Termination Agreement - Yahoo! Inc. and Rogers Media Inc.
TERMINATION AGREEMENT
This Termination Agreement ("Agreement") is entered into between
Yahoo! Inc., a California corporation ("Yahoo"), and Rogers Media Inc.
(formerly known as Rogers Multi-Media Inc.), a corporation organized under
the laws of British Columbia ("Rogers"), effective as of the 6th day of
January 1999.
RECITALS:
A. Yahoo and Rogers entered into that certain Yahoo Canada
Affiliation Agreement, dated February 29, 1996 (the "Affiliation Agreement"),
pursuant to which, among other things, Yahoo licensed certain intellectual
property and development rights to Rogers with respect to the Yahoo Internet
Directory and associated Internet services that have been customized and
localized specifically for the Canadian market and which are currently
offered through the Yahoo! Canada website ("Yahoo Canada").
B. In December 1998, pursuant to the terms of the Affiliation
Agreement, each of Yahoo and Rogers formally initiated a dispute resolution
process in order to resolve differences arising under the Affiliation
Agreement.
C. On January 6, 1999, Yahoo and Rogers each executed and
delivered a letter agreement (the "Letter Agreement") pursuant to which the
parties agreed to terminate the Affiliation Agreement and to release each
other from all claims arising out of or relating to the Affiliation Agreement.
D. Pursuant to the terms of the Letter Agreement, Yahoo and Rogers
agreed to enter into this Agreement, which is intended to supersede the
Letter Agreement in its entirety.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants contained herein, the parties agree to the following terms
and conditions.
1. TERMINATION OF AFFILIATION AGREEMENT. Subject to Section 13
below, Yahoo and Rogers agree that the Affiliation Agreement shall terminate
in its entirety on the Termination Date (as defined below). In connection
therewith, all licenses and other rights and obligations granted under the
Affiliation Agreement shall terminate effective as of the Termination Date.
Notwithstanding anything to the contrary in the Affiliation Agreement, no
provisions thereof shall survive its termination. After the Termination
Date, any and all rights and obligations of Yahoo and Rogers shall be
governed exclusively by this Agreement and the exhibits attached hereto and
such other documents contemplated hereby. Notwithstanding the foregoing,
Sections 2.7, 2.9 and 2.11 only of the Affiliation Agreement shall terminate
as of February 15, 1999 and neither Yahoo nor Rogers shall be bound by or
have any obligations thereunder as of such date.
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2. CONSIDERATION.
2.1 PAYMENT BY YAHOO. As consideration for entering into
this Agreement, and such other covenants and agreements set forth herein, on
the Termination Date, Yahoo, or its affiliates, shall deliver to Rogers
payments in the aggregate amount of Eighteen Million United States Dollars
(US$18,000,000) (the "Termination Fee") inclusive of any and all sales, use,
consumption, value-added, goods and services or other taxes incurred as a
result of this Agreement and the transactions contemplated hereby. The
Termination Fee shall be paid without interest in two installments, each of
which shall be equal to 50% of the Termination Fee as follows:
(a) the first installment shall be paid on the
Termination Date by wire transfer to an account designated by Rogers in the
amount of Nine Million United States Dollars (US $9,000,000); and
(b) the second installment shall be paid in the form
of an unsecured promissory note, bearing interest in accordance with its
terms, substantially in the form attached hereto as EXHIBIT A (the
"Promissory Note"), payable in full on April 1, 1999 to Rogers in the amount
of Nine Million United States Dollars (US $9,000,000).
2.2 PAYMENTS BY ROGERS. Rogers shall deliver to Yahoo by
wire transfer to an account designated by Yahoo an aggregate amount equal to
accrued but unpaid royalties due and payable to Yahoo by Rogers under the
Affiliation Agreement as of the Termination Date in two installments to be
paid as follows:
(a) on the Termination Date, an amount equal to the
accrued but unpaid royalties as of January 31, 1999; and
(b) seven (7) days after the Termination Date, an
amount equal to the accrued but unpaid royalties for the period of February
1, 1999 to the Termination Date.
The royalties payable by Rogers to Yahoo pursuant to the Affiliation
Agreement shall be reduced after February 15, 1999 (as such may be prorated)
by the "net loss", if any, incurred by Rogers with respect to the maintenance
and operation of Yahoo Canada from February 15, 1999 until the Termination
Date in the ordinary course of business consistent with past practices. The
determination of "net loss" in regard to the maintenance and operation of
Yahoo Canada shall be determined in accordance with Generally Accepted
Accounting Principles as set forth by the Canadian Institute of Chartered
Accountants from time to time. Only those payments, expenses, charges and
other liabilities or accruals directly allocable to the maintenance and
operation of Yahoo Canada by Rogers shall be utilized in determining the "net
loss" of Yahoo Canada. In addition, interest charges for the financing of
Rogers shall not be included in "net loss" other than interest directly
allocable for the maintenance and operation of Yahoo Canada. Notwithstanding
the foregoing, the parties agree that in no event shall Yahoo be responsible
for any "net losses" incurred by Rogers in connection with the operation of
Yahoo Canada that
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exceed the royalties payable by Rogers to Yahoo pursuant to the Affiliation
Agreement for the period from February 15, 1999 to the Termination Date.
2.3 ACCOUNTING. Together with the royalty payment payable
by Rogers pursuant to Section 2.2 above, Rogers shall provide Yahoo with a
complete and accurate accounting of the royalties payable by Rogers.
2.4 TAXES. Except as otherwise provided in Section 2.5 of
the Affiliation Agreement in regard to the payment set forth in Section 2.2
above, Rogers shall be solely responsible for the payment of any and all
sales, use, consumption, value-added, goods and services or other taxes
incurred as a result of this Agreement and the transactions contemplated
hereby, and Rogers shall be solely responsible for the due and punctual
payment and remittance of all such taxes to all applicable governmental
authorities in Canada. In the event Yahoo is required by law to pay any
interest or penalties in connection with the payment of taxes pursuant to the
Affiliation Agreement as a result of actions or inactions on the part of
Rogers, Rogers agrees to reimburse Yahoo for all such amounts paid and costs
and expenses incurred by Yahoo in connection therewith, provided that Yahoo
gives Rogers reasonable notice of such interest, penalties, costs and
expenses prior to the payment thereof.
3. TERMINATION DATE. The "Termination Date" shall be March 1,
1999.
4. MUTUAL RELEASE. Subject to Section 13 and as of the
Termination Date, the parties each fully release and discharge the other, and
their respective officers, directors, employees, representatives and agents,
and any affiliated corporations or companies from any and all potential and
outstanding legal claims, actions, suits, duties, obligations, contracts,
debts, demands, or causes of action whatsoever ("Claims"), whether known or
unknown, whether in law or in equity, and whether past, future or present,
arising out of, based upon, or relating to the Affiliation Agreement or any
settlement or termination thereof, except for any Claims arising out of this
Agreement.
5. CONTRACTS RELATING TO YAHOO CANADA. Rogers and Yahoo
acknowledge and agree that the termination of the Affiliation Agreement, the
return of certain assets and the assignment of certain contracts by Rogers to
Yahoo is not an acquisition of a business, and except for the contractual
obligations set forth on EXHIBIT B attached hereto (the "Assigned Contracts")
or as otherwise expressly provided herein, Yahoo shall not assume or perform,
and shall not be responsible for performing or satisfying, any of the duties,
liabilities, obligations or agreements of Rogers, whether or not arising out
of or relating to the Affiliation Agreement, including, but not limited to,
any liabilities or other obligations arising in connection with the
employment of Rogers' employees or the termination thereof, taxes,
indebtedness, royalty payments, claims or legal proceedings and contractual
obligations arising on or before the Termination Date. As of the Termination
Date, Rogers assigns and transfers to Yahoo, and Yahoo assumes, all of the
rights and obligations under the Assigned Contracts.
6. RETURN OF ASSETS. As of the Termination Date, Rogers shall
return or cause to be returned to Yahoo all of the assets set forth on
EXHIBIT C attached hereto (the "Returned Assets").
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To the extent Rogers has any interests in such Returned Assets at the
Termination Date, Rogers transfers and assigns to Yahoo, as of the
Termination Date, all of its right, title and interest in and to the Returned
Assets free and clear of any and all liens, claims, equities and encumbrances
of any nature. In the event that the URL "www.yahoo.ca" is not able to be
transferred to Yahoo or its affiliate or designee on or prior to the
Termination Date, Rogers shall license exclusively to Yahoo all rights to use
the URL "www.yahoo.ca" for the period after the Termination Date up to and
including December 31, 1999 in exchange for a royalty of One United States
Dollar (US $1). If not assigned on or prior to the Termination Date, the URL
"www.yahoo.ca" shall be assigned by Rogers to Yahoo or its affiliate or
designee in consideration of One United States Dollar (US $1) on December 31,
1999 or such earlier date as requested in writing by Yahoo.
7. REPRESENTATIONS AND WARRANTIES.
7.1 REPRESENTATIONS AND WARRANTIES OF ROGERS. Rogers hereby
represents and warrants as of the date hereof and as of the Termination Date
as follows:
(a) AUTHORITY. Rogers has the requisite corporate
power and authority to execute and deliver this Agreement. This Agreement,
and the consummation by Rogers of its obligations contained herein, have been
duly authorized by all necessary corporate action of Rogers and the Agreement
has been duly executed and delivered by Rogers.
(b) BINDING EFFECT. This Agreement is a valid and
binding agreement of Rogers, and is enforceable against Rogers in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, and general principles of equity.
(c) RETURNED ASSETS. To the extent that Rogers has
any interest in the Returned Assets, Rogers has the right, power and
authority to transfer the Returned Assets, and the Returned Assets shall be
transferred to Yahoo, free and clear of all liens, claims, equities and
encumbrances of any type or nature, other than the interests of Yahoo in the
Returned Assets.
(d) CONTRACTS AND COMMITMENTS. Except for the
Assigned Contracts set forth on EXHIBIT B, neither Rogers nor any of its
affiliates, is a party to any contracts, agreements, licenses or commitments
which relate to Yahoo Canada, which could prevent or hinder consummation of
the transactions contemplated hereby or which could affect Yahoo's title to
the Returned Assets or the Assigned Contracts or to Rogers' knowledge after
reasonable inquiry, materially affect Yahoo's ability to operate Yahoo
Canada. Rogers has provided Yahoo with true and correct copies of all of the
Assigned Contracts. Each of the Assigned Contracts is a valid and binding
obligation of Rogers and is enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting creditors' rights generally, and general
principles of equity. Rogers is not, and is not aware that any other party
to any of the Assigned Contracts is, in breach of the Assigned Contracts, and
Rogers is not aware of any facts or circumstances that have occurred which,
through the passage of time or the giving of notice, would result in a breach
thereof. Except for the Assigned Contracts, Rogers does not have any debts,
obligations, liabilities or commitments
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of any nature relating to Yahoo Canada which may result in any claim against,
or an obligation of, Yahoo.
(e) EMPLOYEES. None of the employees of Rogers who
provide services for Yahoo Canada is a party to a collective bargaining
agreement, a written employment agreement or an oral agreement which would be
binding on Yahoo, with Rogers, or an affiliate of Rogers. To the best of
Rogers' knowledge, no such employee is in violation of any term of any
proprietary information or nondisclosure agreement, non-competition agreement
or any other agreement affecting the relationship between such employee and
Rogers. Rogers has no collective bargaining agreement with any of its
employees and to the best of Rogers' knowledge, there is no labor union
organizing activity pending or threatened, in either case with respect to
Rogers' employees who are employed in connection with Yahoo Canada.
(f) LITIGATION. There is no action, suit, proceeding
or investigation before any court or before or by any governmental
department, agency or authority or before any arbitrator, except for the
disputes between the parties hereto under the Affiliation Agreement, of any
kind, that is pending or, to the best of Rogers' knowledge, threatened
against Rogers relating to Yahoo Canada or which seeks to stay or enjoin the
transactions contemplated by this Agreement or materially impair the
operations of Yahoo Canada.
(g) CONSENTS. Rogers has not contravened or
breached, and Rogers' consummation of, and performance of the obligations
under, this Agreement will not cause any contravention or breach of, any
laws, regulations, approvals, consents, orders, authorizations, registrations
or filings with any governmental agency or third party in any manner or to
any extent, that would interfere with, prevent or limit Rogers' performance
of its obligations under this Agreement or which could have material adverse
effect on the operations of Yahoo Canada.
7.2 REPRESENTATIONS AND WARRANTIES OF YAHOO. Yahoo hereby
represents and warrants as of the date hereof and as of the Termination Date
as follows:
(a) AUTHORITY. Yahoo has the requisite corporate
power and authority to execute and deliver this Agreement. This Agreement,
and the consummation by Yahoo of its obligations contained herein, have been
duly authorized by all necessary corporate action of Yahoo and the Agreement
has been duly executed and delivered by Yahoo.
(b) BINDING EFFECT. Each of this Agreement and the
Promissory Note, when executed and delivered, shall be a valid and binding
agreement of Yahoo, and is enforceable against Yahoo in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights generally, and
general principles of equity.
(c) LITIGATION. There is no action, suit, proceeding
or investigation before any court or before or by any governmental
department, agency or authority or before any arbitrator, except for the
disputes between the parties hereto under the Affiliation Agreement and
applications with respect to Regulatory Consents (as defined in Section 9.4),
of any kind, that is
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pending or, to the best of Yahoo's knowledge, threatened against Yahoo
relating to Yahoo Canada or which seeks to stay or enjoin the transactions
contemplated by this Agreement.
(d) CONSENTS. All approvals, consents, orders,
authorizations, registrations and filings with any governmental authority or
third party required on the part of Yahoo in connection with the valid
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been obtained, or will be effective, as of the
Termination Date.
8. POST-TERMINATION DATE SERVICES.
8.1 SERVICES BY ROGERS. During the period of time
commencing with the Termination Date and ending on the dates set out in
Exhibit D or in any event not later than May 31, 1999, for no additional
consideration, Rogers shall supply the services to Yahoo set out in EXHIBIT
D.
8.2 SERVICES BY YAHOO. During the period of time commencing
with the Termination Date and ending on the dates set out in Exhibit D or in
any event not later than May 31, 1999, for no additional consideration, Yahoo
shall perform the obligations set out in EXHIBIT D.
8.3 COMPANY REPRESENTATIVES. In order to facilitate the
provision of services contemplated by Section 8, Yahoo and Rogers hereby
appoint Maury Zeff, and Mike Abramsky, or in his absence Brian Segal, as
their respective representatives for this purpose. Each of Yahoo and Rogers
shall cause such representatives to be available upon reasonable notice to
assist in the provision of such Services. All requests for information or
services shall be directed to the representative(s) of the party identified
in EXHIBIT D.
9. OTHER AFFIRMATIVE COVENANTS.
9.1 ACCESS TO INFORMATION; AUDITS. From and after the date
hereof and for a period of six (6) months after the Termination Date, Rogers
agrees to permit access to, and shall make available to Yahoo's
representatives, the properties, books and records and such other
documentation of Rogers relating to the operations of Yahoo Canada as may be
reasonably requested by Yahoo to facilitate the transactions contemplated by
this Agreement. For a period of six (6) months following the Termination
Date, Yahoo shall have the right, upon five (5) business days notice and at
its own expense, to audit during regular business hours the books and records
of Rogers that are relevant to the royalty payment pursuant to Section 2.2 of
this Agreement.
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9.2 FURTHER ASSURANCES. Each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, all other things reasonably necessary, proper or
advisable to consummate as promptly as practicable the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, each of the parties shall use good faith efforts to provide the
services set forth in Section 8, subject to the limitations set forth in
Section 16.4.
9.3 REGULATORY MATTERS. Rogers and Yahoo shall each use
commercially reasonable efforts to obtain and assist the other party to
obtain promptly all U.S. and Canadian regulatory and governmental approvals,
consents, authorizations and filings which such other party deems advisable,
upon the advice of legal counsel, and of which such party provided written
notice prior to the Termination Date ("Regulatory Consents").
9.4 NOTICE OF CLAIMS. In the event that Rogers receives or
is provided notice of any claim or threatened suit, action or proceeding
prior to the Termination Date that it reasonably believes is likely to rise
to the level of any suit, action or proceeding described in Section 13.1(d),
Rogers shall provide notice of same to Yahoo as soon as practicable.
9.5 CONFIDENTIALITY OBLIGATIONS. Neither party shall induce
or encourage any former employee of the other party to disclose any
Confidential Information of the other party, breach any duties or obligations
owed to the other party, or breach any non-disclosure, confidentiality or
employment agreement of such former employee with the other party.
10. ROGERS' EMPLOYEES. Rogers acknowledges that Yahoo shall not
have, and is not under, any obligation to employ any of the Rogers' employees
who provide services that relate to Yahoo Canada. Without limiting the
generality of the foregoing, Rogers agrees that Yahoo shall not be
responsible for performing or satisfying any of the liabilities or
obligations of Rogers relating to any employees of Rogers, including, but not
limited to, employee benefits, severance or termination payments, arising on
or prior to the Termination Date. Rogers further acknowledges, however, that
Yahoo may desire, but is not obligated, to employ a limited number of key
employees of Rogers' dedicated to Yahoo Canada and listed in EXHIBIT E, and
Rogers agrees not to interfere with the employment by Yahoo of such employees
listed on EXHIBIT E. Rogers agrees to provide Yahoo with all information
relating to the compensation and benefits of the employees listed on EXHIBIT
E, including, without limitation, all termination, severance, holiday,
vacation, pregnancy and parental leave benefits and accruals related thereto,
except to the extent that providing such information would violate
confidentiality obligations of Rogers. For greater certainty, nothing in this
Agreement shall preclude Rogers from dealing with its employees listed in
EXHIBIT E in the normal course, including offering raises and bonuses in the
ordinary course of business consistent with past practices. Nothing in this
Agreement shall preclude Rogers from attempting to retain any of its
employees not listed in EXHIBIT E. All liabilities or obligations relating
to any employees of Yahoo who are former employees of Rogers arising after
such employee terminates his or her employment with Rogers shall be the
responsibility of Yahoo. All liabilities or obligations relating to any
employees of Rogers not employed by Yahoo after the Termination Date shall
remain the responsibility of Rogers.
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11. CONFIDENTIALITY.
11.1 CONFIDENTIALITY COVENANT. All information concerning
each party to this Agreement, whether disclosed prior to or after the date
hereof, including, without limitation, all commercial, financial, sales,
marketing, technological, customer and software information, is deemed to be
proprietary and confidential information of the disclosing party
("Confidential Information"). Each party agrees not to disclose or use,
other than as required to perform its obligations under this Agreement, the
other party's Confidential Information in any manner whatsoever without the
prior written consent of the disclosing party. Each of the parties hereto
shall cause its officers, directors, employees, representatives and agents
("Representatives") to observe the terms of this Section 11 and will be
responsible for any breach of this Section 11 by any of its Representatives.
Confidential Information does not include information that (a) is or becomes
publicly available other than by disclosure by the receiving party, (b) is or
becomes available to the receiving party from a source that is not prohibited
from disclosing such information, (c) is or was known to the receiving party
prior to receipt of such information by the disclosing party, as evidenced by
prior written records of the receiving party, or (d) is required to be
disclosed, on the advice of legal counsel, by law, regulation or legal
process; provided, where not precluded by law, regulation or legal process,
the receiving party provides the disclosing party with reasonable notice of
such obligation to allow the disclosing party sufficient time to object.
Except for that Confidential Information that the receiving party is required
to maintain by law or regulation, such as accounting records, invoices and
sales reports, as soon as practicable after the Termination Date, the
recipient of any Confidential Information of the other party hereto shall (a)
promptly destroy such Confidential Information in its possession or (b)
promptly deliver to the disclosing party such Confidential Information, at
the option of the disclosing party. In the event of any conflict between
this Section 11 and the Affiliation Agreement with respect to obligations of
confidentiality prior to the Termination Date, this Section 11 shall prevail.
11.2 CERTAIN ROGERS INFORMATION INCLUDED. The parties
agree, confirm and acknowledge that, except as provided in this Section 11.2,
all Rogers' customers, subscribers, advertisers and all Canadian market
information, and all information concerning such customers, subscribers,
advertisers and the Canadian market (including without limitation their
identity and the identity of the Yahoo System in their possession, as defined
in the Affiliation Agreement), shall be (and is hereby deemed to be) the sole
and exclusive property, and confidential information, of Rogers, and shall be
included in the definition of Rogers' "Confidential Information" set out in
Section 11.1 hereof. Rogers hereby grants Yahoo an unrestricted, perpetual
and royalty-free right to use all information provided to Yahoo by Rogers
pursuant to this Agreement for its internal commercial purposes.
12. YAHOO INTELLECTUAL PROPERTY. Yahoo retains all rights, title
and interest in and to its trade secrets, trademarks, know-how, copyrights,
patents, trade dress and other proprietary rights ("Yahoo Intellectual
Property") that were licensed to Rogers under the Affiliation Agreement or
otherwise a subject of the Affiliation Agreement and nothing contained in the
Affiliation Agreement, this Agreement or otherwise shall be deemed to grant
Rogers any interest therein. Without limiting the generality of the
foregoing, after the date hereof, Rogers shall have
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no right to use any of the Yahoo Intellectual Property in any manner
whatsoever, except as mutually agreed for purposes of providing services
under Section 8. Notwithstanding the foregoing, Yahoo acknowledges that
nothing in this Agreement shall preclude Rogers from retaining and using all
industry and trade knowledge, know-how and intellectual property of general
application which was not acquired or developed by Rogers for the primary
purpose of, and primarily in connection with Yahoo Canada or such
intellectual property rights, developed by or on behalf of Rogers as Rogers
Yahoo Canada Intellectual Property (as defined in the Affiliation Agreement),
that are listed on EXHIBIT F attached hereto.
13. CONDITIONS TO CLOSING.
13.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF YAHOO. The
obligations of Yahoo to consummate the transactions contemplated under this
Agreement shall be subject to the satisfaction or waiver of the following
conditions prior to or as of the Termination Date:
(a) UNDISCLOSED LIABILITIES. There shall be no
liability of Rogers, contingent or otherwise, other than the Assigned
Contracts, which would become material obligations of Yahoo as a result of
the transactions contemplated hereby.
(b) CONSENTS. All material consents or
authorizations required pursuant to the Assigned Contracts shall have been
obtained.
(c) LITIGATION. There shall not be any injunction,
court order or order of an administrative tribunal (A) staying or enjoining
the transactions contemplated by this Agreement, including, without
limitation, Yahoo's ownership rights relating to Yahoo Canada or the Returned
Assets or (B) otherwise materially impairing the operations of Yahoo Canada.
(d) URL. Rogers shall have caused Yahoo
Communications, Inc. to convey, or if unable to do so as contemplated in
Section 6 hereof, to license, the URL "yahoo.ca" to Yahoo, or an affiliate or
designee of Yahoo, and to change its corporate name such that there is no
reference to the name Yahoo or any confusingly similar variant.
(e) ROYALTY PAYMENTS. Yahoo shall have received the
first of the royalty payments set forth in Section 2.2 of this Agreement.
13.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF ROGERS. The
obligations of Rogers to consummate the transactions contemplated under this
Agreement shall be subject to the satisfaction or waiver of the following
conditions prior to or as of the Termination Date:
(a) LITIGATION. There shall not be any injunction,
court order or order of an administrative tribunal staying or enjoining the
transactions contemplated by this Agreement.
(b) PAYMENTS BY YAHOO. Rogers shall have received
the first installment of the Termination Fee and the Promissory Note, or
payment in lieu thereof, in the
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amount of the second installment of the Termination Fee.
14. TERMINATION. This Agreement shall terminate upon the earliest
of (a) at the option of Rogers, the failure to satisfy any of the conditions
set forth in Section 13.2 hereof as of the Termination Date, or (b) at the
option of Yahoo, the failure to satisfy any of the conditions set forth in
Section 13.1 hereof as of the Termination Date. Upon termination of this
Agreement for any reason (i) Yahoo and Rogers shall each continue to be bound
by the terms of the Affiliation Agreement, and each party shall perform its
respective obligations thereunder, as such obligations existed immediately
prior to the execution of the Letter Agreement; and (ii) either party may
proceed with the dispute resolution process requirements of the Affiliation
Agreement with respect to the Disputes (as defined in Section 15 below).
15. DISPUTE RESOLUTION PROCESS. Yahoo and Rogers agree that the
dispute resolution process requirements of the Affiliation Agreement with
respect to the disputes (the "Disputes") set forth in Rogers' letter of
December 8, 1998 and Yahoo's letter of December 9, 1998 are suspended and
that neither party shall take any additional steps or proceedings to
prosecute such Disputes, or to otherwise pursue the Disputes under the
provisions of the Affiliation Agreement, during the term of this Agreement.
In the event of a termination of this Agreement for any reason, either party
may proceed with the dispute resolution process set forth in the Affiliation
Agreement regarding the Disputes. Upon consummation of the transactions
contemplated by this Agreement, the arbitration proceedings initiated under
the Affiliation Agreement with respect to the Disputes shall irrevocably
terminate.
16. LIABILITY
16.1 INDEMNIFICATION BY ROGERS. Rogers shall indemnify and
hold harmless Yahoo against any and all losses, liabilities, claims and
expenses, including reasonable attorneys' fees and costs ("Losses"),
sustained by Yahoo resulting from, arising out of, or in connection with (i)
any material inaccuracy in, breach of, or non-fulfillment of any
representation, warranty, covenant or other obligation of Rogers contained in
this Agreement, (ii) any liability or obligation of Rogers not specifically
assumed by Yahoo or (iii) any claim by a third party or governmental or
regulatory authority relating to the period prior to the Termination Date and
in respect of which Rogers would have been required to indemnify Yahoo under
subsection 5.2(2) of the Affiliation Agreement if that Agreement were not
terminated; provided that the indemnification procedures and any remedies to
enforce such obligations shall be governed solely by this Agreement.
16.2 INDEMNIFICATION BY YAHOO. Yahoo shall indemnify and
hold harmless Rogers against any and all Losses sustained by Rogers resulting
from, arising out of, or in connection with (i) any material inaccuracy in,
breach of, or non-fulfilment of any representation, warranty, covenant or
agreement made by or other obligation of Yahoo contained in this Agreement
and/or the Promissory Note, (ii) Yahoo's failure to satisfy or otherwise
discharge any obligations under the Assigned Contracts after the Termination
Date, (iii) any claim by a third party or governmental or regulatory
authority relating to Yahoo's operation of Yahoo Canada after the
Termination Date, (iv) any claim by a third party or
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governmental or regulatory authority relating to the period prior to the
Termination Date and in respect of which Yahoo would have been required to
indemnify Rogers under subsection 5.2(1) of the Affiliation Agreement if that
Agreement were not terminated, provided that the indemnification procedures
and any remedies to enforce such obligations shall be governed solely by this
Agreement, and (v) any actual or threatened claim that the performance by
Rogers of its obligations under this Agreement after the Termination Date,
infringes, breaches, or harms in any manner or to any extent the Intellectual
Property Rights (as that term is defined in the Affiliation Agreement) of any
other person, provided Rogers acts in a commercially reasonable manner.
16.3 PROCEDURES. In the event any third party asserts any
claim with respect to any matter as to which the indemnities in this
Agreement relate, the party against whom the claim is asserted (the
"Indemnified Party") shall give prompt notice to the other party (the
"Indemnifying Party"), and the Indemnifying Party shall have the right at its
election to take over the defense or settlement of the third party claim at
its own expense by giving prompt notice to the Indemnified Party. If the
Indemnifying Party does not give such notice and does not proceed diligently
so to defend the third party claim within 30 days after receipt of the notice
of the third party claim, the Indemnifying Party shall be bound by any
defense or settlement that the Indemnified Party may make as to those claims
and shall reimburse the Indemnified Party for its Losses and expenses related
to the defense or settlement of the third party claim. The parties shall
cooperate in defending against any asserted third party claims. For purposes
of this Section 16, the indemnification of the Indemnified Party shall also
include the indemnification of the Indemnified Party's employees, agents,
affiliates, and third parties performing services for the Indemnified Party.
16.4 LIMITATION OF LIABILITY. Any claim under this Agreement
with respect to any breach of warranty by either party must be brought within
eighteen months of the Termination Date. Rogers and Yahoo each agree that
each party's liability to the other party for any and all direct harm,
liability, expense, cost, loss or damage, whether in negligence, tort,
equity, contract or otherwise, arising out of, or in connection with, this
Agreement shall be strictly limited in the aggregate, in respect of each and
all incidences or occurrences, to US$18 million, provided that Rogers'
liability arising out of, or in connection with Section 8.1 shall be strictly
limited in the aggregate to US$500,000. EXCEPT WITH RESPECT TO THE
PROVISIONS OF SECTIONS 16.1 AND 16.2 HEREOF, UNDER NO CIRCUMSTANCES WILL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, THIRD PARTY,
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY EXPENSES, COSTS, LIABILITY,
LOSS, OR DAMAGE WHATSOEVER (EVEN IF THAT PARTY HAS BEEN ADVISED OF SUCH
DAMAGES.)
17. PUBLICITY. Neither party to this Agreement shall publicly
disclose the existence or nature of this Agreement without the consent of the
other party, which shall not be unreasonably withheld; provided, however,
that either party may, without the prior consent of the other party, issue a
press release or otherwise publicly disclose this Agreement if, upon the
advice of legal counsel, such disclosure is required by law or the rules or
regulations governing the securities exchange on which such party's
securities are registered for trading; provided further, however,
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that such party shall use its best efforts to provide twenty-four (24) hours
prior notice of such required release.
18. MISCELLANEOUS.
18.1 GOVERNING LAW; VENUE. This Agreement will be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts between residents of that State and executed in and
to be performed in that State. The parties hereto agree that any claim, suit
or action brought to enforce the terms of this Agreement shall be brought in
the State of New York before a judge alone and the parties hereby consent to
the personal jurisdiction of such State.
18.2 ENTIRE AGREEMENT. This Agreement and the exhibits
hereto constitute the entire agreement between the parties hereto relating to
the subject matter hereof and shall supersede and replace in its entirety the
Letter Agreement. There are not and shall not be any oral statements,
representations, warranties, undertakings or agreements between the parties.
18.3 AMENDMENTS; WAIVER. This Agreement may not be amended
or modified in any respect except by written instrument signed by the parties
hereto. No waiver of any provision of this agreement or any breach hereunder
shall be valid or effective unless such waiver is set forth in writing and
signed by the party giving such waiver; and no such waiver shall be deemed a
waiver of any subsequent breach of the same or similar nature or any other
breach of the other party.
18.4 COUNTERPARTS. This Agreement may be executed in several
counterparts which shall constitute one agreement. Facsimile signatures
shall be binding.
18.5 ASSIGNMENT. This Agreement may not be assigned without
the written consent of the parties hereto; provided, however, that either
party shall be entitled to assign its rights hereunder, in whole or in part,
to one or more of its affiliates. This Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of the parties
hereto.
18.6 ATTORNEYS' FEES. Should any lawsuit, action or
proceeding be brought to enforce the rights or obligations relating to this
Agreement, the prevailing party shall be entitled to be reimbursed by the
other party for all reasonable attorneys' fees, expenses and costs incurred
as a result thereof.
18.7 SEVERABILITY. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent
practicable, be modified so as to make it valid, legal and enforceable and to
retain as nearly as practicable the intent of the parties, and the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
18.8 NOTICES. All notices and other communications required
or permitted
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hereunder shall be in writing and shall be deemed effectively given upon
personal delivery, one day following mailing by a reputable overnight courier
or by facsimile transmission with confirmation of receipt or five business
days following mailing by registered or certified mail addressed: (i) if to
Yahoo, 3420 Central Expressway, Santa Clara, California 95051, facsimile
number (408) 731-3400, attn: Heather Killen and Douglas P. Feick, or (ii) if
to Rogers, 777 Bay Street, Toronto, Canada M5W 1A7, facsimile number (416)
593-3175, attn: Timothy Root, with a copy to 333 Bloor Street East, 10th
Floor, Toronto, Ontario, Canada, M4W 1G9, facsimile number: (416) 935-3548,
attn: David Miller, or at such other address or facsimile number as either
Yahoo or Rogers shall have furnished to the other party.
18.9 MUTUAL DRAFTING. Each party has cooperated in the
negotiations, drafting, and preparing of this Agreement. Therefore, no
provision of this Agreement shall be construed against any party by reason of
the fact that such party or its legal counsel was the draftsperson of such
provision.
18.10 HEADINGS. The headings of the paragraphs of this
Agreement are included for purposes of convenience only and shall not affect
the interpretation of any of its provisions.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by officers duly authorized as of the date first written above.
YAHOO! INC.
By:
-----------------------------------
Its:
-----------------------------------
ROGERS MEDIA INC.
By:
-----------------------------------
Its:
-----------------------------------
By:
-----------------------------------
Its:
-----------------------------------
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EXHIBIT A
FORM OF PROMISSORY NOTE
FOR VALUE RECEIVED, Yahoo! Inc. hereby promises to pay to or to the
order of Rogers Media Inc. on or before April 1, 1999 the principal amount of
$9,000,000, in lawful money of the United States of America, together with
any interest accrued thereon as hereinafter provided.
The principal amount under this promissory note (the "Note")
remaining unpaid and outstanding from time to time shall bear interest from
and after the business day following April 1, 1999, at a rate equal to the
Prime Rate plus one percent per annum, compounded and payable monthly in
arrears on the last business day of each month. All compounded interest
hereunder remaining unpaid and outstanding from time to time shall bear
interest at the same rate and shall be compounded in the same manner as the
unpaid principal amount hereof. Such interest shall accrue on a day-to-day
basis.
For the purposes of this Note, "Prime Rate" shall mean a rate per
annum equal to the annual variable rate of interest quoted or published from
time to time as the prime rate of interest charged by the Royal Bank of
Canada for commercial loans in United States dollars made by it in Canada.
The whole or any part of the principal amount of this Note may be
prepaid by the undersigned at any time or from time to time without notice,
bonus or penalty of any kind.
The undersigned hereby waives presentment for payment, notice of
non-payment, protest and notice of protest and hereby agrees to pay all
reasonable costs and expenses (including all reasonable legal costs) paid or
incurred in collecting any amount due and payable hereunder after demand for
payment thereof has been made.
This Note shall enure to the benefit of the holder hereof and its
successors and assigns and shall be binding on the undersigned and its
successors and assigns.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York and the federal laws of the
United States of America applicable therein. The undersigned hereby attorns
to the non-exclusive jurisdiction of the courts of the State of New York.
DATED as of the ___th day of ______________, 1999.
YAHOO! INC.
By:
----------------------------------
Its:
-----------------------------------
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EXHIBIT B
ASSIGNED CONTRACTS
- Linking Agreement between Rogers and Microsoft Network, LLC, dated
January 23, 1998. (The consent to assignment required pursuant to
this Agreement shall not be a material consent for the purposes of
Section 13 hereof).
- Advertising and Insertion Orders set forth on Schedule 1 attached
hereto, together with such additional advertising orders for Yahoo
Canada that may be entered into up to the Termination Date.
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SCHEDULE 1
TO EXHIBIT B
<TABLE>
<CAPTION>
INSERTION ORDER $
<S> <C>
[*] [*]
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[*] [*]
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[*] [*]
[*] [*]
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[*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
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[*]
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
</TABLE>
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EXHIBIT C
RETURNED ASSETS
- URL (www.yahoo.ca) for Yahoo Canada
- Products and merchandise that incorporate Yahoo brand features.
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EXHIBIT D
POST-TERMINATION SERVICES/OBLIGATIONS
COORDINATORS:
ROGERS COORDINATORS. Questions and requests for information from Yahoo! Inc.
("Yahoo") should be directed in writing, whether by e-mail or facsimile,
first to [*] and then to the following representatives from Rogers Media Inc.
("Rogers"):
- Technical issues for platform, DNS, hosting, etc.: [*]
- Technical issues for content feeds and content partners: [*]
- Sales, ad serving and insertion order issues: [*]
- Financial reconciliation issues: [*]
- All other general issues: [*]
YAHOO COORDINATORS. Questions and requests for information from Rogers should
be directed by email (or in writing, if necessary, by facsimile), to [*] and
to the following representatives from Yahoo! Inc. ("Yahoo"), as applicable:
- Technical, hosting and engineering issues: [*]
- Sales, ad serving and insertion order issues: [*]
- Financial issues: [*]
- Content and production issues: [*]
- Marketing, PR and communication issues: [*]; and
- All other general issues: [*].
OBLIGATIONS OF YAHOO AND ROGERS:
HOSTING:
ROGERS OBLIGATIONS:
- Rogers shall, until two weeks after Rogers has sent written
authorization to the Canadian domain registry to transfer
"www.yahoo.ca" to Yahoo, continue operating and maintaining
"www.yahoo.ca" in the ordinary course of business, consistent with
past practices, and agrees to use commercially reasonable efforts not
to cause any disruptions or cessation of Yahoo's services in Canada.
- Rogers will assist in the switchover in terms of file transfer
assistance, remote machine access, and any other server aid required
during this switchover. Any such
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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requests for assistance shall be sent in writing to the appropriate
Coordinator for Rogers. Rogers will use reasonable efforts to
respond to requests in a timely fashion.
- Except as may be required by law or regulation, Rogers will
permanently remove and destroy all Confidential Information of Yahoo
in its possession within 10 business days after its servers are
switched off, but in any event no later than March 31, 1999. Rogers
will provide Yahoo with a letter confirming such removal and
destruction.
- Rogers will assist in the transfer of "www.yahoo.ca" to Yahoo,
including providing its assent to the CA Domain Registrar requesting
the transfer of the "www.yahoo.ca" domain from Yahoo Communications
Inc. to a Canadian corporation owned by Yahoo. As soon as
practicable, Rogers shall send written authorization to the Canadian
domain registry to transfer "www.yahoo.ca" to Yahoo.
YAHOO OBLIGATIONS:
- Yahoo shall be responsible for the set up and operations of its
servers.
- Yahoo shall be responsible for the transfer of the "www.yahoo.ca"
domain to Yahoo and the transition and propagation of the IP address
through the Internet; provided that Rogers shall provide its assent to
the transfer as soon as practicable.
- Except as may be required by law or regulation or as otherwise
provided in the Termination Agreement, Yahoo will permanently remove
and destroy all Confidential Information of Rogers in its possession
within 10 business days after the transfer of the URL, but in any
event no later than March 31, 1999. Yahoo will provide Rogers with a
letter confirming such removal and destruction.
AD SERVING AND SALES:
ROGERS OBLIGATIONS:
- On the Termination Date, Rogers shall provide a final sales reports
for each account up to March 1, 1999.
- On the Termination Date, Rogers shall provide a list of current,
active 'high-level' prospects to Yahoo up to March 1, 1999.
- Rogers shall provide a final sales report for each current account
on the Termination Date. In addition, within 15 days of the
Termination Date, Rogers shall provide a list of accounts, together
with any available contact information, that were approached during
the previous 12 month period by Rogers personnel assigned to sell
advertising on Yahoo Canada and for which Rogers has maintained a
written record (e.g., ACT information maintained by [*] and [*]).
For the period from the Termination Date to March 31, 1999, to the
extent Yahoo requires any additional explanation about specific
accounts, Rogers will attempt to answer any questions directed to
the appropriate Coordinator on a timely basis.
YAHOO OBLIGATIONS
- From the date of transition of the ad serving operations from Rogers
to Yahoo, but in any event no later than the Termination Date, Yahoo
shall be responsible for ad
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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serving, including ensuring the correct content and placement of
all advertising on the site.
- Following the Termination Date, Yahoo shall be responsible for all
sales activities and pre-sales and post-sales communications with
advertising customers.
BILLING, RECONCILIATION, FINANCE:
ROGERS OBLIGATIONS:
- Rogers shall have billed all accounts to the end of February, and will
prepare a final reconciliation of accounts, costs and royalty
obligations as of February 15, 1999 and the Termination Date, so that
Yahoo receives the appropriate portion of royalties (determined on the
basis of number of days) up to the Termination Date, for which
purposes account shall be taken of any "net loss" of Rogers, as
contemplated by Section 2.2 of the Termination Agreement. Rogers
shall provide a complete accounting of any such "net losses" and the
calculation of the amounts payable to Yahoo.
- Rogers shall provide to Yahoo complete copies of all current, active
advertising and insertion orders and all creative and other salient
information regarding such advertising and insertion orders.
- As soon as practicable, but in any event no later than March 31, 1999,
Rogers shall provide Yahoo with the following financial materials.
For the period from the Termination Date until March 31, 1999, to the
extent Yahoo requires any additional explanation regarding the
financial materials, Rogers will attempt to answer any questions
directed to the appropriate Coordinator on a timely basis.
1. Listing of all invoices by month from inception to
Termination Date.
2. Listing of all cash receipts from inception to Termination
Date.
3. Listing of all adjustments and bad debts from inception to
Termination Date.
4. Overall proof and reconciliation of accounts receivable
balance and royalty revenues.
5. Detail of any unbilled receivables, if any, as of the
Termination Date.
6. Detail of current deferred revenue (unmet page view
obligations, prepaid campaigns) as of the Termination Date.
YAHOO OBLIGATIONS:
- Yahoo shall be responsible for all subsequent billing of accounts from
and after March 1, 1999.
CONTENT:
YAHOO OBLIGATIONS:
- From the date of transition of the site hosting operations from Rogers
to Yahoo, Yahoo shall be responsible for all content on Yahoo Canada
site.
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STAFF, RETURNED ASSETS AND OTHER MATTERS:
ROGERS OBLIGATIONS:
- Rogers will arrange to redirect in a timely manner to Yahoo any
correspondence, email, payments or other materials it receives in
respect of Yahoo Canada after the Termination Date.
- As soon as practicable following the Termination Date, Rogers shall
send the tangible Returned Assets to The Exchange Tower, 1800-130 King
Street West, Office #1871, Toronto, Ontario M5X 1E3. Rogers shall
provide notice to Yahoo prior to shipment.
YAHOO OBLIGATIONS:
- Yahoo will arrange to redirect to Rogers in a timely manner any
correspondence, email, payments or other materials its receives
through the "www.yahoo.ca" site or otherwise after the Termination
Date that relates to Rogers or to Yahoo Canada prior to the
Termination Date.
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EXHIBIT E
KEY YAHOO CANADA EMPLOYEES
[*]
[*]
[*]
[*]
[*]
[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT F
ROGERS YAHOO CANADA INTELLECTUAL PROPERTY
All industry and trade knowledge, know-how and intellectual property of
general application which was not acquired or developed by Rogers for the
primary purpose of, and primarily in connection with Yahoo Canada, and the
following modifications, revisions, additions, customizations and
enhancements made by Rogers to the Yahoo Internet Directory pursuant to the
Affiliation Agreement:
- Application software for parsing Canadian Press news feed
- Today's News
- Weekly Picks
- NHL
- Holiday Shop Online
After execution of this Agreement and prior to the Termination Date,
Yahoo shall perform a review of the Rogers Yahoo Canada Intellectual Property
(as defined in the Affiliation Agreement), together with other Rogers
intellectual property associated and used with Yahoo Canada, to determine its
applicability in connection with the maintenance and operation of Yahoo
Canada. In the event that Yahoo determines, at any time within one month
after the Termination Date, that any such Rogers Yahoo Canada Intellectual
Property or other Rogers intellectual property associated and used with Yahoo
Canada is reasonably necessary for the maintenance and operation of Yahoo
Canada, then as of the Termination Date Rogers shall grant to Yahoo a
non-exclusive, perpetual royalty-free license to use same for maintenance and
operation of Yahoo Canada following the Termination Date. THE FOREGOING
LICENSES SHALL BE PROVIDED "AS IS", AND ROGERS HEREBY DISCLAIMS ALL
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE FOREGOING
INTELLECTUAL PROPERTY, INCLUDING, BUT NOT LIMITED TO THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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