Advertising Agreement - NetZero Inc. and Idealab! Inc.
THE ZEROPORT ADVERTISING AGREEMENT
This Advertising Agreement ("Agreement") is effective as of February 5, 2000
(the "Effective Date"), and is by and between NETZERO, INC., a Delaware
corporation with its principal place of business located at 2555 Townsgate Road,
Westlake Village, CA 91361 ("NetZero") and IDEALAB!, INC., a ___________________
corporation with its principal place of business located at 130 West Union
Street, Pasadena, CA 91103 ("Buyer").
1. PURPOSE. NetZero provides free dial-up Internet access services (the "NetZero
Service") to its subscribers ("Subscribers"). Buyer offers capital and resources
to infuse startup companies with the development strategies and financial
support needed to rapidly introduce innovative products and services (the "Buyer
Services"). In conjunction with the NetZero Service, a persistent window ("The
ZeroPort") is displayed to Subscribers while connected to the NetZero Service.
2. BUYER'S DELIVERY OBLIGATIONS. Buyer shall provide advertising creative and
related materials to NetZero within two (2) business days from the Effective
Date of this Agreement.
3. IMPRESSION DELIVERY. NetZero shall deliver a total of Two Billion
(2,000,000,000) run of site banner advertising impressions for Buyer Services
and the companies related to Buyer Services ("Impressions") during the Term of
the Agreement at a net CPM of $1.50. In no event shall the number of Impressions
delivered during any single calendar month exceed 20% of NetZero's total banner
inventory delivered for such month. NetZero shall use commercially reasonable
efforts to display no more than six ads for a particular company of Buyer during
a single Subscriber session. For clarification, NetZero may display up to six
ads for each of several companies of Buyer during such Subscriber session.
4. DATA. NetZero shall provide to Buyer a list the 1,000,000 URL's with the most
visits by Subscribers during each calendar month during the Term (or all URL's
if less than 1,000,000 URL's have at least one visit during such month). Such
list shall be provided in CD-ROM format within seven (7) days after the end of
the applicable month. Additionally, NetZero shall provide to Buyer the
Subscriber tracking data (which shall not include Subscriber usernames, email
addresses or any personally identifiable information) collected by NetZero for
the twenty-four (24) hour periods as follows: the first period to be on or about
seven days after the Effective Date, and subsequent periods on or about the
seventh day of each month during the Term. Such data shall be unformatted and
provided electronically or on other media to be mutually agreed upon by the
parties. All information provided under this Section shall be considered NetZero
Confidential Information, PROVIDED, that Buyer shall have the right to use such
data for Buyer's internal business purposes.
5. PAYMENT. In consideration of the Impressions and the data provided hereunder,
Buyer shall pay NetZero a total of Three Million Dollars ($3,000,000).
6. TERM. The term of this Agreement (the "Term") will begin on the Effective
Date and will continue until July 15, 2000 or such earlier date on which NetZero
has delivered the Impressions hereunder and has provided Buyer with the
applicable data set forth in Section 4.
7. This Agreement, together with the Terms and Conditions attached hereto and
incorporated herein by this reference and that certain Standard Advertising
Insertion Rider by and between the parties dated December 3, 1999 ("Rider")
incorporated herein by this reference, contains the entire understanding of the
parties hereto with respect to the transactions and matters contemplated herein
and supersedes all previous agreements, communications and understandings and
course of dealing between Buyer and NetZero concerning the subject matter
hereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
NETZERO, INC. IDEALAB!, INC.
By: /s/ CHARLES S. HILLARD By: /s/ MARCIA GOODSTEIN
Name: Charles S. Hilliard Name: Marcia Goodstein
Title: SVP & CFO Title: Chief Operating Officer
Date: 2/9/00 Date: 2/9/00
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TERMS AND CONDITIONS
1. PAYMENT. NetZero shall provide to Buyer on a monthly basis within fifteen
(15) days following the last day of the month a report indicating the number of
Impressions delivered during such month and the applicable amounts due. Buyer
shall make the applicable payment within thirty (30) days after receipt of such
report. All payments shall be made in U.S. dollars. Buyer shall pay, and
indemnify and hold NetZero harmless against, all sales, use, excise, value-added
or similar tax, fee or duty not based on NetZero's net income, including any
penalties and interest, as well as any costs associated with the collection or
withholding thereof, levied on any of the activities conducted or payments made
by Buyer hereunder.
2. REPORTING AND AUDIT RIGHTS. NetZero shall track, by independently verifiable
means, the Impressions delivered during the Term. NetZero shall provide Buyer
with a monthly written report within ten (10) days after the end of each
calendar month stating the number of Impressions delivered for such month.
NetZero shall keep, maintain and preserve for at least one (1) year following
termination or expiration of the Term, accurate records relating to the delivery
of Impressions during the Term. During the Term and the six (6) month period
following expiration or termination of the Term, Buyer shall have the right, at
its expense, to audit such records for the purpose of verifying NetZero's
reports. Audits shall be made upon not less than five (5) days' prior written
notice and during regular business hours. NetZero shall promptly deliver any
underdelivered Impressions as revealed by any audit hereunder.
3. LICENSE OF BUYER MATERIALS. Buyer hereby grants to NetZero a non-exclusive,
non-transferable, royalty-free license to use, reproduce, display, transmit, and
redistribute Buyer's and Buyer's companies' advertising creative and related
materials ("Buyer Materials") during the Term solely in furtherance of NetZero's
performance under this Agreement. The foregoing license shall terminate
automatically upon the expiration of the Term or other termination of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES.
a. Each party represents and warrants to the other that: (i) it is duly
organized and validly existing under the laws of the state of its incorporation
and has full corporate power and authority to enter into this Agreement and to
carry out its provisions; (ii) it is duly authorized to execute and deliver this
Agreement and to perform its obligations; and (iii) this Agreement is valid and
legally binding upon it and the execution, delivery and performance of this
Agreement by such party does not conflict with any other agreement, instrument
or understanding to which it is a party or by which it may be bound nor would
violate any law or regulation of any court, governmental body or agency having
jurisdiction over it.
b. Buyer hereby represents, warrants, and covenants to NetZero that (i) it
has the full right, title and authority to grant the license of the Buyer
Materials set forth herein and Buyer is not aware of any violation of law or
infringement of third party intellectual property rights that would result from
such use of such license by NetZero and (ii) with respect to its use of any and
all Subscriber information received from NetZero, it will at all times fully
comply with NetZero's Privacy Statement posted on the NetZero site and any law
or regulation of any governmental body or agency having jurisdiction over it.
5. DISCLAIMER. EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN SECTION 4 ABOVE,
EACH PARTY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING
BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NEITHER
PARTY MAKES ANY WARRANTIES WITH RESPECT TO ITS SERVICES.
6. LIABILITY LIMITATIONS. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR (I) INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES
ARISING FROM SUCH PARTY'S PERFORMANCE OR NON-PERFORMANCE UNDER ANY PROVISION OF
THIS AGREEMENT OR THE PROVISION OF SUCH PARTY'S SERVICES (INCLUDING SUCH DAMAGES
INCURRED BY THIRD PARTIES), SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR
ANTICIPATED PROFITS OR LOST BUSINESS, (II) THE COST OR PROCUREMENT OF SUBSTITUTE
GOODS, SERVICES OR TECHNOLOGY OR (III) ANY AMOUNT IN EXCESS OF THE AMOUNT PAID
OR PAYABLE BY BUYER TO NETZERO DURING THE TERM. NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, THIS SECTION SHALL NOT LIMIT EITHER PARTY'S LIABILITY
TO THE OTHER FOR WILLFUL AND MALICIOUS MISCONDUCT, BREACH OF CONFIDENTIALITY
OBLIGATIONS, OR FULFILLMENT OF ANY INDEMNIFICATION OBLIGATIONS HEREUNDER.
7. INDEMNIFICATION AND INFRINGEMENT REMEDIES.
a. NETZERO'S INDEMNITY. NetZero shall defend, indemnify and hold Buyer and
its successors and assigns harmless from and against all third party claims,
suits and proceedings and any and all damages, liabilities costs and expenses
(including reasonable attorneys' fees and court costs) finally
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awarded against Buyer as a result of any and all such claims, suits and
proceedings against Buyer arising from (i) infringement by the NetZero Service,
The ZeroPort, or any content on The ZeroPort (excluding Buyer Materials) of any
third party patent, copyright, trademark, or trade dress or (ii)
misappropriation by NetZero of any third party trade secret in connection with
any of the foregoing. In the event NetZero determines that such an infringement
may exist, NetZero may, at its option and expense, take such action as its deems
appropriate to eliminate such infringement or, if such infringement cannot be
avoided in a commercially reasonable manner as determined by NetZero, terminate
this Agreement. NetZero assumes no liability for infringement claims arising
from combination of the NetZero Service, The ZeroPort, or the content on
ZeroPort with any products or services not provided by NetZero.
b. BUYER'S INDEMNITY. Buyer shall defend, indemnify and hold NetZero and
its successors and assigns harmless from and against all third party claims,
suits and proceedings and any and all damages, liabilities costs and expenses
(including reasonable attorneys' fees and court costs) finally awarded against
NetZero as a result of any and all such claims, suits and proceedings against
NetZero arising from (i) infringement by the Buyer Materials of any third party
patent, copyright, trademark, or trade dress, (ii) misappropriation by Buyer of
any third party trade secret in connection with any of the foregoing, (iii) any
libelous, defamatory, disparaging, pornographic or obscene materials contained
in any of the Buyer Materials provided to NetZero hereunder or (iv) any act or
failure to act by Buyer in connection with its use of any Subscriber information
received from NetZero.
c. INDEMNIFICATION PROCEDURES. The right of a party (the "indemnified
party") to indemnification under this Agreement shall be conditioned upon the
following: prompt written notice to the party obligated to provide
indemnification (the "indemnifying party") of any claim, action or demand for
which indemnity is claimed; control of the investigation, preparation, defense
and settlement thereof by the indemnifying party; and such reasonable
cooperation by the indemnified party, at the indemnifying party's request and
expense, in the defense of the claim. The indemnified party shall have the right
to participate in the defense of a claim by the indemnifying party with counsel
of the indemnified party's choice at the indemnified party's expense. The
indemnifying party shall not, without the prior written consent of the
indemnified party which shall not be unreasonably withheld, settle, compromise
or consent to the entry of any judgment that imposes any liability upon the
indemnified party.
8. CONFIDENTIALITY OBLIGATIONS. The parties acknowledge and agree that, as a
result of negotiating, entering into and performing this Agreement, each party
(a "receiving party") has and will have access to certain Confidential
Information (as defined below) of the other party (a "disclosing party"). Each
receiving party acknowledges and agrees that misuse and/or disclosure of the
Confidential Information of the disclosing party could adversely affect the
disclosing party's business. Accordingly, the parties agree that, during the
Term, the receiving party shall (a) use and reproduce the disclosing party's
Confidential Information only to perform its obligations under and for the
purposes specified in this Agreement, (b) restrict disclosure of the disclosing
party's Confidential Information to its employees and contractors with a need to
know the Confidential Information to enable the receiving party to perform its
obligations under this Agreement, and (c) not disclose the disclosing party's
Confidential Information to any third party (including, but not limited to, any
third-party consultant, contractor, or agent) without the prior written approval
of the disclosing party and without first obtaining such third party's written
agreement to maintain the confidentiality of the disclosing party's Confidential
Information under terms and conditions at least as stringent as those set forth
in this Section 8. The receiving party further agrees that, following the
expiration or earlier termination of the Term, it shall promptly return to the
disclosing party all Confidential Information of the disclosing party or destroy
such Confidential Information and so certify in writing to the disclosing party.
Notwithstanding the requirements of this Section 8, the receiving party may
disclose Confidential Information of the disclosing party to the extent it is
required to do so under law or in a judicial or other governmental investigation
or proceeding, provided that the receiving party gives the disclosing party
prompt written notice of the compelled disclosure and cooperates with the
disclosing party in seeking a protective order or any other available
protections available to limit the disclosure of the disclosing party's
Confidential Information.
a. CONFIDENTIAL INFORMATION DEFINED. As used in this Agreement, the term
"Confidential Information" shall mean: (i) all information relating to the
disclosing party's business, including, without limitation, computer programs,
technical drawings, algorithms, names and expertise of employees and
consultants, know-how, processes, trade secrets, inventions (whether patentable
or not) and other technical, business, financial, customer and product
development plans, Subscriber information, forecasts, strategies and
information; and (ii) other information relating to either party that is not
generally known to the public. Notwithstanding the foregoing, the term
"Confidential Information" specifically excludes (a) information that is in the
public domain or enters the public domain through no action or default of the
receiving party; (b) information that is known to the receiving party without
restriction, prior to receipt from the disclosing party from its own independent
sources as evidenced by the
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receiving party's written records; (c) information that the receiving party
receives from a third party known by the receiving party to have a legal right
to transmit such information, and not under any obligation of confidentiality;
and (d) information that the receiving party can establish, through written
records created in the normal course of the receiving party's business, was
independently developed by the receiving party's employees or agents without any
use of or reference to the disclosing party's Confidential Information. All
Subscriber information received from NetZero shall be deemed NetZero's
Confidential Information.
9. PRESS RELEASES. Each party shall obtain the other party's prior written
approval, which shall not be unreasonably withheld or delayed, of all press
releases that such party issues which reference this Agreement. Notwithstanding
the foregoing, following the initial press release, if any, announcing the
relationship hereunder, the parties shall have the right to refer to the other
by name and to use the description, in whole or in part, set forth in such press
release without the consent of the other party.
10. TERMINATION. Either party may immediately terminate this Agreement if (a)
the other party files a petition for bankruptcy or is adjudicated bankrupt, a
petition in bankruptcy is filed against the other party and such petition is not
dismissed within sixty (60) days of the filing date, the other party becomes
insolvent or makes an assignment for the benefit of its creditors, or a receiver
is appointed for the other party; (b) the other party materially breaches
Section 8 of this Agreement; or (c) the other party materially breaches any
provision of this Agreement other than Section 8 and fails to cure such breach
within fifteen (15) days after written notice is received by the breaching party
identifying the breach. Sections 1, 2, 4-8 and 12-13 and all rights to accrued
payments and causes of action shall survive expiration or any termination of the
Agreement.
11. FORCE MAJEURE. If either party is delayed or prevented from performing, or
is unable to perform, any of its obligations under this Agreement due to any
cause beyond the reasonable control of the party invoking this provision, the
affected party's performance shall be excused and the time for performance shall
be extended for the period of delay or inability to perform due to such
occurrence.
12. ASSIGNMENT; BINDING EFFECT; SUBCONTRACTING. Neither Buyer nor NetZero may
assign this Agreement or any of its rights or obligations hereunder without the
prior written consent of the other party; provided, however, that either party
may assign this Agreement to an acquirer of all or of substantially all of such
party's equity securities, assets or business relating to the subject matter of
this Agreement or to any entity controlled by, controlling or under common
control with such party. Any purported assignment agreements in violation of
this Section 12 shall be null, void and of no effect.
13. MISCELLANEOUS.
a. CHOICE OF LAW AND FORUM. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within California, without
regard to conflicts of laws provisions thereof. The sole jurisdiction for all
disputes arising under or relating to this Agreement shall be the state and
federal courts located in the County of Los Angeles, California. Each party
hereby consents to the personal jurisdiction of such courts and waives any
objection it has or may have to the personal jurisdiction of, and venue in, such
courts. In any action to enforce this Agreement the prevailing party will be
entitled to recovery its costs and reasonable attorneys' fees.
b. AMENDMENT AND WAIVER. Except as otherwise expressly provided herein, any
provision of this Agreement may be amended or modified and the observance of any
provision of this Agreement may be waived (either generally or any particular
instance and either retroactively or prospectively) only in the form of a
writing signed by both parties. The failure of either party to enforce its
rights under this Agreement at any time for any period shall not be construed as
a waiver of such rights.
c. SEVERABILITY. In the event that any of the provisions of this Agreement
shall be held by a court of competent jurisdiction to be unenforceable, such
provisions shall be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and effect and
enforceable.
d. SCOPE OF AGREEMENT. Unless otherwise agreed to in writing by NetZero,
this Agreement applies to the NetZero Services in the United States only and
excludes non-English speaking and other custom or non-standard versions of The
ZeroPort or the NetZero Service.
e. NOTICES. All notices required to be given under this Agreement must be
given in writing and delivered either by hand, certified mail, return receipt
requested, postage pre-paid, or Federal Express or other commercial overnight
delivery service with tracking capabilities, all delivery charges prepaid, and
addressed to the applicable party's address set forth in this Agreement or such
other address as to which the party has notified the other party in accordance
with this paragraph. Notice shall be deemed effective upon receipt, provided,
however, that notice sent by mail shall be deemed received three (3) days after
deposit in the U.S. mails unless received sooner. Notices shall be to the
attention of the person executing this Agreement, and if such notice is being
provided to NetZero, with a copy to NetZero's General Counsel.
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f. CONSTRUCTION. In the event of any conflict or inconsistency between
these Terms and Conditions and any other provision of this Agreement, such other
provision shall control for purposes of interpretation of such conflicting or
inconsistent provisions.
g. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument. This Agreement may be executed by
facsimile signature and facsimile signatures shall be fully binding and
effective for all purposes and shall be given the same effect as original
signatures.
h. RELATIONSHIP OF PARTIES. NetZero and Buyer are independent contractors
under this Agreement. Neither party has authority to enter into agreements of
any kind on behalf of the other.
i. HEADINGS. Headings and captions are for convenience only and are not to
be used in the interpretation of this Agreement.
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