\n Schedule A: Authorized Advertisers
\n Schedule B: RIN Authorized Representatives
\n Schedule C: Operator Authorized Representatives
\n Schedule D: Existing Content Providers
\n Schedule E: Description of Software
\n Schedule F: Leased Equipment
\n Schedule G: Transition and Disaster Recovery Plan
\n Schedule H: Form of Standard Data Content Provider Agreement
\n Schedule I: Data Formats
\n Schedule J: Real Property Ad Specifications
\n Schedule K: Guidelines for Links to Other REALTOR(R) Internet Sites
\n Schedule L: Exceptions
\n Schedule M: Claims Relating to RPA Business<\/p>\n<\/s><\/c><\/caption>\n<\/table>\n
ii<\/p>\n
OPERATING AGREEMENT<\/p>\n
THIS OPERATING AGREEMENT (this “Agreement”) is entered into as of this 26th
\nday of November, 1996, between REALTORS(R) Information Network, Inc., an
\nIllinois corporation (“RIN”), and RealSelect, Inc., a Delaware corporation
\n(“Operator”).<\/p>\n
W I T N E S S E T H:<\/p>\n
W’HEREAS, RIN was formed to serve the members of the National Association
\nof REALTORS(R) and is engaged in the business of, among other things, soliciting
\nand collecting information related to real estate available for sale for the
\npurpose of presenting such information through Electronic Display (as
\nhereinafter defined) for review by interested persons and operates an Internet
\nURL address known as “realtor.com” for the purpose of, among other things,
\nproviding access to, and displaying, such information to interested persons;<\/p>\n
WHEREAS, RIN desires to engage Operator, and Operator is willing to accept
\nsuch engagement, to manage and operate the business of soliciting, collecting
\nand processing such real estate information and presenting it through Electronic
\nDisplay in accordance with the terms and conditions of this Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
\nhereinafter set forth, the parties hereby agree as follows:<\/p>\n
ARTICLE I<\/p>\n
Definitions and Interpretation<\/p>\n
1.1 Definitions. When used in this Agreement, the following terms shall
\nhave the respective meanings set forth below:<\/p>\n
“AAA Rules” shall have the meaning specified in Section 10.2(b).
\n ————— <\/p>\n
“Active” shall mean Real Property Ads located on Operator’s servers
\nthat are capable of being accessed electronically by users of the System through
\nthe Domain Site.<\/p>\n
“Advertising” shall mean the advertisements and promotional items
\npermitted under this Agreement.<\/p>\n
“Affected Party” shall have the meaning specified in Section 12.8(a).
\n ————— <\/p>\n
“Agreement” shall mean this Operating Agreement dated as of November
\n26, 1996, between RIN and Operator.<\/p>\n
“Arbitrators” shall have the meaning specified in Section 10.2(c).
\n ————— <\/p>\n
“Authorized Advertisers” shall mean the Persons described by SIC code
\nor similar means in Schedule A, as such Schedule may be amended from time to
\n ———-
\ntime as contemplated in Section 5.7(a).
\n ————– <\/p>\n
“Authorized Content Provider” shall mean (i) a REALTOR(R) owned and
\ncontrolled multiple listing service, (ii) a REALTOR(R) owned and controlled real
\nestate entity, (iii) a REALTOR(R) or (iv) if approved by RIN in its sole and
\nabsolute discretion (any such approval to be evidenced in writing by an
\nAuthorized Representative of RIN), a Person not covered by clauses (i), (ii) or
\n(iii) of this definition.<\/p>\n
“Authorized Representative” shall mean (i) with respect to RIN, any of
\nthe officers or individuals set forth on Schedule B, as such Schedule may be
\n ———-
\namended from time to time by RIN by notice given to Operator, and (ii) with
\nrespect to Operator, any of the officers or individuals set forth on Schedule C,
\n ———-
\nas such Schedule may be amended from time to time by Operator by notice given to
\nRIN.<\/p>\n
“Available Advertising Space” shall mean the aggregate number of
\nbanner ad views and other forms of advertising displays available for sale to
\nadvertisers during any thirty day period.<\/p>\n
“Basic Qualifications” shall have the meaning specified in Section
\n ——-
\n10.2(c).
\n——- <\/p>\n
“Basic RPA Information” shall have the meaning specified in Section
\n ——-
\n5.3(b).
\n—— <\/p>\n
“Business Day” shall mean a day of the calendar week, other than
\nSaturday, Sunday or any holiday, on which Operator is open for the transaction
\nof business.<\/p>\n
“Commercially Viable Form of Electronic Display” shall mean any form
\nof Electronic Display the current users of which represent ten percent or more
\nof the households in the United States.<\/p>\n
“Confidential Information” shall have the meaning specified in Section
\n ——-
\n8.1.
\n— <\/p>\n
“Controlled Entity” shall mean, with respect to any Person, any other
\nPerson which, directly or indirectly, (i) owns or controls such Person, (ii) is
\nowned or controlled by such Person, or (iii) is under common control with such
\nPerson. As used herein, “control” means the power to direct the management or
\naffairs of a Person and “ownership” means the beneficial ownership of more than
\n50% of the equity securities of the Person.<\/p>\n
“Data Content Provider” shall mean each, and “Data Content Providers”
\nshall mean all, of the Existing Content Providers and each Authorized Content
\nProvider who shall hereafter enter into a Data Content Provider Agreement.<\/p>\n
“Data Content Provider Agreements” shall mean the agreements between
\nOperator and Data Content Providers, whereby such Data Content Providers have
\nagreed to provide information for Real Property Ads for Electronic Display.<\/p>\n
“Default Rate” shall mean the sum of (i) the annual base interest rate
\non corporate loans posted by at least 75% of the thirty largest banks in the
\nUnited States as published in the Money Rates section of the Wall Street
\nJournal, from time to time, and shall vary when and as such published rate
\nvaries, plus (ii) four hundred basis points (4.00%).<\/p>\n
2<\/p>\n
“Defaulting Party” shall have the meaning specified in Section
\n ——-
\n7.2(d)(i).
\n———-<\/p>\n
“Dispute” shall have the meaning specified in Section 10.1(a).
\n ————— <\/p>\n
“Domain Site” shall mean the Internet URL address owned by NAR and
\nknown as of the date of this Agreement as “realtor.com”
\n(http:\/\/www.realtor.com).<\/p>\n
“EBIT” with respect to an entity for a specified period of time, shall
\nmean the earnings of such entity for such period before interest and any
\ndeductions related to extraordinary depreciation and\/or amortization for such
\nperiod, but after taxes for such period.<\/p>\n
“Electronic Display” shall mean the display of all information
\ncontemplated to be located at the Domain Site in a form such that it may be
\nviewed or accessed via electronic transmission through (i) the Intenet or
\nsystems substantially like the Internet (such as America On-Line or @Home) and
\n(ii) subject to the provisions of Section 5.6(c), other electronic media or
\n ————–
\nformats.<\/p>\n
“Enhanced Content Agreement” shall have the meaning specified in<\/p>\n
Section 5.3(d).
\n————– <\/p>\n
“Enhanced RPA Information” shall have the meaning specified in Section
\n ——-
\n5.3(b).
\n—— <\/p>\n
“Existing Content Providers” shall mean each of the Persons listed on<\/p>\n
Schedule D.
\n———- <\/p>\n
“Force Majeure Event” shall have the meaning specified in Section
\n ——-
\n12.8(a).
\n——- <\/p>\n
“Free Operating Cash Flow” shall mean the cumulative total over the
\nimmediately preceding four calendar quarters of Operator’s cash flows from
\noperating activities, as determined in accordance with generally accepted
\naccounting principles consistently applied and reported in Operator’s statement
\nof cash flows. Payments to RIN under the provisions of Article VI shall be
\n ———-
\ndeducted in calculating Free Operating Cash Flow to the extent such payments
\nhave been paid and have not been deducted pursuant to the preceding sentence.
\nThe following items shall be excluded from, and have no effect on, the
\ncalculation of Free Operating Cash Flow: (i) any accelerated write-offs or
\nwrite-downs of intangible assets (such as software or goodwill) or fixed assets,
\n(ii) depreciation and amortization, (iii) expenditures which in the ordinary
\ncourse of business would typically be funded through financing activities (this
\nprovision is not intended to include normal purchases of computer equipment, but
\nis intended to include major leasehold improvements or large scale replacement
\nof computer technology).<\/p>\n
“Internet” shall mean the worldwide network of computers commonly
\nreferred to as the Internet.<\/p>\n
“Level 1 Review” shall have the meaning specified in Section 10.1(b).
\n ————— <\/p>\n
“Level 1 Termination Date” shall have the meaning specified in Section
\n ——-
\n10.1(c).
\n——- <\/p>\n
3<\/p>\n
“NAR” shall mean the National Association of REALTORS(R), an Illinois
\nnot for profit corporation. The term “REALTORS(R)” is a registered collective
\nmembership mark of NAR and is used herein to refer to individuals who are
\nREALTORS(R) members of NAR.<\/p>\n
“Net Revenues” shall have the meaning specified in Section 6.2.
\n ———– <\/p>\n
“Number of Active Real Property Ads” shall mean the sum of (i) number
\nof Active Real Property Ads housed, maintained or operated by Operator and its
\nControlled Entities and franchisees plus (ii) the number of Real Property Ads
\navailable for display by linking to Subcontractors.<\/p>\n
“Number of Active U.S. Real Property Ads” shall mean the sum of (i)
\nnumber of Active Real Property Ads relating to Real Property located in the
\nUnited States on the Domain Site plus (ii) the number of Real Property Ads
\nrelating to Real Property located in the United States available for display by
\nlinking to Subcontractors.<\/p>\n
“Operator” shall mean RealSelect, Inc., a Delaware corporation.<\/p>\n
“Other REALTOR(R) Internet Sites” shall mean Internet sites owned and
\ncontrolled by (i) state REALTOR(R) associations, (ii) local REALTOR(R)
\nassociations, (iii) institutes, societies and councils of NAR, (iv) REALTOR(R)
\nowned and controlled multiple listing services and (v) REALTOR(R) owned and
\ncontrolled brokerage entities or franchisers.<\/p>\n
“Panel” shall have the meaning specified in Section 10.2(c).
\n ————— <\/p>\n
“Parent” shall mean NetSelect, Inc., a Delaware corporation.<\/p>\n
“Person” shall mean any natural person, partnership, limited liability
\ncompany, corporation, business trust, joint stock company, trust, unincorporated
\nassociation, joint venture, governmental agency or instrumentality, or other
\nentity.<\/p>\n
“Prime Rate” shall mean the sum of (i) the annual base interest rate
\non corporation loans posted by at least 75% of the thirty largest banks in the
\nUnited States as published in the Money Rates section of the Wall Street
\nJournal, from time to time, and shall vary when and as such published rate
\nvaries, plus (ii) fifty basis points (0.50%), provided, however, such rate, as
\n ——– ——-
\nso determined, shall not exceed 10.5%.<\/p>\n
“Real Property” shall mean residential homes (including single and
\nmulti-family dwellings, condominiums, cooperatives and townhouses), land, farms,
\nexotic homes, vacation homes, and improved and unimproved commercial real
\nproperty located throughout the World.<\/p>\n
“Real Property Ads” shall mean graphical, pictorial and\/or textual
\nelectronic displays relating to the sale, lease or rental of Real Property that
\nmeet the requirements of Section 5.3.
\n ———– <\/p>\n
“REALTOR(R) Intranet” shall mean a NAR sponsored network by which
\naccess is gained to, and containing, information accessible only to members of
\nNAR and other Persons <\/p>\n
4<\/p>\n
expressly permitted access by NAR. It is understood that such network shall not
\nbe accessible to or by members of the general public.<\/p>\n
“Restricted Advertisers” shall mean those Authorized Advertisers whose
\nbusiness could reasonably appear to conflict with the real estate business of a
\nbroker or agent associated with a Real Property Ad, including competing real
\nestate entities, lenders, title companies, escrow companies and home inspection
\ncompanies.<\/p>\n
“Revenues” shall have the meaning specified in Section 6.4(a).
\n ————– <\/p>\n
“RIN” shall mean REALTORS(R) Information Network, Inc., an Illinois
\ncorporation.<\/p>\n
“RPA Business” shall mean the business associated with soliciting,
\ncollecting, processing, maintaining, distributing and the Electronic Display of
\n(or arranging for the Electronic Display of) Real Property Ads and Advertising,
\nand activities associated therewith, or incidental thereto.<\/p>\n
“Software” shall mean the software described in Schedule E and shall
\n ———-
\ninclude any modifications, enhancements or improvements thereto or any
\nreplacements thereof, and any other computer software programs, including
\nrelated documentation and materials, developed by Operator for use in the RPA
\nBusiness.<\/p>\n
“Statistical Data” shall mean aggregate statistical data collected by
\nOperator from the usage of the information housed or maintained by Operator
\nunder this Agreement, which data shall not include the identities (whether by
\nname, address or otherwise) of the users (i.e., persons accessing such
\ninformation).<\/p>\n
“Subcontractor” shall mean an operator of another Internet site who
\nhas entered into an agreement with Operator whereunder such operator has agreed
\nto house, operate and maintain real property information similar to Real
\nProperty Ads and to migrate such information to the Domain Site. It is expected
\nthat any such agreement would provide for some form of revenue sharing between
\nOperator and Subcontractor; and consequently, the term “Subcontractor” would not
\ninclude any Person whose agreement or arrangement for linking between such
\nPerson’s Internet site and the Domain Site does not provide for compensation
\nfor, or revenue sharing with, Operator.<\/p>\n
“Surveyor” shall have the meaning specified in Section 4.8(c).
\n ————– <\/p>\n
“System” mean the overall system made up of hardware, Software,
\nscripts and programs that generate the graphical, pictorial and textual screens
\nby which data content, including Real Property Ads and Advertising, is retrieved
\nand presented to users.<\/p>\n
“Trademark License Agreement” shall have the meaning that certain
\nTrademark License dated as of November 26, 1996, between NAR and Operator.<\/p>\n
“Transition” shall have the meaning specified in Section 7.3(a).
\n ————– <\/p>\n
5<\/p>\n
“Transition and Disaster Recovery Plan” shall have the meaning
\nspecified in Section 4.2(c).
\n ————– <\/p>\n
“Unaffected Party” shall have the meaning specified in Section
\n ——-
\n12.8(b)(ii).
\n———– <\/p>\n
1.2 Interpretation. (a) In this Agreement, unless a clear contrary
\n ————–
\nintention appears:<\/p>\n
(i) the singular number includes the plural number and vice
\nversa;<\/p>\n
(ii) reference to any gender includes each other gender;<\/p>\n
(iii) reference to any agreement (including this Agreement),
\ndocument or instrument means such agreement, document or instrument as amended
\nor modified and in effect from time to time in accordance with the term thereof
\nand, if applicable, the terms hereof;<\/p>\n
(iv) reference to any statute means such statue as amended,
\nmodified, codified or reenacted, in whole or in part, and in effect from time to
\ntime, including any rules and regulations promulgated thereunder;<\/p>\n
(v) reference to any Article, Section or Schedule means such
\nArticle or Section of this Agreement or such Schedule to this Agreement, as the
\ncase may be, and references in any Article, Section or definition to any clause
\nmeans such clause of such Article. Section or definition;<\/p>\n
(vi) “hereunder”, “hereof”, “hereto” and words of similar
\nimport shall be deemed references to this Agreement as a whole and not to any
\nparticular Section or other provision hereof; and<\/p>\n
(vii) “including” (and with correlative meaning “include”) means
\nincluding without limiting the generality of any description preceding such
\nterm.<\/p>\n
(b) Each party has reviewed, and has been represented by counsel in
\nconnection with the negotiation of this Agreement, and no question of
\nconstruction shall be resolved by any rule of interpretation providing for
\ninterpretation against that drafting party.<\/p>\n
(c) Article and Section headings and titles in this Agreement are
\ninserted for convenience of reference only and are not intended to be a part of
\nor to affect the meaning or interpretation of this Agreement.<\/p>\n
ARTICLE II
\n Purchase; Effectiveness<\/p>\n
2.1 Purposes. (a) The primary purpose of the activities contemplated by
\n ——–
\nthis Agreement are (i) to house, maintain and operate the Domain Site; (ii) the
\nElectronic Display of Real Property Ads and Advertising; and (iii) to continue,
\nmaintain, improve and provide an electronic means for generating, acquiring,
\nstoring, transforming, processing, retrieving, utilizing, displaying or making
\navailable information provided by or on behalf of Data Content Providers with
\nrespect to the availability for sale, lease or rental of Real Property.<\/p>\n
6<\/p>\n
(b) Except to the extent otherwise provided in Section 5.7(f).
\nOperator shall not generate, acquire, store, transform, process, retrieve,
\nutilize, display or make available information assistance with respect to real
\nestate being offered for lease or sale directly by the owner thereof without the
\nassistance of a licensed real estate broker or salesperson.<\/p>\n
2.2 Effectiveness. This Agreement shall become effective as of the date
\n ————-
\nhereof.<\/p>\n
ARTICLE III
\n Designation as Operator; Nature of Agreement<\/p>\n
3.1 Engagement. RIN hereby engages Operator to perform the services
\n ———-
\ndescribed in this Agreement for the term specified in Section 7.1, and Operator
\n ———–
\nhereby agrees to perform such services for such term, on the terms and
\nconditions specified in this Agreement.<\/p>\n
3.2 Exclusive Nature of Relationship. Except as provided in this
\n ——————————–
\nAgreement, during the terms of this Agreement, Operator and RIN shall not
\nengage, directly or indirectly, in the Electronic Display or Real Property Ads
\nand shall not, directly or indirectly, develop, market, sell, acquire an equity
\nposition in, be engaged or employed by, or endorsed any service or enterprise,
\nor authorize, appoint or engage any other Person for the purposes of the
\nElectronic Display of the RPA Business.<\/p>\n
3.3 RIN\/NAR Activities. It is expected that Operator shall be allowed to
\n ——————
\ninclude a full page advertisement in each issue of NAR’s magazine publication.
\nToday’s REALTOR(R), for the purpose of promoting REALTOR.COM as the door that
\nleads to both Real Property Ads and the REALTOR(R) Intranet. It is expected
\nthat such advertisements would include explaining advertising opportunities
\navailable to REALTORS(R) and their firms, promoting the value of REALOR.COM to
\nREALTOR(R), and promoting specific features of the REALTOR(R) Intranet.
\nAdvertising copy submitted by Operator would be subject to the guidelines with
\nrespect to content, format and submission deadlines that are applied generally
\nto advertisers in Today’s REALTOR(R). The charges for the inclusion of such
\nadvertisements (a) during the period ending on the second anniversary of the
\ninsertion of the first full page advertisement, shall not exceed NAR’s lowest
\ndiscounted rates for similar as and shall be paid one-half by Operator and one-
\nhalf by RIN, and (b) after such second anniversary, shall not exceed NAR’s
\nlowest discounted rates offered to its affiliates for similar ads and shall be
\npaid by Operator.<\/p>\n
3.4 Relationship. This Agreement is not intended to create, and shall not
\n ————
\nbe deemed or treated as creating, a partnership, joint venture, employment
\ncontract or any other relationship between the parties other than the service
\nrelationship expressly provided for in this Agreement. All commitments,
\nobligations, undertakings and liabilities associated with the RPA Business shall
\nbe entered in the name of, and shall be the sole responsibility of, Operator,
\nand neither party shall be authorized to enter into any commitment, obligation,
\nundertaking or liability in the name of, or on behalf of, the other party.<\/p>\n
ARTICLE IV
\n Personnel; Operations; Performance<\/p>\n
7<\/p>\n
4.1 Personnel. (a) Operator shall assemble and maintain personnel (i)
\n ———
\nadequate to perform its obligations under this Agreement and (ii) possessing
\nsuch qualifications, knowledge and experience in the provision of the tasks to
\nwhich they are assigned as would be required for comparable positions and tasks
\nin competitive businesses. Operator shall provide appropriate training to such
\npersonnel as and when required in order to facilitate the efficient and
\nknowledgeable performance of services under this Agreement. Operator shall
\nmonitor the performance of such personnel and shall take such action as is
\nnecessary to remedy promptly and deficiencies in such performance.<\/p>\n
(b) Such personnel may be employees, consultant or contractors to
\nOperator. If such personnel are employees, they shall be governed by Operator’s
\npersonnel policies and practices. Operator shall be solely responsible for all
\npolicy and administrative aspects of such employment relationship, including
\ncompliance with applicable federal and state laws relating to equal opportunity,
\nnondiscrimination and occupational health and safety and payment of payroll
\ntaxes, compensation and employee benefits. Operator shall have sole
\nresponsibility for the supervision, daily direction and control of such
\npersonnel. Operator shall advise such personnel that they are not entitled to
\nany RIN employee benefits. Without limiting the foregoing, RIN shall not be
\nresponsible for workers’ compensation, disability benefits, unemployment
\ninsurance or withholding income taxes or social security for such employees.<\/p>\n
4.2 Operations. (a) Operator shall assemble (whether by acquisition or
\n ———-
\nlease) and maintain suitable facilities and equipment for the efficient and
\neffective operation of the RPA Business. Such facilities and equipment shall be
\nkept in good working order, normal wear and tear excepted.<\/p>\n
(b) Operator shall be entitled to use the equipment described in<\/p>\n
Schedule F (which equipment is owned by RIN) during the term of this Agreement.
\n———-
\nThere shall be no rental charge for the use of such equipment; however, Operator
\nshall be responsible for all costs associated with the possession, use,
\noperation and maintenance of such equipment, including any personal property
\ntaxes assessed in respect of such equipment.<\/p>\n
(c) Attached hereto as Schedule G is Operator’s plan (the
\n ———-
\n“Transition and Disaster Recovery Plan”) to (i) allow for the orderly migration
\nand transition of operating responsibility for the Domain Site and the RPA
\nBusiness to RIN and\/or a third party in the event this Agreement is terminated
\npursuant to Section 7.2 and (ii) protect the Domain Site and the operations of
\n ———–
\nthe RPA Business in the event of a disaster or other emergency. During the term
\nof this Agreement, Operator shall comply with the Transition and Disaster
\nRecovery Plan as such plan may be revised and updated upon the agreement of both
\nparties, not be unreasonably withheld or delayed.<\/p>\n
4.3 Licenses, Etc. Operator shall be responsible for obtaining and
\n ————-
\nmaintaining (i) all licenses and permits required from any governmental body or
\nagency for the performance of its services hereunder, the collection of
\ninformation from Data Content Providers, the formatting of such information into
\nReal Property Ads and the Electronic Display of Real Property Ads and (ii) all
\nlicenses or rights required from any third parties (other than Data Content
\nProviders) for the performance of its services hereunder and the Electronic
\nDisplay of Real Property Ads.<\/p>\n
8<\/p>\n
4.4 Insurance. Operator shall obtain, and maintain during the terms of
\n ———
\nthis Agreement insurance against such risks and in such amounts as are carried
\nby similar businesses in similar circumstances; provided that Operator shall, at
\n ——–
\na minimum, obtain and maintain in force insurance policies providing coverages
\nagainst the following risks and in the following amounts: (i) general liability,
\n$2,000,000, (ii) umbrella liability, $1,000,000, (iii) products\/completed
\noperations, $2,000,000, (iv) non-owned & hired automobile liability $1,000,000,
\nand (v) workers compensation as required by applicable state laws. RIN, Parent
\nand NAR shall be named as additional insureds under any such policies providing
\nliability coverage. Operator shall furnish RIN with evidence of the insurance
\nrequired to be maintained under this Section 4.4 from time to time upon the
\n ———–
\nreasonable request of RIN.<\/p>\n
4.5 Expenses. Operator shall be solely responsible for all expenses,
\n ——–
\nobligations or commitments incurred in connection with the performance of its
\nobligations under this Agreement.<\/p>\n
4.6 Performance Standards. (a) Except to the extent otherwise expressly
\n ———————
\nprovided, Operator shall, in the performance of its obligations and duties under
\nthis Agreement, exercise and use a degree of care and skill that a similarly
\nsituated service provider would exercise and use in providing services in
\nsimilar circumstances.<\/p>\n
(b) Operator shall perform its responsibilities set forth in this
\nAgreement so that the Domain Site, and the Real Property Ads and any other
\ninformation maintained threat, are competitive with any other similar (based on
\nmarkets and customers, features, services and volumes) for profit real estate
\nsites that use Electronic Display in terms of objective performance factors,
\nincluding user response time, functionality, reliability and price to customers
\nand REALTORS(R).<\/p>\n
(c) Operator shall maintain adequate server, communications and
\nother capability to handle all Active Real Property Ads. Operator shall also
\nmaintain sufficient equipment and resources such that the following performance
\nrequirements are met at least 28 out of 30 days each month, excluding reasonable
\nscheduled maintenance or System failure not the fault of Operator.<\/p>\n
(i) the number of connections shall not reach (1) eighty
\n percent for more than sixty percent of any individual day or (20 ninety-
\n five percent more than five percent of any individual day; and<\/p>\n
(ii) the amount of any individual system resource (central
\n processing unit, disk and network bandwidth) on any individual Internet
\n server, or on the System as a whole, shall not exceed (1) eighty percent
\n for more than sixty percent of any individual day or (2) ninety-five
\n percent for more than five percent of any individual day.<\/p>\n
As additional new Electronic Display media is added and as industry standards
\nchange related to expected Internet performance, Operator shall create new or
\nrevised performance standards for each Electronic Display media that it operates
\nunder this Agreement. Any such standards so developed shall be subject to the
\napproval of RIN, which shall not be unreasonably withheld if the proposed
\nperformance standards reasonably measure performance necessary to assure<\/p>\n
9<\/p>\n
competitive performance of the System. If RIN reasonably believes performance
\nstandards are not being met, it (1) shall notify Operator in writing of such
\nbelief and the reasons therefor and (2) can request Operator to measure and
\nreport the performance on any future three day period of RIN’s choice. If RIN
\nrequests, it may, at its costs, have a qualified and independent auditor review
\nOperator’s compliance with the performance standards set forth in, or
\nestablished under, this Section 4.6.
\n ———– <\/p>\n
(d) Operator shall use reasonable commercial efforts (i) to broaden
\nthe geographic penetration of the RPA Business in terms of the Data Content
\nProviders who are providing Real Property information for conversion into Real
\nProperty Ads and (ii) to increase the volume of Active Real Property Ads on the
\nSystem.<\/p>\n
4.7 Inspection of Records. RIN may (i) at any time it reasonably believes
\n ———————
\nOperator is in breach of any provision of this Agreement (in which case, it
\nshall notify Operator in writing of such belief and the reasons therefor) and
\n(ii) once during any calendar year, request Operator to, and Operator shall,
\nupon reasonable advance notice, permit employees, agents or representatives of
\nRIN, during normal business hours, to review, inspect and\/or audit Operator’s
\nfinancial records and its operating procedures relating to the performance of
\nservices under this Agreement. Operator shall cooperate and make available
\nappropriate personnel to assist representatives of RIN in inspecting or auditing
\nthe books, records and facilities of Operator, and Operator will reasonably
\ncooperate with respect to any such audit or inspection.<\/p>\n
4.8 Reports; Meetings. (a) On or before the commencement of each calendar
\n —————–
\nyear, commencing with calendar year 1997, Operator shall prepare and forward to
\nRIN a business plan with respect to such calendar year, indicating projections
\nof revenues and expenses, sales activities and the resources to be devoted to
\nsuch activities.<\/p>\n
(b) On or before the last day of each month during the term of this
\nAgreement, commencing February 28, 1997. Operator shall prepare and forward to
\nRIN a report containing the number of Real Property Ads made Active during the
\nprior month and the aggregate number of Active Real Property Ads on the System
\nat such end of such prior month.<\/p>\n
(c) On or before March 1 in each year, commencing March 1, 1998,
\nOperator shall cause to be delivered to RIN a report prepared by an independent
\nthird party (the “Surveyor”) reflecting the results of a survey of REALTORS(R)
\nand consumers regarding their use of the Domain Site. Such Surveyor shall (i)
\nbe chosen by Operator, subject to the reasonable approval of RIN and NAR as to
\nthe independence, qualifications and experience of the Person so chosen, (ii)
\nprepare the form and content of the survey, based upon input from Operator, RIN
\nand NAR (each of which shall have a reasonable opportunity to provide such input
\nand to review the proposed form and content of the survey), and (iii) conduct
\nthe survey. Operator shall be responsible for all costs associated with such
\nsurvey; provided that such costs shall not exceed $30,000 annually.
\n ——– <\/p>\n
(d) Operator shall cause its senior management to meet with the
\nfollowing persons at the following frequencies in order to review the RPA
\nBusiness and the status of Operator’s activities under this Agreement:<\/p>\n
10<\/p>\n
(i) the Board of Directors of RIN, quarterly;<\/p>\n
(ii) senior management of NAR, quarterly; and<\/p>\n
(iii) the Executive Committee of NAR and the Board of Directors
\n of NAR three times per year in conjunction with meetings of such
\n Committee or Board.<\/p>\n
In addition, Operator shall cause appropriate personnel to meet at least twice
\nper year with an advisory group appointed by NAR. The purpose of such meetings
\nwith such advisory group shall be to review and discuss the Domain Site and the
\nSystem and ways in which it might be made more effective for REALTORS(R) and
\nconsumers.<\/p>\n
ARTICLE V
\n Data Content and Handling<\/p>\n
5.1 Data Sourcing. (a) Operator shall be responsible for developing and
\n ————-
\nimplementing a program, with the reasonable assistance of RIN, (i) to identify
\nAuthorized Content Providers, (ii) to solicit such Authorized Content Providers
\nto enter into Data Content Providers Agreements and (iii) to solicit renewals of
\nData Content Provider Agreements that are scheduled to expire; and Operator
\nshall be responsible for carrying out such program. Operator shall establish a
\nmeans by which Data Content Providers may communicate problems or questions with
\nrespect to their Data Content Provider Agreements and\/or activities associated
\ntherewith; and Operator shall seek to respond promptly to such problems or
\nquestions.<\/p>\n
(b) Operator is authorized (i) enter into Data Content Provider
\nAgreements with Authorized Content Providers, provided such agreements are in
\n ——–
\nthe form of Schedule H or contain in an addendum to such form only such
\n ———-
\nsubstantive changes as may be approved by an Authorized Representative of RIN,
\nand (ii) to enter into renewals of Data Content Provider Agreements with Data
\nContent Providers. Copies of all such Data Content Provider Agreements and any
\nrenewals thereof shall be provided to RIN. RIN shall use reasonable commercial
\nefforts to complete its review of any addendum to a Data Content Provider
\nAgreement, and to notify Operator of its approval thereof or objectives thereto,
\nwithin three Business Days of RIN’s receipt of such addendum and the
\naccompanying Data Content Provider Agreement (it being understood that such
\nturnaround may be delayed during the time of conventions or association meetings
\nof the NAR).<\/p>\n
(c) Operator shall perform all of RIN’s obligations accruing under
\nthe Data Content Provider Agreements with the Existing Content Providers from
\nand after the Effective Date; it being understood that (i) except as provided in
\nclause (iii) of this sentence, Operator is not assuming, and shall not be
\nresponsible for, any breach or default by RIN of its obligations under such Data
\nContent Provider Agreements as a result of events that occurred prior to the
\nEffective Date, (ii) except as provided in clause (iii) of the sentence, RIN
\nshall remain responsible for, and shall indemnify and hold Operator harmless
\nfrom, any such breaches or defaults and (iii) Operator shall be responsible for,
\nand shall indemnify and hold RIN harmless from, any breaches or defaults by
\nInfoTouch Corporation of its service obligations to RIN in connection with such
\nData Content Provider Agreements. RIN shall cooperate with Operator in <\/p>\n
11<\/p>\n
securing each Existing Content Provider’s consent that is required to the
\nassignment to Operator of such Existing Data Content Provider’s Data Content
\nProvider Agreement and upon receipt of such consent, shall assign its rights and
\nobligations under such Data Contract Provider Agreement. To the extent that such
\nconsent and assignment have not been previously obtained, Operator shall use
\nreasonable commercial efforts in connection with any renewal or extension of any
\nsuch Data Content Provider Agreements to obtain the consent of such Existing
\nContent Provider to (i) the assignment of RIN’s rights under such Data Content
\nProvider Agreement to Operator and (ii) the assumption by Operator of, and the
\nrelease of RIN from, RIN’s post-Effective Date duties and obligations under such
\nData Content Provider Agreement. Operator shall be solely responsible for the
\nperformance of its obligations under Data Content Provider Agreements with Data
\ncontent Providers other than Existing Content Providers.<\/p>\n
5.2 Data Collection. (a) Operator shall be responsible for maintaining
\n —————-
\nadequate means to facilitate the transmission, receipt and collection of Real
\nProperty information from Data Content Providers in accordance with the
\napplicable Data Content Provider Agreements.<\/p>\n
(b) Data receipt and collection with respect to Basic RPA
\nInformation shall be performed without charge to the Data Content Provider;
\nprovided that the data is received in one of the formats described in Schedule
\n——– ——–
\nI. In the event that the data is not receivable or received in one of such
\n—
\nformats, Operator may charge the Data Content Provider (i) a reasonable fee for
\ndeveloping and maintaining an appropriate conversion link and (ii) Operator’s
\nadditional cost, if any, related to transmitting data for such Data Content
\nProvider: provided, however, that if the Data Content Provider so desires, it
\n ——– ——-
\nmay arrange with a third party to develop the required conversion link and
\nOperator shall provide the necessary specifications for such third party to
\ndevelop such link: provided, further, such specifications shall only be
\n ——– ——-
\ndisclosed under a standard confidentiality agreement.<\/p>\n
5.3 Preparation of Real Property Ads. (a) Operator shall be responsible
\n ——————————–
\nfor preparing Real Property Ads from the Real Property information received from
\nData Content Providers in accordance with the requirements of this Section 5.3.
\n ———–
\nReal Property information received from a Data Content Provider in the form
\nspecified in the related Data Content Provider Agreement shall be converted into
\nReal Property Ads and made Active on the System (i) in the case of the initial
\nbulk delivery of Real Property information from a new Data Content Provider,
\nwithin thirty days of the receipt of such information by Operator, and (ii) in
\nthe case of subsequent deliveries of Real Property information from Data Content
\nProviders, within three Business Days of the receipt of such information by
\nOperator. Operator shall be responsible for updating the Active Real Property
\nAds at least weekly with information provided by Data Content Providers.
\nOperator shall employ a reasonable means to verify that errors are not being
\nintroduced into the Real Property information as a result of Operator’s
\nactivities and shall undertake all reasonable commercial efforts to correct
\nerrors that are detected.<\/p>\n
(b) Real Property Ads (i) shall contain the information specified in<\/p>\n
Section 5.3(c) (the “Basic RPA Information”) and (ii) may contain additional
\n————–
\ninformation as described in Section 5.3(d) (the “Enhanced RPA Information”).
\n ————–
\nNotwithstanding the foregoing, in no event shall a Real Property Ad contain
\ninformation with respect to (1) the name of the property owner, (2) whether the
\nproperty is presently occupied or vacant, or (3) content, if any, restricted or
\nprohibited in the relevant Data Content Provider Agreement. If specifically
\npermitted in the <\/p>\n
12<\/p>\n
relevant Data Content Provider Agreement or specifically requested by the Data
\nContent Provider (or, if a Data Content Provider has authorized the listing
\nbrokers, if requested by a listing broker), a Real Property Ad may contain the
\nstreet address of the property.<\/p>\n
(c) Real Property Ads shall contain the following information:<\/p>\n
(i) a color (if available) or black and white (if available)
\n photograph of the property;<\/p>\n
(ii) a text description of the property;<\/p>\n
(iii) additional information regarding the property; and<\/p>\n
(iv) the firm name (including branch office identification, if
\n any) and telephone number (including area code).<\/p>\n
It is understood that Basic RPA Information will be accessed in two levels, the
\nfirst level containing a smaller photograph (if available) of the property, the
\ninformation specified in clause (ii) and the listing broker’s name and phone
\nnumber along with similar information on other properties; and the second level
\ncontaining a larger photograph (if available) of the property and the
\ninformation specified in clause (ii) through (iv), inclusive. Each Real
\nProperty Ad shall be prepared to meet the general specifications set forth in
\nSchedule J.
\n———- <\/p>\n
(d) Real Property Ads may contain such additional information as
\nOperator may agree in an agreement (an “Enhanced Content Agreement”) with (i) A
\nData Content Provider and\/or (ii) the listing broker. Operator shall be
\nauthorized to solicit, and to enter into, Enhanced Content Agreements with Data
\nContent Providers and\/or listing brokers containing such terms as Operator shall
\ndeem appropriate: provided, however, such terms shall not be inconsistent with
\n ——– ——-
\nthis Agreement or the related Data Content Provider Agreement; and provided
\n ——–
\nfurther that copies of all such Enhanced Content Agreements shall be provided to
\n——-
\nRIN within ten Business Days of their execution. Any such additional
\ninformation shall be presented in a manner that does not adversely affect the
\nsize or graphic presentation of Real Property Ads for Persons who do not elect
\nto have additional information included — i.e., additional information shall be
\npresented generally via additional screens beyond the screens containing the
\nBasic RPA Information.<\/p>\n
5.4 Presentation of Real Property Ads. (a) The parties recognize that
\n ———————————
\nReal Property Ads are the basic informational component of the electronic
\ndelivery system to be maintained under this Agreement, but that such information
\nwill need to be organized in some manner (i) to facilitate consumer and general
\npublic access and searches for relevant information and (ii) to provide
\nopportunities for the insertion of Advertising to assist Operator in generating
\nrevenues. Consequently, it is likely that a user will proceed from a main
\nintroductory screen through one or more icon\/menu driven screens in order to
\naccess Real Property Ads in a particular geographical area or price range or
\nReal Property Ads offered by a particular listing broker or firm. The purpose
\nof this Section is to describe general standards with respect to the
\norganization and presentation of such information and to allow for the
\ngeneration of additional revenue by Operator.<\/p>\n
13<\/p>\n
(b) The System shall be organized in a fashion to facilitate
\nefficient access to the Real Property Ads by a user. Graphical interfaces shall
\nbe designed in a professional manner with the objective of providing a sharp,
\nuncluttered image and ease of use. At present, the System provides a series of
\nsublevels based upon a narrowing geographic search pattern using map graphics
\nand zip code information. It is expected that the series of graphical maps will
\nbe retained as a primary means of searching for Real Property Ads; however,
\nOperator may develop improvements to such search and\/or alternative means for
\nsearching for relevant Real Property Ads. It is also expected that the user will
\nnot be required to step through primarily advertising screens on such user’s
\nsearch to relevant Real Property Ads unless such user so elects by deliberate
\nmouse click. Operator may recommend to RIN changes to the user interface based
\nupon its market research, user feedback and changes in technology that it
\nreasonably believes will improve the overall functionality and usability of Real
\nProperty Ads. Any such changes, as they relate to the use and presentation of
\nthe marks covered by the Trademark Agreement and the functionality of the user
\ninterface, shall be subject to the approval of RIN (which approval shall not be
\nunreasonably withheld) prior to their implementation. RIN shall respond to a
\nrequest to approve such changes within ten Business Days of Operator’s
\nsubmission of any such proposed changes.<\/p>\n
(c) The design and layout for the main home page (introductory
\nscreen) for the Domain Site shall be prepared and submitted by Operator to NAR
\nfor its approval (which approval shall not be unreasonably withheld or delayed);
\nhowever, it is understood that the functional space available on such home page
\n(i.e., space available after meeting technical and legal requirements) shall be
\nsplit evenly between Operator and NAR\/RIN. NAR may request reasonable changes,
\nconsistent with the above, in such content or design so long as such changes
\nshall not adversely financially impact Operator, and Operator shall make such
\nchanges. Such home page shall provide a visual and electronic link to (i) the
\nSystem, including Real Property Ads, (ii) NAR’s externally-accessible databases
\n(i.e., information that is intended to be accessible to, and accessed by, the
\ngeneral public), (iii) NAR’s internally-accessible databases (i.e., the
\nREALTOR(R) Intranet and other information that is intended to be accessible to,
\nand accessed by, a restricted group) and (iv) such information as Operator and
\nRIN shall agree from time to time.<\/p>\n
(d) Screens containing Real Property Ads shall meet the requirements
\nset forth in Section 5.3(b). In addition, such screens shall, as to content and
\n ————–
\nlinkages, be subject to any restrictions contained in the corresponding Data
\nContent Provider Agreement; and Operator shall observe such restrictions.<\/p>\n
(e) Appropriate copyrights, service mark and trademark notifications
\nshall be included in the presentation. Operator shall receive appropriate
\ncredit as the designer and operator of the Domain Site.<\/p>\n
(f) In addition, Operator shall be authorized to prepare and present
\nprinted listings of Real Property Ads for the purposes of (i) increasing the
\nvisibility of the Domain Site and the Real Property Ads housed thereat and (ii)
\nmarketing the availability of Real Property Ads via Electronic Display. It is
\nexpected that such printed material will refer the reader back to the Domain
\nSite.<\/p>\n
14<\/p>\n
5.5 Other Information. (a) If NAR determines to produce and make
\n —————–
\navailable the following Content, Operator shall integrate such content into the
\nSystem and store and maintain such content on its facilities:<\/p>\n
(i) questions and answers regarding the process of buying and
\n selling real estate, the definition of a REALTOR(R), the services
\n performed by REALTOR(R), and related matters;<\/p>\n
(ii) news related to, or affecting, real estate; and<\/p>\n
(iii) information related to NAR’s economic forecast, home
\nsales statistics and consumer related press releases.<\/p>\n
(b) If NAR determines to allow the linkage for one or more of the
\nfollowing areas, Operator shall provide a means whereby users of the System may
\nlink to the following information which would be maintained by NAR:<\/p>\n
(i) NAR press releases;<\/p>\n
(ii) NAR memberships, including information on joining NAR and
\n information regarding careers in real estate.<\/p>\n
(iii) NAR conventions, meetings and other gatherings or events;<\/p>\n
(iv) NAR legislative briefing papers; and<\/p>\n
(v) other information which does not compete with the RPA
\nBusiness.<\/p>\n
5.6 Electronic Display Outlets. (a) Operator shall be responsible for
\n ————————–
\nmaintaining the Domain Site, and the interconnection between such Domain Site
\nand other Electronic Display sites and\/or databases.<\/p>\n
(b) Operator shall also exercise reasonable commercial efforts to
\nidentify, solicit and contract for the Electronic Display and distribution of
\nReal Property Ads and Advertising with the objective of reaching as broad a
\ngeographic audience as is possible in each form of Electronic Display. Operator
\nshall identify Commercially viable Forms of Electronic Display of Real Property
\nAds. With respect to Commercially viable Forms of Electronic Display, Operator
\nshall either assemble the necessary equipment and personnel to furnish Real
\nProperty Ads via such Commercially Viable Form of Electronic Display or use
\nreasonable commercial efforts to negotiate, execute and deliver such contracts
\nor agreements as may be required to provide for the distribution of Real
\nProperty Ads via such Commercially Viable Form of Electronic Display; provided,
\n ——–
\nhowever, that if Operator shall fail to do either of the foregoing within six
\n——-
\nmonths of notice from RIN of a Commercially Viable Form of Electronic Display,
\nthen RIN’s recourse shall be to declare such form of Electronic Display to be
\nexcluded from the provisions of this Agreement (i.e., Operator shall have no
\nrights under this Agreement to present Real Property Ads via such form of
\nElectronic Display). Any contracts or agreements with third parties with
\nrespect to the handling, distribution and display of Real Property Ads shall be
\nsubject to the following:<\/p>\n
16<\/p>\n
(i) subject to the technological constraints of the
\n Electronic Display system, such contracts shall provide for Real
\n Property Ads to be carried in approximately the same form and with the
\n same content from one Electronic Display system to another, it being
\n the objective of this requirement to ensure, whether possible,
\n relative uniformity in content and appearance of Real Property Ads and
\n to avoid discriminatory restrictions in favor of a particular system
\n or media; provided, however, this section is not intended to prevent
\n ——– ——-
\n the Operator from taking advantage of technology differences between
\n media or from conforming to design requirements reasonably placed on
\n it by the related contracts or agreements for Electronic Display.<\/p>\n
(ii) unless otherwise approved by RIN in its sole discretion,
\n such contracts shall not grant an exclusive to the delivery medium or
\n owner so as to prohibit or restrict the carriage or display of Real
\n Property Ads by competitive or alternative means;<\/p>\n
(iii) such contracts shall (1) provide that the parties thereto
\n shall not challenge the Data Content Provider’s claim of ownership of
\n the data constituting the Real Property Ads, (2) incorporate any
\n restrictions on the use of data, or its juxtaposition with other
\n content or data (including advertisements), contained in the related
\n Data Content Provider Agreements, (3) prohibit such Person from
\n copying the data for its own use and (4) prohibit association with
\n non-REALTOR(R) material, except as otherwise permitted by this
\n Agreement; and<\/p>\n
(iv) such contracts shall contain a provision allowing their
\n assignment to, and assumption by, RIN in the event this Agreement is
\n terminated in accordance with Section 7.2.
\n ———– <\/p>\n
(c) Operator may propose, for RIN’s consideration, other electronic
\nmedia or formats for the display of the information contemplated to be located
\nat the Domain Site so that such information may be viewed or accessed via
\nelectronic transmission. If RIN decides in its sole discretion that such
\nproposed media or format is acceptable, such media or format shall be included
\nwithin the term “Electronic Display,” as used in this Agreement, subject to
\narriving at mutually acceptable performance standards for such media or format
\nand mutually acceptable guidelines for the proposed format of Real Property Ads
\non such media or format. It is understand that the economic terms of this
\nAgreement shall apply to such approved media or format and shall not be subject
\nto renegotiation. If RIN decides in its sole discretion that such proposed
\nmedia or format is not acceptable, (i) such media or format shall not be
\nincluded within the definition of the term “Electronic Display,” and Parent
\nshall be free to pursue such media or format within RIN on economic terms that
\nare not more favorable than those available to RIN under this Agreement and (ii)
\nRIN shall not pursue the display of the information contemplated to be located
\nat the Domain Site on such media or format for a period of eighteen months after
\nthe date its decision is communicated to Operator.<\/p>\n
5.7 Advertising. (a) Subject to the provisions of this Section 5.7,
\n ———– ———–
\nOperator shall be permitted to carry Advertising from Authorized Advertisers in
\nconnection with the Electronic Display of Real Property ads, provided such
\n ——–
\nAdvertising shall relate only to the businesses or <\/p>\n
16<\/p>\n
activities described in Schedule A. From time to time, either party may propose
\n ———-
\nchanges to Schedule A to the other party for its approval, which approval shall
\n ———-
\nnot be unreasonably withheld; provided, however, such changes are appropriate to
\n ——– ——-
\nmaintaining the professionalism of the particular Electronic Display of Real
\nProperty Ads, will not reflect negatively on the reputations of NAR, RIN,
\nREALTORS(R) or Operator, and in the case of proposed deletions will not affect
\nadversely Operator’s revenue opportunities by more than $5,000 in any six month
\nperiod. Any such changes so approved shall be reflected in a new or supplemented
\nSchedule A.<\/p>\n
(b) Operator shall be responsible for developing and implementing a
\nprogram to identify Authorized Advertisers for the System and to solicit
\nadvertisements from such Persons; and Operator shall be responsible for carrying
\nout such program. Operator shall be responsible for the costs of soliciting
\nsuch advertising, setting such advertisements up on the System in compliance
\nwith the requirements set forth in Section 5.7, and collecting the revenues
\n ———–
\nassociated therewith.<\/p>\n
(c) Operator shall exercise reasonable commercial efforts to assure
\nthat all advertising is appropriate to maintaining the professionalism of the
\nSystem and that it not negatively reflect on the reputations of REALTORS(R), RIN
\nor NAR. In the event RIN determines that (i) a particular advertisement
\nviolates the foregoing standard or (ii) an advertisement does not meet the
\nrequirements of the first sentence of Section 5.7(a). RIN may request the
\n ————–
\nremoval of such advertisement. and Operator shall remove such advertisement
\nwithin thirty calendar days after it receives such request from RIN. No
\nAdvertising shall indicate that a product or service is endorsed or sponsored by
\nNAR or RIN unless the advertiser has been authorized to do so by NAR or RIN, as
\nthe case may be.<\/p>\n
(d) No advertisements from Restricted Advertisers shall be placed
\non, or linked from, a Data Content Provider’s Real Property Ad that shows
\ninformation on a single property. Except as provided in the next sentence,
\nAdvertising on other Real Property Ads screens (i.e., screens that do not
\ndisplay a single property) shall not be so restricted. In the event that RIN
\nshall determine, based on a survey of Data Content Providers, that there is a
\nproblem with the placement of Advertising from certain Restricted Advertisers on
\nReal Property Ads screens that display more than one Real Property Ad, then RIN
\nmay request Operator to undertake, and Operator shall undertake the following
\nactions:<\/p>\n
(i) Operator shall provide a clear means in any thereafter
\nexecuted Data Content Provider Agreements for Data Content Providers to indicate
\nthat they want any Advertising from such Restricted Advertisers to be excluded
\nfrom Real Property Ads screens carrying such Data Content Provider’s Real
\nProperty Ads, and<\/p>\n
(ii) Operator shall contact all Data Content Providers who
\nhave an effective Data Content Provider Agreement and shall offer such Data
\nContent Providers the opportunity to exclude Advertising from such Restricted
\nAdvertisers from Real Property Ads screens carrying such Data Content Provider’s
\nReal Property Ads.<\/p>\n
(e) No Restricted Advertiser shall be (i) allowed to reserve or
\noccupy more than 25% of the Available Advertising Space in any geographic
\nlocation, or (ii) given an exclusive right to advertising with respect to a
\nparticular type of business.<\/p>\n
17<\/p>\n
(f) Without the express written consent of an affected Data Content
\nProvider, Operator shall not establish linkages from such Data Content
\nProvider’s Real Property Ads to apartment rental advertising services or to new
\nhome developments advertisements. It is understood that NAR engages in public
\neducation and promotional programs with respect to the need for, importance of,
\nand role of, a REALTOR(R); and that such activities shall not in any way be
\naffected by, or deemed a violation of this Section 5.7. It is further
\n ———–
\nunderstood that NAR may arrange, conduct or host forums for Data Content
\nProviders to discuss issues related to this Agreement or other issues of common
\ninterest.<\/p>\n
(g) Operator may market Statistical Data, Operator shall not market
\nany data or information received or derived from Data Content Providers;
\nprovided, however, Operator may request that RIN approve the marketing of
\n——– ——-
\nparticular data or information and:<\/p>\n
(i) in the event that RIN shall, in its sole discretion,
\napprove in writing such marketing then Operator may market such data or
\ninformation; or<\/p>\n
(ii) in the event that RIN shall not approve such marketing, or
\nshall not respond to a request from Operator to approve such marketing within 90
\ndays of the receipt of a request from Operator so to approve, then Operator may
\nsolicit the approval in writing of Data Content Providers to such marketing and
\nmay market such data or information of any Data Content Provider so approving.<\/p>\n
Notwithstanding the foregoing, in no event may Operator disclose or market data
\nor information with respect to (1) the name of property owners, (2) whether any
\nproperty is presently occupied or vacant, or (3) content, if any, restricted or
\nprohibited in a Data Content Provider Agreement. Furthermore, in the event that
\na means shall be developed to identify a user of data or information available
\nthrough Electronic Display (i.e., a Person accessing such data or information),
\nsuch as “Caller ID” for telephone users, the parties must reach agreement on the
\nuse of such information before Operator shall be entitled to use or market such
\ninformation. Finally, in the event that RIN shall determine based on a survey
\nof Data Content Providers, that there is a problem with Operator’s marketing of
\ncertain information or data approved by RIN pursuant to clause (i) of this
\nSection 5.7(g), then RIN may request Operator to undertake, and Operator shall
\n————–
\nundertake, (x) to contact all Data Content Providers who have an effective Data
\nContent Provider Agreement and shall offer such Data Content Providers the
\nopportunity to prohibit the use of such information or data and (y) to offer any
\nPersons thereafter executing Data Content Provider Agreements the opportunity to
\nprohibit the use of such information or data.<\/p>\n
5.8 Links to Other Systems. Schedule K sets forth the guidelines
\n ———————- ———-
\nwhereunder Operator shall be required to establish a means, link or connection
\nfor users of the Domain Site to connect to Other REALTOR(R) Internet Sites.<\/p>\n
ARTICLE VI
\n Fees; Operator’s Compensation<\/p>\n
6.1 Fees. With respect to Data Content Providers, Operator shall have the
\n —-
\nauthority to establish, revise and collect fees only with respect to the
\nhandling and distribution of <\/p>\n
18<\/p>\n
Enhanced RPA Information. Operator shall have the authority to establish, revise
\nand collect fees from other Persons, including, without limitation, advertisers
\nwith respect to advertising carried on the System and third party distributors
\nunder Section 5.6(b). Notwithstanding the foregoing, no charges or fees shall be
\n ————–
\nassessed against, or collected from, Data Content Providers with respect to the
\ncollection handling or distribution of Basic RPA Information, except
\nspecifically provided in Section 5.2(b).
\n ————–<\/p>\n
6.2 Operator Compensation. As compensation for its services hereunder,
\n ———————
\nOperator shall be entitled to retain all New Revenues. As used herein, the term
\n“Net Revenues” means the gross revenues (including the fees described in Section
\n ——-
\n6.1) derived from, or related to, content or services accessed via Electronic
\n—
\nDisplay (but not including any revenues derived from, or related to, content or
\nservices accessed via the REALTOR(R) Intranet., after deducting the payments
\ndescribed in Section 6.3 and 6.4. Notwithstanding the foregoing, Net Revenues
\n ———– —
\nshall not include any revenues derived from, or related to, the activities of
\nRIN and its Controlled Entities described in Schedule L, as such Schedule may be
\n ———-
\namended from time to time by RIN (or by RIN at the request of one of its
\nControlled Entities) with the approval of Operator, which approval shall not be
\nunreasonably withheld.<\/p>\n
6.3 Fixed Payments. (a) Operator shall owe RIN the sum of $1,000,000 as
\n ————–
\nsoon as the Number of Active Real Property Ads shall exceed 1,300,000. Such sum
\nshall be paid to RIN in thirty-six equal monthly installments of principal plus
\ninterest at the Prime Rate, with the first such installment to commence on the
\nthirtieth day following the date on which the Number of Active Real Property Ads
\nshall exceed 1,300,000; provided, however, that if (i) Operator (or Parent)
\n ——– ——-
\nraises more than $7 million (after deduction of underwriters’ discounts and
\ncommissions) from an offering of its stock (or the stock of Parent) or (ii)
\nOperator generates Free Operating Cash Flow of at least $4 million, then the
\nunpaid balance of such installments shall be paid in full within fifteen days
\nfollowing the receipt by Operator (or Parent) of the proceeds of such stock
\noffering or within sixty days after the end of the calendar quarter in which the
\nFree Operating Cash Flow equals or exceeds $4 million, as applicable.<\/p>\n
(b) Operator shall pay to RIN the sum of $1,000,000 (i) within sixty
\ndays after the end of the calendar quarter in which the Free Operating Cash Flow
\nequals or exceeds $2 million or (ii) if earlier, within fifteen days following
\nthe receipt by Operator (or Parent) of proceeds of more than $7 million (after
\ndeduction of underwriters’ discounts and commissions) from an offering of its
\nstock (or the stock of Parent).<\/p>\n
6.4 Variable Payment. (a) Operator shall pay to the Data Content
\n —————-
\nProviders (in the aggregate) and to RIN an amount in respect of the indicated
\ncalendar years during the terms of this Agreement equal to the indicated
\npercentages of Operator’s Revenues during such calendar year.<\/p>\n
\n\n—————————————————————————————————————
\n Aggregate Payments to Aggregate Payments
\n Calendar Year Data Content Providers Payment to RIN by Operator
\n
\n—————————————————————————————————————
\n1997 10% None 10%
\n—————————————————————————————————————
\n1998 10% None 10%
\n—————————————————————————————————————
\n1999 Amount to be determined Lessor of (i) 5% or (ii) the Lesser or (i) the sum of 5%
\n—————————————————————————————————————
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n 19<\/p>\n
\n—————————————————————————————————————
\n
\n by RIN difference between 12 1\/2% plus the percentage of
\n and the percentage of Revenues paid to the Data
\n revenue paid to the Data Content Providers or (ii)
\n Content Providers\/1\/ 12 1\/2%
\n—————————————————————————————————————
\n2000 and Amount to be determined by Less or (i) 5% or (ii) the Less or (i) the sum of 5%
\nthereafter RIN difference between 15% and plus the percentage of
\n the percentage of Revenues Revenues paid to the Data
\n paid to the Data Content Content Providers or (ii) 15%
\n Providers\/1\/
\n—————————————————————————————————————
\n<\/c><\/c><\/c><\/s><\/table>\n____________________
\n1 In the event that Operator’s EBIT for a quarter is, or would be after
\n deducting the payments otherwise required to be made to RIN under this
\n Section 6.4(a), less than 10% of Operator’s Revenues for such quarter, the
\n amount otherwise payable to RIN under this Section 6.4(a) shall be reduced
\n (but not more than an aggregate of 2% of Operators Revenues) until such
\n condition does not exist: provided, however, that if Operator’s EBIT for the
\n calendar year in which any such reductions are made shall exceed 10% of
\n Revenues, then the reductions shall be restored, and the difference paid to
\n RIN, to the extent that operators EBIT, after such restored payments, shall
\n equal or exceed 10% of Operator’s Revenues.<\/p>\n
Such amount shall be payable in quarterly installment during each calendar year
\nwithin thirty days of the end of each calendar quarter based upon Operator’s
\nRevenues during such quarter. As used in this Section 6.4, the term “Revenues”
\n ———–
\nshall mean the collected gross revenues of Operator after deducting (i) sales
\ncommissions payable or paid to third parties related to such revenues and (ii)
\ncollected gross revenues from the marketing of information or data permitted to
\nbe so marketed by Data Content Providers under the provisions of Section
\n ——-
\n5.7(g)(ii). Also if Operator in the future sells any products or services that
\n———-
\nhave a significant related cost of sales, then the excess of such cost of sales
\nover the costs incurred on typical sales shall be subtracted from Revenues
\nrelated to these product or services. Such products could include but not be
\nlimited to printing of property flyers for REALTORS(R) and reselling of products
\nor services produced by other companies.<\/p>\n
(b) Operator shall propose the method or methods for determining the
\nindividual amounts and manner of distribution of payments under Section 6.4(a)
\n ————–
\nto Data Content Providers, which method or methods shall be subject to the
\napproval of RIN. In evaluating any such method or methods so proposed, RIN
\nshall give consideration to (i) the revenues generated by Operator as a result
\nof the Red Property information provided by a Data Content Provider, including
\nhome page sales and banner advertising, and (ii) whether such Data Content
\nProvider is providing such Real Property information on an exclusive basis to
\nOperator. The objectives of such determination shall be, among other things, to
\ncreate reasonable incentives to Data Content Providers to furnish real property
\ninformation to Operator, to promote actively the Domain Site to such Data
\nContent Providers’ respective local communities, and to assist Operator in
\nselling Enhanced Real Property Ads, home pages and related services to
\nREALTORS(R). Furthermore, in determining the percentage of Revenues to be
\navailable for distribution to Data Content Providers in the aggregate in 1998
\nand later years, RIN shall take into account competitive conditions concerning
\nthe payment of fees to content providers and shall provide its determination
\nwith respect to a given calendar year on or before the immediately preceding
\nJuly 1. It is understood by the parties that such proposals approvals and
\ndeterminations cannot be inconsistent with the contractual obligations
\nundertaken to Data Content Providers.<\/p>\n
20<\/p>\n
(c) Until the fifth anniversary of the date of this Agreement, it is
\nexpected that RIN will use all of the payments, if any, received by it from
\nOperator pursuant to Section 6.4(a) (i) to support its activities under this
\n —————
\nagreement and (ii) to meet its obligations to NAR.<\/p>\n
6.5 Late Payments. Any payment not made by a party when due under the
\n ————-
\nterms of this Agreement shall bear interest as the Default Rate from the due
\ndate under this Agreement until paid.<\/p>\n
ARTICLE VII
\n Term; Termination and Extension<\/p>\n
7.1 Term. This Agreement shall continue in effect until terminated by one
\n —-
\nof the parties pursuant to Section 7.2.
\n ———– <\/p>\n
7.2 Termination. (a) RIN may terminate this Agreement by notice to
\n ———–
\nOperator in the event that Operator shall fail to make any payment specified in
\nSections 6.3 or 6.4 on the date such payment is due, and such failure shall
\n———— —
\ncontinue for thirty days after written notice thereof is given by RIN to
\nOperator.<\/p>\n
(b) RIN may terminate this Agreement by notice to Operator in the
\nevent that, after December 31, 1998, the aggregate Number of Active U.S. Real
\nProperty Ads falls below 500,000, and such condition shall continue for ninety
\ndays after written notice thereof is given by RIN to Operator.<\/p>\n
(c) Operator may terminate this Agreement under the circumstances
\ncontemplated in Section 9.2(b)(iv).
\n —————— <\/p>\n
(d) Except as otherwise provided in Sections 7.2(a), 7.2(b) and
\n —— ——
\n7.2(c) a party may terminate this Agreement by notice to the other party in the
\n——
\nevent that:<\/p>\n
(i) the other party (the “Defaulting Party”) shall fail
\n to perform, or shall breach, any of its obligations set forth in this
\n Agreement, and such failure shall continue for thirty days after written
\n notice thereof has been given to the Defaulting Party, or if the breach is
\n not capable of cure within such 30 days, reasonable efforts to cure have
\n not been undertaken; or<\/p>\n
(ii) the other party (1) makes any general assignment for
\n the benefit of creditors, (2) initiates or is the subject of a request to
\n initiate a bankruptcy or insolvency proceeding under any provision of law,
\n including the United States Bankruptcy Code, that is intended to liquidate
\n or rehabilitate such other party, and is not dismissed within sixty days,
\n (3) files, or is the subject of a filing (that is not dismissed within
\n sixty days) with a court of competent jurisdiction for the appointment of a
\n receiver, guardian, conservator or similar officer, or (4) is rendered or
\n declared insolvent; and a termination hereunder shall be effective, if no
\n cure has occurred thirty days after notice has been given to such other
\n party.<\/p>\n
21<\/p>\n
(e) In the event that after the date on which either Parent or
\nOperator becomes subject to the reporting requirements of the Securities
\nExchange Act of 1934, as amended (the “Exchange Act”), a “change in control”
\noccurs, RIN may terminate this Agreement by giving written notice of such
\ntermination to Operator prior to end of the period ending one hundred eighty
\n(180) days after the later of (i) the effectiveness of such “change in control”
\nand (ii) notice to RIN of such “change in control.” Any such termination shall
\nbecome effective thirty days after notice thereof is given to Operator. For the
\npurposes of this Section 7.2(e) a “change in control” shall mean: (1) the
\n ————–
\nacquisition by any Person, including any “person” within the meaning of Section
\n13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership, within the
\nmeaning of Rule 13d-3 promulgated under the Exchange Act, of more than 50% of
\nthe combined voting power of the then outstanding securities entitled to vote
\ngenerally in the election of directors of Operator or Parent; or (2) individuals
\nwho, as of the date hereof, constitute the Board of Directors of Operator or
\nParent (in each case, the “Incumbent Board”) cease for any reason to constitute
\nat least a majority of such Boards; provided that any individual who becomes a
\n ——–
\ndirector of Operator or Parent subsequent to the date hereof whose election or
\nnomination for election by Operator’s or Parent’s stockholders, as the case may
\nbe, was approved by the vote of at least a majority of the directors then
\ncomprising such Incumbent Board shall be deemed a member of such incumbent
\nBoard; and provided, further, that any individual who was initially elected as a
\n ——– ——-
\ndirector of Operator or Parent as a result of an actual or threatened election
\ncontest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
\nunder the Exchange Act, or any other actual or threatened solicitation of
\nproxies or consents by or on behalf of any Person other than the Board in
\nquestion shall not be deemed a member of the Incumbent Board in question.<\/p>\n
(f) In the event that RIN’s nominees to the Board of Directors of
\nOperator shall not be elected to such Board in the manner contemplated by the
\nStockholders Agreement dated as of November 26, 1996, among Operator and its
\nstockholders, or shall be removed in violation of the provisions of said
\nStockholders Agreement, RIN may terminate this Agreement upon thirty days notice
\nto Operator if such condition is continuing upon the expiration of such thirty
\nday notice period.<\/p>\n
7.3 Transition. (a) Notwithstanding the provisions of Section 7.2, in the
\n ———- ———–
\nevent that this Agreement is terminated by either party, RIN may request an
\nextension of this Agreement, and Operator shall continue to perform hereunder at
\nRIN’s sole cost and expense, for a period of up to six months from the otherwise
\neffective date of termination in order to allow the orderly migration and
\ntransition of operating responsibility for the Domain Site and the RPA Business
\nto RIN and\/or a third party (the “Transition”) in accordance with the Transition
\nand Disaster Recovery Plan. The foregoing provision shall not apply if (i)
\nOperator shall terminate this Agreement due to a breach by RIN of its
\nobligations under Section 3.2 or (ii) this Agreement shall be terminated by RIN
\n ———–
\n(or a trustee or receiver in bankruptcy acting on behalf of RIN) as a result of
\nthe bankruptcy of RIN.<\/p>\n
(b) If deemed reasonably necessary by RIN in order to facilitate the
\nTransition, RIN shall have the right to enter the facilities where the personnel
\nand equipment related to the operation of the Domain Site and the RPA Business
\nare located for the purposes of (i) observing such operations, (ii) directing
\nsuch operations and retaining personnel, if felt to be necessary to the
\ncontinued operation of the Domain Site and the RPA Business, and <\/p>\n
22<\/p>\n
(iii) obtaining copies of Data Content Provider Agreement, copies of agreements
\nwith advertisers and copies of any and all related records. In addition,
\nOperator shall provide to RIN copies of all source codes and related
\ndocumentation for the Software without charge.<\/p>\n
7.4 Effect of Termination. In the event that this Agreement shall be
\n ———————
\nterminated, all further obligations of the parties under this Agreement shall be
\nterminated without further liability of either party to the other, except (a)
\nrights to indemnification under Section 9 2 shall continue with respect to
\n ———–
\nevents occurring prior to such termination notwithstanding such termination and
\n(b) nothing in this Section 7.4 shall relieve Operator from liability for breach
\n ———–
\nof its accrued payment obligations prior to termination or a Defaulting Pam from
\nliability for breaches prior to termination.<\/p>\n
ARTICLE VIII
\n Confidentiality<\/p>\n
8.1 Confidential Information. (a) Except as provided in Section 5.29(b)
\n ———————— —————
\nor in connection with a transition contemplated by Section 7.3, neither party
\n ———–
\nwill make any intellectual property, documentation software, enhancements or
\nknow-how, trade secrets, procedures and methods, financial and operational
\ninformation and other matters relating to the Domain Site (“Confidential
\nInformation”) available, in any form, to any other person without the prior
\nwritten consent of the other. The foregoing shall not restrict a party with
\nrespect to information or data identical or similar to that contained in the
\nConfidential Information but which (i) such party rightfully possessed before it
\nreceived such information from the other party as evidenced by written
\ndocumentation; (ii) subsequently becomes publicly available through no fault of
\nsuch party; (iii) is subsequently provided to such party by a third party
\nwithout restrictions on use or disclosure; or (iv) is required to be disclosed
\nby law.<\/p>\n
(b) Except as expressly authorized in a Data Content Provider’s Data
\nContent Provider Agreement, Operator shall not use or disclose any information
\nor data received from such Data Content Provider in connection with Operators
\nactivities under this Agreement.<\/p>\n
(c) Upon termination of this Agreement, the parties agree to return
\nto each other all Confidential Information and copies thereof in their physical
\npossession, in any form, and to deliver to the other a certification to that
\neffect.<\/p>\n
ARTICLE IX
\n Liability and Indemnification<\/p>\n
9.1 LIMITATION OF LIABILITY. IN NO EVENT OR UNDER ANY CIRCUMSTANCES SHALL
\n ———————–
\nEITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS, INDIRECT,
\nSPECIAL, INCIDENTIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTAL DAMAGES OF ANY KIND
\nWHATSOEVER EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED,
\nHOWEVER, THAT THE FORGOING LIMITATION SHALL NOT APPLY TO AN INTENTIONAL OR
\nWILLFUL BREACH OF THIS AGREEMENT (IT BEING UNDERSTOOD THAT IN ORDER TO
\nDEMONSTRATE THAT A FAILURE TO PROVIDE AN APPROVAL, UNDER <\/p>\n
23<\/p>\n
CIRCUMSTANCES WHERE THIS AGREEMENT REQUIRES SUCH APPROVAL NOT TO BE UNREASONABLY
\nWITHHELD, AMOUNTED TO AN INTENTIONAL OR WILLFUL BREACH OF SUCH REQUIREMENT, A
\nPARTY MUST SHOW THAT THE OTHER PARTY ACTED IN BAD FAITH).<\/p>\n
9.2 Indemnification. (a) Each party shall indemnify and hold the other
\n —————
\nparty and its officers, directors, agents, employees and Controlled Entities
\nharmless from and against any and all claims, demands, actions, losses,
\nliabilities, costs, expenses (including reasonable legal fees and expenses),
\nsuits and proceedings of any nature whatsoever arising from the gross negligence
\nor willful misconduct of the indemnifying party that arise out of or are in any
\nmanner connected with its performance under this Agreement, except to the extent
\nsuch claim, demand, action, loss, liability, expense, suit or proceeding is
\nattributable to the gross negligence, willful misconduct, or breach of this
\nAgreement by, the party seeking indemnification hereunder.<\/p>\n
(b) Operator shall indemnify and hold RIN and its officers,
\ndirectors, agents, employees and its Controlled Entities harmless from and
\nagainst any and all claims, demands, actions, losses, liabilities, expenses
\n(including reasonable legal fees and expenses), suits and proceedings arising
\nfrom the infringement, or alleged infringement, of any third party’s
\nintellectual property rights (including copyright, patent and other proprietary
\nrights or claims). If such a claim arises, of in Operator’s judgment is likely
\nto arise, Operator may, at its option:<\/p>\n
(i) procure the right for RIN to continue to benefit
\n from such intellectual property; or<\/p>\n
(ii) replace or modify same in an equivalent manner so
\n that it becomes noninfringing; or<\/p>\n
(iii) discontinue the feature subject to such claim unless
\n such feature is fundamental to the operation and the Electronic Display of
\n Real Property Ads; or<\/p>\n
(iv) in none of the foregoing options are available, or
\n are not available at a commercially reasonable cost, terminate this
\n Agreement without any liability whatsoever.<\/p>\n
ARTICLE X
\n Dispute Resolution<\/p>\n
10.1 Informal Dispute Resolution. (a) Any dispute, controversy, claim or
\n —————————
\ndisagreement between or among any of the parties hereto arising from, relating
\nto or in connection with this Agreement, any agreement, certificate or other
\ndocument referred to herein or delivered in connection herewith, or the
\nrelationships of the parties hereunder or thereunder, including questions
\nregarding the interpretation, meaning or performance of this Agreement. and
\nincluding claims based on contract, tort, common law, equity statute,
\nregulation. order or otherwise (“Dispute”) shall be resolved in accordance with
\nthis Section.<\/p>\n
24<\/p>\n
(b) Upon written request of any party, each party shall appoint a
\n designated representative whose task it will be to meet for the purpose of
\n endeavoring to resolve such Dispute (“Level 1 Review”). The designated
\n representatives shall meet as often as the parties reasonably deem necessary to
\n discuss the Dispute and negotiate in good faith in an effort to resolve the
\n Dispute without the necessity of any formal proceeding.<\/p>\n
(c) If resolution of the Dispute cannot be resolved within fifteen
\n days of the first Level 1 Review meeting (“Level 1 Termination Date”), the
\n parties to the Dispute shall submit the Dispute to mediation in accordance with
\n the Commercial Mediation Rules of the American Arbitration Association (“AAA”)
\n and shall bear equally the costs of the mediation. The parties will act in
\n good faith to jointly appoint a mutually acceptable mediator, seeking
\n assistance in such regard from the AAA within fifteen (15) days of the Level 1
\n Termination Date. The parties agree to participate in good faith in the
\n mediation and negotiations related thereto for a period of thirty days
\n commencing with the selection of the mediator and any extension of such period
\n as mutually agreed to by the parties.<\/p>\n
10.2 Arbitration. (a) If the parties cannot agree to a mediator within
\n ———–
\nfifteen days of the Level 1 Termination Date or if the Dispute is not resolved
\nwithin thirty days after the beginning of the mediation and any extension of
\nsuch periods as mutually agreed to by the parties, the Dispute shall be
\nsubmitted to, and finally determined by, binding arbitration in accordance with
\nthe following provisions of this Section 10.2, regardless of the amount in
\n ————
\ncontroversy or whether such Dispute would otherwise be considered justiciable or
\nripe for resolution by a court or arbitration panel.<\/p>\n
(b) Any such arbitration shall be conducted by the AAA in accordance
\nwith its current Commercial Rules (“AAA Rules”), except to the extent that the
\nAAA Rules conflict with the provisions of this Section, in which event the
\nprovisions of this Section shall control.<\/p>\n
(c) The arbitration panel (the “Panel”) shall consist of three
\nneutral arbitrators (“Arbitrators”), each of whom shall be an attorney having
\nfive or more years experience in the primary area of law as to which the dispute
\nrelates, and shall be appointed in accordance with the AAA Rules (the “Basic
\nQualifications”).<\/p>\n
(d) Should an Arbitrator refuse or be unable to proceed with
\narbitration proceedings as called for by this Section 10.2, a substitute
\n ————
\nArbitrator possessing the Basic Qualifications shall be appointed by the AAA.
\nIf an Arbitrator is replaced after the arbitration hearing has commenced, then a
\nrehearing shall take place in accordance with the provisions of this Section
\n ——-
\n10.2 and the AAA Rules.
\n—- <\/p>\n
(e) The arbitration shall be conducted in the location of the party
\nagainst whom the arbitration claim is being filed; provided, that the Panel may
\n ——–
\nfrom time to time convene, carry on hearings, inspect property or documents and
\ntake evidence at any location which the Panel deems appropriate.<\/p>\n
(f) The Panel may in its discretion order a pre-exchange of
\ninformation including production of documents, exchange of summaries of
\ntestimony or exchange of statements of position, and shall schedule promptly all
\ndiscovery and other procedural steps and <\/p>\n
25<\/p>\n
otherwise assume case management initiative and control to effect an efficient
\nand expeditious resolution of the Dispute.<\/p>\n
(g) At any oral hearing of evidence in connection with any
\narbitration conducted pursuant to this Section 10.2, each party and its legal
\n ————
\ncounsel shall have the right to examine its witnesses and to cross-examine the
\nwitnesses of the other party. No testimony of any witness shall be presented in
\nwritten form unless the opposing parties shall have the opportunity to cross-
\nexamine such witness, except as the parties otherwise agree in writing and
\nexcept under extraordinary circumstances where, in the opinion of Panel, the
\ninterests of justice require a different procedure.<\/p>\n
(h) Within fifteen days after the closing of the arbitration
\nhearing, the Panel shall prepare and distribute to the parties a written award,
\nsetting forth the Panel’s findings of facts and conclusions of law relating to
\nthe Dispute, including the reasons for the giving or denial of any requested
\nremedy or relief. The Panel shall have the authority to award any remedy or
\nrelief that a court of competent jurisdiction could order or grant, and shall
\naward interest on any monetary award from the date that the Loss or Expense was
\nincurred by the successful party. In addition, the Panel shall have the
\nauthority to decide issues relating to the interpretation, meaning or
\nperformance of this Agreement, any agreement, certificate or other document
\nreferred to herein or delivered in connection herewith, or the relationships of
\nthe parties hereunder or thereunder, even if such decision would constitute an
\nadvisory opinion in a court proceeding or if the issues would otherwise not be
\nripe for resolution in a court proceeding, and any shall bind the parties in
\ntheir performance of this Agreement and such other documents.<\/p>\n
(i) Except as necessary in court proceedings to enforce this
\narbitration provision or an award rendered hereunder, or to obtain interim
\nrelief or as otherwise provided in Section 10.3, no party nor any arbitrator
\n ————
\nshall disclose the existence, content or results of any arbitration conducted
\nhereunder without the prior written consent of the other parties.<\/p>\n
(j) To the extent that the relief or remedy granted in an award
\nrendered by the Panel is relief or a remedy on which a court could enter
\njudgment, a judgment upon the award rendered by the Panel may be entered in any
\ncourt having jurisdiction thereof. Otherwise, the award shall be binding on the
\nparties in connection with their obligations under this Agreement and in any
\nsubsequent arbitration or judicial proceedings among any of the parties.<\/p>\n
(k) The parties agree to share equally the cost of any arbitration,
\nincluding the administrative fee, the compensation of the arbitrators and the
\ncosts of any neutral witnesses or proof produced at the direct request of the
\nPanel.<\/p>\n
(1) Notwithstanding the choice of law provision set forth in Section
\n ——-
\n12.5, The Federal Arbitration Act, 9 U.S.C. Sections 1 to 14, except as
\n—-
\nmodified hereby, shall govern the interpretation and enforcement of this Section
\n ——-
\n10.2.
\n—- <\/p>\n
10.3 Recourse to Courts and Other Remedies. Notwithstanding the Dispute
\n ————————————-
\nresolution procedures contained in Sections 10.1 and 10.2, any party may apply
\n ————- —-
\nto any court having jurisdiction (a) to enforce this agreement to arbitrate, (b)
\nto seek provisional injunctive relief so as to maintain the status quo until the
\narbitration award is rendered or the Dispute is otherwise resolved, (c) to avoid
\nthe expiration of any applicable limitation period, (d) to preserve <\/p>\n
26<\/p>\n
a superior position with respect to other creditors or (e) to challenge or
\nvacate any final judgment, award or decision of the Panel that does not comport
\nwith the express provisions of Section 10.2.
\n ———— <\/p>\n
10.4 Attorneys’ Fees. If any action, suit or proceeding is commenced to
\n —————
\nestablish, maintain, or enforce any right or remedy under this Agreement, the
\nparty not prevailing therein shall pay, in addition to any damages or other
\naward, all reasonable attorneys’ fees and litigation expenses incurred therein
\nby the prevailing party.<\/p>\n
ARTICLE XI
\n Representations and Warranties<\/p>\n
11.1 Representations and Warranties Made by Each Party. As an inducement
\n ————————————————-
\nto the other party to enter into this Agreement and to consummate the
\ntransactions contemplated hereby, each party hereby covenants, represents and
\nwarrants to such other party as follows:<\/p>\n
(a) Corporate Authority. Such party is a corporation duly organized,
\n ——————-
\nvalidly existing and in good standing under the laws of the jurisdiction of its
\norganization, with adequate power and authority to enter into this Agreement,
\nand is duly qualified and registered to do business and has or will take all
\naction necessary to enable it to conduct all activity contemplated by this
\nAgreement in all appropriate states in connection with the conduct of its
\nbusiness.<\/p>\n
(b) Due Authorization. This Agreement has been duly authorized,
\n —————–
\nexecuted and delivered by such party and, assuming due authorization, execution
\nand delivery by the other party, constitutes a valid, legal and binding
\nagreement, enforceable against such party in accordance with its terms, except
\nto the extent that the enforceability of remedies therein provided may be
\nlimited under generally applicable laws relating to specific performance,
\nbankruptcy and creditors rights.<\/p>\n
(c) Governmental Approvals. No approval, consent or withholding of
\n ———————-
\nobjections is or will be required from any federal, state or local governmental
\nauthority or instrumentality with respect to the entry into or performance by
\nsuch party of this Agreement, except such as have already been obtained.<\/p>\n
(d) No Violation. The entry into and performance by such party of
\n ————
\nthis Agreement will not: (a) violate any judgment, order, law or regulation
\napplicable to such party or any provision of such party’s certificate of
\nincorporation or by-laws, or (b) result in any breach of, constitute a default
\nunder or result in the creation of any lien, charge, security interest or other
\nencumbrance upon any other agreement binding upon such party.<\/p>\n
(e) big Legal Proceedings. There are no suits or proceedings pending
\n —————–
\nor threatened in court or before any regulatory commission, board or other
\nadministrative or governmental agency against or affecting such party, which if
\nadversely decided would have a material adverse effect on the ability of such
\nparty to fulfill its obligations under this Agreement.<\/p>\n
11.2 Representations and Warranties Made by RIN. RIN represents and
\n ——————————————
\nwarrants to Operator that (i) the Persons listed in Schedule D constitute all of
\n ———-
\nthe Persons with whom RIN <\/p>\n
27<\/p>\n
has entered into an agreement to provide information for Real Property Ads for
\nElectronic Display which is in force on the date hereof (ii) RIN has provided
\ntrue, correct and complete copies of such agreements to Operator, (iii) each of
\nthe Data Content Provider Agreements with the Existing Content Providers has
\nbeen duly authorized, executed and delivered by RIN and, assuming due
\nauthorization, execution and delivery by the applicable Existing Content
\nProvider, constitutes a valid, legal and binding agreement, enforceable against
\nRIN in accordance with its terms, except to the extent that the enforceability
\nof remedies therein provided may be limited under generally applicable laws
\nrelating to specific performance, bankruptcy and creditors’ rights and (iv) no
\nclaims other than those listed in Schedule M have been made against RIN, NAR or
\n ———-
\ntheir Controlled Entities relating to the RPA Business, including the Domain
\nSite.<\/p>\n
THE PARTIES HEREBY WAIVE ANY AND ALL WARRANTIES IMPLIED BY LAW INCLUDING
\nTHE IMPLIED WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.<\/p>\n
ARTICLE XII
\n Miscellaneous<\/p>\n
12.1 Notices. All notices, requests, demands and other communications
\n ——-
\nhereunder shall be in writing and shall be deemed to have been duly given and
\neffective (a) upon receipt, if delivered in person, by cable or by telegram, (b)
\none Business Day after deposit prepaid with a national overnight express
\ndelivery service (e.g., Federal Express or Airborne) or (c) three Business Days
\nafter deposit in the United States mail (registered or certified mail, postage
\nprepaid, return receipt requested):<\/p>\n
If to RIN:<\/p>\n
REALTORS(R) Information Network, Inc.
\n 430 North Michigan Avenue
\n Chicago, Illinois 60611-4087
\n Attention: President and Chief Executive Officer
\n Fax No: (312) 329-8539<\/p>\n
with a copy to:<\/p>\n
National Association of REALTORS(R)
\n 430 North Michigan Avenue
\n Chicago, Illinois 60611-4087
\n Attention: General Counsel
\n Fax No: (312) 329-8256<\/p>\n
and if to Operator:<\/p>\n
RealSelect, Inc.
\n 5655 Lindero Canyon Road — Suite 106
\n Westlake Village, California 91362<\/p>\n
28<\/p>\n
Attention. Stuart Wolff, Ph.D.
\n Fax No: (818) 879-5922<\/p>\n
with a copy to:<\/p>\n
Battle Fowler LLP
\n Park Avenue Tower
\n 75 East 55th Street
\n Now York, New York 10022
\n Attention: Charles H. Baker, Esq.
\n Fax No: (212) 856-7814<\/p>\n
12.2 Amendments. This Agreement may be amended or modified only by a
\n ———-
\nwritten instrument so stating and executed by the parties.<\/p>\n
12.3 Counterparts. This Agreement may be executed in any number of
\n ————
\ncounterparts, each of which shall be deemed an original, but all of which
\ntogether shall constitute one and the same instrument.<\/p>\n
12.4 Parties in Interest; No Assignment. This Agreement shall inure to
\n ———————————-
\nthe benefit of and be binding upon the parties hereto and their respective
\nsuccessors and assigns. Nothing in this Agreement, express or implied, is
\nintended to confer upon any other person any rights or remedies under or by
\nreason of this Agreement. Notwithstanding the foregoing, the rights and
\nresponsibilities of the parties hereto under this Agreement may not be assigned
\nwithout the prior written consent of the other party hereto provided, however,
\n ——– ——-
\nthat RIN may assign its rights and obligations hereunder to NAR upon notice to,
\nbut without the prior consent of Operator.<\/p>\n
12.5 Applicable Law. The rights and obligations of the pestles shall be
\n ————–
\nconstrued under and governed by the internal laws (without application of the
\nconflicts of laws provisions thereof) of the State of California.<\/p>\n
12.6 Waiver. No provision in this Agreement shall be deemed waived by
\n ——
\ncourse of conduct, unless such waiver is in writing signed by both parties and
\nstating specifically that it was intended to modify this Agreement.<\/p>\n
12.7 Partial Invalidity. Wherever possible, each provision hereof shall
\n ——————
\nbe interpreted in such manner as to be effective and valid under applicable law,
\nbut in case any one or more of the provisions contained herein shall, for any
\nreason, be held to be invalid, illegal or unenforceable in any respect, such
\nprovision shall be ineffective to the extent, but only to the extent, of such
\ninvalidity, illegality or unenforceability without invalidating the remainder of
\nsuch invalid, illegal or unenforceable provision or provisions or any other
\nprovisions hereof, unless such a construction would be unreasonable.<\/p>\n
12.8 Force Majeure. (a) Definition. For the purposes of this Agreement,
\n ————- ———-
\n“Force Majeure Event” means an event, condition or circumstance beyond the
\nreasonable control of the party affected (the “Affected Party”) which, despite
\nall reasonable efforts of the Affected Party to prevent it or mitigate its
\neffects, prevents the performance by such Affected Party of its obligations
\nhereunder. Subject to the foregoing, Force Majeure Events shall include:<\/p>\n
29<\/p>\n
(i) explosion and fire,<\/p>\n
(ii) flood, earthquake, storm, or other natural calamity or
\nact of God,<\/p>\n
(iii) strike or other labor dispute;<\/p>\n
(iv) war, insurrection or riot;<\/p>\n
(v) acts of or failure to act by any governmental authority;
\nand<\/p>\n
(vi) changes in law;<\/p>\n
provided, however, that in no event will the unavailability of funds constitute
\n——– ——-
\na Force Majeure Event.<\/p>\n
(b) Obligations Under Force Majeure.
\n ——————————- <\/p>\n
(i) If an Affected Party is rendered unable, wholly or in
\npart, by a Force Majeure Event, to carry out some or all of its obligations
\nunder this Agreement, then, during the continuance of such inability, the
\nobligation of such Affected Party to perform the obligations so affected shall
\nbe suspended.<\/p>\n
(ii) The Affected Party shall give written notice of the Force
\nMajeure Event to the other party (the “Unaffected Party”) as soon as practicable
\nafter such event occurs, which notice shall include information with respect to
\nthe nature, cause and date of commencement of the occurrence(s), and the
\nanticipated scope and duration of the delay. Upon the conclusion of a Force
\nMajeure Event, the Affected Party shall, with all reasonable dispatch, take all
\nnecessary steps to resume the obligation(s) previously suspended.<\/p>\n
(iii) Notwithstanding the foregoing, an Affected Party shall
\nnot be excused under this Section 12.8 for (1) any non-performance of its
\n ————
\nobligations under this Agreement having a greater scope or longer period than is
\njustified by the Force Majeure Event, or (2) for the performance of obligations
\nthat arose prior to the Force Majeure Event. Nothing contained herein shall be
\nconstrued as requiring an Affected Party to settle any strike, lockout or other
\nlabor dispute in which it may be involved.<\/p>\n
(c) Continued Payment Obligation. Either party’s obligation to make
\n —————————-
\npayments already owing shall not be suspended by Force Majeure Events.<\/p>\n
(d) Extended Force Majeure. Either party may terminate this
\n ———————-
\nAgreement upon thirty days prior written notice to the other party if Force
\nMajeure Event prevent the other party from substantially performing its
\nobligations hereunder for a cumulative period of 720 days provided that strikes
\nor other labor disputes shall be disregarded in determining such cumulative
\nperiod.<\/p>\n
12.9 Entire Agreement. This Agreement and the agreement referred to
\n —————-
\nherein and the schedules attached hereto constitute the entire agreement between
\nthe parties governing <\/p>\n
30<\/p>\n
the matters addressed herein. No prior agreement or representation, whether oral
\nor written, shall have any force or effect thereon.<\/p>\n
* * * * *<\/p>\n
31<\/p>\n
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
\nday and year first above written.<\/p>\n
REALTORS(R) INFORMATION NETWORK, INC.<\/p>\n
By: \/s\/ Alan R. [Illegible]
\n ————————————-
\n Name:
\n Title:<\/p>\n
REALSELECT, INC.<\/p>\n
By: \/s\/ Stuart Wolff
\n ————————————-
\n Name: Stuart Wolff
\n Title: Chairman & Chief Executive
\n Officer<\/p>\n
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