IP Telephony Services Distribution and Interactive Marketing Agreement - AOL Inc. and Net2Phone Inc.
EXECUTION VERSION
CONFIDENTIAL
IP TELEPHONY SERVICES DISTRIBUTION AND INTERACTIVE MARKETING AGREEMENT
This IP Telephony Services Distribution and Interactive Marketing
Agreement (this "Agreement"), dated as of November 19, 1999 (the "Effective
Date"), is between AOL, Inc., a Delaware corporation, with offices at 22000 AOL
Way, Dulles, Virginia 20166 ("AOL"), and Net2Phone, Inc. ("N2P"), a Delaware
corporation, with offices at 171 Main Street, Hackensack, NJ 07601. AOL and N2P
may be referred to individually as a "Party" and collectively as the "Parties."
INTRODUCTION
AOL is a provider of online communication services, including the AIM
Service. N2P is a provider of various IP Telephony services. The Parties wish
for N2P to develop and provide to AOL a customized version of certain N2P
Services that can be distributed through the AIM Service so as to enable AIM
Members to send and receive free, or low cost, Internet-enabled telephony
communications. This relationship is further described below and is subject to
the terms and conditions set forth in this Agreement. Defined terms used but not
defined in the body of the Agreement shall have the meanings ascribed to such
terms in Exhibit A hereto.
TERMS
1. AIM IP TELEPHONY SERVICES GENERALLY
1.1 Description of AIM IP Telephony Services. The N2P Services to
be offered collectively as the customized AIM IP Telephony
Services shall be comprised of the following:
1.1.1. PC-to-Fax Service. A PC-to-fax calling service
whereby AIM Members may send faxes from their PCs to a
facsimile machine of a third party.
1.1.2 Fax-to-PC Service. A fax-to-PC calling service
whereby AIM Members may receive faxes through their PCs from a
facsimile machine of a third party.
1.1.3. PC-to-Phone Service. A PC-to-telephone calling
service, which shall allow any AIM Member to originate a voice
conversation on an Internet-enabled PC (through use of the AOL
IP Telephony Software as distributed through the AIM Service
in accordance with the terms of this Agreement) and terminate
such conversation on a telephone located virtually anywhere in
the world (the "PC-to-Phone Service").
1.1.4. Phone-to-PC Service. A telephone-to-PC calling
service, which shall allow any AIM Member to originate a voice
conversation from a telephone and terminate such voice
conversation on an Internet-enabled PC (through use of the AOL
IP Telephony Software as distributed through the AIM Service
in accordance with the terms of this Agreement) (the
"Phone-to-PC Service"). Such calls shall be initiated by any
such AIM Member by dialing a local and/or toll-free N2P access
number (i.e., a local POP) and entering any such AIM Member's
account number and PIN, and then the number of the receiving
party. The Phone-to-PC Service generally shall enable
telephone conversations with any AIM Member online even if
such AIM Member is also using his or her only telephone line
for online access.
1.1.5. Phone-to-Phone Calling Card Service. A
telephone-to-telephone calling card service using IP
Telephony, which shall allow any AIM Member to call a third
party
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by dialing a local and/or toll-free N2P access number (i.e.,
local POP) and entering the AIM Member's account number and
PIN, and then dialing the phone number of the person whom such
AIM Member is calling (the "PTP Calling Card Service"). The
PTP Calling Card Service shall use the AIM Card (as defined in
Section 4.3). For the avoidance of doubt, the Parties
acknowledge that the PTP Calling Card Service shall include
fax-to-fax service.
1.1.6. Conference Calling Service. A conference
calling service, which shall allow conference calls initiated
from a combination of phones and/or Internet-enabled PCs (the
"Conference Calling Service").
1.1.7. Fax-to-Fax Service. A fax-to-fax service using
IP Telephony which shall allow any AIM Member to fax a third
party by dialing a local and/or toll-free N2P access number
(i.e., local POP) and entering the AIM Member's account number
and PIN, and then dialing the fax number of the person to whom
such AIM Member is sending a fax, which uses the AIM Card,
pursuant to Section 1.1.5.
1.1.8. Optional Services.
(a) AOL shall provide N2P with a [****] with
respect to the provision of the following additional
services as additional AIM IP Telephony Services:
[****] the AIM Client or the Worldwide Web; (iv)
[****] (the [****] aforementioned services,
collectively, the "Optional Services" and each, an
"Optional Service"). [****]
(b) At any point during the Term, AOL shall
have the option, but not the obligation, in AOL's
sole discretion to include the PC-to-PC Service as
part of the AIM IP Telephony Services. In such event,
AOL agrees that N2P shall provide such PC-to-PC
service, and such PC-to-PC Service shall constitute
an additional Core Premium Service, according to the
terms and conditions set forth in this Agreement
pursuant to such Core Premium Services.
Such PC to PC Service shall be provided to AIM
Members without a per minute or other similar charge.
(c) In addition to the foregoing, if during
Year One or Year Two AOL develops and implements
third party AIM talk functionality into a directory
for AIM Members within the AIM Service, and such
directory is fully-owned or controlled by AOL and
does not link to any third party site (excluding any
third party data source), and AOL elects, in its sole
discretion, to include IP Telephony Services in such
directory (the "Click to Talk Service"), then N2P
shall provide such Click To Talk Service, and such
Click To Talk Service shall constitute an additional
Core Premium Service, according to the terms and
conditions set forth in this Agreement, at no charge
to AOL or AIM Members.
(d) Notwithstanding the foregoing, the
provision of such PC to PC Service or any other Core
Premium Service by N2P shall not be designed to
compromise the [****].
N2P acknowledges, for the avoidance of doubt, that the right to access
the AIM IP Telephony Services initially [****] to AIM Members, provided
that N2P reserves the right [****] consistent with its obligations
under Sections 3.1 and 3.3. In addition to the foregoing services, N2P
shall (i) provide APIs, or SDKs, as the case may be, and (ii) to the
extent commercially reasonable (a) provide connection for AOL to N2P's
local equipment and (b) assist finding space for AOL and its Affiliates
to locate equipment along with or near N2P's local equipment to enable
AOL and its partners to link into aspects or features of the AOL IP
Telephony System to provide related services (e.g., voice messaging);
provided, however, that any such arrangement shall be subject
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to the mutual agreement of the Parties as to the reasonable terms and
conditions for such arrangement.
1.2 Performance. Each Party shall cause all aspects of the AIM IP
Telephony Services within its control, including customer
service and billing, network coverage and performance and
fraud detection, to comply in all material respects with the
applicable standards set forth on Exhibits B, C and D.
1.3 Launch Cutoff
1.3.1 Cutoff Dates. N2P shall cause (i) the PTP
Calling Card Service to be fully prepared for launch on the
AIM Service within [****] following the Effective Date; and
(ii) each of the Secondary AIM IP Telephony Services to be
fully prepared for launch on the AIM Service by the respective
cutoff dates therefor set forth on Exhibit I to this Agreement
(each such date in clauses (i) and (ii) above, a "Cutoff
Date," and collectively, the "Cutoff Dates"). If any Core
Premium Service is not fully prepared for launch by the
applicable Cutoff Date in any particular country, AOL shall
have the right to terminate the exclusivity (as set forth in
Section 9 of this Agreement) with respect to such Core Premium
Service in that country, and thereby enter into an agreement
with any third party (including a N2P Competitor) with respect
to such Core Premium Service in such country(s); provided,
however, that in the event any such Core Premium Service is
not fully prepared for launch by the applicable Cutoff Date in
the United States, then AOL shall have the right to terminate
the exclusivity worldwide (as set forth in Section 9 of this
Agreement) with respect to such Core Premium Service(s) that
is or are not fully prepared for launch by the applicable
Cutoff Date , and thereby enter into an agreement with any
third party (including a N2P Competitor) with respect to such
Core Premium Service(s).
1.3.2 AOL Assistance. To the extent that it shall be
reasonably necessary for AOL to undertake any activities
within AOL's reasonable control (including providing
information or materials) reasonably requested by N2P in order
to enable N2P to fulfill its development and deployment
obligations and meet any Cutoff Date, AOL shall undertake any
such activities in a timely manner.
1.3.3 Excusable Delays. Each applicable Cutoff Date
and N2P's obligation to provide the Core Premium Services
thereafter (together with any rights of AOL related thereto,
including, without limitation, any right to terminate this
Agreement or any exclusivity hereunder) shall be deemed
extended, subject to the remainder of this Section 1.3.3, to
the extent (and only for the duration in which): (i) AOL fails
to undertake the reasonably requested and reasonably necessary
activities described in Section 1.3.2 with respect to any Core
Premium Service, and N2P has provided AOL with reasonable
informal notice (e.g., by e-mail message to the AOL Technical
Liaison or through discussion at the quarterly meetings
described in Section 2.8) of such failure and of its causal
effect on N2P's ability to meet any such Cutoff Date (an "AOL
Delay"); (ii) there is (or is reasonably expected to be) a
U.S. or other regulation which would prevent N2P from offering
a Core Premium Service (or which such regulation would make it
commercially unreasonable for N2P to offer any such Core
Premium Service (in such country)) (collectively, a
"Regulatory Event"); or (iii) any other Force Majeure Event
occurs. The Parties, through the Management Committee, shall
determine in good faith the period by which the Cutoff Date is
to be extended (or any other obligations or criteria that are
to be affected), if at all, by any of the events described in
this Section 1.3.3; provided, however, that, unless otherwise
agreed by the Parties, the extension of any Cutoff Date
resulting from any Regulatory Event or Force Majeure Event
shall not exceed [****] in the aggregate. In the event that a
Regulatory Event or Force Majeure Event affects N2P
Competitors generally with respect to the provision of the PTP
Calling Card Service, then AOL shall discuss with N2P in good
faith extending the Cutoff Date beyond such [****] period. For
the avoidance of doubt, any extension of a Cutoff Date
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due to an AOL Delay shall be as mutually agreed upon in
writing by the Parties.
1.4 Launch Dates. The Parties shall record the date on which each
AIM IP Telephony Service is launched (each such date, a
"Launch Date") in a written instrument signed by both Parties
promptly following any such Launch Date; provided, however,
that in the event that the Parties cannot agree as to the
definitive Launch Date with respect to a particular AIM IP
Telephony Service, the Parties shall submit such Dispute to
the dispute resolution provisions set forth in Section 17 of
this Agreement.
2. DEVELOPMENT OBLIGATIONS
2.1 Initial Version. The initial version of each of the AIM IP
Telephony Services shall be developed by N2P, by customizing
each of the existing N2P Services as set forth in Sections
1.1.1 through 1.1.7 to conform to the product specifications
set forth in Exhibit B to this Agreement (collectively,
together with such modifications thereto or any such
additional specifications as may be agreed to in writing by
the Parties after the Effective Date, the "Specifications").
As part of such customization, the N2P Services shall be
developed to function in an integrated manner with the
operation of the AIM Client to the extent set forth in the
Specifications or elsewhere in this Agreement (including, but
not limited to, the provision of SDKs to AOL in connection
with Section 10.1.2). Without limiting the foregoing,
throughout the Term, N2P shall support on the AIM Service
(i.e., through integration of voice over IP ("VOIP")
applications) any AOL or third party communications platform
that AOL reasonably requests (i.e., considering the time
necessary for N2P to deliver and the technological
capabilities of N2P or its contractors) from N2P and/or adopts
for the AIM Service, including unified messaging, voice
messaging, audio, video, etc. (the "Platform Support").
[****]. N2P shall cooperate with AOL in documenting and
perfecting all of AOL's rights with respect to such
development, including executing any necessary assignments,
applications or documentation with respect to such
development. Such Platform Support shall include, without
limitation, providing AOL with APIs, SDKs, or other necessary
tool kits to Seamlessly Integrate the AIM IP Telephony
Service(s) into such other AOL platforms and/or communications
functionality as designated by AOL, and shall not constitute
an Additional AOL Modification pursuant to Section 2.3 below.
Notwithstanding the foregoing, in the event that N2P fails to
provide AOL with such Platform Support as set forth in this
Section 2.1, then N2P shall provide AOL with any and all
functionality necessary for AOL (or its contractors) to
perform such Platform Support, in accordance with the Limited
Source Code License set forth in Section 10.2.2.
To the extent that any material conflict exists between (i)
Exhibit B to this Agreement and (ii) the provisions of the
principal body of this Agreement, the principal body of this
Agreement (i.e., Sections 1 through 18 hereof) shall govern.
2.2 Updates.
2.2.1 Notification of Updates. If, during the Term,
N2P develops any Update of any N2P Service that is generally
commercially available to users of the N2P Services, N2P
shall, in each such case, (i) promptly notify AOL of such
Update and (ii) promptly (i.e., in the shortest commercially
reasonable time period) include such Update (provided that
such Update complies with the Specifications or the terms of
this Agreement) in the applicable AIM IP Telephony Service.
2.2.2 No Notification Required. N2P shall not be
obligated to notify AOL of or to provide to AOL any
modification, improvement, addition, deletion, feature or
functionality
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of the N2P Services provided by N2P to another customer if
such modification, improvement, addition, deletion, feature or
functionality is subject to contractual restrictions that
would prohibit N2P from providing it to AOL hereunder. For the
avoidance of doubt, the Parties acknowledge that N2P shall not
be required to notify AOL of or provide to AOL any
modification, improvement, addition, deletion, feature or
functionality of any Optional Service, Expanded Service or
other IP Telephony Service (apart from any Core Premium
Service) unless the Parties have agreed to the provision by
N2P to AIM Members of any such service pursuant to the terms
of this Agreement.
2.2.3 Disagreement. In the event of any disagreement
between the Parties regarding the provision by N2P of any such
Updates to AOL (e.g., as to whether any such Update is
generally commercially available, the length of the time
period in which any such Update is to be implemented, etc.),
such disagreement shall be submitted to the Management
Committee pursuant to Section 17 of this Agreement.
2.3 Additional AOL Modifications.
2.3.1 Definition. AOL may in its discretion, from
time to time during the Initial Term, request that N2P, to the
extent commercially reasonable, (i) add new functionality or
features to any AIM IP Telephony Service(s), (ii) modify
elements related to the AOL GUI (but not elements of the AOL
GUI itself), and/or (iii) modify the AIM IP Telephony Services
in connection with modifications of the AIM Client and AIM
Service (which modifications shall be subject to Section 2.7
and which modifications AOL estimates will occur at least
twice a year), (each of (i), (ii) and (iii) above, an
"Additional AOL Modification"). The Parties agree that any
features, functionality, additions, deletions or other
modifications necessary to be carried out by N2P in order for
N2P to comply with its obligations under Section 3 of this
Agreement (collectively, the "Necessary Modifications") shall
not constitute Additional AOL Modifications and that [****].
2.3.2 Request for Non-Substantial Modification. In
the event that AOL requests Additional AOL Modifications that
N2P reasonably believes would not involve (i) a substantial
cost or expense to N2P (i.e., [****] in the aggregate during
any Year of this Agreement) or (ii) a substantial commitment
of N2P personnel, N2P shall develop the Additional AOL
Modifications in cooperation with AOL on a schedule to be
mutually agreed upon by the Parties. Each Party shall allocate
development resources on a high priority basis to complete
such Additional AOL Modifications in accordance with such
schedule.
[****].
2.3.3 Request for Substantial Modification. In the
event that AOL requests an Additional AOL Modification that
N2P reasonably believes would involve a substantial cost or
expense to N2P, or a substantial commitment of N2P personnel,
the Parties shall negotiate in good faith regarding the
request for such Additional AOL Modification, including,
without limitation, the appropriate schedule for development
and deployment, rights to the results of the development,
interoperability requirements, and the relevant business terms
(e.g., amount of any payments for the development, the revenue
model for the features or functions, etc.). If and when the
Parties reach agreement on the terms and conditions for such
Additional AOL Modification, N2P shall develop the Additional
AOL Modification in cooperation with AOL, and each Party shall
allocate development resources on a high priority basis to
complete such Additional AOL Modification in accordance with
such schedule.
2.3.4 Commissioned Works. Notwithstanding the
foregoing, in the event that the Parties are unable to agree
as to the development or deployment of any Additional AOL
Modification in accordance with Section 2.3.3, AOL shall have
the right during the Initial
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Term to require N2P to assist AOL in securing a mutually
agreed-upon third party to develop any such Additional AOL
Modifications for AOL; provided, however, that either N2P or
(at AOL's option) AOL may perform such development. In the
event that a third party is secured to perform such
development, N2P will use commercially reasonable efforts to
assist such third party in performing such development. Any
development by any such third parties shall not be considered
the responsibility of N2P, and such third parties shall not be
considered contractors of N2P. To the extent that portions of
such Additional AOL Modifications (including intellectual
property rights therein) are developed by N2P specifically for
AOL pursuant to this Section 2.3.4, such portions shall be
considered "Commissioned Works," but "Commissioned Works"
shall exclude, any software, modules, routines or subroutines,
documentation or other materials, and any methods, processes,
techniques or inventions, that were (i) developed by or for
N2P prior to such development for AOL or (ii) developed
independently by or for N2P (i.e., independent of the
development carried out for AOL under this Section 2.3.4 by
N2P). To the extent that (a) N2P develops any Commissioned
Works pursuant to this Section 2.3.4 without requiring that
AOL pay for such Commissioned Works (in cash or such other
consideration as may be agreed to by the Parties), then N2P
shall own all right, title and interest in and to such
Commissioned Works (provided, however, that in such case, AOL
shall have a fully paid-up, [****], non-exclusive,
non-transferable and worldwide license for the Term to use,
reproduce, directly and indirectly distribute, transmit,
display, perform, sublicense and adapt such Commissioned
Works), (b) [****] for any such Commissioned Works pursuant to
this Section 2.3.4, then AOL shall own all right, title and
interest in and to such Commissioned Works, and (c) the
Parties so agree, the Parties shall co-own all right, title
and interest in and to such Commissioned Works, which shall be
treated as Joint Work Product for purposes of this Agreement.
Each Party shall cooperate with the other Party in documenting
and perfecting all rights with respect to the Commissioned
Works, including executing any necessary assignments,
applications or other documentation with respect to the
Commissioned Works.
2.3.5 Disagreement. In the event that the Parties
disagree as to the development or deployment of any Additional
AOL Modification, including any disagreement as to the terms
and conditions for the development or deployment thereof, the
Parties shall submit such Dispute to the Management Committee
in accordance with the terms of Section 17 of this Agreement.
2.4 Expansion to Cover Other Services and Platforms of AOL.
2.4.1 Request by AOL to Encompass Expanded Service
Within an AOL Telephony Service. AOL may in its discretion,
from time to time during the Initial Term, seek to expand any
AIM IP Telephony Service(s) to provide service through any and
all platforms and services hereafter offered by AOL or an
Affiliate of AOL (other than the AIM Service) (the "Expanded
Services"). In such event, AOL may in its discretion request
that N2P develop or deploy or assist with the development or
deployment of any such Expanded Services. Upon the receipt of
any such request, and before any development or deployment of
any Expanded Services, the Parties shall negotiate in good
faith regarding the request for any such Expanded Services,
including, without limitation, with respect to the appropriate
schedule for any development and deployment, and the relevant
business terms (e.g., the amount of any payments for any
development, the revenue model for the Expanded Services,
etc.). If and when the Parties reach agreement on the terms
and conditions related to the development and deployment of
such Expanded Services, each Party shall allocate development
and deployment resources on a high priority basis towards the
development and deployment of an updated version of the
applicable AOL IP Telephony Software to support such Expanded
Services in accordance with the terms and conditions agreed
upon by the Parties.
2.4.2 Failure to Agree. In the event that the Parties
disagree as to the development or deployment of any Expanded
Service, including any disagreement as to
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the terms and conditions for the development or deployment
thereof, the Parties shall submit such Dispute to the
Management Committee in accordance with the terms of Section
17 of this Agreement; provided, however, that in the event
that the Management Committee is unable to agree as to the
terms and conditions regarding such development and
deployment, such Expanded Service shall not constitute an AIM
IP Telephony Service for purposes of this Agreement, and N2P
shall not have any rights or obligations with respect to such
Expanded Service.
2.4.3 Agreement. Nonetheless, if the Parties agree to
add an Expanded Service to this Agreement, such Expanded
Service, for all purposes hereof, shall be considered part of
the AIM IP Telephony Services, and all rights and obligations
of AOL and N2P hereunder shall apply to such Expanded Service
and users of such services shall be considered AIM Members for
purposes of this Agreement. For purposes of calculating the
Revenue Share and the Revenue Threshold hereunder, any such
agreed-upon Expanded Service shall be aggregated with the AIM
IP Telephony Services as if only one service existed (unless
otherwise agreed upon by the Parties).
2.4.4 Migration. Throughout the Term, AOL shall
have the right, in its sole discretion, to require N2P,
[****], to migrate and/or route any and all voice over IP
traffic in connection with the PC-to-PC Service (as
applicable), the PC-to-Phone Service, or any and all other
Core Premium Services, as applicable, to servers, protocols,
or platforms in connection with standards designated by AOL,
provided that: (i) such migration shall not affect N2P's right
to revenues pursuant to Section 7 of this Agreement; and (ii)
the quality of the AIM IP Telephony Services is not materially
degraded below generally recognized industry standards
accepted by AOL for VOIP services, resulting solely from the
fault of AOL in connection with such migration. In such event,
N2P shall provide AOL, or any third party designated by AOL,
with a peering agreement from the AOL designated server(s) to
N2P's network, on terms to be mutually agreed to by the
Parties, in connection with any and all such traffic (e.g.,
for termination or pass-through purposes). AOL acknowledges
that N2P shall not be deemed in breach for its failure to meet
its performance obligations set forth in Sections 3.2 and 3.3
if such failure is due solely to N2P's compliance with the
requirements of this Section 2.4.4.
2.5 Delivery and Acceptance.
2.5.1 Initial Versions. Following the completion of
the development and internal testing of each initial version
of the Core Premium Services, N2P shall deliver each such
initial version to AOL for evaluation and acceptance in
accordance with the delivery dates set forth on Exhibit I
hereto. AOL shall have thirty (30) days following such
delivery by N2P to evaluate whether each such initial version
functions in accordance with the Specifications and without
any Severity 1 or Severity 2 Problems. If AOL reasonably
determines that any such initial version of any Core Premium
Service does not function in material conformity with the
Specifications and/or without Severity 1 or Severity 2
Problems, AOL may reject such version by providing N2P with
written notice within such thirty (30) day period specifying
in detail the reason for rejection. Any initial version of the
Core Premium Services that has not been so rejected within
such thirty (30) day period shall be deemed accepted. If AOL
rejects any initial version of any Core Premium Service, then
following such rejection, N2P shall use commercially
reasonable efforts to correct (as promptly as commercially
possible but in any case by the applicable Cutoff Date) in all
material respects, the deficiencies in such initial version
that were specified in AOL's notice of rejection. If the
deficiencies specified in any such AOL notice of rejection
have not been remedied in all material respects by such Cutoff
Date, AOL shall have the right to terminate the exclusivity
(as set forth in Section 9 of this Agreement) with respect to
such Core Premium Service and thereby enter into an agreement
with any third party (including a N2P Competitor) with respect
to such Core Premium Service.
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2.5.2 Subsequent Versions. Following the completion
of the development and internal testing of each subsequent
version (i.e., subsequent to the initial version) of any Core
Premium Service (or any initial version of any Optional
Service, Expanded Service or other IP Telephony service
mutually agreed upon by the Parties to be provided by N2P
hereunder) (each, a "Subsequent Version"), N2P shall deliver
each such Subsequent Version to AOL for evaluation and
acceptance. AOL shall have thirty (30) days following such
delivery by N2P to evaluate whether such Subsequent Version
functions in accordance with the Specifications and without
any Severity 1 or Severity 2 Problems. If AOL reasonably
determines that any such Subsequent Version does not function
in material conformity with the Specifications and without
Severity 1 or Severity 2 Problems, AOL may reject such
Subsequent Version by providing N2P with written notice within
such thirty (30) day period specifying in detail the reason
for rejection. Any Subsequent Version that has not been so
rejected within such thirty (30) day period shall be deemed
accepted.
2.5.3 Acceptance Process. The acceptance criteria set
forth in Sections 2.5.1 and Section 2.5.2 of this Agreement
shall not include as factors the Core AOL Obligations, and AOL
shall not withhold any such acceptance due to its failure to
comply with the Core AOL Obligations.
2.6 Assistance from AOL. AOL shall provide N2P with reasonable
consultative assistance in connection with the development
obligations of N2P as set forth in this Section 2. In
addition, during the Term, AOL agrees to notify N2P in advance
of any modifications and/or changes to the AIM Service that
AOL believes may result in incompatibility between the
Parties' respective systems or interruptions in the AIM IP
Telephony Services (including without limitation, network
configuration changes and system maintenance). The Parties
shall work together to resolve any such potential or actual
incompatibility, or interruptions, in connection with AOL's
implementation of any such change and/or modification.
2.7 Other Modifications. AOL reserves the right to redesign and/or
modify the organization, structure, "look and feel,"
navigation, features and other elements of the AIM Client, the
AIM Service and the AIM IP Telephony Services (subject to (i)
the technical limitations and design requirements of the N2P
Services and N2P System (which shall themselves remain subject
to the Specifications) and (ii) the requirement that such AIM
Service and AIM IP Telephony Services remain in compliance
with the terms and conditions of this Agreement. AOL shall
provide N2P with reasonable notice of any material proposed
redesign and/or modification in advance of developing such
redesign or modification, and the Parties shall consult in
good faith on how to avoid any adverse effect on the AOL
Telephony Services (including, without limitation, any adverse
effect on the functionality or performance thereof) as a
result of such redesign and/or modification. Such notice shall
be sufficiently in advance of the proposed redesign or
modification such that the Parties will have a reasonable
opportunity to complete the process, and avoid the adverse
effect on the AIM IP Telephony Services, as contemplated by
this Section 2.7.
2.8 Meetings. In furtherance of the rights and obligations of the
Parties under this Agreement, the Parties shall meet, in
person on a quarterly basis (the "Quarterly Meetings") and by
telephone on a monthly basis (the "Telephone Meetings"). With
respect to the four (4) Quarterly Meetings to take place
during each Year of the Initial Term, two (2) such Quarterly
Meetings shall take place in Virginia (at AOL headquarters or
such other location as mutually agreed upon by the Parties)
and the other two (2) such Quarterly Meetings shall take place
in the United States (at N2P headquarters or such other
location as mutually agreed upon by the Parties). The
Quarterly Meetings shall be used to discuss, inter alia,
long-term planning, strategic and development issues, and
marketplace and performance information regarding the
obligations and criteria applicable to the Parties hereunder
(including the obligations and criteria under Section
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EXECUTION VERSION
3), and shall be attended by the Technical Liaisons and
appropriate senior development and management personnel. The
Parties anticipate that the first such Quarterly Meeting shall
occur as promptly as possible following the Effective Date but
in no event later than two (2) months following the Effective
Date. The Telephone Meetings shall be used to discuss, among
other things, the activities and relationship contemplated by
this Agreement, including the proposed implementation and/or
progress of any Updates or Additional AOL Modifications,
changes to the operating standards set forth on Exhibit B,
Exhibit C or Exhibit D hereto, AOL Exclusive Offers to be
provided during the subsequent quarter, and the redesign or
modification of elements of the AIM Service or AIM IP
Telephony Services.
2.9 No Support for AOL Modifications. The Parties acknowledge that
any modifications or additions to the AIM IP Telephony
Services that are carried out by AOL (or carried out for AOL
by a third party not contracted or subcontracted by N2P) shall
not affect the determination of whether N2P has met its
obligations or the criteria set forth in Sections 1.3 or 3 of
this Agreement.
3. N2P PERFORMANCE
3.1 Pricing and Terms. [****]
3.2 Operating Standards.
3.2.1 Compliance. During the Term, N2P will cause the AIM IP
Telephony Services to comply in all material respects with the
standards set forth in each of Exhibit B, Exhibit C and
Exhibit D. To the extent standards are not established in
Exhibits B, C or D with respect to any aspect of the AIM IP
Telephony Services, N2P will use commercially reasonable
efforts to provide such aspect at a level of quality,
completeness or timeliness which meets or exceeds prevailing
standards in the IP Telephony industry. Without limiting the
generality of the foregoing, N2P will use commercially
reasonable efforts to provide all hardware, software,
telecommunications lines and other infrastructure necessary to
meet traffic and usage demands on the AIM Service in
connection with the offering of the AIM IP Telephony Services.
3.2.2 N2P Technical Problem.
(a) Occurrence; Cure Period. In the event of
any material technical problem (over which N2P exercises
control) affecting the use by AIM Members of any AIM IP
Telephony Service and constituting a Severity 1 Problem or
Severity 2 Problem (an "N2P Technical Problem"), AOL shall
have the right to suspend (i) distribution of such AIM IP
Telephony Service, (ii) any of AOL's promotional obligations
hereunder related specifically to such AIM IP Telephony
Service, and/or (iii) any Listings related specifically to the
such AIM IP Telephony Service until such time as N2P corrects
such N2P Technical Problem. Prior to suspending any such
distribution of any particular AIM IP Telephony Service,
related promotional obligations of AOL or related Listings
hereunder, AOL shall provide N2P with notice and an
opportunity to cure, as provided below, unless, in its
reasonable discretion, AOL will be materially and adversely
affected in a substantial manner by failing to act immediately
or at some subsequent time prior to the completion of the
notice and cure period. Any such notice shall be in writing
and shall contain a reasonably detailed explanation for AOL's
intention to suspend (and, in reasonable detail, the reasons
for suspending) access to the particular AIM IP Telephony
Service and related promotional obligations and Listings due
to the occurrence of the N2P Technical Problem. Upon receipt
of such notice, N2P will have at least [****] to cure the
applicable N2P Technical Problem to AOL's reasonable
satisfaction and, if cured, AOL shall not suspend the affected
AIM IP Telephony Service(s) and/or related promotional
obligations
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EXECUTION VERSION
or Listings. AOL will make good faith efforts to facilitate
N2P's cure efforts and to extend the cure period as
appropriate, so long as AOL, in its reasonable discretion, is
not materially adversely affected by any such extension. In
the event AOL suspends distribution of any AIM IP Telephony
Service, any AOL promotional obligations and/or any Listings
due to the occurrence of any such N2P Technical Problem, AOL
will notify N2P in writing within [****] of such decision,
setting forth in reasonable detail the explanation therefor.
(b) Cure; Resumption of Distribution. When
and if the cure to an N2P Technical Problem is demonstrated to
AOL's reasonable satisfaction, which satisfaction shall not be
unreasonably withheld, AOL shall resume distribution of the
affected AIM IP Telephony Service, promotional obligations and
Listings as soon as commercially practical; provided, however,
that (in addition to any other remedies available to AOL in
this Agreement, including, without limitation, in Section 16.6
hereof) in the event that N2P shall fail to cure any such N2P
Technical Problem within thirty (30) days following notice
thereof by AOL to N2P, then AOL shall have the right to
terminate the exclusivity (as set forth in Section 9 of this
Agreement) with respect to the Core Premium Service(s)
affected by such N2P Technical Problem and thereby enter into
an agreement with any third party (including any N2P
Competitor) to promote (or offer the services of) such third
party with respect to such Core Premium Service(s).
3.3 Competitive Performance Standards. [****]
3.4 [****] AOL. For the avoidance of doubt, the Parties
acknowledge that AOL [****] connection with any modification,
addition, deletion, feature or functionality or other
improvement required to be provided by N2P in order for N2P to
comply with its obligations under Section 3 of this Agreement.
3.5 N2P Not Responsible for Core AOL Obligations. The Parties
acknowledge that the Core AOL Obligations shall not affect the
determination as to whether N2P has satisfied the criteria and
obligations set forth in Section 3 of this Agreement. The
Parties also acknowledge that the determination of whether N2P
has satisfied the criteria and obligations set forth in
Sections 3.1, 3.2 or 3.3 of this Agreement shall not be
affected by features or functionality that N2P offers to AOL
and that AOL (a) declines to implement or support or (b)
cannot (e.g., due to technological or operational constraints
within the control of AOL) reasonably implement or support,
provided that (i) in either such case, N2P provides AOL with
reasonable prior, informal, written notice (e.g., by e-mail)
of the anticipated effects of AOL's not implementing or
supporting the features or functions on the AIM IP Telephony
Services and (ii) in the case of technological or operational
constraints within AOL's control, N2P provides AOL with
reasonable prior informal notice of such constraints.
3.6 Restrictions.
3.6.1 N2P will not integrate, or enter into an agreement to
integrate into any of the AIM IP Telephony Services or the N2P
IP Telephony Software, or in any other products or services
developed by or on behalf of N2P, instant messaging protocols,
components or other technology that use or access the AIM
Service, the AOL Service, or any other AOL-branded product or
service (e.g., ICQ, CompuServe) in a manner not expressly
authorized by AOL, or that AOL contends in good faith is not
expressly authorized, or distribute, market or promote any
products or services containing instant messaging protocols or
components or other technology that use or accesses the AIM
Service, or solicits, encourages or promotes end-users to use
or access the AIM Service, in a manner not expressly
authorized by AOL or that AOL contends in good faith is not
expressly authorized.
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EXECUTION VERSION
3.6.2 Except as expressly provided herein, N2P shall not have
any right to (i) adapt, alter, copy, modify, translate or
create derivative works of the AIM Client, or (ii) reverse
engineer, decompile, disassemble, or otherwise attempt to
reconstruct the source code of, those portions of any AOL
software (e.g., the AIM Client) provided to N2P, as
applicable. N2P acknowledges that it obtains no intellectual
property rights or licenses by this Agreement except for those
licenses expressly granted, and that, except as otherwise
provided herein, AOL hereby expressly retains all of its
rights in and to the AIM Service, the AOL Namespace, the AOL
Service, and the AIM Client.
4. DISTRIBUTION AND PROMOTION
4.1 Distribution and Promotion Requirements. During the Term,
subject to the terms and conditions herein, the Parties agree
to the following:
4.1.1. Access to AIM IP Telephony Services. AOL shall
distribute the AIM IP Telephony Services through the
AIM Service, provided that AOL shall determine in its
reasonable discretion (upon consultation with N2P)
the manner in which such distribution occurs (e.g.,
through the bundling with the AIM Client of the
AOL-customized N2P IP Telephony Software, through a
"plug-in" of such software, etc., or through
distribution of the AIM Client or a separate AIM
application which includes certain functionality or
services from N2P using the SDK provided to AOL
pursuant to Section 10.1.2).
4.1.2 Distribution of AOL IP Telephony Software.
(a) PTP Calling Card Service. Promptly upon
the acceptance by AOL of the initial version of the
PTP Calling Card Service (including any Updates
thereto), AOL shall promote and distribute such
initial version as part of the AIM Service subject to
the remainder of this Section 4.1.2.
(b) Secondary AIM IP Telephony Services.
Following the acceptance by AOL of the initial
version of any Secondary AIM IP Telephony Service
(including any Updates thereto) and subject to the
remainder of this Section 4.1.2, AOL shall promote
and distribute such accepted Secondary AIM IP
Telephony Service as part of the AIM Client and
related version of the AIM Service. AOL shall launch
(i.e., make generally commercially available) such
AIM Client and version of the AIM Service no later
than [****]; provided, however, that in the event
that AOL shall not have launched the AIM Client and
related version of the AIM Service by [****] (as
N2P's sole and exclusive remedy hereunder), the
Initial Term shall be extended by one day for each
day beyond [****] that AOL fails to launch the AIM
Client and related version of the AIM Service.
Notwithstanding the foregoing, in the event AOL's
failure to distribute such accepted Secondary AIM IP
Telephony Service(s) by [****] due solely to AOL's
inability to integrate N2P's functionality or
services using the SDK (without fault of N2P), then
AOL shall distribute such AIM IP Telephony Service
through bundling the AOL IP Telephony Software with
the AIM Client or through integration using the SDK
no later than [****], provided that N2P shall have
delivered the SDK to AOL in accordance with Section
10.1.2.
(c) Subsequent Versions. Following the
acceptance by AOL of any Subsequent Version, AOL will
distribute such Subsequent Version with the AIM
Service within a time period [****] to be determined
by AOL in its reasonable discretion (e.g., taking
into account such factors as the imminence of the
launch of a new version of the AIM Client, etc.),
upon consultation with N2P.
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EXECUTION VERSION
4.1.3 Educational Promotions of AIM IP Telephony Services.
Upon the Launch Date of any of the AIM IP Telephony
Services, AOL will use good faith efforts, in AOL's
sole discretion, to educate AIM Members, through the
AIM controlled properties, of how to access and use
such AIM IP Telephony Service(s).
4.1.4 N2P Listing and Promotion. AOL shall feature, offer
and promote the AIM IP Telephony Services prominently
in the AIM Service.
(a) In furtherance and as part of the
foregoing, the initial implementation of such
promotional requirement shall include, where
feasible, at AOL's sole discretion, the following
(and any future implementation shall be consistent in
terms of prominence (e.g., in terms of size,
location, appearance and the like) with the
following):
(i) Each AIM IP Telephony Service
will be "sub-branded" with the name "Net2Phone,"
"N2P" or any other N2P Mark designated by N2P,
subject to the approval of AOL not to be unreasonably
withheld (the "N2P Name"). "Sub-branding" means that
each AIM IP Telephony Service will be labeled and
marketed with the name [****] or such other AOL name
as AOL designates (the "AOL Name"), but that each
such AIM IP Telephony Service shall, where feasible
and to the extent not inconsistent with the AOL Look
and Feel, have a prominent tag line such as [****] or
[****] and a N2P Mark. The N2P tag line and Mark (the
"Brandings") will be included prominently in (and
where feasible, will be placed within reasonable
proximity to the AOL brandings in) the (A) areas
which provide information regarding the use of and
enable AIM Members to launch the AIM IP Telephony
Service (collectively, the "Support Area"), (B) other
areas within the AIM Service that relate principally
to the AIM IP Telephony Services (e.g., [****]), and
(C) the AOL IP Telephony Software or areas within the
AIM Client that relate principally to an AIM IP
Telephony Service (the "Branded Areas").
(ii) The Brandings will also appear
prominently in advertising, promotional, public
relations and marketing material relating principally
to the AIM IP Telephony Services.
(iii) There will be links (evidenced
by the AOL Name or a graphical image of a telephone,
or such other link as AOL selects) to the
PC-originated AIM IP Telephony Services (initially,
the PC-to-Phone Service) throughout the AIM Service
in areas providing AIM Members with the ability to
perform communication functions (e.g., [****])
(collectively, the "Links"). The Links will launch
the AIM IP Telephony Services.
(b) The name, design and "look and feel" of
the Branded Areas, the Brandings and the Links
(collectively, the "Listings") will be determined by
AOL in its reasonable discretion in consultation with
N2P. The Listings will properly convey the
functionality of the AIM IP Telephony Services.
(c) AOL generally will provide to N2P
branding, marking and promotion that are no less
prominent, in terms of size, placement, appearance
and the like, than those accorded to [****]. In the
event that AOL begins to sell advertising inventory
on [****] of the AIM Client, AOL shall provide N2P
with an opportunity to bid on the purchase of a
placement within such inventory.
(d) Subject to the other requirements of
this Section 4.1.4, Section 9.1.1, and the other
provisions of this Agreement, the foregoing will not
preclude users from linking to another such provider
from the AIM Service, provided that the link to such
other provider is limited to [****] that is no more
prominent than any similar reference to N2P. Nothing
in this Agreement shall prevent AOL from offering
(whether through buttons, icons or otherwise) an AOL
PC-to-PC communication function on the AOL Service or
the AIM Service.
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EXECUTION VERSION
4.1.5 Promotion of AIM Service. N2P shall promote AOL or
the AIM Service to its customers and partners, and
shall use reasonable efforts to encourage such
customers and partners to adopt the AIM Service as an
integrated component of the IP Telephony products and
services provided to such customers and partners by
N2P, as and to the extent set forth in Exhibit E. All
promotion of the AIM Service by N2P hereunder,
including, without limitation, any and all such
promotional materials distributed by or authorized by
N2P shall be subject to AOL's prior written consent.
AOL shall assist N2P, as reasonably requested by N2P,
in such promotional efforts. In addition to the
foregoing, all promotion of the N2P Services by AOL
hereunder, including, without limitation, any and all
such promotional materials distributed by or
authorized by AOL shall be subject to N2P's prior
written consent.
4.2 General Conditions to Distribution and Promotional
Obligations. Notwithstanding anything contained in this
Section 4, AOL shall have no obligation to promote a
particular version of the AIM IP Telephony Services, to
distribute to AIM Members a particular version of the AIM IP
Telephony Services or to provide any Listing therefor to the
extent that and for so long as:
(i) AOL has received notice (whether written or
verbal) of, and reasonably believes, that the reproduction,
use or distribution of such version of the AIM IP Telephony
Services in accordance with this Agreement infringes or
misappropriates the intellectual property rights of any third
party, provided that AOL may not promote or offer access to
any other similar IP Telephony product unless AOL reasonably
believes that it raises a lesser risk of infringement or
misappropriation; or
(ii) An aspect of any such version of the AIM IP
Telephony Service exists, other than an acknowledged security
risk that a corporation/user accepts by opening up holes in
its firewall to enable use of any such AIM IP Telephony
Service (and other than security risks ordinarily associated
with Web-based communications products), that could be
exploited in a manner that AOL reasonably believes (a) would
expose AIM Members to potential efforts to invade their
privacy or damage or modify data, software or hardware in an
unauthorized manner or (b) would otherwise result in
meaningful and serious claims that any such AIM IP Telephony
Service presents a security risk to its users, provided that
AOL may not promote or offer access to any other similar IP
Telephony product unless AOL reasonably believes that it
raises a lesser security risk.
4.3 Exclusive Offers/AIM Member Benefits. N2P shall offer through
the AIM Service on a regular and consistent basis (but no less
than once per quarter) special offers comparable to those
available through Additional N2P Channels (e.g., preferred
rates to specific termination points to be offered
periodically, raffle or sweepstakes conducted from time to
time, etc.), which such special offers shall be exclusively
available to AIM Members (the "AOL Exclusive Offers"). Each
AOL Exclusive Offer made available by N2P shall provide a
substantial member benefit to AIM Members, either by virtue of
a meaningful price discount, product enhancement, unique
service benefit or other special feature. N2P will provide AOL
with reasonable prior notice of AOL Exclusive Offers so that
AOL can market the availability of such AOL Exclusive Offers
in the manner AOL deems appropriate in its reasonable
discretion; provided that AOL shall consult with N2P regarding
the marketing of the AOL Exclusive Offers. In addition to the
foregoing, the Parties shall create a virtual and/or physical
debit card to be used in connection with the AIM IP Telephony
Services and/or any other products or services as determined
by AOL in its sole discretion (the "AIM Card").
4.4 Limited Waiver. To the extent that any of N2P's obligations
under this Agreement are expressly inconsistent with N2P's
obligations to ICQ, Inc. ("ICQ") (pursuant to N2P's July 15,
1999 agreement with ICQ, Inc.), CompuServe Interactive
Services, Inc. ("CompuServe") (pursuant to CompuServe's
agreement with N2P dated as of November 19, 1999) or any other
agreement with any other AOL Affiliate existing as of the
Effective Date (collectively,
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EXECUTION VERSION
the "Inconsistent Obligations"), and to the extent that such
Inconsistent Obligations may reasonably restrict N2P from
materially performing its obligations under this Agreement,
then N2P shall provide notice to AOL immediately upon its
discovery of such Inconsistent Obligations. Promptly after
AOL's receipt of such notice from N2P, AOL and N2P shall work
together in good faith to work around or obtain a waiver from
ICQ, CompuServe or such other AOL Affiliates of such
Inconsistent Obligations. To the extent that the Parties
cannot or do not obtain relief in connection with such
Inconsistent Obligations, then AOL shall have the option, in
its sole discretion, to: (a) waive such inconsistency in this
Agreement and instruct N2P to perform all of its obligations
under this Agreement and such other agreement(s), including
any and all such Inconsistent Obligations; or (b) elect under
which of the applicable agreements for N2P to perform such
Inconsistent Obligations. Notwithstanding the foregoing,
nothing contained in this Section 4.4 shall be construed in
any manner whatsoever to provide N2P with an excuse for
non-performance under this Agreement, and except as expressly
provided herein, AOL reserves any and all of its rights in
connection with N2P's failure to perform under this Agreement.
5. AIM MEMBER REGISTRATION AND INFORMATION
5.1 Ownership of Assets and Customer Relationships. In addition to
the provisions of Section 12.1, AOL shall own all tangible and
intangible assets (and all personal and intellectual property)
provided by AOL in developing the AIM IP Telephony Services
(except as otherwise expressly set forth herein) and the
Support Area, including all materials provided by AOL to N2P
for the purpose of branding the AIM IP Telephony Service and
the Support Area ("AOL Branding Materials"), and the
relationship with AIM Members, including, without limitation,
all aspects of such relationship specified in this Section 5.
AOL shall own any and all rights in the call detail records
generated in providing the AIM IP Telephony Services which
shall be treated as Confidential Information for purposes of
this Agreement (collectively, the "Call Detail Records"). AOL
hereby grants N2P a non-exclusive, non-transferable,
worldwide, [****] license to use the Call Detail Records only
to the extent necessary to provide the AIM IP Telephony
Services to be provided by N2P hereunder (including any
related planning and development). Such license shall continue
through the end of the Term, but shall survive expiration of
the Term with respect to the provision by N2P of the PTP
Calling Card Service. Without limiting the foregoing, N2P
acknowledges and agrees that AOL may, in its sole discretion,
promote, distribute and/or use the AIM Card (in accordance
with applicable law) as an electronic debit card throughout
the Term in connection with any other products and services
offered by AOL and/or its partners, in AOL's sole discretion,
[****] be mutually agreed upon by the Parties. N2P shall
perform any and all reasonably requested development services
(i.e., considering available technology, regulatory
requirements, and time required) for such use, and [****] in
connection with material, incremental development and/or
customization required for such use by AOL after the Effective
Date, subject to AOL's prior written consent.
5.2 AIM Member Relationship.
5.2.1 Registration Information. In order to use the Surcharged
AIM IP Telephony Services, an AIM Member will be required to
register for such AIM IP Telephony Services. The Parties shall
determine by mutual agreement the terms and conditions of use
to be agreed to by such AIM Members (including, without
limitation, with respect to any special access codes to be
used by such AIM Members in connection with the AIM IP
Telephony Services, provided, that neither Party shall
unreasonably withhold such agreement with respect to the use
of such special access codes), and AOL shall determine both
(i) the information to be collected from the AIM Members as
part of the registration process (provided that such
information shall in any event include information that N2P
reasonably requests in connection with the provision of the
AIM IP Telephony Services, including, without limitation, any
Personal Identification Numbers (PINs) for use by AIM Members
in connection with the AIM IP Telephony Services) and (ii) any
domain names, unique identifier
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EXECUTION VERSION
numbers, e-mail addresses and passwords to be assigned and/or
used by such AIM Members in connection with such AIM IP
Telephony Services. Registration for the AIM IP Telephony
Services shall take place at the Support Area or at such other
location as may be mutually agreed upon by the Parties. AOL
shall use reasonable efforts to build into the end of the
registration process for the AIM Service (the "AOL
Registration Process") a sub-routine for the registration for
the AIM IP Telephony Services. Notwithstanding the foregoing,
in the event that any AIM Members shall not have registered
for the Surcharged AOL IP Telephone Services prior to
attempting to use any such service, AOL shall cause any such
AIM Member to register for the Surcharged AIM IP Telephony
Services prior to the use thereof. N2P shall determine the
pricing for the Core Premium Services and other AIM IP
Telephony Services to be provided by N2P hereunder. In
addition, N2P shall handle the assignment of applicable phone
numbers to AIM Members (using the AIM Member unique identifier
number as an identifier and provided that such phone numbers
and special access codes (unless otherwise agreed upon in
writing by the Parties) shall be different from any phone
numbers and access numbers used in connection with any N2P
Services), and shall handle the billing and collection of any
fees or other amounts to be charged to AIM Members from time
to time in connection with the AIM IP Telephony Services
(collectively, the "IPT Fees"); provided, however that, unless
otherwise expressly consented to in writing by AOL, N2P shall
not directly contact or communicate with any AIM Members other
than in connection with the billing and collection of the IPT
Fees, or in connection with maintenance and customer support
for the AIM IP Telephony Services; provided, further, that
such communications shall be limited to obtaining billing
information, providing pricing information related to the AIM
IP Telephony Services and ensuring collection of the IPT Fees
or providing maintenance or customer support, and shall not be
used by N2P as a platform to sell, market, advertise or
promote any products or services other than the AIM IP
Telephony Services.
5.2.2 Billing Transition. Notwithstanding the foregoing, at
any time during the Term and at AOL's sole discretion, AOL
shall have the right to assume responsibility for the
aforementioned billing and collection obligations with respect
to the IPT Fees (collectively, the "Billing Transition");
provided, however, that (i) AOL shall give N2P reasonable
advance notice of any such Billing Transition; (ii) the
Billing Transition shall be subject to agreement of the
Parties on arrangements (a) for N2P to receive the same
portion of revenue from the AIM IP Telephony Services as it
would have received before the Billing Transition (and on
procedures to verify the proper payment of such revenue), (b)
for handling fraud, and (c) for the handling of the billing
for the PTP Calling Card Service after the Initial Term, and
(iii) AOL shall be responsible for all costs and out-of-pocket
expenses incurred by N2P in connection with such Billing
Transition. In the event of such Billing Transition, N2P
hereby agrees to provide AOL with reasonable assistance (and
to otherwise cooperate with AOL), [****], regarding such
Billing Transition, and following such Billing Transition, AOL
shall use commercially reasonable efforts to ensure that the
billing services comply in all material respects with the
standards set forth in Exhibits B and C of this Agreement.
5.3 AIM Member Information and Solicitation.
5.3.1 Ownership of AIM Member Information. AOL shall
own any and all information collected from AIM Members in
connection with the AIM IP Telephony Services, including,
without limitation, information collected during the
registration processes for the AIM Service and/or any AIM IP
Telephony Service, respectively, and information then or
subsequently obtained from any use of the AIM Service and/or
any AIM IP Telephony Services, including without limitation
[****] (collectively, "User Information"). All User
Information shall be deemed Confidential Information of AOL.
N2P agrees, both during and after the Term, not to (i) use any
User Information for any purpose other than in connection with
the operation of the AIM IP Telephony Services or (ii)
disclose any such information to any third party without the
prior written consent of AOL, which consent may be granted or
withheld in AOL's sole and absolute discretion; provided,
however, that N2P may disclose
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EXECUTION VERSION
User Information solely as necessary (and only to the extent
necessary) to comply with applicable laws, regulations and
government orders or requests; provided, further, that N2P
shall use all reasonable efforts to limit any such disclosure
to the maximum extent possible and to provide AOL with as much
advance written notice of N2P's intended use or disclosure as
is practicable. N2P agrees to comply with the AOL Privacy
Policy to the same extent as AOL, as such policy exists on the
Effective Date (i.e., the AOL Privacy Policy), as the same may
be modified by AOL and notified to N2P from time to time. N2P
shall not sell, license, rent or otherwise transfer any AIM
Member Information or any list of AIM Members for any purpose
whatsoever, without AOL's prior written consent.
Notwithstanding the foregoing, N2P shall have the right to use
User Information to the extent necessary to provide the PTP
Calling Card Service to then-existing AIM Member customers
following the expiration of the Initial Term, and AOL shall
provide N2P with the customer records and other information to
the extent necessary for N2P to continue providing the PTP
Calling Card Service to such customers for the [****] period
immediately following the expiration of the Initial Term,
subject to Section 5.3.2 and 5.3.3 of this Agreement and
prohibitions, if any, under applicable law.
5.3.2 No Competitive Solicitation. [****].
5.3.3 No Communication. During the Term and for the
[****] period following the expiration or termination of this
Agreement (and without limiting any other provision of this
Agreement, including Section 5.3.1), N2P agrees not to send
any AIM Member any messages or communications on or through
the Qualified AIM Services for any commercial purpose, unless
N2P has an Independent Business Relationship with such AIM
Member. Any commercial e-mail communications (i.e., e-mail
communications offering products or services) to AIM Members
on or through the AIM Service or the AIM IP Telephony Services
which are otherwise permitted hereunder (i.e., permitted as
exceptions to general prohibitions included in this Agreement)
shall include a prominent and easy means to "opt-out" of
receiving any future commercial e-mail communications from
N2P. The Parties acknowledge that any incidental (i.e., de
minimis) failure by N2P to comply with the terms of this
provision shall not be deemed a material breach of this
Agreement; provided, however, that N2P shall take appropriate
steps to prevent any further failure to comply with the terms
of this Section 5.3.3.
6. TECHNICAL SUPPORT
N2P shall provide all frontline technical and customer support
to AIM Members as set forth in Exhibit B, including, without
limitation, technical and customer support for AIM Members who
have problems with, or questions concerning, the installation,
use, operation or maintenance of the AIM IP Telephony Service
(collectively, the "Frontline Support"). The Parties
acknowledge that N2P may provide such Frontline Support using
e-mail and/or telephone support, at N2P's option. N2P shall,
[****], provide to AOL the back-end support regarding the AIM
IP Telephony Service specified on Exhibit D. During the Term,
each Party will designate one (1) internal technical contact
(each such contact, a "Technical Liaison") and will conduct
technical communication activities as may be necessary for the
optimization of the integration of the AIM IP Telephony
Services into the AIM Service. AOL will use commercially
reasonable efforts to provide technical and marketing
assistance, including facilitating the maintenance of regular
communication channels between relevant personnel, for the
purpose of assisting both Parties in abiding by their
respective obligations under this Agreement. The initial
Technical Liaison for N2P shall be [****], and the initial
Technical Liaison for AOL shall be [****], unless otherwise
designated from time to time by the Parties. Each Party may
change its Technical Liaison from time to time, in its sole
discretion. Unless otherwise agreed upon by the Parties, N2P
shall not be obligated to provide support for any
modifications or
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EXECUTION VERSION
additions to the AIM IP Telephony Services carried out by AOL
(or carried out for AOL by a third party not contracted or
subcontracted by or on behalf of N2P); provided, however, that
where not required to provide such support pursuant to the
terms of this Section 6, N2P shall assist in the support of
such work to the extent necessary for either Party to comply
with its obligations under this Agreement.
7. PAYMENT AND REVENUE PROVISIONS
7.1 Guaranteed Payments; Refund. In partial consideration for
[****] marketing of the AIM IP Telephony Services, [****]. In
the event of any termination of this Agreement before
expiration of the Initial Term in accordance with (i) Section
16.2 due to a material breach by AOL of this Agreement, (ii)
Section 16.3 due to a Change of Control of AOL by a N2P
Competitor or a Parent Company Competitor or (iii) Section
16.5 due to the occurrence of a Regulated Entity Event, [****]
shall refund to [****] (e.g., if such termination occurs on
the [****] anniversary of the Effective Date, and [****] has
paid [****] in guaranteed payments as required by the terms of
this Agreement, [****] shall refund to [****] of such
guaranteed payments, [****]. In the event of any termination
of this Agreement before the expiration of the Initial Term in
accordance with Section 16.6(i)(c) or Section 16.6(i)(d), then
[****] shall refund to [****] of the pro rata portion (based
on a [****]) of any guaranteed payments made by [****] prior
to the date of such early termination. In partial
consideration for such guaranteed payments, [****] shall
provide [****] during the Initial Term with promotional
placements (on areas of the [****] Service or other Web
properties solely controlled by [****], to be determined by in
its reasonable discretion as further set forth in Section
4.1.4) with a value of [****] in Year [****] (based on amounts
for comparable Advertisements set forth on [****] then-current
advertising rate card).
7.2 Net Advertising Revenue for IP Telephony Services.
7.2.1 Advertising Sales. AOL shall have the right to
license or sell promotions, advertisements, links,
sponsorships, pointers or similar services or rights
("Advertisements") through the AOL Service and the AIM
Service, subject to AOL's then-applicable advertising
policies.
7.2.2 Revenue Sharing.
(a) Net Advertising Revenue. As partial consideration
for its marketing efforts hereunder, [****] shall retain
[****] of the Net Advertising Revenue. [****] shall pay
[****], within [****] following the end of each quarter during
the Term, the remaining [****] of the Net Advertising Revenue
that is actually collected by [****] or any Affiliate of AOL
(collectively, the "Advertising Revenue Share").
(b) Net Button Advertising Revenue. In the event that
[****] sells (which such decision to sell shall be in [****]
sole discretion) any buttons that appear on the [****] IP
Telephony client (the "Special Buttons"), (i) [****] shall
receive (1) [****] of the Net Button Advertising Revenue
generated from the sale (without N2P participation or support)
of any such Special Button or (2) [****] of the Net Button
Advertising Revenue generated from the sale (with [****]
participation or support) of any such Special Button, and (ii)
[****] shall retain the remainder of such Net Button
Advertising Revenue (clauses (i) and (ii) above, collectively,
the "Net Button Advertising Revenue Share"). Notwithstanding
the foregoing, in no event shall the total portion of the Net
Button Advertising Revenue received by [****] during the Term
exceed [****] (i.e., after the receipt by [****] in Net Button
Advertising Revenue, [****] shall retain [****] of such Net
Button Advertising Revenue), except as otherwise mutually
agreed to by the Parties in writing. In the event that [****]
utilizes such
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EXECUTION VERSION
Special Buttons to promote any [****] or other commercial
products or services, [****] shall utilize a portion of such
Special Buttons (i.e., at least one such Special Button) to
promote the [****] IP Telephony Services.
7.2.3 Definition of Net Advertising Revenue. For purposes of
this Agreement, "Net Advertising Revenue" shall mean, for any
calendar quarter, [****] (or, if no such commissions were
incurred, [****] of the gross revenues received by AOL for
such Advertisements). If Advertisements in the Designated
Advertising Areas are sold or otherwise made available to a
party that also purchases or obtains Advertisements through
one or more other areas or media of AOL or an Affiliate
(collectively, a "Combined Sale"), the revenue from the
Combined Sale shall be allocated [****] between such
Designated Advertising Areas and such other areas or media
(based on list prices for such Designated Advertising Areas
and other areas or media). For the avoidance of doubt, [****].
7.2.4 Ownership of Advertising. The right of N2P to
participate in the Net Advertising Revenue pursuant to the
provisions of this Section 7.2 shall in no way create any
ownership interest in N2P with respect to AOL advertising
inventory. AOL owns all right, title and interest in and to
the Advertisements and promotional spaces within the AIM
Service, including the Support Area and the AIM Client, and
AOL has the sole authority to market and sell such
Advertisements; provided, however, that AOL agrees that,
during the Initial Term within the Designated Advertising
Areas, AOL shall not include any Advertisements for (or sell
any advertising inventory to) N2P Competitors with respect to
(i) the Core Premium Services (to the extent that N2P enjoys
exclusivity with respect thereto under this Agreement) and
(ii) any Optional Service(s) or Expanded Service(s) which the
Parties mutually agree from time to time shall be exclusive to
N2P). Further, AOL shall be responsible for all obligations,
liabilities and duties under any and all agreements that AOL
has with third parties and otherwise with regard to such
Advertisements, including serving such advertisements, subject
to Section 15 of this Agreement.
7.3 Transaction Revenues Sharing Arrangement.
7.3.1 Revenue Threshold. If at any time during each of Years
One through Three or the Renewal Term of this Agreement the
amount of Transaction Revenues received by N2P during such
Year exceeds [****] (for each such Year, the "Revenue
Threshold"), then N2P will pay AOL, in partial consideration
for AOL's marketing and distribution efforts hereunder,
[****]. N2P will pay all of the foregoing amounts within
[****] following the end of the Year in which the applicable
Transaction Revenues were received. At the end of each such
Year, the calculation of Transaction Revenues for purposes of
this Section 7.3.1 shall recommence. N2P shall have the right
to collect and retain all [****] other than the [****] paid to
or retained by AOL. To the extent mutually agreed upon by the
Parties in writing in connection with any Billing Transition,
AOL shall be responsible (following any such Billing
Transition) for calculating the [****] and for paying N2P its
portion of such [****] as contemplated by this Section 7.3.1.
7.3.2 Revenue Share. The "Revenue Share" shall mean the
amounts to be paid to AOL (in each case, determined as a
percentage of Incremental Transaction Revenues) set forth on
Exhibit H hereto.
7.3.3 [****] Users. To the extent that N2P is required to
share revenue with [****] (pursuant to agreements in full
force and effect on the Effective Date) for transaction
revenues generated with respect to the Core Premium Services,
any Transaction Revenue received by N2P [****] with respect to
the Core Premium Services shall not constitute Transaction
Revenues for purposes of this Section.
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EXECUTION VERSION
7.4 No Other Revenue Sharing. Except as expressly provided in this
Section 7 and on Exhibit H, neither Party shall be entitled to
any revenues derived from, or related to, the activities of
the other Party.
7.5 Alternative Revenue Streams. In the event that N2P receives or
desires to receive (directly or indirectly) any compensation
in connection with the AIM Service from the sale of any
Products other than the AIM IP Telephony Services or as
otherwise agreed to by the Parties (an "Alternative Revenue
Stream"), N2P will promptly inform AOL in writing, and the
Parties will negotiate in good faith regarding whether N2P
will be allowed to market the Products producing such
Alternative Revenue Stream (the "Alternative Products")
through the AIM Service, and if so, the equitable portion of
revenues from such Alternative Revenue Stream (if applicable)
that will be shared with AOL.
7.6 Reports and Payments. Each Party (the "Paying Party") shall
comply with the following requirements in connection with its
payment obligations to the other Party (the "Payee Party")
under this Agreement: Within [****] following the end of each
payment period, the Paying Party shall provide the Payee Party
with a report that contains information detailing the amount
payable for such payment period. Such report shall, with
reasonable detail, explain the basis upon which such payment
has been determined and shall be accompanied by payment in
full of all amounts indicated on such report as due for such
period. Each such report shall constitute Confidential
Information of the Paying Party. Without limiting the
generality of the foregoing:
7.6.1 Reports on Transaction Revenues. N2P will
provide AOL with a report in a mutually agreed-upon format,
detailing the following activity in such period (and any other
information mutually agreed upon by the Parties as required
for measuring Transaction Revenues): [****] AOL will be
entitled to use the Sales Reports only in its internal
business operations, subject to the terms of this Agreement.
The report will also contain information which supports the
payment based on Transaction Revenues, including information
identifying [****].
7.6.2 Reports on Advertising Revenue Share. AOL will provide
N2P with a quarterly report in a mutually agreed-upon format,
detailing the following in such quarter (and any other
information mutually agreed upon by the Parties as required
for measuring Advertising Revenues): [****].
7.7 Late Payments; Wired Payments. All amounts owed hereunder not
paid when due and payable will bear interest from the date
such amounts are due and payable at the prime rate in effect
at such time. All payments required to be paid to AOL
hereunder will be paid in immediately available,
non-refundable U.S. funds wired to the "America Online"
account, Account Number [****]. All payments required to be
paid to N2P hereunder will be paid in immediately available,
non-refundable U.S. funds wired to an account to be designated
by N2P (within thirty (30) days following the Effective Date)
in a written notification to AOL.
7.8 Audit Rights. Each Party (as Paying Party) will maintain
complete, clear and accurate records of the information
required to determine the amounts of payments made hereunder.
For the sole purpose of ensuring compliance with the payment
obligations of this Agreement, either Party (as Payee Party)
will have the right to request that an independent certified
accountant selected by the Parties (and which accountant
enters into a confidentiality agreement mutually agreed to by
the Parties) conduct (no more than twice per calendar year of
this Agreement) a reasonable and necessary inspection of
portions of such books and records as are necessary to verify
the correctness of the payments made hereunder. Any such audit
may be conducted after twenty (20) business days prior written
notice to the Paying Party. The Payee Party shall bear the
expense of any audit conducted
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<PAGE> 20
EXECUTION VERSION
pursuant to this Section 7.8 unless such audit shows an error
in the Payee Party's favor amounting to a deficiency in excess
of [****] of the actual amounts payable to the Payee Party
hereunder, in which event the Paying Party shall bear the
reasonable costs and expenses incurred in connection with such
audit. The Paying Party shall pay the Payee Party the amount
of any deficiency discovered by the Payee Party within [****]
after receipt of notice thereof from the Payee Party, except
to the extent disputed in good faith by the Paying Party.
7.9 Taxes. Each Party will collect and pay, and indemnify and hold
harmless the other Party from, any sales, use, excise, import
or export value added or similar tax or duty required to be
collected and paid by such Party, including any penalties and
interest, as well as any costs associated with the collection
or withholding thereof, including attorneys' fees
(collectively, the "Taxes").
7.10 Fraudulent Transactions. To the extent permitted by applicable
law, N2P will (i) provide AOL with prompt notice of any
fraudulent order (a "Fraudulent Order"), including the date,
screen name or e-mail address and amount associated with such
order, promptly following N2P obtaining knowledge that the
order is, in fact, fraudulent and (ii) as promptly as possible
following the occurrence of any such Fraudulent Order (but in
no event later than one (1) month after the occurrence
thereof), provide AOL with a report regarding any such order
and the steps taken by N2P with respect thereto.
7.11 [****]
8. STOCK WARRANTS
Attached hereto as Exhibit G is a form of amended and restated common
stock warrant to be executed by N2P on behalf of AOL, or, if AOL so
directs N2P in writing, any parent, subsidiary or affiliate entity of
AOL). In the event that AOL directs N2P to issue such warrant to such
other entity, the Parties agree that such entity shall have the right
to enforce the terms of such warrant against N2P.
9. EXCLUSIVITY
9.1 Scope.
9.1.1 N2P Exclusivity. Subject to the provisions of
Section 1.1.8 (with respect to other AOL or third party PC to
PC communications products), and Section 4.14(d), and except
to the extent that AOL is expressly relieved of its
exclusivity obligations under this Agreement, N2P shall be the
exclusive provider of the Core Premium Services on the AIM
Service for the period of [****] immediately following the
Effective Date (the "N2P Exclusivity"); [****]. Provided that
N2P retains exclusivity hereunder with respect to any Core
Premium Service, AOL will not promote on the AIM Service any
IP Telephony service which is comparable to such Core Premium
Service. The Parties hereby acknowledge and agree that the N2P
Exclusivity may be terminated with respect to particular AIM
IP Telephony Services in accordance with the terms of this
Agreement.
9.1.2 [****].
9.2 Optional Services. With respect to all other IP Telephony
services not expressly contemplated by this Agreement, [****]
with respect to the offering of such additional services
through the AIM Service. In the event that the Parties cannot
agree, within such time period, to the terms and conditions
regarding the provision of any such additional service to AIM
Members through the AIM Service, AOL shall have the right to
offer such additional service(s) to AIM Members through any
third party (including, without limitation, [****].
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<PAGE> 21
EXECUTION VERSION
9.3 Termination of Exclusivity. In the event that [****] is
entitled to relief from the [****] as to a particular Core
Premium Service and/or country in accordance with the express
terms and conditions of this Agreement, then only the [****]
with respect to such Core Premium Service and/or country (as
the case may be and subject to Section 16 hereof) shall
terminate.
9.4 Exception to Exclusivity. For the avoidance of doubt, the
Parties acknowledge that the N2P Exclusivity does not preclude
the listing of N2P Competitors or any AOL PC-to-PC
communication function in any whites pages, yellow pages or
other online search or directory service, subject to Section
4.1.4 and Section 7.2.4.
10. LICENSE FROM N2P
10.1 Licenses.
10.1.1 Software License. Subject to all the terms and
conditions of this Agreement, N2P hereby grants to AOL a
worldwide, non-exclusive, non-transferable, [****] license for
the Term to use, reproduce, distribute directly and
indirectly, transmit, display, perform and sublicense (i.e.,
grant to end-users the right to use) and adapt the AOL IP
Telephony Software, including any and all components (e.g.,
APIs, and the reference implementations for the SDK and APIs)
contained in the AOL IP Telephony Software necessary to
effectuate the provision of the AIM IP Telephony Services to
AIM users, and the use by end-users of the AIM IP Telephony
Services, in each case, in object code form only (except as
provided in Sections 10.1.2 and 10.2) in accordance with the
terms of this Agreement. To the extent reasonably requested by
AOL, N2P shall deliver the AOL IP Telephony Software
electronically to AOL.
10.1.2 SDK License. Within thirty (30) days from the
Effective Date, N2P shall provide AOL [****] with a software
development kit ("SDK"), and updates thereto during the Term,
which shall contain such object code (and/or source code, if
necessary) and/or other applicable technology, relating to the
AOL IP Telephony Software or otherwise, to the extent
reasonably necessary for AOL to integrate all of the Core
Premium Services within the AIM Client, and perform any and
all of its other obligations and exercise its rights under
this Agreement. Without limiting the provisions of Section
10.1.1, N2P agrees that AOL shall have the right to use, adapt
and copy, in any manner whatsoever, the components contained
in the SDK provided by N2P (e.g., object code) in connection
therewith. Notwithstanding the foregoing, in the event that
N2P does not provide AOL with such SDK within [****] of the
Effective Date, in addition to any other remedies AOL may
have, AOL shall have the right to terminate the exclusivity
with respect to all of the Core Premium Services. In addition
to the foregoing, AOL shall have the right to request, from
time to time during the Term, that N2P provide AOL with
additional SDKs which shall contain such source code (as
necessary), object code, and/or other applicable technology
necessary to allow AOL to integrate any and all additional AIM
IP Telephony Services (e.g., the Optional Services, and/or the
Expanded Services ) designated by AOL within the AIM Client.
In such event, N2P shall provide AOL with such additional
SDK(s) as the necessary technology becomes generally available
(following such request from AOL, which request shall contain
reasonable specificity of the technology needed from N2P by
AOL for such integration), and such additional SDK(s), and the
technology contained therein, shall be deemed through this
reference incorporated within the licenses granted to AOL in
this Section 10.1.2 and in Section 10.1.1.
10.1.3 Purpose of License. The foregoing license is
expressly intended to permit (and limited to permitting) AOL
to effectuate all of its rights and conduct all of the
business expressly contemplated hereunder, including
distributing the AIM IP Telephony Services
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EXECUTION VERSION
pursuant to the terms and conditions of this Agreement. Except
as set forth in this Section 10.1, Sections 10.2 and 12.1 or
as otherwise set forth in this Agreement (including, without
limitation, with respect to the AOL GUI), AOL acknowledges and
agrees that N2P and its licensors retain all rights, title and
interest in and to the AOL IP Telephony Software in both
object and source code forms, and, except pursuant to the
Source Code Escrow Agreement, or as otherwise set forth in
this Agreement, AOL shall not have any rights to use such code
licensed hereunder following termination of this Agreement
without N2P's consent. AOL shall not have any right under any
circumstances, or authorize any third party (which, for
avoidance of doubt, includes any Affiliate of AOL), to (i)
[****] the AOL IP Telephony Software (other than adaptation in
accordance with Sections 10.1.1, 10.1.2, or in connection with
AOL's integration obligations hereunder, or as otherwise
authorized by the Source Code Escrow Agreement or license
described in Section 10.2), (ii) [****], or otherwise [****]
the source code for or underlying algorithms, processes or
methods of the AOL IP Telephony Software that is provided in
object code form, or (iii) [****] the AOL IP Telephony
Software to any third party (other than as expressly provided
in this Agreement). All copies of the AOL IP Telephony
Software made hereunder shall include all proprietary notices
included on the copy provided by N2P, and AOL shall not
remove, deface or obscure or authorize to be removed, defaced
or obscured any of N2P's or its licensors' proprietary rights
notices on or in the AOL IP Telephony Software or on output
generated by the software; provided that the placement of such
notices, if any, in the AOL IP Telephony Software that are
visible in the user interface of such software shall be
subject to AOL's prior written approval, which approval will
not be unreasonably withheld. AOL agrees that any and all
copies of the AOL IP Telephony Software distributed to third
parties shall be pursuant to binding license agreements no
less restrictive or protective of N2P's rights than this
Section 10.1. AOL agrees that any material violation of this
Section 10.1 by AOL that is not cured by AOL within [****]
shall constitute a material breach of this Agreement. N2P
agrees to provide the AOL IP Telephony Software in object code
form (except as set forth in Sections 10.1.1, 10.1.2, 10.2 or
otherwise), including all required Documentation, to AOL as
and when needed for AOL to exercise its rights under this
Agreement. For the avoidance of doubt, the Parties acknowledge
that the AOL IP Telephony Software, may not be provided by N2P
to any third party.
10.2 Source Code License and Escrow.
10.2.1 Escrow Agreement. N2P and AOL will enter into
an escrow agreement (the "Source Code Escrow Agreement"),
containing terms and conditions subject to the mutual
agreement of the Parties, for the limited use by AOL of the
AOL IP Telephony Software in source code form (the "Source
Code") solely for the purposes of undertaking any activity
which N2P is obligated to perform or undertake hereunder and
fails to perform or undertake as required hereunder. The
Source Code Escrow Agreement shall provide that AOL shall be
entitled to a copy of the Source Code only upon the occurrence
of all of the following four (4) events (collectively, the
"Release Conditions"): (i) N2P's material breach of its
material obligations hereunder to provide, maintain or support
the AOL IP Telephony Software, which breach materially
adversely affects the AIM IP Telephony Services; (ii) AOL's
written notice to N2P detailing such material breach; and
(iii) N2P fails to cure such material breach within ninety
(90) days of receipt of such notice; or (iv) N2P's failure to
provide the SDK to AOL to AOL's reasonable satisfaction,
pursuant to Section 10.1.2. The license will not include any
right to [****] the Source Code to any third party without
N2P's prior written consent, and the Source Code Escrow
Agreement will contain provisions, reflective of the
sensitivity of the Source Code, to preclude the unauthorized
use or disclosure of the Source Code or information derived
therefrom. Promptly after execution of this Agreement, and in
any event within [****], N2P and AOL shall negotiate and enter
into the Source Code Escrow Agreement with Data Securities
International or another escrow holder acceptable to each
Party. The Source Code Escrow Agreement will contain
provisions for N2P to provide AOL with reasonable assistance
in understanding and using the Source Code upon occurrence of
the Release Conditions.
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10.2.2 Limited Source Code License. To the extent
reasonably necessary for AOL to modify, develop, add, delete
or use any functionality or features of the AIM IP Telephony
Services in connection with the development of any Additional
AOL Modifications pursuant to Section 2.3.4, N2P shall provide
to AOL APIs or SDKs to the AOL IP Telephony Software so that
such Additional Modifications or other obligations under this
Agreement (e.g., Section 2.1) (whether developed by N2P, AOL
or any third party) can interoperate with (including use of
the principal functions of) the AOL IP Telephony Software;
provided, however, that, to the extent that such APIs or SDKs
are insufficient to enable such interoperability, N2P shall
either (i) modify, as promptly as commercially practicable,
the APIs or SDKs [****], the AOL IP Telephony Software or the
Additional Modifications to enable such interoperability, or
(ii) in the event that (a) N2P does not perform the work
described in clause (i) of this Section 10.2.2 as promptly as
commercially practicable or (b) elects not to perform such
work, provide to AOL portions of the Source Code for the AOL
IP Telephony Software (and grant a license) necessary to
permit AOL to modify the APIs, SDKs, or AOL IP Telephony
Software to enable such interoperability. If N2P elects to do
the modifications, it shall make the modifications as promptly
as is commercially reasonable. AOL's use of the Source Code
pursuant to this Section 10.2.2 will not include any right to
sublicense, transfer, assign, disclose or distribute the
Source Code to any third party without N2P's prior written
consent, and will be subject to mutually agreed provisions,
reflective of the sensitivity of the Source Code, to preclude
the unauthorized use or disclosure of the Source Code or
information derived therefrom.
10.2.3 Limits on Use. AOL's use of the Source Code
shall not exceed the narrow purpose set forth in Section
10.2.1 or Section 10.2.2.
10.3 Trademark License. Subject to the terms and conditions of this
Agreement, N2P will be entitled to use the following trade
names, trademarks, and service marks of AOL: the "AOL(TM)"
trademark and service mark and other trademarks and service
marks relating specifically to one or more of the AIM IP
Telephony Services, provided that AOL has approved in writing
the use of each such other trademarks or service marks
(collectively, the "AOL Marks"). Subject to the terms and
conditions of this Agreement, AOL will be entitled to use the
trademarks and service marks of N2P set forth on Exhibit J
hereto and other trademarks and service marks relating
specifically to one or more of the N2P IP Telephony Services,
provided that N2P has approved in writing the use of such
other trademarks or service marks (collectively, the "N2P
Marks") (collectively, together with the AOL Marks, the
"Marks"); provided that: (i) each Party does not create a
unitary composite mark involving a Mark of the other Party
without the prior written approval of such other Party; (ii)
each Party displays symbols and notices clearly and
sufficiently indicating the trademark status and ownership of
the other Party's Marks in accordance with applicable
trademark law and practice; and (iii) all such uses of the
other Party's Marks shall be subject to the quality standards
set forth in Section 10.5 of this Agreement, and the granting
Party's prior written approval.
10.4 Ownership of Trademarks. Each Party acknowledges the ownership
right of the other Party in the Marks of the other Party and
agrees that all use of the other Party's Marks will inure to
the benefit, and be on behalf, of the other Party. Each Party
acknowledges that its utilization of the other Party's Marks
will not create in it, nor will it represent it has, any
right, title, or interest in or to such Marks other than the
licenses expressly granted herein. Each Party agrees not to do
anything contesting or impairing the rights of the other Party
in such other Party's Marks.
10.5 Quality Standards. Each Party agrees that the nature and
quality of its products and services supplied in connection
with the other Party's Marks will conform to quality standards
set by the other Party. Each Party agrees to supply the other
Party, upon
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request, with a reasonable number of samples of any materials
publicly disseminated by such Party which utilize the other
Party's Marks. Each Party will comply with all applicable
laws, regulations, and customs and obtain any required
government approvals pertaining to use of the other Party's
Marks.
10.6 Infringement Proceedings.
10.6.1 Notification. Each Party agrees to promptly
notify the other Party of any third party's unauthorized use
of the other Party's Marks or other intellectual property
rights (including, without limitation, those set forth in
Section 12) of which it has actual knowledge. Each Party will
have the sole right and discretion to bring proceedings
alleging infringement of its Marks and other intellectual
property rights; provided, however, that each Party agrees to
provide the other Party with its reasonable cooperation and
assistance with respect to any such infringement proceedings.
10.6.2 Infringement Claims. In addition to the remedies
set forth in Sections 16.2 and 16.7 of this Agreement, in the
event that during the Initial Term, one (1) or more
infringement actions, claims or proceedings are brought
against either Party concerning (i) [****] (each, an
"Infringement Claim" and collectively, "Infringement Claims"),
and such Infringement Claim or Infringement Claims result(s)
in the issuance of a preliminary or permanent injunction
prohibiting the promotion, distribution or use of [****]
during the Initial Term, and which last (with respect to each
such service) [****] following the issuance thereof, AOL shall
have the following rights and remedies with respect to N2P:
(a) AOL may immediately terminate its exclusivity
obligations with respect to such preliminarily or permanently
enjoined Core Premium Services upon delivery of notice to N2P;
and
(b) AOL shall be entitled to immediately terminate
this Agreement in the event that (a) an injunction or
injunctions (whether preliminary or permanent) is or are
issued with respect to any Core Premium Service or Core
Premium Services, and (b) any such injunction or injunctions
lasts or last, in the aggregate, for a period of [****].
11. PUBLICITY
11.1 Press Releases. After execution of this Agreement, N2P may
issue an initial press release, with terms to be mutually
agreed by the Parties, regarding this Agreement and the
relationship between the Parties established hereby. The
Parties will mutually agree on the appropriate timing of each
such release and any other public announcement of the
relationship. Each Party agrees that it shall not issue any
other press release or make any public announcement regarding
this Agreement, including AOL or the AIM IP Telephony
Services, without the prior written consent of the other
Party; provided, however, that each Party shall be permitted,
without the other Party's prior consent, merely to list the
other Party's as one of its industry partners and to repeat
factual information or statements contained in any mutually
agreed-upon press release.
11.2 Statements to Third Parties. Neither Party shall make,
publish, or otherwise communicate, or cause to be made,
published, or otherwise communicated, any deleterious remarks
whatsoever to any third parties concerning the other Party or
its affiliates, directors, officers, employees or agents,
including without limitation, the other Party's products,
services, business projects, business capabilities,
performance of duties and services or financial position.
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12. OWNERSHIP
12.1 AOL Properties. As between the Parties, AOL owns all
copyrights, patents, trade secrets, trademarks, trade name
rights, other intellectual property rights, and all other
right, title and interest, in and to (i) the components of the
AIM Client and the AIM Service, and any Updates thereto,
including, but not limited to the AOL GUI, that (in each case)
are developed or supplied by AOL; (ii) the Commissioned Works
(but excluding the Joint Work Product), subject to the rights
expressly granted to N2P as set forth in this Agreement; (iii)
the AOL Service; (iv) the AOL Marks; and (v) the AOL
Namespace. Without limiting the generality of the foregoing,
all right, title and interest in and to all servers and
server-based technology related to the AIM Service developed
or supplied by AOL (including, without limitation, protocols,
parameters, designs, specifications and user identification
algorithms and technology underlying such algorithms) shall be
owned by AOL. Except as expressly authorized in this
Agreement, N2P will not access or use in any manner the AOL
Namespace or any portion thereof. Without limiting the
foregoing, N2P shall not use, substitute or assign aliases in
place of names assigned by the AOL Registration Process to
users of the AIM IP Telephony Services.
12.2 N2P Properties. As between the Parties, N2P owns all
copyrights, patents, trade secrets, trademarks, trade name
rights, other intellectual property rights, and all other
right, title and interest, in and to the N2P System, the N2P
Services (including, but not limited to, the elements of
graphics, design, organization, presentation, layout,
navigation and stylistic convention (including the digital
implementations thereof) of the graphical user interface
generally associated with online areas contained within the
N2P System and the N2P Services), the N2P IP Telephony
Software, the AOL IP Telephony Software and the AIM IP
Telephony Services (including, in each case, Updates thereto)
that (in each case) are developed or supplied by N2P (but
excluding the AOL GUI, the AOL Look and Feel (and any other
AOL Properties set forth in Section 12.1 above) the Joint Work
Product and the Commissioned Works), subject to the rights
expressly granted to AOL as set forth in this Agreement.
Without limiting the generality of the foregoing, all right,
title and interest in and to all servers and server-based
technology related to the N2P System and the N2P Services
developed or supplied by N2P, including, without limitation,
protocols, parameters, designs, specifications and user
identification algorithms and technology underlying such
algorithms, shall be owned by N2P.
12.3 Co-Development. Any works, including without limitation,
software or other copyrightable materials, as to which both
Parties (or their employees, contractors or agents) are joint
authors, and any patents as to which both Parties (or their
employees, contractors, or agents) are co-inventors
(collectively, the "Joint Work Product") shall be jointly
owned by the Parties (with each Party having the right to use
and exploit, or authorize the use or exploitation by others of
such Joint Work Product, provided that such use or
exploitation is not in breach of this Agreement), without an
obligation to obtain the consent of, or to account to, the
other Party and subject to N2P's and AOL's respective
proprietary rights in any underlying software, works, or
technology to the extent incorporated or included in such
Joint Work Product. Notwithstanding the foregoing, to the
extent that with respect to any co-developed works created
under this Agreement, the Parties shall not constitute
co-authors or co-inventors, and N2P owns such works or
inventions as a matter of law, any and all such works or
inventions shall be deemed included in the license set forth
in Section 10.1, and AOL shall be deemed by this reference to
have a fully paid-up, royalty-free, non-exclusive,
non-transferable and worldwide license for the Term to use,
reproduce, distribute (directly and indirectly), transmit,
display, perform, sublicense and adapt such works as set forth
in Section 10.1 of this Agreement. Each Party shall cooperate
with the other Party in documenting and perfecting all rights
with respect to the Joint Work Product, including executing
any necessary assignments, applications or other documentation
with respect to
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the Joint Work Product.
13. CONFIDENTIAL INFORMATION
Each Party acknowledges that Confidential Information may be disclosed
to the other Party during the course of this Agreement. Each Party
agrees that it will take reasonable steps, at least substantially
equivalent to the steps it takes to protect its own proprietary
information (and, in no event, with less than the exercise of
reasonable care), during the Term, and for a period of [****] following
expiration or termination of this Agreement, to prevent the duplication
or disclosure of Confidential Information of the other Party, other
than by or to its employees or agents who must have access to such
Confidential Information to perform such Party's obligations hereunder,
each of whom shall agree to comply with this Section. Notwithstanding
the foregoing, either Party may disclose Confidential Information
without the consent of the other Party, [****]. Furthermore, in the
event that such disclosure is required of either Party under the laws,
[****] or any other applicable governing body, such Party will (i)
redact portions of this Agreement [****] to the fullest extent
permitted under applicable laws, rules and regulations and (ii) submit
a request to such governing body that such portions and other
provisions of this Agreement receive confidential treatment under the
laws, rules and regulations of the governing body or otherwise be held
in the strictest confidence to the fullest extent permitted under such
laws, rules and regulations.
14. REPRESENTATIONS AND WARRANTIES; INDEMNITIES
14.1 Joint. Each Party represents and warrants to the other Party
that: (i) such Party has the full corporate right, power and
authority to enter into this Agreement, to grant the licenses
granted hereunder and to perform the acts required of it
hereunder; (ii) the execution of this Agreement by such Party,
and the performance by such Party of its obligations and
duties hereunder, do not and shall not violate any agreement
to which such Party is a party or by which it is otherwise
bound or any applicable law; (iii) when executed and delivered
by such Party, this Agreement shall constitute the legal,
valid and binding obligation of such Party, enforceable
against such Party in accordance with its terms; and (iv) to
the best of its knowledge after due inquiry, the N2P
Indemnified Properties (in the case of N2P) and the AOL
Indemnified Properties (in the case of AOL) do not infringe,
misappropriate or violate any patents, copyrights, trade
secrets, trademarks or other proprietary rights of any third
parties. Additionally, N2P hereby represents, to the best of
its knowledge and after due inquiry, that it possesses (and
warrants that it will obtain during the Term) all
authorizations, approvals, consents, licenses, permits,
certificates and all other rights and permissions necessary
for it to (a) perform under this Agreement or (b) to offer the
AOL IP Telephony Software and the AIM IP Telephony Services
hereunder (including, without limitation, the N2P Services and
N2P IP Telephony Software offered as part thereof).
14.2 Intellectual Property Indemnity. Each Party (the "IP
Indemnifying Party") shall, at its sole cost and expense,
indemnify, hold harmless and defend the other Party, and such
other Party's officers, directors, agents, affiliates,
distributors, franchisees and employees (the "IP Indemnified
Party"), from any and all claims, demands, liabilities, costs
or expenses of third parties (including, without limitation,
reasonable attorney's fees) (collectively, the "Liabilities")
arising from or in connection with a third-party claim that
the N2P Indemnified Properties (in the case of N2P) or the AOL
Indemnified Properties (in the case of AOL) infringes upon any
patents, copyrights, trade secrets, trademarks or other
proprietary rights of such third party. The IP Indemnifying
Party shall pay any damages (including costs and attorneys'
fees) finally awarded against the IP Indemnified Party by a
court of competent jurisdiction as a result of such claim (or
pay any settlement of such claim agreed to by the IP
Indemnifying Party). The foregoing obligation of the
Indemnifying Party shall not apply to any such claim to the
extent that it is based on or arises out of
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<PAGE> 27
services, software, materials or rights specifically granted
pursuant to this Agreement by the IP Indemnified Party. The IP
Indemnified Party shall promptly notify the IP Indemnifying
Party in writing of any indemnifiable claim after the IP
Indemnified Party first learns of such claim, and shall
provide the Indemnifying Party with such assistance and
cooperation as the IP Indemnifying Party may reasonably
request from time to time in connection with the defense or
settlement thereof. The IP Indemnified Party shall have the
right to employ separate counsel and to participate in the
defense of any such claim at its own expense. If any
settlement requires a material affirmative obligation of,
results in any material ongoing liability to, or prejudices or
detrimentally impacts in any material way, the IP Indemnified
Party, then such settlement shall require the IP Indemnified
Party's written consent, which shall not be unreasonably
withheld. If the IP Indemnified Party is enjoined or
restrained from exercising any of its rights under this
Agreement as a result of an infringement claim, or if any such
claim is brought or threatened, the IP Indemnifying Party
shall have the right, at its option, to (i) obtain a license
at no cost to the IP Indemnified Party permitting continued
use of the software or other materials that are the subject of
such claim on terms and conditions consistent with the rights
granted to the IP Indemnified Party hereunder, (ii) modify the
software or other materials that are the subject of such claim
to perform their intended function without infringing third
party rights and without materially affecting the
functionality or performance of such software or other
materials, (iii) substitute software or other materials that
are the subject of such claim with items of comparable
functionality and performance, or (iv) if none of the
foregoing is reasonably practicable, terminate this Agreement.
14.3 Indemnity. Each Party (the "Indemnifying Party") shall, at its
sole cost and expense, indemnify, hold harmless and defend the
other Party, and its officers, directors, agents, affiliates,
distributors, franchisees and employees (the "Indemnified
Party"), from any and all Liabilities arising from or in
connection with a third-party claim based upon the
Indemnifying Party's material breach of any duty,
representation or warranty contained in this Agreement, and
shall pay any damages (including costs and attorneys' fees)
finally awarded against the Indemnified Party by a court of
competent jurisdiction as a result of such claim (or pay any
settlement of such claim agreed to by the Indemnifying Party).
The foregoing obligation of the Indemnifying Party shall not
apply to any such claim to the extent that it is based on or
results from services, software, materials, information or
rights provided by the Indemnified Party. The Indemnified
Party shall promptly notify the Indemnifying Party in writing
of any indemnifiable claim after the Indemnified Party first
learns of such claim, and shall provide the Indemnifying Party
with such assistance and cooperation as the Indemnifying Party
may reasonably request from time to time in connection with
the defense or settlement thereof. The Indemnified Party shall
have the right to employ separate counsel and to participate
in the defense of any such claim at its own expense. If any
settlement requires a material affirmative obligation of,
results in any material ongoing liability to, or prejudices or
detrimentally impacts the Indemnified Party in any material
way, then such settlement shall require the Indemnified
Party's written consent, which shall not be unreasonably
withheld.
15. LIMITATION ON LIABILITY; DISCLAIMER
15.1 LIABILITY. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL,
SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARISING FROM
BREACH OF OR OTHERWISE RELATING TO THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, INCLUDING, WITHOUT LIMITATION, THE SALE
OF PRODUCTS, THE USE OR INABILITY TO USE THE AIM SERVICE, THE
AIM CLIENT, THE AIM IP TELEPHONY SERVICES, THE SUPPORT AREA,
THE AOL IP TELEPHONY SOFTWARE, THE N2P
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SYSTEM, OR THE N2P IP TELEPHONY SOFTWARE, INCLUDING, BUT NOT
LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT
EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT
ANY DISCLAIMED DAMAGES ARE PAYABLE TO A THIRD PARTY AND ARE
SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 14.2 OR 14.3.
EXCEPT FOR SUCH LIABILITY UNDER SECTIONS 14.2 AND 14.3, (I)
LIABILITY ARISING UNDER THIS AGREEMENT WILL BE LIMITED TO
DIRECT, OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE MAXIMUM
LIABILITY OF ONE PARTY TO THE OTHER FOR ANY CLAIMS ARISING IN
CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED (EXCLUSIVE OF
AMOUNTS ALREADY PAID BY EITHER PARTY TO THE OTHER PARTY
HEREUNDER) [****]; PROVIDED THAT EACH PARTY WILL REMAIN LIABLE
FOR THE AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS DUE AND
PAYABLE TO THE OTHER PARTY PURSUANT TO THE AGREEMENT.
15.2 NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY HEREBY
SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF
PERFORMANCE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EACH PARTY SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING THE
REVENUE FROM OR SUCCESS OF THE AIM IP TELEPHONY SERVICES.
16. TERM AND TERMINATION
16.1 Term.
16.1.1 Initial Term. Unless earlier terminated as set
forth herein, the initial term of this Agreement (the "Initial
Term") shall be the lesser of [****].
16.1.2 Extension Periods. Upon the expiration of the
Initial Term, AOL may elect, in its sole discretion, to extend
the term of this Agreement for an additional period [****] on
the same terms and conditions as the Initial Term (the
"Renewal Term"), and for [****] each thereafter (each, an
"Extension Period"), up to an aggregate maximum of [****] (the
Initial Term, together with the Renewal Term and any Extension
Periods, collectively referred to herein as the "Term"). AOL
shall be deemed to have exercised its option for the Renewal
Term, or any Extension Period unless, at least [****] prior to
the expiration of the Initial Term, or the Renewal Term (in
the case of the first Extension Period) (or, as to the second
Extension Period, at least [****] prior to the end of the
first Extension Period), AOL provides written notice to N2P
that AOL does not wish to exercise its option for the
forthcoming Extension Period. During any Extension Period, the
obligations of the Parties with respect to exclusivity,
development, and , promotions [] shall not apply. Without
limitation of the generality of the foregoing, during any
Extension Period, (i) the Parties will not be subject to the
obligations of Sections [****] of this Agreement; (ii) [****]
with respect to all [****] generated during the Renewal Term
and/or any Extension Period and [****] set forth in Section
7.2.2 of this Agreement.
16.2 Termination for Breach. Except as expressly provided
elsewhere in this Agreement, either Party may terminate this
Agreement at any time in the event of a material breach of
the Agreement by the other Party which remains uncured after
thirty (30) days written
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notice thereof to the other Party (or such other period as may
be expressly specified elsewhere in this Agreement); provided
that the cure period with respect to any scheduled payment
shall be thirty (30) days following receipt by the Party owing
such payment of written notice of the failure to make such
payment. For avoidance of doubt, the Parties acknowledge that,
if a particular provision of this Agreement includes a right
to terminate this Agreement due to breach of such provision
after a cure period set forth in such provision, only such
other cure period shall apply, and the thirty (30) day cure
period set forth in this Section 16.2 shall not be in addition
to such other cure period.
16.3 Termination on Change of Control. Promptly upon undergoing any
Change of Control, each Party shall provide the other Party
with written notice thereof. In the event of (i) a Change of
Control of N2P resulting in Control of N2P by an AOL
Competitor or AOL Competitor or (ii) in the event that N2P is
(at the time of such Change of Control) Controlled by the
Parent Company, any Change of Control of the Parent Company
resulting in Control of the Parent Company by any AOL
Competitor , AOL shall have the right to terminate this
Agreement by providing thirty (30) days' prior written notice
of such intent to terminate. In the event of (i) a Change of
Control of AOL resulting in Control of AOL by an N2P
Competitor or Parent Company Competitor or (ii) if AOL is (at
the time of such Change of Control) Controlled by AOL, any
Change of Control of AOL resulting in Control of AOL by any
N2P Competitor or Parent Company Competitor, N2P may terminate
this Agreement by providing thirty (30) days' prior written
notice of such intent to terminate. Notwithstanding anything
to the contrary, each Party's termination right under this
Section 16.3 shall be exercised no later than thirty (30) days
following such Party's receipt of written notice of the Change
of Control triggering such termination right, and shall expire
if not exercised within such thirty (30) day period.
16.3.1 AOL Buyout Right. Notwithstanding the
provisions of the Section 16.3, if during the Initial Term,
AOL is acquired by or acquires a telecommunications company
with a market capitalization in excess of the Buyout
Threshold, AOL shall have the right to terminate this
Agreement by providing thirty (30) days prior written notice
to N2P and AOL shall refund to N2P an amount equal to [****].
16.4 Termination for Bankruptcy/Insolvency. Either Party may
terminate this Agreement immediately following written notice
to the other party if the other party (i) ceases to do
business in the normal course, (ii) becomes or is declared
insolvent or bankrupt, (iii) is the subject of any proceeding
related to its liquidation or insolvency (whether voluntary or
involuntary) which is not dismissed within ninety (90)
calendar days or (iv) makes an assignment for the benefit of
creditors.
16.5 Termination for Regulated Entity Event.
16.5.1 United States. The Parties acknowledge that in
undertaking the obligations set forth herein, AOL is not
offering services as a reseller of telecommunications services
or as a provider of telecommunications services. It is
understood and agreed that if, during the Term, the Federal
Communications Commission or any other relevant United States
federal regulatory body issues (or is reasonably likely to
issue) a ruling that subjects (or is reasonably likely to
subject, as the case may be) AOL to regulation as a reseller
or provider of telecommunications services (or similar
regulation) (collectively, a "Regulated Entity Event"), the
Parties agree to work together in good faith to amend this
Agreement to ensure that AOL can secure the benefit of the
bargain under this Agreement without being subject to
telecommunications related regulation in the United States as
a telecommunications reseller or provider (or
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<PAGE> 30
similar status). If the Parties are unable to agree upon such
amendments within ninety (90) days of AOL's notification of
the Regulatory Entity Event, AOL may terminate this Agreement
without liability by providing written notice of its intention
to terminate.
16.5.2 International. In the event that during the
Term any non-US regulatory body issues (or is reasonably
likely to issue) a ruling that subjects (or is reasonably
likely to subject, as the case may be) AOL to a
telecommunications or similar regulation that could prevent
AOL from obtaining the benefit of the bargain under this
Agreement (e.g., regulation as a reseller or provider of
telecommunications services (or similar status)), the Parties
shall work together in good faith to amend this Agreement to
ensure that AOL can secure the benefit of the bargain under
this Agreement without being subject to telecommunications
related or similar regulation in such country. If the Parties
are unable to agree upon such amendments within ninety (90)
days of AOL's notification of the regulatory event likely to
cause AOL to be subjected to any such regulation, AOL may
terminate this Agreement with respect to the country (or
countries) in which such regulatory event applies without
liability, upon delivery of written notice.
16.6 Termination for Non-Competitiveness. At any time following the
[****] anniversary of the Effective Date, (i) AOL shall have
the right to terminate this Agreement, in the event that:
(a) [****] or more of the Core Premium Services do
not satisfy the requirements of Section 3.1 of this Agreement;
(b) [****] or more of the Core Premium Services do
not satisfy the requirements of Section 3.2 of this Agreement;
(c) [****] or more of the Core Premium Services are
[****]
(d) [****]
(e) N2P shall have missed the Cutoff Dates for [****]
or more Core Premium Services in accordance with and subject
to Section 1.3 of this Agreement;
unless (ii) N2P cures such failure within the applicable cure
periods set forth in Section 3.1 (in the case of clause (a)
above), Section 3.2 (in the case of clause (b) above), Section
3.3 (in the case of clauses (c) and (d) above) or Section 1.3
and Exhibit I (in the case of clause (e) above), respectively.
16.7 AOL IP Termination Right. At any time during the Term, in the
event that any Infringement Claim(s) materially adversely
affect the integration, distribution, promotion or offering of
the AOL IP Telephony Software or any AIM IP Telephony Service,
then AOL shall have the right to terminate this Agreement upon
thirty (30) days prior written notice to N2P, and without any
refund to N2P (collectively, the "IP Termination Right").
16.8 Termination for Strategic Relationship. If at any time after
the [****] anniversary of the Effective Date, AOL enters into
a broad-ranging, strategic relationship with (i) any major
national or international telecommunications company [****],
(ii) any [****] or (iii) any major wireless carrier (e.g.,
[****]) for the distribution of telecommunication services
across substantially all of the properties of AOL and its
Affiliates as in existence on the Effective Date
(collectively, the "New Strategic Relationship"), then AOL
shall have the right to terminate this Agreement; provided,
however, that AOL shall use commercially
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reasonable efforts to have such company enter into an
agreement with N2P to distribute or otherwise offer the Core
Premium Services in connection with such New Strategic
Relationship on terms and conditions comparable to those
contained herein (including those with respect to promotion,
distribution, exclusivity for N2P and revenue share to N2P,
but specifically excluding any warrants or similar rights). In
the event of any such termination of this Agreement pursuant
to this Section 16.8, [****]; provided, however, that (a) if,
before the expiration of such [****], such company and N2P
have entered into such an agreement to distribute or otherwise
offer some but not all of the Core Premium Services in
connection with such New Strategic Relationship, then [****]
or (b) if, before the expiration of such [****] period, such
company and N2P have entered into such an agreement to
distribute or otherwise offer all of the Core Premium Services
in connection with such New Strategic Relationship, then AOL
shall have no obligation to pay any such termination fee to
N2P. The Parties acknowledge and agree that the payment
contemplated by this Section 16.8 is solely a termination fee
agreed to by the Parties, and shall not be used to determine
any damages payable by either Party to the other Party
hereunder, which shall be determined in accordance with the
remainder of this Agreement (including, without limitation,
Section 15.1 hereof) and applicable law.
16.9 Transition Assistance. In the event of any termination of this
Agreement other than pursuant to Sections 16.1, 16.4 or 16.5,
each Party will provide to the other Party the dedicated,
full-time services of one (1) qualified engineer for a period
of ninety (90) days to assist the other Party in effecting an
orderly termination of this Agreement, including minimizing
disruption for customers of the AIM IP Telephony Services. In
the event of termination due to an AOL material breach of this
Agreement pursuant to Section 16.2, or a Change of Control of
AOL under Section 16.3, or the occurrence of a Regulated
Entity Event under Section 16.5, AOL shall pay N2P the actual,
reasonable, fully-allocated costs incurred in connection with
N2P's assistance in the migration or transition. In the event
of termination due to a N2P material breach of this Agreement
pursuant to Section 16.2, a Change of Control of N2P under
Section 16.3, or the exercise by AOL of its IP Termination
Right under Section 16.7 of this Agreement, N2P shall pay for
the actual, reasonable, fully-allocated costs incurred in
connection with AOL's assistance in the migration or
transition. In the event of any other termination of this
Agreement, [****]. For the avoidance of doubt, such migration
or transition assistance shall not include development
obligations. At AOL's request, at the end of the Initial Term,
N2P shall use commercially reasonable efforts to transfer to
AOL the phone numbers and special access codes referred to in
Section 5.2.1 of this Agreement unless such phone numbers are
used for N2P Services other than the AIM IP Telephony
Services.
16.10 Transition Period. For a period of up to [****] following the
termination or expiration of this Agreement (the duration of
which, up to [****], shall be determined by AOL and notified
to N2P) (the "Transition Period"), the Parties shall cooperate
to effect an orderly termination of this Agreement, including
minimizing disruption for customers of the AIM IP Telephony
Services. During the Transition Period, each of AOL and N2P
shall have all of the rights and obligations set forth in this
Agreement (including, without limitation, with respect to the
AIM IP Telephony Services) that they had prior to the date of
termination or expiration (including, in the case of AOL, all
rights necessary to enable AOL to transition the AIM IP
Telephony Services (other than PTP Calling Card Services) to
another system without interruption of service).
Notwithstanding the foregoing, during the Transition Period,
N2P shall be entitled to Transaction Revenues to the same
extent as before such termination or expiration, but the
Parties shall not be subject to the obligations and criteria
in this Agreement with respect to exclusivity, promotions,
development, delivery, performance and Updates. During the
Transition Period, N2P shall remain obligated to provide to
AOL the support services described in Section 6. Also, during
the Transition Period, N2P shall provide AOL with reasonable
assistance in migrating or transitioning the AIM IP Telephony
Services (other than PTP Calling Card
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Services) to another provider. Each Party shall be entitled to
seek injunctive relief such as specific performance in the
event the other Party fails to comply with its transition
obligations under this Section 16.10; provided, however, that,
following any termination or expiration of this Agreement, in
the event either Party fails to comply with its transition
obligations under this Section 16.10, the Parties shall
attempt to resolve such failure to the satisfaction of both
Parties through the Management Committee, and in the event
that the Parties are unable to do so, AOL shall be entitled to
seek injunctive relief in accordance with this Section 16.10.
Notwithstanding the foregoing, all end-user sublicenses of the
AOL IP Telephony Software shall survive the termination or
expiration of this Agreement pursuant to the terms of such end
user license agreement as provided herein.
16.11 Return of Information. Upon the expiration or termination of
this Agreement, each Party shall, upon the written request of
the other Party, return or destroy (at the option of the party
receiving the request) all Confidential Information of the
other Party.
16.12 Survival. Notwithstanding anything to the contrary contained
herein, the provisions of Sections 7.1, 7.2, 7.3 and 7.6 (as
to amounts accrued but unpaid), 7.7, 7.8, 7.9, 10.2, 12, 13,
14, 15, 16.8, 16.9, 16.10, 16.11, 16.12, 17, 18.1, 18.3, 18.5
and 18.14 shall survive the termination, cancellation or
expiration of this Agreement. In addition, all payment terms
of this Agreement and any provision which, by its nature, must
survive the expiration, termination or cancellation of this
Agreement, shall survive the expiration, termination or
cancellation of this Agreement. All licenses granted by either
Party to the other pursuant to this Agreement shall terminate
upon termination or expiration of this Agreement except as
otherwise expressly set forth herein with respect to the
Transition Period.
17. DISPUTE RESOLUTION
17.1 Management Committee. The Parties will act in good faith and
use commercially reasonable efforts to promptly resolve any
claim, dispute, controversy or disagreement between the
Parties or any of their respective Affiliates, successors and
assigns under or related to this Agreement (including, without
limitation) any document executed pursuant to this Agreement
or any of the transactions contemplated hereby or any rights
or obligations hereunder (each, a "Dispute"). If the Parties
cannot resolve any such Dispute within ten (10) business days,
such Dispute will be submitted to the Management Committee for
resolution. For ten (10) days following submission of the
Dispute to the Management Committee, the Management Committee
will have the exclusive right to resolve such Dispute;
provided, further, that the Management Committee will have the
final and exclusive right to resolve Disputes arising from any
provision of the Agreement which expressly or implicitly
provides for the Parties to reach mutual agreement as to
certain terms. If the Management Committee is unable to
amicably resolve the Dispute during the ten (10) day period,
then such Dispute shall be subject to the resolution
mechanisms described below. Neither Party shall seek, nor
shall be entitled to seek, binding outside resolution of the
Dispute unless and until the Parties have been unable amicably
to resolve the Dispute as set forth in this Section 17.1 and
then, only in compliance with the procedures set forth in this
Section 17. For the avoidance of doubt, neither Party shall be
required to submit any Dispute to the Management Committee or
to arbitration prior to issuing any notice of suspension or
termination under Sections 3, 4, 9 or 16 of this Agreement. In
addition, the submission of any Dispute to the Management
Committee or to arbitration hereunder shall not affect either
Party's right to exercise any such suspension or termination
right under this Agreement, except as otherwise determined,
pursuant to a binding decision or order, by a court of
competent jurisdiction (in accordance with Section 17.4 of
this Agreement) or an arbitral panel (in accordance with
Section 17.2 of this Agreement).
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17.2 Arbitration.
17.2.1 Arbitration. Any Dispute not resolved by
amicable resolution as set forth in Section 17.1 shall be
governed exclusively and finally by arbitration conducted by
the American Arbitration Association ("AAA") in New York, New
York in accordance with the Commercial Arbitration Rules
("Commercial Rules") of the AAA, including the AAA
Supplementary procedures for Large Complex Commercial Disputes
("Complex Procedures"), as such rules shall be in effect on
the date of delivery of a demand for arbitration ("Demand"),
except to the extent that such rules are inconsistent with the
provisions set forth herein. Notwithstanding the foregoing,
the Parties may agree in good faith that the Complex
Procedures shall not apply in order to promote the efficient
arbitration of Disputes where the nature of the Dispute,
including without limitation the amount in controversy, does
not justify the application of such procedures.
17.2.2 Selection of Arbitrators. The arbitration
panel shall consist of three (3) arbitrators. Each Party shall
name one (1) arbitrator within ten (10) days after the
delivery of the Demand, and the two Party-appointed
arbitrators shall appoint the third arbitrator. The third
arbitrator shall be a neutral participant, with no prior
working relationship with either Party. If the two arbitrators
are unable to select a third arbitrator within ten (10) days,
a third neutral arbitrator shall be appointed by the AAA from
the panel of commercial arbitrators of any of the AAA Large
and Complex Resolution Programs.
17.2.3 Arbitral Rules. The Federal Arbitration Act, 9
U.S.C. Secs. 1-16, and not state law, shall govern the
arbitrability of all Disputes. The arbitrators shall allow
such discovery as is appropriate to the purposes of
arbitration in accomplishing a fair, speedy and cost-effective
resolution of the Disputes. The arbitrators shall reference
the Federal Rules of Civil Procedure then in effect in setting
the scope and timing of discovery.
17.2.4 Arbitration Awards. The arbitrators shall have
the authority to award compensatory damages only. Any award by
the arbitrators shall be accompanied by a written opinion
setting forth the findings of fact and conclusions of law
relied upon in reaching the decision. The award rendered by
the arbitrators shall be final, binding and non-appealable,
and judgment upon such award may be entered by any court of
competent jurisdiction. The Parties agree that the existence,
conduct and content of any arbitration shall be kept
confidential and no Party shall disclose to any person any
information about such arbitration, except as may be required
by law or by any governmental authority or for financial
reporting purposes in each Party's financial statements.
17.2.5 Arbitration Expenses. Each Party shall pay the
fees of its own attorneys, expenses of witnesses and all other
expenses and costs in connection with the presentation of such
Party's case (collectively, "Attorneys' Fees"). The remaining
costs of the arbitration, including without limitation, fees
of the arbitrators, costs of records or transcripts and
administrative fees (collectively, "Arbitration Costs") shall
be borne equally by the Parties. Notwithstanding the
foregoing, the arbitrators may modify the allocation of
Arbitration Costs and award Attorneys' Fees in those cases
where fairness dictates a different allocation of Arbitration
Costs between the Parties and an award of Attorneys' Fees to
the prevailing Party as determined by the arbitrators.
17.3 Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of New York, without
reference to New York's choice of law rules.
17.4 Limited Interim Injunctive Relief; Consent to Jurisdiction.
Notwithstanding the foregoing, the Parties hereby acknowledge
and agree that the Parties may seek interim injunctive
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relief with respect to any Disputes arising under Sections
5.3, 10.3 and 13 of this Agreement. In connection with any
such Disputes, each of AOL and N2P: (i) irrevocably consents
to the exclusive jurisdiction of any state or Federal court
located in the Borough of Manhattan, City of New York, State
of New York over any and all such interim injunctive relief;
(ii) waives personal service of any and all process upon it in
connection with such interim injunctive relief; (iii) consents
that any such service of process in connection therewith shall
be made by registered mail directed to AOL or N2P (as the case
may be), and that such service shall be deemed to have been
completed on the date determined in accordance with Section
18.3 of this Agreement; and (iv) waives any objection based
upon forum non conveniens and any objection to venue in
connection with any such interim injunctive relief.
18. GENERAL PROVISIONS
18.1 Acknowledgment. AOL AND N2P EACH ACKNOWLEDGE THAT THE
PROVISIONS OF THIS AGREEMENT WERE NEGOTIATED TO REFLECT AN
INFORMED, VOLUNTARY ALLOCATION BETWEEN THEM OF ALL RISKS (BOTH
KNOWN AND UNKNOWN) ASSOCIATED WITH THE TRANSACTIONS
CONTEMPLATED HEREUNDER. THE LIMITATIONS AND DISCLAIMERS
RELATED TO WARRANTIES AND LIABILITY CONTAINED IN THIS
AGREEMENT ARE INTENDED TO LIMIT THE CIRCUMSTANCES AND EXTENT
OF LIABILITY. THE PROVISIONS OF THIS SECTION 18.1 SHALL BE
ENFORCEABLE INDEPENDENT OF AND SEVERABLE FROM ANY OTHER
ENFORCEABLE OR UNENFORCEABLE PROVISION OF THIS AGREEMENT.
18.2 Independent Contractors. The Parties to this Agreement are
independent contractors. Neither Party is an agent,
representative, or partner of the other Party. Neither Party
shall have any right, power or authority to enter into any
agreement for or on behalf of, or incur any obligation or
liability of, or to otherwise bind, the other Party. This
Agreement shall not be interpreted or construed to create an
association, agency, joint venture or partnership between the
parties or to impose any liability attributable to such a
relationship upon either Party.
18.3 Notice. Any formal notice under this Agreement will be given
in writing and will be deemed to have been delivered and given
for all purposes (i) on the delivery date if delivered by
confirmed facsimile; (ii) on the delivery date if delivered
personally to the Party to whom the same is directed; (iii)
one (1) business day after deposit with a commercial overnight
carrier, with written verification of receipt; or (iv) five
(5) business days after the mailing date, whether or not
actually received, if sent by U.S. mail, return receipt
requested, postage and charges prepaid, or any other means of
rapid mail delivery for which a receipt is available.
To AOL: To N2P:
AOL, Inc. Net2Phone Inc.
22000 AOL Way 171 Main Street
Dulles, Virginia 20166 Hackensack, NJ 07601
Attention: David Gang Attention: Jonathan Reich
Phone: (703) 265-3677 Phone: (201) 928-4438
Fax: (703) 265-3921 Fax: (201) 928-2970
E-mail: Dgang@aol.com E-mail: jreich@net2phone.com
In the case of AOL, such notice also will be provided to both
the Senior Vice President
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for Business Affairs (fax no. 703-265-1206 and the Deputy
General Counsel (fax no. 703-265-1105), each at the address
set forth above. In the case of N2P, such notice also will be
provided to the General Counsel at the address and fax number
set forth above.
18.4 No Waiver. The failure of either Party to insist upon or
enforce strict performance by the other Party of any provision
of this Agreement or to exercise any right under this
Agreement shall not be construed as a waiver or relinquishment
to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather,
the same shall be and remain in full force and effect.
18.5 Entire Agreement. This Agreement sets forth the entire
agreement, and supersedes any and all prior and
contemporaneous agreements of the Parties with respect to the
transactions set forth herein. Neither Party shall be bound
by, and each Party specifically objects to, any term,
condition or other provision which is different from or in
addition to the provisions of this Agreement (whether or not
it would materially alter this Agreement) and which is
proffered by the other Party in any correspondence or other
document, unless the party to be bound thereby specifically
agrees to such provision in writing.
18.6 Amendment. No change, amendment or modification of any
provision of this Agreement will be valid unless set forth in
a written instrument signed by each Party by an executive or
officer authorized to bind such Party.
18.7 Assignment. Neither Party may assign any of its rights,
interest or benefits or delegate any of its duties under this
Agreement, or otherwise transfer this Agreement without the
prior written consent of the other Party; provided that either
party may assign this Agreement as part of a reincorporation,
change of domicile or merger of a Party with or into, or sale
of all or substantially all of the assets of a Party to
another entity that is not a competitor of the non-assigning
Party (i.e., an AOL Competitor or AOL Competitor if AOL is the
non-assigning Party or an N2P Competitor or Parent Company
Competitor if N2P is the non-assigning Party) if, in any such
event, the assignee (and any successor entity) agrees to be
bound by this Agreement to the same extent as the assigning
Party. Subject to the foregoing, this Agreement shall be fully
binding upon, inure to the benefit of and be enforceable by
the Parties hereto and their respective successors and
assigns.
18.8 Construction. In the event that any provision of this
Agreement conflicts with the law under which this Agreement is
to be construed or if any such provision is held invalid by a
court with jurisdiction over the parties to this Agreement,
(i) such provision shall be deemed to be restated to reflect
as nearly as possible the original intentions of the Parties
in accordance with applicable law, and (ii) the remaining
terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect.
18.9 Export Controls. With respect to their activities under this
Agreement, both Parties shall adhere to all applicable laws,
regulations and rules relating to the export of technical data
and shall not export or re-export any technical data, any
products received from the other Party or the direct product
of such technical data to any proscribed country listed in
such applicable laws, regulations and rules unless properly
authorized.
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18.10 Headings. The captions and headings used in this Agreement are
inserted for convenience only and shall not affect the meaning
or interpretation of this Agreement.
18.11 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which
together shall constitute one and the same document. This
Agreement may also be signed by facsimile transmission and any
signature sent or received via facsimile transmission shall
constitute an original signature.
18.12 Force Majeure. N2P shall not be responsible for (any delays,
errors, failures to perform, interruptions or disruptions
caused by or resulting from any acts of God, strikes,
lockouts, riots, acts of war, fire, power failure,
earthquakes, severe weather, floods or other natural disaster
or from any other unforeseeable events outside of N2P's
reasonable control (not including any subcontractor of
services provided by N2P hereunder) that prevents N2P from
complying with any of its material obligations under this
Agreement (each, a "Force Majeure Event"). The foregoing shall
not relieve N2P from responsibility to the extent that
reasonable actions or actions normally undertaken in the
industry would have made such events within N2P's reasonable
control or prevented any such delays, errors, failures,
interruptions or disruptions. In addition, in no event will a
Force Majeure Event permit any delay, error, failure,
interruption or disruption for longer than a commercially
reasonable time considering the event (or beyond any
applicable cure period expressly set forth in this Agreement),
and after such reasonable time period (or express cure period,
as the case may be), the Force Majeure Event shall no longer
be deemed to exist or apply.
18.13 Insurance. N2P, at its cost and expense, shall secure and
maintain adequate insurance coverage as is necessary for N2P
to bear all of its obligations under this Agreement.
Maintenance of such insurance shall not be deemed to relieve
or limit N2P of any responsibility or obligation hereunder
whatsoever. N2P assumes full and complete liability for all
injuries to, or death of, any person or for any damages to
property arising from its acts or omissions. N2P will add AOL
as an additional insured on all appropriate insurance
policies, including all liability policies, with endorsements
that require thirty (30) days notice of AOL of any
cancellation of such policies, and shall promptly provide AOL
with copies of such policies and endorsements and any changes
thereto from time to time. N2P's insurance shall be primary as
to any other insurance AOL may have.
18.14 Remedies. Except where otherwise specified, the rights and
remedies granted to a Party under this Agreement are
cumulative and in addition to, and not in lieu of, any other
rights or remedies which the Party may possess at law or in
equity; provided that, in connection with any dispute
hereunder, neither Party will be entitled to offset any
amounts that it claims to be due and payable from the other
Party against amounts otherwise payable by such Party to the
other Party.
18.15 Disclaimers. Each AIM IP Telephony Service shall contain an
appropriate disclaimer (the specific form and substance to be
mutually agreed upon by the Parties).
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
AOL, INC. NET2PHONE INC.
By: /s/ David M. Colburn By: /s/ Clifford M. Sobel
Print Name: David M. Colburn Print Name: Clifford M. Sobel
Title: President, Business Affairs Title: Chairman
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EXHIBIT A
DEFINITIONS
ADDITIONAL N2P CHANNEL. Any other distribution channel (e.g., an Interactive
Service other than AOL) through which N2P makes available an offering comparable
in nature to the offerings on the AIM Service.
AFFILIATE. As to a Party, any entity that Controls, is Controlled by or under
common Control with such Party. "Affiliate" means, with respect to any Party,
any entity controlling, controlled by, or under common control with, such Party;
it being understood that [****] or greater voting, equity or equivalent interest
in the controlled entity shall be deemed "CONTROL".
AIM CLIENT. "AIM Client" means the Win 32 version of the client software (United
States version 3.0) (or any successor version thereof designated by AOL)
developed and distributed by AOL that enables end-users to access and use the
AIM Service. The AIM Client shall not include (a) any discrete applications
providing substantially different services, regardless of any shared use of the
AIM Service backend (e.g., presence engine, directory server, etc.), (b) any
desktop search application, AOL desktop information "ticker," AOL mail client or
AOL co-browser, (c) any version of the AIM Client that is co-branded with an
unaffiliated third party other than the Qualified N2P Competitors listed on
Exhibit K hereto (provided that (1) the Parties may mutually agree from time to
time to expand such list of Qualified N2P Competitors (such agreement not to be
unreasonably withheld by either Party) or (2) plug-ins to other clients (e.g.,
browser plug-ins), provided that AOL shall use reasonable efforts to include the
AIM IP Telephony Services in such plug-ins.
AIM IP TELEPHONY SERVICES. The N2P Services customized by N2P to be distributed
by AOL on the AIM Service in accordance with this Agreement, utilizing the
services of N2P hereunder and consisting of: (i) the PTP Calling Card Service,
the Secondary AIM IP Telephony Services and the Conference Calling Service
(including, in each case, any Updates thereto); and (ii) any other IP Telephony
Services (including Optional or Expanded Services) that the Parties agree to add
to this Agreement.
AIM MEMBER. Any registered user of the AIM Service (including any registered
user of any AIM IP Telephony Service).
AIM SCREEN NAME. A unique identifier assigned to each AIM Member that enables
such AIM Member to send and receive instant messages and communicate with others
on the AIM Service.
AIM SERVICE. "AIM Service" means the standard, narrow-band AOL-branded service,
currently available through the Internet, that enables end-users of such service
to exchange, in real-time, private, personalized messages with, and to monitor
the online status of, other end-users of such service through use of the AIM
Client, and any upgrades or enhancements thereto during the Term, excluding: (i)
such service(s) or similar services available on the AOL Service; and (ii) any
other version of an AIM service which is materially different from the standard
narrow-band U.S. version of the AIM brand service, by virtue of its branding,
distribution, functionality, Content or services, including, without limitation,
any co-branded version of the service or any version distributed through or
designed for any broadband distribution platform or through any platform or
device other than a desktop personal computer (e.g., a service designed
primarily for distribution to a hand-held, wireless personal digital assistant
(e.g., a Palm VII PDA)).
AOL COMPETITOR. "AOL Competitor" shall mean an entity offering one or more of
the following: (i) online or Internet connectivity services (e.g., an Internet
service provider); (ii) an interactive site or service featuring a broad
selection of aggregated third party interactive content (or navigation thereto)
(e.g., an online service or search and directory service) and/or marketing a
broad selection of products and/or services across numerous interactive commerce
categories (e.g., an online mall or other leading online commerce site); and
(iii) communications software capable of serving as the principal means through
which a user creates, sends and receives electronic mail or real time online
messages.
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AOL DISTRIBUTION OBLIGATION. The obligations under this Agreement of AOL to
distribute the Core Premium Services (and other AIM IP Telephony Services which
have been accepted by AOL pursuant to the terms of this Agreement), in
accordance with and subject to Section 4.1.2 of this Agreement.
AOL GUI. The elements of graphics, design, organization, presentation, layout,
navigation, sound and stylistic convention (including the digital
implementations thereof) of the graphical user interface generally associated
with online areas contained within the AIM Service, the AIM Client and the AIM
IP Telephony Services.
AOL INDEMNIFIED PROPERTIES. (a) The elements of the AIM Service, the AIM Client
and the AOL GUI (including, in each case, any Updates thereto), that are
supplied or developed (as between the Parties) by AOL or by third parties for or
on behalf of AOL, and (b) the AOL Marks, the AOL Distribution Obligation and the
Advertisements.
AOL IP TELEPHONY SOFTWARE. The customized version(s) of the N2P IP Telephony
Software developed or supplied by N2P pursuant to this Agreement, including,
without limitation, the SDKs, APIs, all Documentation therefor and all Updates
thereto.
AOL LOOK AND FEEL. The elements of graphics, design, sound, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with the AIM Service, or the AIM Client.
AOL NAMESPACE. "AOL Namespace" means the AOL database of users of the AIM
Service and their AIM Screen Names, the algorithms, and the server complex used
by AOL to implement and support the AIM Service.
AOL SERVICE. The standard narrow-band U.S. version of the America Online(R)
brand service, specifically excluding the AIM Service. N2P acknowledges that in
connection with this Agreement, N2P obtains no distribution rights whatsoever of
the AIM IP Telephony Services on the AOL Service.
AOL USER. Any registered user of the AOL Service.
[****]
CHANGE OF CONTROL. Change of Control shall mean either (a) the consummation of a
reorganization, merger or consolidation or sale or other disposition of
substantially all of the assets of a party or (b) the acquisition by any
individual, entity or group (within the meaning of Section 13d-3 or 14(d)(2) of
the Securities Exchange Act of 1934, as amended) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under such Act) of more than [****] of
either (i) the then outstanding shares of common stock of such party; or (ii)
the combined voting power of the then outstanding voting securities of such
party entitled to vote generally in the election of directors.
CO-BRANDED SITE. "Co-Branded Site" shall have the meaning set forth in Exhibit B
to this Agreement.
CONTENT. Text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data, Products,
Advertisements, promotions, links, pointers and software, including any
modifications, upgrades, updates, enhancements and related documentation.
CONTROL. "Control" (including the terms "controlling", "controlled by" or "under
common control with") as to any person shall mean beneficial ownership (within
the meaning of Rule 13d-3 issued under the Securities Exchange Act of 1934, as
amended) promulgated under the Securities and Exchange Act of 1934, as amended)
of more than [****] of either (i) the then outstanding shares of common stock of
such person or (ii) the combined voting power of the then outstanding voting
securities of such person entitled to vote generally in the election of
directors.
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CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the course
of the negotiation or performance of this Agreement which is, or should be
reasonably understood to be, confidential or proprietary to the disclosing
party, including, but not limited to, the existence and material terms of this
Agreement, User Information or other information about AIM Members, AOL Users,
technical processes and formulas, other technical information and materials,
product designs, sales, cost and other unpublished financial information,
product and business plans, projections and marketing data. Without limiting the
generality of the foregoing, all protocols, parameters, designs, specifications
and user identification algorithms relating to the AOL Service, the AIM Service
and/or the N2P IP Telephony Services are Confidential Information of AOL and
N2P, respectively. "Confidential Information" shall not include information that
the receiving party can establish is (a) already lawfully known to or
independently developed by the receiving party, (b) generally known to the
public, or (c) lawfully obtained from any third party. In addition a Party may
disclose Confidential Information to the extent required to be disclosed by law,
or permitted to be disclosed pursuant to the terms of this Agreement.
CORE AOL OBLIGATIONS. The AOL GUI, the AOL Distribution Obligation and any other
obligations that the Parties mutually agree (in a written instrument signed by
an executive or officer of such Party authorized to bind such Party) shall be
AOL's primary responsibility under this Agreement.
CORE PREMIUM SERVICES. The PC-to-Fax Service, the Fax-to-PC Service, the
PC-to-Phone Service, the Phone-to-PC Service and the PTP Calling Card Service,
the Fax-to-Fax Service, the Conference Calling Service, together (to the extent
mutually agreed upon in writing by the Parties) with all Updates thereto. From
time to time during the Term, the Parties may, by mutual agreement, designate
additional N2P Services as "Core Premium Services" or may remove certain N2P
Services from the definition of "Core Premium Services."
DOCUMENTATION. Documentation, as to any software or service, means all
documentation relating to the software or service provided to or used by end
users. Documentation as to the source code form of software also includes all
technical documentation and source code notations used or created by the
creating party or provided to or used by any support or other technical
personnel.
INDEPENDENT BUSINESS RELATIONSHIP. A commercial relationship between N2P and an
AIM Member whereby the AIM Member has either (i) purchased products or services
from N2P other than through the AIM Service (including, without limitation,
through the AIM IP Telephony Services), or (ii) voluntarily provided information
to N2P through a contest, registration, or other communication, which included
clear and conspicuous notice to the AIM Member that the information provided by
the AIM Member could result in a message or communication being sent to that AIM
Member by N2P or its agents
INITIAL TERM. "Initial Term" shall have the meaning set forth in Section 16.1.1
of this Agreement. The Parties acknowledge for avoidance of doubt that the
Initial Term ends upon expiration or earlier termination of this Agreement.
INTERACTIVE SERVICE. An entity offering one or more of the following: (i) online
or Internet connectivity services generally to the public (e.g., an Internet
service provider); (ii) an online interactive site or service featuring a broad
selection of aggregated third party interactive content (or navigation thereto)
(e.g., a "portal" or an online search and directory service) and/or marketing a
broad selection of products and/or services across numerous interactive commerce
categories (e.g., an online mall); (iii) a persistent desktop client offering
Internet or online connectivity services; and (iv) communications software
capable of serving as the principal means through which a user creates, sends
and receives electronic mail or real time or "instant" online messages (whether
by telephone, computer, PDA or other wireless mobile devices), including without
limitation greeting cards.
INTERACTIVE SITE. Any interactive site or area, including, by way of example and
without limitation, (i) a site on the World Wide Web portion of the Internet or
(ii) a channel or area delivered through a "push" product such as the Pointcast
Network or interactive environment such as Microsoft's Active Desktop.
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IP TELEPHONY. Voice, video or facsimile service provided over one or more data
networks using an Internet Protocol (whether through one or more data networks
only or through one or more data networks interfacing with a public switched
telephone network).
MANAGEMENT COMMITTEE. A committee comprised of one senior executive from each of
AOL and N2P, formed for the purpose of resolving certain Disputes under this
Agreement (or related to the terms hereof) as set forth in Sections 17.1 of this
Agreement and generally overseeing the relationship between the Parties as
contemplated by this Agreement.
NET BUTTON ADVERTISING REVENUE. For any calendar quarter, (i) the [****]
(including cash and the value of any non-cash consideration) received by AOL, or
any Affiliate of AOL, from the sale of any Special Buttons, [****] in connection
with the sale of such Special Buttons (or, if no such commissions were incurred,
[****].
N2P COMPETITOR. A third party that provides IP Telephony services, provided that
such services constitute a significant portion of such competitor's business or
such competitor is a major participant in the business of providing IP Telephony
services.
N2P INDEMNIFIED PROPERTIES. (a) The elements of the N2P Services, the N2P
System, the AIM IP Telephony Services, the N2P Telephony Software and the AOL IP
Telephony Software (including, in each case, any Updates thereto) that are
supplied or developed (as between the Parties) by N2P or by third parties for or
on behalf of N2P and (b) the N2P Marks and the Products.
N2P INTERACTIVE SITE. Any Interactive Site which is managed, maintained, owned
or controlled by N2P or its agents.
N2P IP TELEPHONY SOFTWARE. The standard suite of client software products
distributed by N2P that enables the provision of IP Telephony services
comparable to the AIM IP Telephony Services (including any Updates thereto).
N2P SERVICES. IP Telephony services generally provided by N2P.
N2P SYSTEM. The software and related systems pursuant to which N2P provides the
N2P Services.
PARENT COMPANY. IDTCorp., a Delaware corporation with its principal office at
190 Main Street, Hackensack, NJ 07601.
PARENT COMPANY COMPETITOR. A third party that provides telecommunications
services generally to the public, provided that such services constitute a
significant portion of such competitor's business or such competitor is a major
participant in the business of providing telecommunications services.
PC OR PERSONAL COMPUTER. A multimedia-enabled, Internet-connected personal
computer that meets the minimum system requirements of each Party (including
those with respect to peripheral devices and Internet connectivity) and that
does not contain software or hardware which disables or adversely affects the
functionality of the Parties' services and software.
PC-TO-PC SERVICE. A PC-to-PC calling service, which shall allow any AIM Member
(through use of the AOL IP Telephony Software as distributed through the AIM
Service in accordance with the terms of this Agreement) to originate a voice
conversation on an Internet enabled PC and to terminate such conversation on
another Internet-enabled PC.
PRODUCT. Any product, good or service (other than carriage sold to commercial
carriers) which N2P (or others acting on its behalf) sells, provides,
distributes or licenses to AIM Members (or for which N2P recharges AIM Members
(e.g., in connection with the PTP Calling Card Service)) through (i) the AIM
Service, (ii) any other electronic means directed at AIM Members (e.g., e-mail
offers), or (iii) an "offline" means (e.g., toll-free number) for receiving
orders related to specific offers within any AIM IP Telephony
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Service requiring purchasers to reference a specific promotional identifier or
tracking code, including, without limitation, electronically transmitted
products sold through surcharged downloads (to the extent expressly permitted
hereunder). A product, good or service shall constitute a Product only if
actually sold, provided, distributed or licensed through one of the foregoing
means, and shall not constitute a Product if sold, provided, distributed or
licensed through another means (e.g., through an alternative distribution
channel) to a person who also happens to be an AIM Member.
QUALIFIED AIM SERVICES. (i) The AIM Service, (ii) the AIM Client, and (iii) any
other Product or service which is owned or operated by AOL or any AOL Affiliate
or which is distributed by or through the AIM Service.
QUALIFIED INTERACTIVE SERVICES. Any entity offering (i) an interactive site or
service featuring a broad selection of aggregated third party interactive
content (or navigation thereto) (e.g., an online service or search and directory
service)and/or marketing a broad selection of products and/or services across
numerous interactive commerce categories (e.g., an online mall or other leading
online commerce site); (ii) a persistent desktop client; and (iii)
communications software capable of serving as the principal means through which
a user creates, sends and receives electronic mail or real time or "instant"
online messages (whether by telephone, computer or other means), including
without limitation greeting cards.
SEAMLESSLY INTEGRATE. Achieved by AOL, to the extent possible, using the N2P
provided toolkit to fully integrate the AIM IP Telephony Services (e.g.,
PC-to-Phone Service, PC-to-Fax Service) into the AIM Client such that the N2P
client software is not needed to run as a separate program in connection with
the provision of such AIM IP Telephony Services because the key functions are
integrated into the AIM Client.
SECONDARY AIM IP TELEPHONY SERVICES. The PC-to-Fax Service, the Fax-to-PC
Service, the Fax-to-Fax Service, the Conference Calling Service, the PC-to-Phone
Service and the Phone-to-PC Service.
SEVERITY 1 PROBLEMS. Problems with respect to any AIM IP Telephony Service that
halt or materially disrupt service execution, cause a major loss of the material
functionality of such AIM IP Telephony Service or otherwise create an emergency
which will cause significant financial or reputation loss or other significant
loss or business disruption to the provider of such AIM IP Telephony Service.
SEVERITY 2 PROBLEMS. Problems with any AIM IP Telephony Service that are not
Severity 1 Problems but that materially reduce the core functionality of such
AIM IP Telephony Service cause data corruption or damage, or otherwise require
prompt correction to maintain material use of the core functionality of such AIM
IP Telephony Service (such as, for example, a consistently reproducible problem
resulting in system crash or loss of core or material functionality, but which
can be avoided through a workaround without undue disruption).
SEVERITY 3 PROBLEMS. Problems with respect to any AIM IP Telephony Service,
including bugs, that are not Severity 1 Problems or Severity 2 Problems.
SPECIFICATIONS. "Specifications" shall have the meaning set forth in Section 2.1
of this Agreement. "Specifications" as to any AIM IP Telephony Service shall
mean the Specifications applicable thereto.
SURCHARGED AIM IP TELEPHONY SERVICES. The Core Premium Services and any other
AIM IP Telephony Service for which N2P charges a flat-rate, pre-minute or other
user fee or charge in accordance with the terms of this Agreement.
TERM. "Term" shall have the meaning set forth in Section 16.1.2 of this
Agreement. The Parties acknowledge for avoidance of doubt that the Term ends
upon expiration or earlier termination of this Agreement.
TRANSACTION REVENUES. Aggregate amounts actually paid by AIM Members to N2P and
its Affiliates for the purchase or other acquisition of any Products,
specifically including any recharges on the PTP Calling
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Card Service, [****].
UPDATES. As to any product or service, all subsequent releases thereof including
maintenance releases and services patches, error corrections, upgrades,
enhancements, additions, improvements, extensions, modifications and new,
replacement or successor versions, products or service, and all related
Documentation.
YEAR. Each of Year One, Year Two, and Year Three. Such definition shall not
include the lowercase term "year", as the same is used in this Agreement.
YEAR ONE. The period commencing on the Effective Date and ending on the earlier
of (a) the fifteen (15) month anniversary of the Effective Date; or (b) one (1)
year from the launch of any of the Core Premium Services.
YEAR TWO. The period commencing on the day immediately following the end of Year
One and ending on the one (1) year anniversary thereof.
YEAR THREE. The period commencing on the day immediately following the end of
Year Two and ending on the one (1) year anniversary thereof.
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EXHIBIT C
N2P HOSTING AND IP TELEPHONY SUPPORT OBLIGATIONS
N2P will host a Co-Branded Site as outlined in Exhibit B (unless and until AOL
decides to assume operational control of such Co-Branded Site). Such Co-Branded
Site shall perform according to the following standards:
BRANDING OF SITE: AIM will be the lead brand on the site with a powered by N2P
tag line.
DESIGN OF SITE: AOL will retain creative and graphical control of the look and
feel and overall design of the site to maintain close ties and linkages with AIM
web properties and cohesive user experience throughout.
DOMAIN OF SITE: Domain name must be AOL.com root (e.g., N2P.aim.aol.com).
PURPOSE OF SITE: To sell AIM Cards and promote AIM. AOL, in its sole discretion,
may also provide an outlet for AIM-driven retail purchases using the AIM Card as
currency. The site must include, without limitation, a store-front, merchant
retail tracking and services, shopping cart and checkout facilities, and retail
item cataloging, checking of balances, changing of account information, gift
purchases.
MERCHANT SERVICES: Enable AOL to promote and sell hard goods and services that
it markets through partnerships and other agreements.
CARD USAGE ON PARTNER SITES: If AOL elects, in its sole discretion, to provide
check out services for AIM partners that agree to accept the AIM Card as
currency for retail transactions, [****]. AOL will provide N2P with an approved
list of partner sites.
LAUNCH: The Co-Branded Site will be available upon launch of the first Core
Premium Service, and will in each period reflect the AIM IP Telephony Service
offerings available for use by AIM Members at such time.
WEB BACKEND AVAILABILITY AND SERVICE RESPONSE: Minimum acceptability [****]
uptime, including scheduled and unscheduled updates, maintenance, etc. Planned
system downtime should be communicated to AOL with at least [****] lead time.
There must be a turn around time for resolution within [****] of reporting the
problem; provided that if the problem is a Severity One or Severity Two Problem,
the turn around time must be within [****]. An escalation provided shall be
necessary if the such times are exceeded (e.g., call tree). Web pages load,
links work, data delivered at least [****] of the time. All pages should
completely load (including images).
WEB CONTENT: N2P will provide AOL access to Content to make editorial
refinements that bring AOL's voice to basic content pages, but will not be
required to provide AOL access to the N2P server for such purposes. Such changes
will not include pricing and promotional offers.
ACCOUNT MANAGEMENT: AIM Members will be able to access web-based billing
information and account management services [****] of the time. In the event
that the system is down, AIM Members will see a screen announcing technical
difficulties except in the case where the server is down.
SECURITY AND BILLING: Security features will be generally reliable. Credit card
transactions will be protected by industry standard encryption methods such as
SSL Billing system to be [****] accurate.
REPORTING: N2P to provide monthly reports identifying traffic to each major
section and page, including number of page views. Reports should be delivered
within [****] after the end of each month, and reports should be [****]
accurate.
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AD SERVING: In the event that N2P and AOL agree to deliver Advertisements on the
Co-Branded Site, N2P will work with AOL to add enabler pages for the serving of
any such Advertisements by AOL.
CUSTOMER SERVICE INBOUND PHONE CALLS: N2P will support all end user
issues/problems for the Phone-to-Phone, PC-to-Phone (as applicable), PC-to-Fax,
Fax-to-PC, and Phone-to-PC Services via telephone, after reasonable e-mail and
web-based support efforts have failed. For such telephone calls, [****] of such
calls will be answered within [****] during standard business hours (9am - 5pm
EST), and abandoned calls will be less than 8%. Phone messages that are taken
will be answered within [****], except in the case of any holidays (which such
holidays will not exceed [****] during [****] period), during which N2P will use
commercially reasonable efforts to respond to such phone messages within [****].
CUSTOMER SERVICE INBOUND E-MAILS: N2P will acknowledge [****] of e-mails within
[****], and respond to [****] of e-mails within [****]. Answers will be accurate
90% of the time. 95% of problems will be resolved within [****], except in the
case of any holidays (which such holidays will not exceed [****] during any
[****], during which N2P will use commercially reasonable efforts to respond to
such phone messages within [****].
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EXHIBIT E
CROSS-PROMOTION
Net2Phone shall prominently promote AOL or the AIM Service, provided
that the manner of such promotion shall be determined by N2P in its reasonable
discretion upon prior consultation with AOL. The initial promotions of the AIM
Service shall be as follows (and each subsequent promotion during the Initial
Term shall be consistent with the following requirements):
A. Within each N2P Interactive Site other than any N2P Interactive Site
(including, without limitation, the N2P client and any N2P web
properties hosted by N2P or any N2P Affiliate) that is co-branded with
another Qualified Interactive Service (the "Cross-Promo N2P Interactive
Sites"), N2P shall include the following (collectively, the "AOL
Promos"): (i) a prominent promotional banner or button (at least 90 x
30 pixels or 70 x 70 pixels in size) appearing (A) "above the fold" on
the first screen of the N2P Interactive Site located at
www.net2phonedirect.com and (B) on any other N2P Interactive Site, in
the most prominent, commercially reasonable location (whether "above
the fold" on the first screen thereof or otherwise), in each case to
promote the AIM Service; or (ii) a prominent "Try AOL" feature (at
least 90 x 30 pixels or 70 x 70 pixels in size) through which users can
obtain promotional information about AOL products or services
designated by AOL (and approved by N2P) and, at AOL's option, download
either the then-current version of the AIM Client or such other
AOL-branded software or, as determined by AOL in its reasonable
discretion, the then-current version of the appropriate localized AIM
client or such other AOL-branded software. AOL will provide the
creative content to be used in the AOL Promos (including designation of
links from such content to other content pages). N2P shall promptly
post (or update, as the case may be) the creative content supplied by
AOL within the spaces for the AOL Promos, and in no event later than
ten (10) business days following its receipt of such content from AOL.
Without limiting any other reporting obligations of the Parties
contained herein, N2P shall provide AOL with monthly written reports
specifying the number of impressions to the pages containing the AOL
Promos during the prior month. In the event that AOL elects to serve
the AOL Promos to the Cross-Promo N2P Interactive Sites from an ad
server controlled by AOL or its agent, N2P shall take all reasonable
operational steps necessary to facilitate such ad serving arrangement
including, without limitation, inserting HTML code designated by AOL on
the pages of the Cross-Promo N2P Interactive Sites on which the AOL
Promos will appear.
B. In N2P's television, print and "out of home" (e.g., buses and
billboards) advertisements and in any publications, programs, features
or other forms of non-interactive media (excluding radio) (i) over
which N2P exercises at least significant editorial control, (ii) which
are not co-branded with another Qualified Interactive Service (unless
otherwise agreed upon by the Parties) and (iii) which relate to IP
Telephony products or services, N2P will include specific, prominent
references or mentions (verbally where possible) to the AIM Service or
other AOL-branded product or service (as designated by AOL) (by way of
site name, related company name or otherwise) (i.e., N2P shall promote
[****] of the time, and [****] of the time, as designated by AOL).
Without limiting the generality of the foregoing, N2P's listing of the
"URL" for any N2P Interactive Site which is not co-branded with any
Qualified Interactive Service may be accompanied by a prominent listing
of the "search keyword" term on AOL (or other AOL properties) for the
AIM IP Telephony Services (except in the event that such URL is the
most prominent feature of any such advertisement or promotion, in which
case the AOL "search keyword" shall not be required to be of equal
prominence). N2P shall not be required to include such references or
mentions in those instances in which, in its reasonable discretion,
such promotion is economically prohibitive.
C. In the event that N2P places buttons on a version of the N2P client
that is not co-branded with any Qualified Interactive Service to
promote N2P or other products or services, N2P shall utilize a
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portion of such buttons (i.e., at least one (1) such button) to launch
or promote the AIM Service, or such other AOL-branded product or
service, designated by AOL.
D. In the event that N2P sends correspondence that is not co-branded with
any Qualified Interactive Service (e.g., account fulfillment, customer
service mailings, etc.) to its customers via regular mail, N2P shall
utilize a portion of such correspondence to promote the AIM Service
and/or such other AOL-branded product or service, as designated by AOL.
E. AOL shall have the [****] for a period of [****] from the Effective
Date to sell N2P buttons or other advertisements based upon N2P
advertising standards (including, N2P's available technology, pricing,
third party serving capacity, etc.). After such [****] period, the
continuation of such [****] period shall be subject to the mutual
agreement of the Parties.
F. Net2Phone shall provide to AOL promotional AIM Cards with a pre-paid
balance at no charge. The parties shall mutually agree upon the number
of cards to be provided to AOL and the amount of the pre-paid balance
on such cards.
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EXECUTION VERSION
EXHIBIT I
DELIVERY DATES AND CUTOFF DATES
<TABLE>
<CAPTION>
-------------------------- --------------------- ---------- ------------ -----------
CORE PREMIUM DELIVERY DATE MAXIMUM MAXIMUM CUTOFF DATE
SERVICE TO AOL AOL REVIEW CURE PERIOD
PERIOD
<S> <C> <C> <C> <C>
-------------------------- --------------------- ---------- ------------ -----------
-------------------------- --------------------- ---------- ------------ -----------
-------------------------- --------------------- ---------- ------------ -----------
Phone-to-Phone No later than [****] Period until [****]
[****] from the Cutoff Date
Effective Date
-------------------------- --------------------- ---------- ------------ -----------
PC-to-Phone No later than [****] Period until [****]
[****] from the Cutoff Date
Effective Date
-------------------------- --------------------- ---------- ------------ -----------
PC-to-Fax, Fax-to-PC No later than [****] Period until [****]
[****] from the Cutoff Date
Effective Date
-------------------------- --------------------- ---------- ------------ -----------
Phone-to-PC No later than [****] Period until [****]
[****] from the Cutoff Date
Effective Date
-------------------------- --------------------- ---------- ------------ -----------
Conference Calling Service No later than [****] [****] Period until [****]
Cutoff Date
-------------------------- --------------------- ---------- ------------ -----------
</TABLE>
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EXECUTION VERSION
EXHIBIT J
N2P MARKS
Net2Phone
[NET2PHONE LOGO]
POWERED BY NET2PHONE
[NET2PHONE LOGO]
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EXECUTION VERSION
EXHIBIT K
QUALIFIED N2P COMPETITORS
[****]
56