Exhibit 10.37
ADCENTER LICENSE, HOSTING AND
SUPPORT AGREEMENT
This AdCenter License, Hosting and
Support Agreement (“ Agreement ”) is entered
into as of May 16, 2005 (the “ Effective Date
”), by and between Ask Jeeves, Inc., a Delaware corporation
(“ Partner ”) and LookSmart, Ltd., a Delaware
corporation (“ LookSmart ”).
RECITALS
The parties wish to provide for a
hosted private-label solution to enable Partner to access and use
the LookSmart Advertising Center and associated systems (including
any improved version(s) or features of the LookSmart Advertising
Center implemented and made generally commercially available to
private label AdCenter customers by LookSmart after the Effective
Date) (together, the “ AdCenter ”) on the
Partner Network, on the terms and conditions herein.
NOW, therefore, for good and
adequate consideration, the receipt of which is acknowledged, the
parties agree as follows:
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a)
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“
Billable Clicks ” means the number of clicks on
Partner advertisements occurring on the Partner Network as recorded
by the AdCenter (provided that such clicks do not exceed the
maximum CPC or account budgets set by the advertiser).
“Billable Clicks” shall in no event include any Test
Traffic, Promotional Traffic, or clicks that are determined by the
AdCenter to be fraudulently generated clicks.
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b)
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“
Gross Revenues ” means amounts collected by Partner
from advertisers who advertise on the Partner Network using the
AdCenter.
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c)
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“
Licensed Marks ” means the trademarks, trade names and
related logos owned by Partner.
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d)
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“
Licensed Rights ” means the rights licensed to Partner
in Section 2 hereof.
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e)
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“
Partner Network ” means Internet sites owned and
operated by Partner, its subsidiaries or other affiliates, and its
syndication network.
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f)
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“
Promotional Traffic ” means clicks provided by Partner
to its customers without charge as part of any advertiser incentive
or promotional plan or arrangement. For the avoidance of doubt,
traffic shall be considered “Promotional Traffic” only
if (i) Partner notifies LookSmart in writing in advance of its
intention to conduct a promotion, and (ii) such traffic shall
comprise no more than 0.1% of the number of Billable Clicks per
month.
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g)
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“ Test
Traffic ” means automatically generated
‘clicks’ on AdCenter-supported advertising generated
for test purposes by Partner servers using predefined test
syndicate codes agreed by the parties. For the avoidance of doubt,
traffic shall be considered “Test Traffic” only if
(i) Partner notifies LookSmart in advance of its intention to
conduct a test, and (ii) such traffic shall comprise no more
than 1% of the number of Billable Clicks per month.
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a)
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License. LookSmart grants to Partner, subject to the
terms, limitations and conditions herein and during the Term
hereof, a non-exclusive, non-transferable, worldwide, royalty-free
(except as set forth in Section 3) license to access the
AdCenter for the limited purposes of making the AdCenter available
on the Partner Network to Partner’s advertising customers who
become AdCenter account holders and who advertise on the Partner
Network.
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b)
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Limitations
on License . The license
granted above is limited by the following restrictions:
(i) except as expressly permitted herein, Partner will not
display, use, reproduce, distribute, make derivative works from,
modify, sell, resell, rent, license, sublicense, transfer, assign
or redistribute in any way the Licensed Rights; (ii) Partner
will not attempt to alter, reverse engineer, decompile, disassemble
or otherwise attempt to derive the Licensed Rights or any of
LookSmart’s databases, computer code, computer programs,
patents, copyrights, other proprietary rights or any other
information furnished to Partner by LookSmart; (iii) Partner
will not display, sublicense or syndicate the Licensed Rights on or
to any third party or web site outside of the Partner Network
unless it first obtains LookSmart’s written consent;
(iv) Partner will use tracking URLs, as reasonably requested
by LookSmart, for all advertisements intended to be tracked through
the AdCenter which are displayed on the Partner Network (though
Partner may use the display URLs for purposes of displaying the
listing); (v) Partner will not use or authorize its
advertisers to use the AdCenter in connection with the
advertisement of illegal activities or the violation of third party
rights; and (vi) Partner will not encourage, aid, abet,
authorize or permit any employee, affiliate, contractor, agent,
representative or third party to do or attempt to do any of the
foregoing.
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3)
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PAYMENTS AND
REPORTING.
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a)
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Subscription
Payment . Partner shall
pay the following subscription payment to LookSmart for Gross
Revenues collected by Partner in each calendar month during the
Term. For the avoidance of doubt, the revenue share payments
described in this section shall be due and payable (at the time
specified in Section 3(d) below) beginning as soon as Partner
customers use the AdCenter, regardless of whether any of the launch
dates described herein have occurred.
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Gross Revenue in Calendar Month
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LookSmart Share (for applicable Tier)
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1
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$[***]
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[***]
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%
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2
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$[***]
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[***]
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%
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3
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$[***]
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[***]
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%
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4
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$[***]
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[***]
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%
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5
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$[***] and
higher
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[***]
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%
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b)
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For example, if
Partner collects $[***] of Gross Revenues in a given month, then
the applicable subscription payment to LookSmart would be [***].
Setup Fee . The setup fee of $[***] (the “ Setup
Fee ”) for the provision of integration services by
LookSmart as described in Exhibit B shall be due and payable
by Partner as follows: (a) $[***] shall be paid to LookSmart
within three business days after the Effective Date,
(b) $[***] shall be paid within three business days after the
Version 1.0 Launch Date (as defined below), and (c) $[***]
shall be paid within three business days after the Version 1.1
Launch Date (as defined below). All Setup Fees paid or payable
under this section are non-refundable.
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[***] indicates
redacted text
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2
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c)
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Annual
License Fee . Annual
license fees of $[***] (the “ Annual License Fee
”) shall be due and payable by Partner as follows:
(i) $[***] shall be paid to LookSmart within three business
days after the Version 1.0 Launch Date (as defined below), and
(ii) subject to the remainder of this paragraph, an additional
$[***] shall be paid on the first anniversary of the Version 1.0
Launch Date. All Annual License Fees paid or payable under this
section are non-refundable. If on the first anniversary of the
Version 1.0 Launch Date, the Gross Revenues collected by Partner
from its customers using the AdCenter during the preceding twelve
months exceeds $[***], then the Annual License Fee for the second
twelve-month period shall not become due and payable from
Partner.
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d)
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Payment and
Reporting . LookSmart
will make available to Partner daily reports describing Billable
Clicks generated. The Billable Clicks numbers in such reports shall
be final and may be relied upon by Partner for the purposes of this
Agreement starting 10 days after the date on which the clicks
occurred. Partner shall pay LookSmart its revenue share portion of
Gross Revenues collected, and shall provide reasonable
documentation detailing the amounts of such payments, within thirty
(30) days after the end of each calendar month. Within 30 days
after the third calendar month of each calendar quarter, LookSmart
shall provide a report including information regarding any
penalties to be paid by LookSmart for such calendar quarter as
required by the SLA, and Partner may offset such amount against its
subsequent monthly payment to LookSmart.
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e)
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“
Version 1.0 Launch Date ” means the date on which
(i) the private label AdCenter, meeting all aesthetic and
functional requirements set forth for Version 1.0 of the private
label AdCenter, as set forth in Exhibit B , may be accessed
by Partner’s advertising customers, which access and
functionality shall in any case be no less than the AdCenter access
and functionality that LookSmart makes then available to
LookSmart’s advertising customers, and (ii) LookSmart
has provided to Partner all Version 1.0 documentation set forth in
Exhibit B . For the purposes of clarity, the parties shall
write and initial here to acknowledge the Version 1.0 Launch Date
once it has occurred:
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Version 1.0 Launch Date:
8/1/2005
LookSmart Initials:
__________
Partner Initials:
_____________
On or immediately after the Version
1.0 Launch Date, LookSmart shall notify Partner via email that the
Version 1.0 Launch Date has occurred. Partner shall, within two
business days of receipt of such notice, indicate its agreement and
the parties shall complete and initial the Version 1.0 Launch Date
definition above. If Partner disagrees in good faith that the
Version 1.0 Launch Date has occurred, Partner shall notify
LookSmart via email, including reasonable detail as to what aspects
or features of the AdCenter are not substantially completed. If
LookSmart does not resolve the discrepancy to Partner’s
satisfaction within ten days of receipt of such email, Partner
shall have the right to terminate this Agreement.
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f)
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“
Version 1.1 Launch Date ” means the date on which
(i) the private label AdCenter, meeting all aesthetic and
functional requirements set forth for Version 1.1 of the private
label AdCenter, as set forth in Exhibit B , may be accessed
by Partner’s advertising customers, which access and
functionality shall in any case be no less than the AdCenter access
and functionality that LookSmart makes then available to
LookSmart’s advertising customers, and (ii) LookSmart
has provided to Partner all Version 1.1 documentation set forth in
Exhibit B . For the purposes of clarity, the parties shall
write and initial here to acknowledge the Version 1.1 Launch Date
once it has occurred:
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[***] indicates
redacted text
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3
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Version 1.1 Launch Date:
9/1/2005
LookSmart Initials:
__________
Partner Initials:
_____________
On or immediately after the Version
1.1 Launch Date, LookSmart shall notify Partner via email that the
Version 1.1 Launch Date has occurred. Partner shall, within two
business days of receipt of such notice, indicate its agreement and
the parties shall complete and initial the Version 1.1 Launch Date
definition above. If Partner disagrees in good faith that the
Version 1.1 Launch Date has occurred, Partner shall notify
LookSmart via email, including reasonable detail as to what aspects
or features of the AdCenter are not substantially completed. If
LookSmart does not resolve the discrepancy to Partner’s
satisfaction within ten days of receipt of such email, Partner
shall have the right to terminate this Agreement.
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g)
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Audit . Each party will maintain accurate records with
respect to the calculation of all payments made or due made under
this Agreement. The other party (the “ Examining Party
”) may, upon no less than 15 days prior written notice to the
first party (the “ Audited Party ”) and no more
than once in any twelve month period, cause an independent auditor
of nationally recognized standing to inspect the appropriate
records of the audited party reasonably related to the calculation
of such payments during the Audited Party’s normal business
hours. Such examination will be undertaken in a manner reasonably
calculated not to interfere with the Audited Party’s normal
business operations. The fees charged by such auditor in connection
with the inspection will be paid by the Examining Party, unless the
auditor discovers an underpayment of greater than [***]%, in which
case the Audited Party will pay the reasonable fees of the
auditor.
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a)
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Customer
Support. Partner (not
LookSmart) shall enter into contractual relationships with all
customers who purchase advertising through the AdCenter on the
Partner Network. Such contractual relationship shall be governed by
written terms and conditions which shall be consistent in all
respects with the AdCenter’s features and functions. For the
avoidance of doubt, Partner’s contracts with its customers
shall include language ensuring the parties maximum flexibility to
manage the AdCenter so that LookSmart may change, add or delete the
features, functionality and appearance of the AdCenter at any time
without notice. Partner shall be responsible for invoicing
customers who choose to receive paper invoices and for all other
billing and collection matters (except to the extent Billable
Clicks data is produced by the AdCenter). Partner shall be
responsible for all customer service issues with respect to
customers who purchase advertising on the Partner Network,
including all email and telephone service, and shall not refer
customers to LookSmart at any time.
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b)
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Tracking
Codes. Partner shall
ensure that all advertisements added by customers through the
AdCenter include tracking codes as required to enable the AdCenter
to track clicks. LookSmart shall provide specifications to Partner
for such tracking codes, and Partner shall be responsible for
ensuring that the tracking codes are properly used.
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c)
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Promotion. LookSmart shall not be responsible for promoting
the private label AdCenter or for generating customer interest in
using the private label AdCenter. Any customer support, marketing,
advertising, and sales conducted by Partner shall be conducted in a
manner consistent with the functions and features of the AdCenter,
and Partner shall not misrepresent or mislead customers or the
public as to any of the functions or features of the
AdCenter.
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[***] indicates
redacted text
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4
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d)
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Trademarks. Partner grants to LookSmart, subject to the
terms, limitations and conditions herein, a non-exclusive,
non-transferable, non-sublicensable license during the term hereof
to use and reproduce the Licensed Marks solely in connection with
the hosting and serving of the private-label AdCenter as set forth
herein. Partner grants no rights in the Licensed Marks other than
those expressly granted in this section. LookSmart agrees not to
take any action inconsistent with such ownership and to cooperate,
at Partner’s request and expense, in any action (including
the conduct of legal proceedings) which Partner deems necessary or
desirable to establish or preserve its exclusive rights in and to
the Licensed Marks.
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5)
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LOOKSMART
OBLIGATIONS.
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a)
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Service
Levels . Beginning on the
Version 1.0 Launch Date (except for the reporting features of the
AdCenter, which shall begin on the Version 1.1 Launch Date),
LookSmart will use commercially reasonable efforts to provide the
service levels and technical support as specified in the SLA
attached hereto as Exhibit A . LookSmart shall have no
customer service duties with respect to Partner’s
customers.
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b)
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Hosting/Integration . LookSmart shall provide the AdCenter on a
private-label basis, branded with Partner’s “look and
feel” so that Partner’s customers have a consistent
branding experience on the Partner Network. LookSmart shall host
and serve the AdCenter pages and integration shall proceed as
outlined on Exhibit B . The parties shall agree as soon as
practicable hereafter on a statement of work, to be executed by the
parties, which shall set forth the specifications and details of
the work required by Exhibit B (the “ Statement of
Work ”).
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c)
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Changes to
AdCenter. Except as
otherwise expressly provided herein, the AdCenter licensed to
Partner hereunder shall be functionally the same as the AdCenter
generally made available to LookSmart’s customers during the
Term.
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i)
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Upon
Request . Partner may, at
any time during the Term, request that LookSmart develop additional
features or functions of the AdCenter. If the parties agree that
such additional features or functions shall be developed, they will
jointly develop a project plan (including appropriate
specifications, timelines, and allocation of resources) and
negotiate market-based pricing and payment terms. No such
additional development work shall be required to be performed by
LookSmart, and no payments shall be required from Partner, until
the parties have developed a project plan, agreed on financial
terms, and signed an addendum to this Agreement.
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ii)
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By
LookSmart . Other than as
expressly set forth herein, LookSmart shall retain full ownership
and discretion over all elements of the AdCenter and may make
modifications, additions or deletions at any time in its
discretion, provided that LookSmart does not reduce or remove any
material features or functionality from the AdCenter which are
required by Exhibit B . In the event that LookSmart makes
significant modifications, additions or deletions to the AdCenter,
LookSmart will provide Partner with advance notice of such changes,
and will not implement such changes on the Partner Network without
at least 10 days’ advance notice. Notwithstanding the above,
LookSmart will not make any modifications to the AdCenter that
would reduce or remove any material features or functionality from
the AdCenter which are required by Exhibit B .
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d)
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Data on Partner Network
Customers . Upon request,
LookSmart will provide data generated by the AdCenter regarding the
customers who used the AdCenter to purchase advertisements on the
Partner Network, in a format to be mutually agreed by the parties.
Such data shall be owned
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by Ask Jeeves and may be accessed
by LookSmart solely for the purpose of carrying out its obligations
pursuant to this Agreement. Without limiting the foregoing,
LookSmart agrees not to use such Partner Network customer data for
any prospecting purposes, or for any other purposes aside from
those expressly contemplated by this Agreement; provided
that nothing herein shall prevent LookSmart from engaging in sales,
marketing and advertising activities based on customer lead
information from any other sources. For the avoidance of doubt,
nothing herein shall prevent (i) the parties, from time to
time, from conducting customer acquisition activities toward
advertisers who are customers of the other party, so long as such
activities do not violate this section, or (ii) LookSmart from
granting a limited license to third party vendors to assist with
back-end features of the AdCenter, provided that LookSmart enters
into contractual arrangements with such third parties that are at
least as protective of Partner’s rights to such customer data
as the protections contained herein.
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e)
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Data on
Partner Network Users .
Upon request, LookSmart will provide data generated by the AdCenter
regarding the Partner Network users who have clicked on
AdCenter-supported advertisements, in a format to be mutually
agreed by the parties. Such data shall be owned by Ask Jeeves and
may be accessed by LookSmart solely for the purpose of carrying out
its obligations pursuant to this Agreement. Without limiting the
foregoing, LookSmart agrees not to disclose such Partner Network
user data to third parties or to use such Partner Network user data
for any purposes aside from those expressly contemplated by this
Agreement, provided that LookSmart may grant a limited
license to third party vendors to assist with back-end features of
the AdCenter, so long as LookSmart enters into contractual
arrangements with such third parties that are at least as
protective of Partner’s rights to such customer data as the
protections contained herein.
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f)
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MFN .
If LookSmart enters into any agreement with a third party that is
similar to this agreement, and such agreement provides for a source
code escrow, then LookSmart will offer a substantially similar
source code escrow provision to Partner.
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g)
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Training . LookSmart will provide Partner personnel
designated by Partner with up to 40 hours of training on the
operation of the AdCenter. Such training will be provided on-site
at Partner’s designated location, on dates reasonably agreed
upon by LookSmart and Partner, and at no additional charge.
LookSmart will bear all of its expenses for such training. Any
additional training shall be on such terms, and at such times and
locations, as agreed by the parties based on then-prevailing market
rates.
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h)
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Internal Controls
. LookSmart shall, throughout the
term of this Agreement, (a) document all key internal controls
governing all significant systems that are used to provide the
services provided by LookSmart under this Agreement, and
(b) test such controls in accordance with the requirements for
public companies set forth in Auditing Standard No. 2, An
Audit of Internal Control over Financial Reporting Performed in
Conjunction with an Audit of Financial Statements, adopted by the
Public Company Accounting Oversight Board. Such documentation and
testing will be performed as part of LookSmart’s annual
Sarbanes-Oxley Section 404 compliance process and will be
reported in its periodic filings with the SEC. LookSmart will
(i) make available to Partner’s internal compliance
personnel and/or to Partner’s consulting firm (e.g.
Protiviti) (for purposes of interview) compliance personnel and
consultants (if any are used by LookSmart) reasonably required by
Partner to comply with Partner’s obligations under all
applicable laws, including without limitation, and all
documentation prepared by LookSmart under (a) and
(b) above (which shall be made available for review and
note-taking from time to time, as required by Partner to comply
with all applicable laws, at reasonable times at LookSmart’s
business offices, and which shall not be copied or removed from
LookSmart’s premises,
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except that Partner or its
consultants may remove all notes that they may make with respect to
such materials and interviews), (ii) use its best efforts to
implement a plan to correct material weaknesses in such controls as
soon as practicable, and at no charge to Partner, correct such
material weakness as soon as reasonably practicable,
(iii) promptly provide Partner with a report of any such
material weaknesses determined to exist by LookSmart or its
auditors, and (iv) provide Partner with a quarterly report of
any significant deficiencies in key i
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