Services Agreement - MarketWatch.com LLC and Data Broadcasting Corp.
AGREEMENT made as of the 29th Day of October, 1997, by and
between MARKETWATCH.COM.LLC, c/o Data Broadcasting Corporation, 1900 South
Norfolk Street. San Mateo, CA 94403 (herein called 'MarketWatch') and DATA
BROADCASTING CORPORATION, 1900 South Norfolk Street, San Mateo, CA 94403 (herein
1.1 During the term of this Agreement, subject to the terms and
conditions stated herein
(a) at the request of MarketWatch, DBC Will perform the
following services for MarketWatch:
(i) subject to MarketWatch's prior approval in each
instance, DBC shall engage or employ personnel assigned to
service MarketWatch (hereinafter referred to as 'MarketWatch
Employees') on a full-time or part-time basis as needed,
including the calculation and administration of employee (or
engaged personnel) compensation, benefits and/or related
payments or deductions/withholdings. MarketWatch shall have
the right to require DBC to terminate any employee (or engaged
personnel, as applicable). In connection with the foregoing
services, MarketWatch shall hold DBC harmless from liability
with respect to any personnel action involving a MarketWatch
Employee (acting solely within the scope of his or her
employment for MarketWatch), provided such personnel action is
directed by MarketWatch. (For avoidance of doubt, the
preceding sentence shall not relieve DBC of liability in its
capacity as a principal of MarketWatch.)
(ii) handle customer billing and collection for
MarketWatch subscription products and services and other
services including without limitation, real-time data service.
(iii) provide computer software programming
assistance, including, without limitation, assistance with the
operation of the on-line services (including advertising
services) offered by MarketWatch and the creation of
MarketWatch web site pages and navigation systems.
(b) (i) At the request of MarketWatch in each instance, DBC
will license to MarketWatch, free of charge, the delayed
commodities and stock data feeds delivered from the financial
exchanges with whom DBC has existing contracts (including,
without limitation, the New York Stock Exchange; The American
Stock Exchange; The Nasdaq Stock Market. Inc.; New York
Mercantile Exchange; Chicago Board Options Exchange; Chicago
Board of Trade; MidAmerica Commodity Exchange; Commodities
Exchange Center; Chicago Mercantile Exchange; and Coffee,
Sugar & Cocoa Exchange), which feeds are currently made
available by DBC to users/subscribers of the Internet web site
currently knows as dbc.com.
(ii) DBC will provide MarketWatch with communications
lines (including at least two (2) T-3 connections to the
Internet, hardware and software to effect the required
capability to receive/transmit etc. the data feeds described
in section 1.1(b)(i) above. DBC will use its best efforts to
ensure third party provided lines will be in good working
order at all times.
(iii) In connection with the data feed described in
section 1.1(b)(i) above, DBC will provide MarketWatch with
network operations and web site management support (including,
without limitation, hosting connectivity, serving content,
serving and reporting ads and reporting content) twenty-four
hours a day seven days a week.
(c) At MarketWatch's request, DBC Will provide (from its
rented or owned office space) office space and related facilities, to the extent
available, for MarketWatch Employees; provided, however, DBC will furnish
MarketWatch with sufficient space in its San Mateo offices to conduct
MarketWatch's current operations until the current lease for DBC's San Mateo
offices expires. Such right to use such facilities shall in no way be construed
as a sublease or license by DBC of any real property but shall only be construed
as a reimbursement arrangement. The provision of space at DBC's current offices
in San Mateo shall be free of charge.
1.2 During the term of this Agreement, subject to the terms and
conditions stated herein:
(a) DBC will pay MarketWatch:
(i) Five Dollars ($5) per month per subscriber for
each DBC PC-based subscriber who receives real-time quotes and
news, and Two Dollars Fifty Cents ($2.50) per month for each
Quotrek subscriber who receives real-time quotes and news. The
payment will be a minimum of $100,000 per month.
(ii) With respect to subscribers of the real-time
market feeds described below:
(A) twenty-five percent (25%) of the Net
Revenues earned from the real-time market feed to be
known as 'MarketWatch Live'; and
(B) seventy-five percent (75%) of the Net
Revenues earned from the real-time market feed to be
known as 'MarketWatch RT'.
As used in section 1 2(a)(ii), the term 'Net Revenues' shall
mean gross subscription fees collected less exchange fees
actually paid by DBC, credit card fees actually paid by DBC
and any applicable sales taxes billed by DBC and paid by the
2.1 The term of this Agreement shall begin as of the date hereof and
shall continue in full force and effect for a period of five (5) consecutive
years, through and including October [ ], 2002, unless it is terminated earlier
in accordance with the terms and conditions contained herein.
3. COMPENSATION; OFFSET
3.1 In consideration for all grants herein made or agreed to be made
and all rights, licenses, privileges and property herein conveyed or agreed to
be conveyed, and all warranties, representations and covenants herein made by
DBC, MarketWatch agrees to pay DBC as follows:
(a) DBC's actual costs, subject, however, to the approval of
MarketWatch of the costs to be incurred, other than the costs incurred by DBC in
the ordinary course of business. in connection with:
(i) the services rendered pursuant to subparagraph
1.1 (a) and section 1.1(b)(iii); and
(ii) the provision of communications lines described
in section 1.1(b)(ii) above.
(iii) the provision of office space and related
facilities to MarketWatch personnel, it being understood that
such actual cost shall be DBC's cost per rented square foot of
space utilized by the MarketWatch personnel concerned, subject
to the next sentence. The provision of office space and
related facilities to MarketWatch personnel at DBC's current
San Mateo location, however, shall be free of charge.
3.2 In the event that DBC breaches subparagraph 1.01(b) of the
Contribution Agreement among CBS Inc., DBC and MarketWatch dated as of October
29, 1997 (the 'Contribution Agreement'), then, in addition to whatever other
rights and remedies MarketWatch may have under the Contribution Agreement,
MarketWatch may offset any
monies due and owing from DBC under the (subparagraph 1.01 (b) of the)
Contribution Agreement against monies payable (from MarketWatch) to DBC
3.3 In the event that the services provided by DBC pursuant to this
Agreement cause DBC to recognize income for federal income tax purposes in an
amount which exceeds the amount prescribed for such services in subparagraph
3.1(a) above (the 'Excess'), then the entire amount of any deductions available
to MarketWatch solely attributable to such Excess shall be allocated by
MarketWatch to DBC.
4. WARRANTIES; REPRESENTATIONS; INDEMNITIES
4.1 (a) DBC represents and warrants that:
(i) it has full power and authority to enter into and
fully perform this Agreement.
(ii) it has sufficient right and authority to grant
to MarketWatch all licenses and rights granted or agreed to be
granted by it hereunder.
(iii) all materials and services furnished to
MarketWatch or the use thereof will not violate any applicable
lay, or violate or infringe upon the rights of any third
(iv) at all times. DBC will comply with all
applicable federal, state and local laws.
(b) MarketWatch represents and warrants that it is free to
enter into and fully perform this Agreement.
4.2 (a) DBC will assume all obligations for and indemnify and hold
MarketWatch harmless from (i) malfunctions or other usage problems resulting
from or in connection with the 'Year 2000 Problem' (i.e., the year 2000 (and
later years) as distinct from the years 1900 through 1999, (and earlier years)),
and (ii) 'bugs', 'viruses' or defects in the feeds or other software goods
provided herein, which affect the function or capabilities of such feeds or
(b) Each party shall at all times indemnify, hold harmless and
defend the other party in accordance with the indemnification provisions
(applicable to such party) set forth in Article VI of the Contribution
5.1 DBC will compute Net Revenues or any other transactions on which
monies are payable to MarketWatch as of each March 31, June 30, September 30 and
December 31, for the prior three (3) months. Within sixty (60) days after the
close of the calendar quarterly period concerned, DBC will send MarketWatch a
statement covering the number of subscribers who pay for the feeds described in
paragraph 1.2 during such quarterly period and will pay
MarketWatch for any Net Revenues or other monies due (including, without
limitation, sums due in connection with the subscriptions concerned).
5.2 DBC will maintain books and records which report the sales and
maintenance of subscriptions hereunder. Any Member of MarketWatch may make an
examination of a particular statement within three (3) years after the date when
DBC sends the statement concerned. Any Member of MarketWatch may review and copy
the books and records of DBC with respect to such statement, upon reasonable
notice during normal working hours.
6.1 MarketWatch shall have the right to terminate this Agreement if:
(a) DBC breaches any material term or condition of this
Agreement and has failed to cure such breach within ten (10) days after
MarketWatch's notice of default. The foregoing cure period will not apply to
DBC's obligations regarding the provision of delayed data feeds or to breaches
incapable of being cured;
(b) DBC: (i) becomes insolvent or unable to pay its debts as
they mature or makes an assignment for the benefit of its creditors; (ii) is the
subject of a voluntary petition in bankruptcy or any voluntary proceeding
relating to insolvency, receivership, liquidation, or composition for the
benefit of creditors, if such petition or proceeding is not dismissed within
sixty (60) days of filing; (iii) becomes the subject of any involuntary petition
in bankruptcy or any involuntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors, if such
petition or proceeding is not dismissed within sixty (60) days of filing; or
(iv) is liquidated or dissolved; or
(c) MarketWatch is dissolved.
MarketWatch may exercise its rights pursuant to this paragraph 6.1 by sending
DBC the appropriate notice. No exercise of MarketWatch's rights under this
Section 6.1 will limit MarketWatch's remedies by reason of DBC's default,
MarketWatch s rights to exercise any other right under this paragraph 6.1, or
any of MarketWatch's other rights.
7.1 Neither party may assign this Agreement, or their respective rights
and obligations hereunder, in whole or in part without the other party's prior
written consent. Any attempt to assign this Agreement without such consent shall
be void and of no effect ab initio. Notwithstanding the foregoing, MarketWatch
may have the right to assign this Agreement or any of its rights and obligations
hereunder to any entity controlling, controlled by or under common control with,
MarketWatch, or to any entity that acquires MarketWatch by purchase of stock or
by merger or otherwise, or by obtaining substantially all of MarketWatch's
assets (a '`MarketWatch Assignee'), provided that any such MarketWatch Assignee,
or any division thereof, thereafter succeeds to all of the rights and is subject
to all of the obligations of MarketWatch under this Agreement.
7.2 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York; applicable to agreements made
and to be performed entirely within such State, without regard to the conflicts
of law principles of such State.
7.3 Each party hereto irrevocably submits to the exclusive jurisdiction
of (a) the Supreme Court of the State of New York, New York County, and (b) the
United States District Court for the Southern District of New York, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby or thereby. Each of DBC and MarketWatch
agrees to commence any such action, suit or proceeding either in the United
States District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the Supreme Court of the State of New York, New York County. Each of
DBC and MarketWatch further agrees that service of any process, summons, notice
or document by U.S. registered mail to such party's respective address set forth
above shall be effective service of process for any action, suit or proceeding
in New York, with respect to any matters to which it has submitted to
jurisdiction in this Section 7.3. Each of DBC and MarketWatch irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby and thereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of
New York, and hereby and thereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
7.4 Each party shall comply in all material respects with all laws and
regulations applicable to its activities under this Agreement.
7.5 If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any Person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof (or the remaining portion thereof)
or the application of such provision to any other Persons or circumstances.
7.6 All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(i) if to MarketWatch,
c/o Data Broadcasting Corporation
1900 South Norfolk Street
San Mateo, CA 94403
Attention of Larry Kramer
(ii) if to DBC,
Data Broadcasting Corporation
1900 South Norfolk Street
San Mateo, CA 94403
Attention of Mark Imperiale, President
with copies to:
Camhy Karlinsky & Stein LLP
New York, NY 10019
Attention of Alan I. Annex, Esq.
7.7 The parties to this Agreement are independent contractors. There is
no relationship of partnership, joint venture, employment, franchise, or agency
between the parties. Neither party shall have the power to bind the other or
incur obligations on the other's behalf without the other's prior written
7.8 No failure of either party to exercise or enforce any of its rights
under this Agreement shall act as a waiver of such right.
7.9 This Agreement, along with the Exhibits thereto, contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other part, in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein.
7.10 This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each of the other parties.
7.11 This Agreement shall not become effective until executed by all
proposed Parties hereto.
7.12 This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto. By an instrument in
writing, any two parties hereto may waive compliance by the third partly with
any term or provision of this Agreement that such third party was or is
obligated to comply with or perform.
7.13 Except as provided in Article VI of the Contribution Agreement,
this Agreement is for the sole benefit of the parties hereto and their permitted
assigns and nothing herein expressed or implies shall give or be construed to
give to any person, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
7.14 The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. When a reference is made in this Agreement to a paragraph such
reference shall be to a paragraph of this Agreement unless otherwise indicated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
DATA BROADCASTING CORPORATION MARKETWATCH.COM, LLC
By: /s/ MARK F. IMPERIALE By: /s/ DEREK R.. REISFIELD
Title: President Title: Chairman