendar dates falling on or after January 1, 2000 in
substantially the same manner and with substantially the same degree of
performance and functionality as prior to January 1, 2000.
11. INDEMNIFICATION.
11.1 Each party shall defend, indemnify and hold harmless (in such capacity,
the "Indemnifying Party") the other party and its officers, directors,
affiliates, employees, agents, successors and assigns (collectively, the
"Indemnitees") from and against any and all losses, liabilities, damages, costs
and expenses (including reasonable attorneys' fees) (collectively, "Losses")
incurred by the Indemnitees based upon, arising out of, attributable to or
resulting from any demand, claim, suit or action ("Claim") by any third party
that (i) includes any allegation that, if true, would constitute a breach by the
Indemnifying Party of any of its representations or warranties in this
Agreement, (ii) Be Free's performance of any of the services relating to the
GeoCities Affiliates Program (with respect to a GeoCities Indemnitee), or
GeoCities' operation of, or content residing on, the GeoCities Site (with
respect to a Be Free Indemnitee), infringes or otherwise violates such third
party's rights, or (iii) the Indemnitees' use of any Licensed Materials in
compliance with this Agreement infringes the rights of any party other than the
Indemnitees. The foregoing shall not apply to either party's indemnification
for Losses related to the FTC Order, which shall be covered by the following
paragraph.
11.2 GeoCities shall defend, indemnify and hold harmless the Be Free
Indemnitees from and against any and all Losses they may incur based upon,
arising out of, attributable to or resulting from a Claim by the FTC that the
FTC Order has been violated, except to the extent GeoCities is entitled to be
indemnified by Be Free under the following sentence. Be Free shall defend,
indemnify and hold harmless the GeoCities Indemnitees from and against any and
all Losses the GeoCities Indemnitees may incur based upon, arising out of,
attributable to or resulting from Be Free's (a) willful act or omission
resulting in GeoCities' violation of the FTC Order or (b) breach of Section
13.2.
11.3 If GeoCities' use of the Licensed Materials is, or is reasonably likely
to become, subject to a preliminary injunction or other similar material
restriction, Be Free shall (a) secure GeoCities' right to continue to exercise
the rights and licenses granted in this Agreement, or (b) modify the Licensed
Materials so they have substantially equivalent functionality and are not
reasonably likely to be subject to such restriction.
9
11.4 The indemnification obligation in Section 11.1, shall not apply to any
Losses to the extent attributable to (a) a modification of the Licensed
Materials not performed or authorized by Be Free to the extent such Losses would
not have been incurred absent such modification, (b) the use of the Licensed
Materials in combination with other software or materials not provided or
authorized by Be Free to the extent such Losses would not have been incurred
absent such combination, (c) the use of any version of the Licensed Materials
other than the most current version Be Free has provided to GeoCities, to the
extent such Losses would have been avoided through the use of such version, or
(d) use of the Licensed Materials in violation of this Agreement.
11.5 With respect to any indemnification under this Section 11, the
Indemnified Party shall promptly notify the other party in writing of any Claim
for which indemnification is available hereunder; provide, however, that failure
to provide such notice shall not affect the obligation of the Indemnifying Party
hereunder except to the extent of actual prejudice to the Indemnifying Party.
The Indemnifying Party shall have fifteen (15) business days, or such shorter
time period as reasonably required after receipt of notice of a Claim, to assume
control of the defense, settlement or compromise of such Claim with counsel of
its choice, provided, however, that the Indemnifying Party may not settle or
compromise the Claim without the written consent of the Indemnitee(s) unless
such settlement or compromise includes a complete and unconditional release of
any non-consenting Indemnitee(s) from any liability under the Claim. If the
Indemnifying Party has not assumed control of the defense, settlement or
compromise of such Claim within the fifteen (15) business day period, or such
shorter period as provided above, the Indemnitee(s) may assume control of, and
recover from the Indemnifying Party any amounts incurred in, the defense,
settlement or compromise of such claim. The Indemnitees shall reasonably
cooperate and assist the Indemnifying party in investigating and defending any
Claim, at the Indemnifying Party's request and expense.
12. TECHNOLOGY ESCROW; OPERATIONAL INSPECTION.
12.1 Source Code Escrow. The parties shall establish an escrow of the
source code to the Licensed Materials and any other software required for Be
Free to perform its obligations under this Agreement ("Source Code"). The
parties shall negotiate in good faith the terms of the escrow agreement with,
and under a prescribed form of, Data Securities International, Inc. ("DSI"),
including the conditions for release of the deposited Source Code and a license
to GeoCities to use such Source Code.
10
12.2 Operational Inspection. If Be Free files for or becomes subject to a
proceeding under Chapter 11 of the United States Bankruptcy Code, commits a
material breach of the Service Level Agreement or makes an assignment for the
benefit of its creditors, GeoCities may conduct an inspection of Be Free's
facilities and operations to determine the resources needed to exercise the
rights contemplated under Section 12.1, including without limitation, review of
connectivity, hardware resources, human resources, software program
applications, and their documentation, other than a review of Source Code. Be
Free shall cooperate in good faith and assist GeoCities in conducting this
inspection.
13. FTC ORDER.
13.1 FTC Order. The parties acknowledge the existence the FTC Order.
Nothing in this Agreement shall be construed as limiting or restricting
GeoCities from complying fully with the FTC Order. Be Free shall cooperate
fully with GeoCities to ensure compliance with the FTC Order in connection with
the collection and use of GeoCities Data or otherwise.
13.2 Safe Harbor. Notwithstanding the foregoing, Be Free shall not be in
breach of its obligations under this Agreement that relate to the FTC Order if:
(i) within 24 hours after GeoCities requests that Be Free take or cease
any action in order to avoid a violation of the FTC Order (a "Request"), Be Free
either (A) promptly commits its best efforts to comply in all with respects with
the Request, or (B) requests GeoCities to initiate, and commits appropriate Be
Free personnel to be available at any time to participate in, communication(s)
with the FTC to confirm that Be Free needs to comply with the Request, and
(ii) if Be Free requests consultation with the FTC under clause (i)(B)
and the FTC indicates that Be Free must comply with the Request and/or take or
cease any other actions to comply with the FTC Order, Be Free complies with the
FTC's instructions.
13.3 Communications Regarding the FTC Order. Notwithstanding any other
provision of this Agreement, for purposes of this Section 15, all communications
between the parties shall be effected through live communication, such as in
person or by phone (excluding, for example, facsimile or e-mail) between
authorized officers of each party.
11
14. TERM; TERMINATION.
14.1 Term. This Agreement will remain in effect, unless terminated in
accordance with Section 16.2, from the Effective Date for a period of three (3)
years.
14.2 Termination on Breach. Either party may terminate this Agreement if
the other party breaches any of its material obligations under this Agreement,
unless cured within thirty (30) days following notice thereof.
14.3 Termination Without Cause. At any time 12 months after the date of the
earliest program launch described in Exhibit A, GeoCities may terminate this
Agreement without cause upon the payment to Be Free of a Termination Fee;
provided, however, that a Termination Fee shall not be payable in the event of a
change of control of Be Free. The "Termination Fee" shall be (a) if GeoCities
terminates the Agreement on or prior to the first anniversary of the date of
this Agreement, $[**] or (b) if GeoCities terminates the Agreement after such
first anniversary, $[**] minus a fraction thereof, the numerator of which shall
be the number of months the Agreement has then been in effect minus 12 (pro
rated for any partial Month), and the denominator of which shall be 24. Be Free
shall cooperate in good faith and provide reasonable assistance to GeoCities, at
GeoCities' expense, in transitioning the GeoCities Affiliates Program to another
service provider.
14.4 Effect of Termination. Except as required in order to comply with
applicable law (including the FTC Order) or otherwise provided in Section 14.3,
in the event of any termination or expiration of the Agreement, all rights and
obligations hereunder shall terminate, except under Sections 8
(Confidentiality), 6 (Ownership), 11 (Indemnification), 9 (Limitation of
Liability) and, if GeoCities terminates the Agreement for a breach by Be Free,
Section 4 (Exclusivity). Promptly following the Termination Date, each party
shall return all materials owned or disclosed/provided by the other party during
the term of the Agreement including modifications thereof (regardless of form,
format or completeness); provided that nothing in this paragraph requires
GeoCities to return reports containing GeoCities Data.
15. CHANGE OF CONTROL OF BE FREE.
If Geocities determines in good faith that a change of control of Be Free by a
GeoCities Competitor is reasonably likely to occur, upon request thereafter by
Geocities, Be Free shall promptly return to GeoCities all Proprietary
Information of GeoCities, other than Proprietary Information needed for Be Free
to perform its obligations under the Agreement. In addition, for a period not
to exceed 90 days following such request, (a) Be Free shall prepare the
GeoCities Data and related GeoCities materials for expedited transition of the
Affiliates Program by Be Free to a third-party service provider, and (b)
cooperate in good faith and provide reasonable
12
assistance to GeoCities in preparing to transfer the Affiliates Program.
Promptly following the effective date of the termination of this Agreement, Be
Free shall transfer such GeoCities Data and related GeoCities materials to such
third-party service provider, and in such format and manner as designated by,
GeoCities. GeoCities agrees to pay Be Free for such services on a time-and-
materials basis at Be Free's standard rates. GeoCities may elect to terminate
this Agreement effective upon closing of a change of control without any
liability to Be Free or its successor in interest for such termination.
16. GENERAL PROVISIONS.
16.1 Entire Agreement. This Agreement constitute the sole and entire
Agreement between the parties with respect to the subject matter hereof and
supersedes any prior or contemporaneous discussions, understandings, agreements
(whether oral or written) between the parties including the LOI and related
documents.
16.2 Waiver, Amendments. The failure of either party to enforce its rights
under this Agreement at any time for any period shall not be construed as a
waiver of such rights. No changes or modifications or waivers are to be made to
this Agreement unless evidenced in writing and signed for and on behalf of both
parties.
16.3 Governing Law; Dispute Resolution. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to the conflicts of laws provisions thereof. In any action or proceeding
to enforce rights under this Agreement, the prevailing party shall be entitled
to recover costs and attorneys fees.
16.4 Non-Exclusive Remedies. The rights and remedies of a party set forth
herein with respect to failure of the other to comply with the terms of this
Agreement (including, without limitation, rights of full termination of this
Agreement) are not exclusive, the exercise thereof shall not constitute an
election of remedies and the aggrieved party shall in all events be entitled to
seek whatever additional remedies may be available in law or in equity.
16.5 Publicity and Press Releases. The parties agree to issue a joint press
release regarding the nature of this Agreement. The parties agree that no press
releases or other publicity relating to the substance of the matters contained
herein will be made without joint approval.
16.6 Relationship of the Parties. Notwithstanding any provision hereof, for
all purposes of this Agreement each party shall be and act as an independent
contractor and not as partner, joint venturer or agent of the other and shall
not bind nor attempt to bind the other to any contract.
13
16.7 Successors and Assigns. This Agreement shall be binding on and inure
to the benefit of the parties hereto and their respective heirs, administrators,
executors, and permitted successors and assigns.
16.8 Severability. If any provision or any portion of any provision of this
Agreement shall be held to be void or unenforceable, the remaining provisions of
this Agreement and the remaining portions of any provisions held void or
unenforceable in part shall continue in full force and effect.
16.9 Assignment. Be Free shall have no right or ability to assign,
transfer, or sublicense any obligations or benefit under this Agreement without
the written consent of GeoCities, and any proposed assignment in violation of
this Section 16.9 shall be null and void.
16.10 Notices. All notices under this Agreement shall be in writing, and
shall be deemed given when personally delivered or three days after being sent
by prepaid certified or registered U.S. mail or private, rapid courier service
with tracking capabilities to the address of the party to be noticed as set
forth herein or such other address as such party last provided to the other by
written notice.
If to GeoCities:
GeoCities
0000 Xxxxxxx Xxxxxx
Xxxxxx xxx Xxx, XX 00000
Attention: General Counsel & Vice President of Legal Affairs
---------
With a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx, LLP
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. XxXxx, Esq.
---------
Facsimile: (000) 000-0000
If to Be Free:
Be Free, Inc.
000 Xxxxxx Xxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: President
---------
14
With a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxx, Esq.
---------
Facsimile: (000) 000-0000
16.11 Headings. Headings herein are for convenience of reference only and
shall in no way affect interpretation of the Agreement.
16.12 Counterparts. This Agreement (including each of its Exhibits) may be
executed in multiple counterparts, all of which shall constitute a singular
instrument and each counterpart, and fax copy thereof shall be deemed an
original.
IN WITNESS WHEREOF, each party has cause this Agreement to be duly executed by
its representative as of the Effective Date.
BY AND ON BEHALF OF BE FREE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Printed Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
BY AND ON BEHALF OF GEOCITIES
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Printed Name: Xxxxxx X. Xxxxxxx
Title: Vice President Strategic
Development
15
EXHIBIT A
SPECIFICATIONS
A. BFAST Application
1. BFAST Application Functions
Reference Manual will serve as the functional specification for the features and
functions of the BFAST application
2. Merchant/Aggregator Reports
The following reports are available for BFAST. The BFAST Manual shall serve as
the functional specification for these reports.
. Cost Effectiveness [Merchant]
. Link Success [Merchant]
. Product [Merchant]
. Top 10 Best Sellers [Merchant]
. Generated Voucher Report [Merchant]
. Revenue (detail) [Merchant]
. Revenue (summary) [Merchant]
. Sales (detail) [Merchant]
. Sales (summary) [Merchant]
. Sales Trends [Merchant]
. Oldest Orders [Merchant]
. Shipments Due [Merchant]
. Top 10 Traffic Providers [Merchant]
. Traffic [Merchant]
. Click-through Trend [Merchant]
. Merchandise Type Detail [Merchant]
. Site Traffic Summary [Merchant]
. Traffic Trend [Merchant]
. Vendor Report [Merchant]
. Product (by day) [Publisher]
. Product Activity [Publisher]
. Top 10 Best Sellers [Publisher]
. Publisher Summary Product Report [Publisher]
. Revenue (detail) [Publisher]
. Revenue (summary) [Publisher]
. Sales (daily) [Publisher]
. Traffic [Site]
. Link Success [Site]
16
. Product Activity [Site]
. Top 10 Best Sellers [Site]
. Sales [Site]
. Sales Trends [Site]
. Traffic [Site]
. Click-through Trend [Site]
. Traffic Trend [Site]
. Merchandise Type Summary Report [Site]
. Merchandise Type Detail [Site]
3. Raw Data Delivery
Be Free shall provide GeoCities with raw data on Affiliate performance in a
format to be mutually agreed upon by the parties.
B. Sales Center
GeoCities Affiliates Program Sales Center will be a general resource for link
generation, merchant selection, and reporting, as well as marketing and
promotion, site building, and merchandising information.
1. Unified Log In
Be Free will allow affiliates to have a singular login between the GeoCities
site and the GeoCities Affiliates Program Sales Center. This is also true among
the various functions of account management, link generation, and reporting
within the Sales Center.
Unified log in will be accomplished by permitting Be Free to access and decrypt
authentication information in the GeoCities visitor cookie. This will be
accomplished through the establishment of a xxxxxxxxx.xxx sub-domain using a Be
Free owned IP address.
Be Free integration with the GeoCities LDAP server and by mutual authentication
passing between GeoCities and Be Free. In the interest of maintaining the
security and privacy of affiliates' financial information, Be Free authenticates
every request for pages containing reporting or account management information.
Be Free proposes to continue this scheme if it proves practicable as GeoCities
scales its Affiliates Program. In the event that performance of repeated
authentication becomes an issue, Be Free will implement a scheme where by the
affiliate will be initially authenticated and subsequently periodically
authenticated between which times an encrypted authentication code will be
stored in a session cookie. This will reduce the load on the LDAP server by
reducing the number of authentication requests.
17
INITIAL GEOCITIES LOG IN: If an affiliate has entered an area of GeoCities
requiring a log in and subsequently navigates to the Sales Center, the GeoCities
cookie will contain the required authentication information, which Be Free will
access and use for transparently authenticating and logging on the affiliate to
the restricted pages it serves in the sales center.
INITIAL BE FREE LOG IN: Should the affiliate initially navigate to restricted
pages Be Free serves in the Sales Center, Be Free will authenticate the
affiliate by examining its GeoCities cookie. If the appropriate authentication
information does not exist, Be Free will redirect the user to a designated
GeoCities login URL containing an appended destination URL as a CGI parameter.
GeoCities will authenticate the user, populate the cookie, and redirect the user
to the destination URL.
2. Affiliate Messaging
Be Free will provide the capability to deliver personalized, targeted messages
within the content of the Sales Center. These messages may be targeted by
merchant, affiliate category and by using search-by-example criteria, or they
may be broadcast to the entire affiliate community. These messages may be
personalized through the use of substitution placeholders.
3. Link Generation
Be Free offers the highest rate of flexibility for link generation in the
industry. Specifically, Be Free allows merchants to offer product-specific
links, categorical links, promotional links, and product-search links to their
affiliates. A key component of the Be Free architecture is an abstraction layer
which underlies ALL of the above listed link types. This abstraction layer
xxxxxxx the affiliate link from the specific URL to which it is redirected.
This will benefit GeoCities directly by allowing it to switch merchants who
provide a specific type of merchandise without requiring its affiliates to alter
their links, assuming an industry-standard product identification or conversion-
table is available. Secondly, this allows merchants to re-architect their web
sites without invalidating their affiliate links.
Sophisticated affiliates who prefer to work directly with HTML may go to a link
generation section of the Sales Center. In this section they may choose from a
list of available search links, category links, and promotional links. They may
also choose product-specific links using a product search interface, which
allows them to find specific products by category, type, keyword, identifier,
and other criteria. After choosing one or more links, BFAST will generate HTML
fragments and present them to the user to allow them to cut and paste them into
their pages.
18
4. Program Application
GeoCities will collect additional data including a tax identifier from
Homesteaders who wish to join the Affiliates Program. Be Free will accept this
information from GeoCities in the form of URL CGI parameters passed to Be Free
after the Homesteader submits a registration form. Members may go directly to
link generation or any other area of the Sales Center requiring a log in
immediately, assuming that their authentication information exists in the
GeoCities cookie. This will permit members to log in under the single GeoCities
member name and will provide a unified and seamless log in across the Sales
Center as well as all other areas of GeoCities.
5. Affiliate Reporting
Be Free offers web-based reports to affiliates for sales, marketing, and
merchandising performance analysis and improvement. These reports are accessed
through an entirely HTML interface and are optimized for web-based performance.
The XXXXXXXXX.XXX documentation shall serve as the functional specification for
these reports:
. Product Activity
. Revenue (Detail)
. Revenue (Summary)
. Sales (Daily)
. Best Sellers
. Traffic
. Link Success
. Merchandise Type
6. Account Management
Affiliates need only to maintain a single record of account information despite
relationships with multiple merchants. Be Free will provide an Account
Management section of the sales center that allows affiliates to maintain their
affiliate profiles.
C. GeoBuilder Integration
GeoCities wishes to offer seamless integration of affiliate opportunities into
the GeoBuilder toolkit and wishes to maintain the look, feel, and functionality
of the presentation layer. Be Free will provide the integration by serving link
generation pages into a frame of the GeoBuilder interface. The business case,
functional specification, and graphical specification are to be provided to Be
Free by GeoCities.
19
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
D. Merchant Categories
GeoCities wishes to define merchant categories and provide differential
affiliate and merchant functionality based on category. The business case,
functional specification, and graphical specification are to be provided to Be
Free by GeoCities.
E. Merchant Integration
1. Quickstart Guide
Be Free will re-brand its Quickstart Integration Package with the GeoCities
brand and provide it to the merchants with whom GeoCities contracts with to
provide specific merchandise types to the GeoCities Affiliates Program.
2. Merchant Integration Services
Merchants with Existing Programs. GeoCities shall notify Be Free within a
reasonable period of time following execution of each Merchant Agreement. Be
Free shall promptly provide GeoCities with a detailed integration plan ("MIP").
GeoCities shall accept or reject such MIP without unreasonable delay. Be Free
shall integrate Merchants with Existing Programs into the GeoCities Affiliates
Program in accordance with the MIP. GeoCities shall compensate Be Free for
these services at a pro-rated rate of [**] per qualified technician per day
(minimum eight (8) hours).
Merchants Without Existing Programs. Be Free shall integrate Merchants without
Existing Programs into the GeoCities Affiliates Program on a first-in first-out
basis, unless otherwise agreed by the parties, within seven (7) days after
GeoCities notifies Be Free of the execution of the applicable Merchant
Agreement.
20
EXHIBIT B
SCHEDULE
GeoCities Affiliates Program Phase 1
"Basic" Features; NOT Multi-Leveling Marketing Features (See below)
Schedule of Deliverables and Activities Delivery Dates
--------------------------------------------------------------------------------
Week Deliverable/Objective
Ending
Friday:
--------------------------------------------------------------------------------
1/15 . Both GeoCities and Be Free identify and make available all elements
necessary for overall Program QA process.
. Parties jointly conduct QA activities
. Merchant #1 joins Program; GeoCities provides Merchant #1 contact
(and certain integration) information to Be Free.
--------------------------------------------------------------------------------
1/22 . Program QA process conducted/completed:
Priority #1: Identify, analyze instances non-conformance issues with
respect to functional Specifications (See Exhibit A).
Priority #2: Identify and agree upon features and/or technical
aspects to develop prior to Program Launch in addition to function
Specifications (e.g., GeoBuilder integration; multi-Merchant).
. Perform, complete integration services for Merchant #1.
(Maximum 3 calendar days from commencement).
GOAL: Merchant #1 integrated.
--------------------------------------------------------------------------------
1/29 . Conduct QA on Merchant #1 integration.
. Respond to Priority #1 Program Specification non-conformance.
GOAL: Program Non-Conformance issues resolved.
Program meets all Specifications. (Launch preparations complete.)
--------------------------------------------------------------------------------
21
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXHIBIT C
MULTI-LEVEL MARKETING (MLM)
FEATURES
A. Multi-Level Marketing Program Specifications
1. Overview
Be Free will provide services to GeoCities to support a [**] multi-level
marketing program to be used with the Pages that Pay program. These services
will enable a merchant to reward affiliates for their own sales, and for the
sales of affiliates who they recruit to the program, and other affiliates
subsequently recruited by those affiliates recruited by the affiliate. Be Free
will create link-generation and reporting capabilities that will allow GeoCities
affiliates and merchants to track activity and sales results of the program.
2. Definitions
Generation: The level of ancestry of a given Descendant Affiliate with respect
to a given Affiliate. (For example, if Affiliate W recruits Affiliate X and Y,
and Affiliate Y recruits Affiliate Z, W is generation 1, X and Y are generation
2, Z is generation 3. (Referring Member: A member who displays an Affiliate
Recruitment Link.
Ancestor Affiliate: The affiliate who referred a given Descendant Affiliate, or
any of the Descendant Affiliate's Ancestors, [**] of Ancestry.
Descendant Affiliate: Any affiliate referred by a given Ancestor Affiliate, or
referred by any of the Ancestor Affiliate's Descendants, [**] of Ancestry.
3. Application Source Tracking
For applications that result from Members clicking on an Affiliate Recruitment
Link, the system shall track the identification of the member displaying the
Affiliate Recruitment Link. For applications resulting from direct navigation
to the application page not through an affiliate application link, the system
shall allow the applicant to identify the Referring Member directly.
22
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
4. Multiple Generation Commission Rate Structure
The system shall enable the merchant to enter commission rates for [**] levels,
and will process that information to calculate commissions according to rates
specified by the merchant. The system will provide functionality to allow a
merchant to designate the maximum number [**] to be compensated under the
commission structure, [**].
5. Link Generation
Be Free will make available a means for affiliates to generate Affiliate
Recruitment links to the Pages that Pay application page that track the
Referring Affiliate. Be Free will also make available a means of automatically
presenting all new Pages that Pay applicants with an Affiliate Recruitment link
at the end of the application process.
6. Reporting
Be Free will make available reports for affiliates, merchants and GeoCities that
allow them to track the activity and commissions generated by the multi-level
marketing program.
SCHEDULE OF DELIVERY DATES
-------------------------------------------------------------------------------
WEEK OBJECTIVE; DELIVERABLE
ENDING
FRIDAY:
-------------------------------------------------------------------------------
1/22 GeoCities provides Be Free with MLM features functional
specifications
-------------------------------------------------------------------------------
2/12 Parties identify MLM Development and Implementation plan
(including priorities, changes (if any) to MLM specifications, target
dates).
-------------------------------------------------------------------------------
2/19 Begin implementing MLM Development and Integration Plan
-------------------------------------------------------------------------------
23
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXECUTION COPY
--------------
ADDENDUM AND AMENDMENT NO. 1 TO
GEOCITIES AFFILIATES PROGRAM
LICENSE AND SERVICES AGREEMENT
This Addendum and Amendment No. 1 ("Amendment") to GeoCities Affiliates
Program License and Services Agreement is entered into as of January 26, 1999
("Amendment Date") by and between Be Free, Inc. ("Be Free"), located at 000
Xxxxxx Xxxx Xxxx Xxxx, Xxxxxxxxxxx, XX 00000 and GeoCities ("GeoCities"),
located at 0000 Xxxxxxx Xxxxxx, Xxxxxx xxx Xxx, XX 00000.
WHEREAS, Be Free and GeoCities entered into the GeoCities Affiliates
Program License and Services Agreement dated as of January 13, 1999
("Agreement"); and
WHEREAS, Be Free and GeoCities have agreed to supplement and modify certain
provisions of the Agreement with the remaining provisions in full force and
effect:
NOW THEREFORE, the parties agree to amend the Agreement as follows:
B. Any capitalized terms not otherwise defined in this Amendment shall have
the meaning set forth in the Agreement.
C. Certain Definitions. Section 1 is hereby amended as follows:
-------------------
1. The definition of "Hot Swapping" in the eleventh (11th) paragraph of
the Agreement shall be deleted.
2. A new sentence shall be added to the Agreement at the end of Section 1
as follows:
"Multi-Merchant Aggregation" means a feature or set of features,
substantially the same as those services or Deliverables described in
Exhibit A to the Agreement as amended that allows brokering of a relationship
---------
between an affiliate and more than one merchant and includes affiliate links
directly to the associated merchant site."
D. Be Free Services.
----------------
1. Section 2 of the Agreement is hereby amended by inserting before
Section 2.1 the following sentence:
"Be Free's performance of the services pursuant to this Agreement shall be
on behalf of GeoCities only."
2. Check Writing Services. Section 2.3.1 of the Agreement is hereby
amended by replacing the first sentence with the following paragraph:
"Upon GeoCities' request, Be Free shall perform its customary check writing
services (described below) in connection with the GeoCities Affiliates
Program, provided that (i) each check generated by Be Free shall reflect
aggregate amounts payable by one or more Merchants, (ii) the documentation
delivered to each Affiliate with such check shall contain a break-down of
the amount owed to the Affiliate by individual Merchants and the amount
paid by each such Merchant included within the aggregate amount of such
check, (iii) Be Free shall establish a system enabling Merchants to submit
Affiliate payments to a central fund for GeoCities' approval of
disbursements to Affiliates and (iv) Be Free shall identify Merchants who
have, and Merchants who have not, paid into such central fund amounts owed
to Affiliates and shall establish a mechanism for notifying nonpaying
Merchants of their payment obligations. Be Free shall comply with
GeoCities' standard trademark license agreement and GeoCities standard
trademark usage guidelines."
3. Section 2.3.2 of the Agreement is hereby amended by adding after the
words "affiliate management services" in line 2 "as described in Exhibit A to
the Agreement as amended."
4. Section 2.4 of the Agreement is hereby amended and restated as
follows:
"Be Free shall perform the services required herein in a professional and
xxxxxxx-like manner and in accordance with current standard industry
practice and the terms of the Service Level Agreement set forth in Exhibit
11 to the Agreement as amended."
X. Xxxxx to Be Free. Section 3.3 of the Agreement is hereby amended by
----------------
replacing the first sentence with the following sentence:
"GeoCities hereby grants Be Free a worldwide, nontransferable,
nonsublicensable, nonexclusive, fully paid-up right and license to use the
GeoCities Data solely for the purpose of fulfilling its obligations under
this Agreement; provided that all such use shall be strictly in accordance
with the FTC Order."
2
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
F. Exclusive Features. Section 4.1 of the Agreement is hereby amended and
------------------
restated as follows:
"Be Free shall not make Multi-Merchant Aggregation available to any
GeoCities Competitor for the period beginning on the Effective Date and
continuing for twelve (12) months following the date on which Be Free first
makes Multi-Level Aggregation available to GeoCities in a form that
complies with the specifications set forth in Exhibit A to the Agreement as
amended. Be Free shall not make Multi-Level Marketing available to any
third party for the period beginning on the Effective Date and continuing
for twelve (12) months following the date on which Be Free first makes
Multi-Level Marketing available to GeoCities in a form that complies with
the specifications set forth in Exhibit C to the Agreement as amended. Be
Free shall be the exclusive provider of the primary affiliate network
services to GeoCities in connection with the GeoCities Affiliates Program."
G. Be Free Behavioral Targeting Technology. Section 4.2 of the Agreement is
---------------------------------------
hereby amended as follows:
1. The following sentence shall be added to Section 4.2 of the Agreement
following the first sentence:
"For purposes of this Agreement, 'disaggregated format' shall mean (i) any
format, collection or organization of data from which such data may be
identified as having been collected from, or attributable to, the GeoCities
Web site ("GeoCities Site") or (ii) any format, collection or organization
of data collected from the GeoCities Site from which one or more specific
individuals may be identified or contacted using the Internet or
otherwise."
2. A new Section 4.2.1 shall be added to the Agreement as follows:
"Subject to Section 4.5, Be Free (i) shall [**] Be Free Behavioral
Targeting Technology and (ii) shall [**] Be Free Targeting Technology to
[**] during the period beginning on the date GeoCities [**] described in
Section 4.5 and ending 120 days after the date [**]."
H. New Be Free Technology. A new Section 4.3 shall be added to the Agreement
----------------------
as follows:
3
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
"Subject to Sections 4.5 and 8, GeoCities shall [**] all new technologies
and services developed, conceived or reduced to practice by Be Free ("New
Be Free Technology"). The parties shall meet at least once each calendar
quarter during the term of the Agreement for the purpose of [**]; provided,
however, nothing in this Section 4.3 shall be construed as requiring Be
Free to take any action in violation of any obligation of confidentiality
or non-disclosure to a third party. GeoCities' rights under this Section
4.3 shall expire upon a Change of Control of Be Free; provided, that in
connection with such Change of Control, all shares of capital stock of
GeoCities are purchased for cash at the then current fair market value in
connection with such Change of Control. For purposes of this Section 4.3,
"Change of Control" shall have the meaning ascribed to that term in the
principal operative agreement for the investment described in Section 4.5."
I. New GeoCities Business Models. A new Section 4.4 shall be added to the
-----------------------------
Agreement as follows:
"Subject to Sections 4.5 and 8, during the [**], GeoCities will [**]
(whether by GeoCities or Be Free), that are [**] the GeoCities Affiliates
Program or otherwise made widely available by Be Free through the GeoCities
Site. GeoCities shall have [**] for a period of [**] after it is
incorporated by Be Free into the GeoCities Affiliates Program or otherwise
made widely available by Be Free through the GeoCities Site. The parties
agree to use reasonable efforts [**]."
J. GeoCities' Investment. A new Section 4.5 shall be added to the Agreement
---------------------
as follows:
"Sections 4.2.1, 4.3 and 4.4 shall be effective only if GeoCities has made
an equity investment in Be Free (i) in the amount of seven million seven hundred
twenty thousand six hundred forty-seven ($7,720,647) (based upon a premoney
valuation of $75 million), or (ii) another amount mutually agreeable to Be Free
and GeoCities."
K. Referral Fees. Section 5.6 of the Agreement is hereby amended and restated
-------------
as follows:
4
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
"The parties acknowledge that Be Free may, from time to time, enter into
business relationships with Merchants outside the scope of their
involvement in the GeoCities Affiliates Program during the term of the
Agreement. In such cases, Be Free shall pay GeoCities the following
referral fees based upon the revenues from transactions fees (excluding
installation and training fees) generated by each such Merchant during the
[**] period following the date on which such Merchant begins making
payments to Be Free:
Applicable
Merchant Referral Fee
-------------------------------------------- ------------
First [**] Merchants integrated during the [**]
term of the Agreement
Second [**] Merchants integrated during the [**]
term of the Agreement
[**] and subsequent Merchants integrated [**]
during the term of the Agreement
L. Dedicated Development Team. Section 7 of the Agreement is hereby amended
---------------------------
as follows:
1. The first sentence of the first paragraph shall be replaced with the
following sentence:
"Be Free shall establish a dedicated team of engineers with appropriate
experience and qualifications, the number of such engineers shall be at
GeoCities' discretion, (collectively, the "Development Team") to perform
services related to the development, support, maintenance and other
services relating to [**] as well as any other development
project as requested by GeoCities."
2. The first sentence of the second paragraph shall be replaced with the
following sentence:
"The first $[**] of costs associated with the services relating to [**] and
other services performed by the Development Team shall be billed at [**]."
5
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
M. Representations and Warranties.
------------------------------
1. Section 10.1 of the Agreement is hereby amended by adding the
following clause (iv) at the end of such Section:
"and (iv) it shall comply with all applicable laws, rules and regulations,
domestic and foreign, pertaining to the performance of its obligations
under the Agreement and the conduct of such party in the GeoCities
Affiliates Program."
2. Section 10.2 of the Agreement is hereby amended by adding the
following clause (v) at the end of the paragraph:
"and (v) it shall [**], in a disaggregated format (as defined in Section
4.2), [**] any data derived from use of the Be Free Behavioral Targeting
Technology."
N. Indemnification. Replace the second sentence of Section 11.2 with the
---------------
following sentence:
"Be Free shall defend, indemnify and hold harmless the GeoCities
Indemnitees from and against any and all Losses the GeoCities Indemnitees
may incur based upon, arising out of, attributable to, or resulting from Be
Free's (a) willful act or omission resulting in GeoCities' violation of the
FTC Order, (b) material breach of this Agreement resulting in GeoCities'
violation of the FTC Order, other than a breach by Be Free reasonably
related to any act or omission by GeoCities constituting a violation of the
FTC Order (excluding acts or omissions by Be Free attributed to GeoCities
under the FTC Order), (c) collection or use of information from Affiliates,
other than (i) GeoCities Data and (ii) information contained in a GeoCities
Affiliate Program application or other standard form expressly approved
beforehand by the parties (including any updates to the foregoing
information), or (d) any breach of Section 4.2 (excluding Section 4.2.1
thereof) or of Section 13.2."
6
O. Technology Escrow.
-----------------
1. Section 12.1 of the Agreement is hereby amended and restated as
follows:
"Source Code Escrow. The parties shall establish an escrow of the source
code to the Licensed Materials and any other software required for Be Free
to perform its obligations under this Agreement ("Source Code"), by entering
into an escrow agreement with Data Securities International, Inc. ("DSI")
and depositing the Source Code with DSI. Notwithstanding any other term of
the escrow agreement: (a) Be Free shall be obligated to promptly deposit
into escrow any update of the Source Code and (b) the deposited Source Code
shall be released to GeoCities only if Be Free files for or becomes subject
to a proceeding under Chapter 7 of the United States Bankruptcy Code."
2. New Section 12.1.1 shall be added to the Agreement as follows:
"Source Code License. Be Free hereby grants to GeoCities a perpetual,
irrevocable, royalty-free, non-exclusive, worldwide license of Be Free's
intellectual property rights in the Source Code to perform or have performed
all services contemplated to be provided by Be Free under this Agreement;
provided, however, GeoCities shall not exercise its rights under the
foregoing license in any respect until the release of the Source Code
pursuant to Section 12.1 and the escrow agreement."
3. New Sections 12.2 and 12.2.1 shall be added to the Agreement as
follows, and Section 12.2 (Operational Inspection) shall be renumbered as 12.3
and amended and restated as set forth below:
"12.2 Object Code Escrow. The parties shall establish an escrow of the
object code to the Licensed Materials and any other software required for
Be Free to perform its obligations under this Agreement ("Object Code"), by
entering into an escrow agreement with Data Securities International, Inc.
("DSI") and depositing the Object Code with DSI. Notwithstanding any other
term of the escrow agreement: (a) Be Free shall be obligated to promptly
deposit into escrow any update of the Object Code and (b) the deposited
Object Code shall be released to GeoCities only if Be Free commits an
Object Code Release Breach of the Service Level Agreement (as defined
therein), unless GeoCities has elected to terminate this Agreement.
7
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
12.2.1 Object Code License. Be Free hereby grants to GeoCities a non
exclusive, worldwide license of Be Free's intellectual property rights
in the Object Code for the term of this Agreement to perform or have
performed the services contemplated to be provided by Be Free under
Section 2 of the Agreement; provided, however, GeoCities pays [**] the
amounts otherwise payable by GeoCities pursuant to Section 5. Be Free
shall provide customary software maintenance services in accordance with
general industry standards free of charge with respect to the Object
Code during the term of this license."
12.3 Operational Inspection. If Be Free files for or becomes subject to a
proceeding under Chapter 11 of the United States Bankruptcy Code, commits
an Operational Inspection Breach of the Service Level Agreement (as defined
therein) or makes an assignment for the benefit of its creditors, GeoCities
may conduct an inspection of Be Free's facilities and operations to
determine the resources needed to exercise the rights contemplated under
Section 12.1, including without limitation, review of connectivity,
hardware resources, human resources, software program applications, and
their documentation, other than a review of Source Code. Be Free shall
cooperate in good faith and assist GeoCities in conducting this
inspection."
P. FTC Order.
---------
1. Section 13.1 is hereby amended by replacing the first sentence with
the following sentence:
"The parties acknowledge the existence of the FTC Order and Be Free
acknowledges that it has received a copy of the FTC Order and is aware of
its provisions.
2. Section 13.2 is hereby amended by replacing clause (A) with the
following words:
"(A) promptly complies in all respects with the Request, of"
3. A new Section 13.3 shall be added to the Agreement as follows and
current Section 13.3 shall be renumbered as Section 13.4:
"Notwithstanding the foregoing, if at any time, (a) GeoCities requests Be
Free to (i) discontinue using or disclosing any personal identifying
8
information of a child (age 12 or under) obtained through use of the
GeoCities Site, or (ii) remove any such information from its databases and
(b) BeFree has failed to (1) discontinue using or disclosing such personal
identifying information, or (2) remove any such information from its
databases, in the case of (1) and/or (2), as soon as practicable (it being
understood that Be Free shall assign such request the highest priority),
GeoCities shall be permitted to terminate this Agreement without any
recourse by Be Free and such termination shall not be subject to payment of
the Termination Fee."
4. Current Section 13.3 (being renumbered as Section 13.4 in accordance
with the foregoing) is hereby amended by adding the following sentence at the
end of such Section:
"For this purpose, at any time during the term of this Agreement, the
authorized officers of GeoCities shall be limited to the Chief Executive
Officer, the Chief Financial Officer and the General Counsel of GeoCities,
and the authorized officers of Be Free shall be limited to the Chief
Executive Officer, the Chief Financial Officer, the Executive Vice
President, Technology and the Executive Vice President, Business
Development of Be Free."
5. A new Section 13.5 shall be added to the Agreement as follows:
"Be Free acknowledges GeoCities' obligation to maintain a privacy statement
on the GeoCities Site, and to update that privacy statement from time to
time in order to reflect any changes in the GeoCities Site's content and
operations relating to, among other things, the collection and use of
information, and applicable law. At least seven (7) and no more than
twenty-one (21) days before Be Free Behavioral Targeting Technology is
incorporated in the GeoCities Affiliates Program, Be Free shall provide
GeoCities with a description of Be Free Behavioral Targeting Technology
that is sufficient to enable GeoCities to update its privacy statement to
accurately disclose the relevant changes. Thereafter, Be Free shall assist
GeoCities in good faith in maintaining the accuracy of GeoCities' privacy
statement during the term of this Agreement, keep GeoCities apprised of
proposed and actual changes in the Be Free Behavioral Targeting Technology
that affect the collection or use of information, and provide reasonable
notice of material changes it proposes to make to Be Free Behavioral
Targeting Technology in order to allow GeoCities to update its privacy
statement prior to implementation of the changes.
Q. Termination. Section 14.1 of the Agreement is hereby amended and restated
-----------
as follows:
9
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
"This Agreement will remain in effect, unless earlier terminated in
accordance with Section 14.2 or Section 14.3, from the Effective Date for
of period of three (3) years."
R. Termination for Cause. Section 14.2 is hereby amended and restated as
---------------------
follows:
"GeoCities may immediately terminate this Agreement upon an Object Code
Release Breach (as defined in the Service Level Agreement), unless
GeoCities elects to receive the license provided under Section 12.2.1. In
addition to the foregoing, either party may terminate this Agreement in the
event of a material breach by the other party of its material obligations
under this Agreement following [**] notice, unless such breach is cured
within such [**] period. If GeoCities terminates this Agreement in
accordance with this Section 14.2, GeoCities shall have no obligation to
pay any Termination Fee."
S. Effects of Termination. Section 14.4 of the Agreement is hereby amended by
-----------------------
inserting "12.1.2 (Source Code License) (if such Source Code is then being, or
has previously been, duly released from escrow)" after "(Limitation of
Liability)".
T. General. The Agreement, as modified by this Amendment, together constitute
-------
the entire Agreement between the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements between the
parties in connection with the subject matter hereof Except as otherwise
provided in this Amendment, the terms of the Agreement shall remain in full
force and effect. This Amendment may be executed in two or more counterparts,
each of which shall be an original and all of which shall constitute one and the
same instrument.
U. Amendment Controls. To the extent any of the terms set forth in this
------------------
Amendment conflict with the terms of the Agreement, the terms of this Amendment
shall control.
10
IN WITNESS WHEREOF, the parties have executed this Amendment as of Amendment
Date.
GEOCITIES BE FREE, INC.
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------- --------------------------
Name: Xxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
----------------------- -----------------------
Title: VP Title: CEO
-------------------------- -----------------------
11
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
ADDENDUM AND AMENDMENT NO. 2 TO
GEOCITIES AFFILIATES PROGRAM
LICENSE AND SERVICES AGREEMENT
This Addendum and Amendment No. 2 ("Amendment No. 2") to GeoCities Affiliates
Program License and Services Agreement is entered into as of 6/25, 1999
("Amendment No. 2 Effective Date") by and between Be Free, Inc., located at 000
Xxxxxx Xxxx Xxxx Xxxx, Xxxxxxxxxxx, XX 00000 ("Be Free"), and GeoCities,
located at 0000 Xxxxxxx Xxxxxx, Xxxxxx xxx Xxx, XX 00000 ("GeoCities").
WHEREAS, Be Free and GeoCities entered into the GeoCities Affiliates Program
License and Services Agreement dated as of January 13, 1999, as amended by that
certain Addendum and Amendment No. 1 as of January 26, 1999, (the "Amended
Agreement"); and
WHEREAS, Be Free and GeoCities have agreed to supplement and modify certain
provisions of the Amended Agreement as set forth in this Amendment No. 2 with
the other provisions remaining in full force and effect.
NOW THEREFORE, the parties agree to amend the Amended Agreement as follows:
V. Any capitalized terms not otherwise defined in this Amendment No. 2 shall
have the meaning set forth in the Amended Agreement.
1. Certain Definitions. Section 1 of the Amended Agreement is hereby
-------------------
amended by adding the following definition:
"GeoCities Subdomain" means that portion of the GeoCities domain which is
accessible at the Uniform Resource Locator."
W. GeoCities Subdomain. A new Section 2.5 shall be added to the Amended
-------------------
Agreement as follows:
"During the Term of the Agreement, Be Free shall cause each Link generated
in conjunction with the GeoCities Affiliates Program to be directed to the
GeoCities Subdomain and shall otherwise utilize the GeoCities Subdomain to
the fullest extent possible in Be Free's performance of services relating
to the GeoCities Affiliates Program. Be Free shall not use, or permit any
third party to use, the GeoCities Subdomain for the benefit of any person
or entity other than GeoCities during the term of the Agreement [**].
X. Merchant Data Transfer Capability. A new Section 2.6 shall be added to the
---------------------------------
Amended Agreement as follows:
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
"GeoCities reserves the right to require Merchants to direct any data
necessary for Be Free to perform services relating to the GeoCities
Affiliates Program, to GeoCities. GeoCities shall be responsible for
promptly forwarding such data to Be Free."
Y. Be Free Behavioral Targeting Technology. Section 4.2.1 of the Amended
---------------------------------------
Agreement is hereby amended and restated in its entirety as follows:
"Be Free (i) shall provide GeoCities the first opportunity to test and
license, subscribe to or otherwise receive access to the Be Free Behavioral
Targeting Technology and (ii) shall not provide the Be Free Targeting Technology
to any GeoCities competitor for a period of 120 days beginning on the date that
Be Free first makes a commercial version of the Be Free Targeting Technology
available to GeoCities for use by way of an offer for a license, subscription or
otherwise."
Z. New Be Free Technology. The first sentence of Section 4.3 of the Amended
----------------------
Agreement is hereby deleted and replaced with the following:
"Be Free shall [**] Be Free [**] Be Free [**] ("New Be Free Technology").
GeoCities' use and disclosure of any such information pertaining to New Be
Free Technology shall be subject to the restrictions set forth in Section 8
of this Agreement. Be Free's obligations under this Section 4.3 shall not
require Be Free's disclosure of any information that it is prohibited from
disclosing pursuant to a written agreement with a third party."
AA. New GeoCities Business Models. Section 4.4 of the Amended Agreement
-----------------------------
is hereby amended and restated as follows:
"Subject to Section 8, during the [**] period following the Effective Date,
[**], that are [**] (iii) not obvious to a person of ordinary skill [**].
GeoCities shall [**] after it is [**] or otherwise made widely
available[**]. The parties agree to use reasonable efforts to document
other origins of each such new business model, product service and
improvement. In the event of a dispute as to whether any such business
model, product, service or improvement is not obvious a provided in clause
(iii) above, either party may submit such dispute to mediation for
resolution by notifying the other party in writing of its desire to
initiate mediation. The mediation shall be conduced in San Francisco,
California under the auspices of JAMS/Endispute. The mediator shall have
experience in intellectual property law and the Internet and shall be
reasonably acceptable to both parties. Neither party shall be permitted to
conduct any discovery in connection with the mediation. Each party shall
have a maximum of four (4) hours to present its case and the mediator shall
decide the dispute within thirty (30) days of the conclusion of the
parties' presentation of the dispute. The mediation proceedings shall be
confidential, and the mediator may not testify for either party in any
later proceeding
2
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
relating to the dispute. The mediator shall be empowered solely to decide
whether the business model(s), product(s), service(s) and/or improvement(s)
in question is/are not obvious as provided in clause (ii) above. The
mediator is not empowered to award damages in favor of either party. Each
party shall bear its own costs in the mediation. The fees and expenses of
the mediator shall be shared equally by the parties."
BB. Investment; Exclusivity. Section 4.5 of the Amended Agreement shall
-----------------------
be deleted in its entirety.
CC. [**] Client/Pricing. A new Section 5.7 shall be added to the
-------------------
Amended Agreement as follows:
"During the term of this Agreement, [**] provided hereunder [**] set forth
in this Agreement [**]."
DD. Change of Control. Section 15 of the Amended Agreement shall be
-----------------
amended by inserting "or if [**]" in the first sentence after "is reasonably
likely to occur".
EE. Yahoo Store Integration. A new Section E(3) shall be added to Exhibit
-----------------------
A (Specifications) of the Amended Agreement as follows:
"Within fifteen (15) days following a request by GeoCities, Be Free shall
commence taking the necessary steps to integrate Merchants utilizing Yahoo
Stores features into the GeoCities Affiliates Program and Be Free shall
diligently continue such efforts until the integration is completed. Such
integration shall enable such Merchants to participate in the GeoCities
Affiliates Program directly through Yahoo Stores to the same extent as
other Merchants including, without limitation, integration in the data
transfer and report access features of the GeoCities Affiliates Program."
FF. General. The Amended Agreement, as modified by this Amendment No. 2,
-------
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements between
the parties in connection with the subject matter hereof. Except as otherwise
provided in this Amendment No. 2, the terms of the Amended Agreement shall
remain in full force and effect. This Amendment No. 2 may be executed in two or
more counterparts, each of which shall be an original and all of which shall
constitute one and the same instrument.
3
GG. Amendment No. 2 Controls. To the extent any of the terms of this
------------------------
Amendment No. 2 conflict with Amended Agreement, the terms of this Agreement No.
2 shall control.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 as of
Amendment No. 2 Effective Date.
GEOCITIES BE FREE, INC.
By: /s/Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
------------------------ ----------------------------
Title: VP Title: CEO
------------------------ --------------------------
4
