Website Services Agreement

Exhibit 10.26


WEBSITE SERVICES AGREEMENT


This Agreement (the "Agreement") has been entered into as of the 19th day of December, 2003 (the "Effective Date"), by and between iVillage, Inc. a Delaware corporation ("IV") located at 500 Seventh Avenue, New York, NY 10018 and Hearst Communications, Inc., a Delaware corporation ("Hearst") located at 959 Eighth Avenue, New York, NY 10019 (each a "party," and collectively, the "parties").


WHEREAS:


A. IV produces and hosts third party websites for certain
companies that feature selected content and material and are
branded by the indicia of the third party companies;


B. Hearst publishes the magazines CosmoGirl, Seventeen, and Teen
branded specials (the magazines collectively known as the
"Magazines") and maintains associated websites with each
publication known as cosmogirl.com.seventeen.com. and
TEEN.COM (the websites collectively known as the "Websites"),
all of which are targeted to teenage girls; and


C. Hearst and IV intend to enter into a relationship in which IV
will migrate the Websites to IV's platform and relaunch the
Websites that Hearst had heretofore maintained and thereafter
will provide to Hearst certain hosting and production
services in connection with the Websites in the manner set
forth herein.


NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:


1. IV Obligations


(a) Migration and Relaunch. IV agrees to migrate and relaunch each of the Websites to IV's platform in accordance with the schedule set forth at Exhibit A hereto. Until the Seventeen.com and Teen.com Websites are relaunched, they will be supported by IV at IV's third party vendor's data center on their existing server platforms, and will continue to offer the same array of content, features, applications and interactivity as offered prior to the migration, provided however that Hearst has obtained and secured all rights necessary in order for IV to maintain the same array of content, features, applications and interactivity during the migration and relaunch to IV. Hearst agrees to secure the cooperation of the current host of Seventeen.com and Teen.com in order to effect a timely, smooth transition to IV (or its third party vendor) so that the Websites may continue to operate following termination from existing host without interruption. Hearst will arrange for the current host of the CosmoGirl Website to continue to host such Website until the date of its relaunch by IV. Hearst is solely liable to pay any fees imposed by the current hosts of the Websites for services rendered through and including the migration to IV. Upon relaunch, the Websites will be supported by IV at IV's data center. It is understood and agreed that certain of the features of the Websites may be supported on platforms maintained by IV's third party vendors and that references herein to IV's platforms include the platforms of such third party vendors. Prior to relaunch, each of the Websites will be subject to acceptance testing by Hearst, as set forth at Exhibit A. The date of relaunch for each of the Websites is referred to as the "Relaunch Date".


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(b) Features. During the migration period, IV and Hearst shall participate in strategic, technical and creative discussions to determine appropriate requirements for each Website upon relaunch, taking into account the branding and identity of each respective affiliated magazine. Upon relaunch, each Website will have features, applications, games and content (collectively the "Features") as specified at Exhibit B, or as mutually agreed upon by the parties.


(c) Functionality. During the migration period, IV will rebuild the Websites so that upon relaunch, the Websites will have the following functionalities: all pages of the Websites will be tagged and capable of tracking metrics; standard newsletter templates will be in effect at each Website; customer service rules will be operational at IV; standard, consistent ad spaces will be implemented and the pages will be tagged and capable of receiving ads through DART(or an alternative third party tracking service as reasonably determined by IV and acceptable to Hearst); user interfaces to content management tools will be established to enable Hearst employees to update the Websites remotely; links will be established to a site designated by Hearst for the purpose of selling subscriptions to the magazines on-line; and the member databases of each Website will be migrated and implemented on the IV platform. The Websites will be operated on a stand alone basis and will not in any way be integrated into the iVillage network (except however that iVillage network service and vendor agreements may be utilized to provide certain services to the Websites), nor, will they in anyway bear the branding, indicia or trade dress of the iVillage network.


(d) Staffing. During the migration period and following the relaunch of each Website throughout the Term and any Renewal Term, IV shall make no fewer than nine responsible employees available to perform IV's obligations set forth herein and to review and/or improve any changes or developments in the management, maintenance, design, operations, marketing and creative aspects of the Websites. IV shall be entitled to deploy additional employees and/or freelancers to aid in the migration and ongoing performance of services hereunder, provided all freelancers shall be retained on terms such that ownership of the results of their work product vests in the parties, consistent with the terms of this Agreement. Hearst shall be entitled to phone consultations, meetings, strategic consultations and brainstorming sessions at its request. IV shall implement any changes and/or developments in a timely manner that result from all meetings and consultations. IV agrees that the nine employees will include a dedicated client manager for Hearst, who will have responsibility for delivery of all editorial and marketing initiatives; a producer, designer and developer for each of the Seventeen and CosmoGirl Websites; and design and production personnel to support advertising initiatives. Hearst shall have the right to direct IV to redeploy the assigned personnel to other Websites on a temporary or permanent basis in the event that the production needs of any of the Websites require a realignment of staff, provided such nine employees will at all times be dedicated exclusively to the Websites. During the migration period, IV will offer employment to the following Hearst employees: Chris Gonzalez; Kim Rygiel; Jesse Mumford; and Yufang Chang. Hearst agrees not to offer any of the foregoing employees incentives to decline employment with IV. IV agrees to offer an opportunity for employment subject to the following conditions: IV will offer each employee an opportunity for employment with a similar base salary as currently paid by Hearst (exclusive of all employee benefits, severance, medical, 401K contributions, paid time off and so forth) and will further provide such employees an opportunity for employment that includes IV's standard employee benefit package. Notwithstanding anything to the contrary provided for herein, IV has the right to remove any individual performing services on the Websites if (i) IV reasonably believes that said individual is not qualified to perform the services or tasks required of that individual; or (ii) the individual does not meet appropriate professional standards as reasonably determined by IV; and in either case, IV will replace such individual with a qualified employee reasonably acceptable to Hearst.


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(e) Content Management. After the Effective Date and up to thirty (30) days following the relaunch of each Website (or longer, if requested by Hearst), IV shall train Hearst employees in the use of the third party content management application utilized by IV (the "Content Management Application"), currently Vignette. Such training shall occur at reasonable times and durations to be mutually agreed upon. During the Term and any Renewal Term of this Agreement IV shall grant Hearst access to the Content Management Application as permitted by IV's site license solely for the purposes described in this subparagraph, provided that: (i) each Hearst employee complies with the confidentiality and right to use provisions provided for in the license agreement entered into between iVillage and Vignette Corporation (the "Vignette License Agreement") and (ii) each employee completes training on the software to IV's reasonable satisfaction. Following training, Hearst will require its employees to comply with IV's copy edit and quality control processes, to coordinate through IV with respect to art and production issues, to consistently report to IV with respect to which articles have been made live and to continuously update IV on features that have been updated. Hearst agrees to hold IV, its directors, officers, agents and employees harmless from and against any damages, costs or liabilities resulting from a Hearst employee's use of and access to the Content Management Application, including without limitation attorneys' fees, including any claim by Vignette alleging a breach by a Hearst employee of any right to use or confidentiality provisions provided for in the Vignette License Agreement.


(f) Update Services. The parties anticipate that ongoing production of the Websites will be performed in part by IV and in part by Hearst, with original content and editorial material to be provided by Hearst pursuant to subparagraph 2(a) below, using the Content Management Application. IV will provide Hearst with password-protected remote access to the Content Management Application to enable Hearst to produce and update the Websites. A list of the production services to be provided by IV is included in Exhibit B, as the Exhibit maybe amended from time to time as mutually agreed to To the extent that IV is responsible for production, IV agrees to perform such services promptly in accordance with the timetables set forth at Exhibit A or as the parties may from time to time agree. During the Term and any Renewal Term of this Agreement, IV will post monthly updates to each of the Features on each Website tied to content in the latest issue of the associated magazine, as provided by Hearst (except in the case of Teen, such updates will correspond to publication of Teen special edition magazines, which may not be on a monthly basis).


(g) Website Newsletter Mailings: IV will provide no less than the following newsletter services: for CosmoGirl, twenty mailings per year, as well as an additional ten mailings per year for CosmoGirl's 2024 project; and for Seventeen, two mailings per month using the standard website email templates created by IV. Additional mailings will be considered Value Added Features as hereafter defined. Upon commencement of this Agreement, Hearst will provide IV with a list of those names to whom newsletters should be sent (the "Newsletter List"). IV's customer service department shall be responsible thereafter for maintaining the Newsletter List, including complying with opt-in/opt-out requests by users and potential users.


(h) Maintenance Services. During the Term of this Agreement and any Renewal Term, IV will provide maintenance services as specified in Exhibit C hereto (the "Maintenance Services").


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(i) Hosting Services. During the Term and any Renewal Term of this Agreement, IV shall provide hardware, software and bandwidth for the Websites as well as hosting and technical support services. Additionally IV shall cause the Websites to be available and operational 24x7 except for scheduled downtime for hardware maintenance and upgrades, which IV agrees to use best efforts to cause to be performed only between the hours of midnight to 5:00 am, EST. Additionally, IV will provide data storage and management of the member names for each Website and customer service systems to analyze and direct visitor email messages to Hearst.


(j) Subcontractors/Third party vendors: Subject to Hearst's prior approval, IV may subcontract aspects of the services to be provided by IV and may delegate obligations hereunder to any person or entity other than an employee of IV. IV may also utilize the services of third party vendors in order to provide certain services, with the prior approval of Hearst, provided IV shall at all times remain liable to Hearst for its obligations hereunder. IV shall ensure that all subcontractors and vendors are bound by a level of confidentiality with regards to the Confidential Information (as herein defined) which is equal to that contained herein, and that, whenever possible, the results of their work product vests in the parties, consistent with the terms of this Agreement. Any fees owed to such subcontractors or third party vendors shall be the sole responsibility of IV.


(k) Value Added Features: The fees set forth herein at paragraph 11 are intended to compensate IV for the services and Features described herein, predicated on the assumption that IV's obligations can be satisfied through the services of nine dedicated employees performing fulltime services for the Websites (together with such subcontractors and third party vendors that IV may engage), and recognizing, however, that the Internet is an ever changing and evolving medium and that over time, the Features and functionality of the Websites may alter from those described herein and that alteration of the Features and functionality, including without limitation, substitution of new Features, incorporation of evolving technology and implementation of new applications will not entitle IV to any increase in those fees. Notwithstanding, in the event that Hearst requests IV to create additional online features for the Websites as value-added components for advertisers and sponsors such as, by way of example and not limitation, e-mails on behalf of sponsors, viral e-cards and microsites, or if Hearst requests substantial and material additions to the Features or substantial and material alterations to the functionality of the Websites such that accommodation of such requests could not reasonably be accomplished with the level of staffing herein contemplated (collectively "Value Added Features") then the following will apply. Upon request by Hearst, IV will quote a fee for performing a Value Added Feature according to the rate card set forth at Exhibit D. Hearst shall be entitled to have a Value Added Feature performed by a third-party vendor contracted by Hearst if Hearst can procure performance for a fee less than that quoted by IV and in that event, IV agrees to provide Hearst's third party vendor with reasonable assistance and access to the Websites so that the Value Added Feature can be implemented, provided however that IV shall have no liability for damage to the Websites or Works (as hereafter defined), caused as a result of Hearst's third party vendor. In that event, IV will provide Hearst with technical specifications for Hearst to provide third party vendors to ensure that the work performed by such third party vendors is compatible with IV's systems. Notwithstanding, if Hearst requests a Value Added Feature and at the time of the request the dedicated staff described at paragraph 1(d) above (together with existing subcontractors and third party vendors) is capable of producing the Value Added Feature, then IV will produce the Value Added Feature without additional charge to Hearst.


(1) Driving Users. IV agrees to use diligent efforts to achieve best industry practices to drive new and repeat user traffic to the Websites using its own search engines and other resources at all times during the Term and any Renewal Term.


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(m) Hearst Approval. Hearst shall have the right of prior approval over all materials of any kind, and all plans and strategies created or developed by IV or its agents in connection with the services to be provided pursuant to this Agreement, including without limitation approval over all links proposed to be implemented from the Websites, all metatags proposed to be used to drive traffic, the functionality of the Websites and the content of all Features. Hearst shall also have the right of prior approval over all usage on or in connection with the Websites of all intellectual property belonging to or licensed by Hearst, including, without limitation, all Hearst-created or licensed content, text, photos, illustrations, Hearst trademarks, logos, symbols, domain names, and any other information or materials provided by Hearst to IV (collectively, "Licensed Property"). Whenever Hearst's approval is required hereunder, IV shall request such approval in writing and provide all necessary supporting materials with the request. Hearst, within five (5) business days of receipt of such request, shall respond with approval or disapproval. If Hearst has not responded with approval or disapproval within such five (5) business day period, such failure to reply shall be deemed disapproval of IV's request. Hearst will not unreasonably withhold or delay any approval required under this Agreement and Hearst acknowledges that time is of the essence with respect to such approval.


2. Hearst and IV Obligations.


(a) Content. Except as otherwise requested by Hearst and agreed to by IV, Hearst shall employ its staff to supply, or caused to be supplied, all editorial material, privacy policies, terms of service, customer service templates, opt in language, member registration fields and original content for the Websites. Hearst shall also provide IV with pre-existing material made available to third parties for marketing or promotional materials to the extent appropriate for use by IV in performing its obligations hereunder. Hearst shall not be obligated to provide to IV any material that is subject to restrictions on distribution. All material provided hereunder by Hearst shall be deemed Licensed Property.


(b) Distribution. Hearst and IV shall each endeavor to establish relationships with third-party online distributors ("Distributors") for such Distributors to carry portions of content from the Websites on the Distributors' sites, with links back to the Websites ("Content Distribution Relationships"). IV shall enter into no Content Distribution Relationship unless it shall have sought and obtained Hearst's prior written approval. IV, shall provide reasonable cooperation and technical assistance in respect of any Content Distribution Relationship that maybe established by Hearst.


(c) Syndication. IV acknowledges and agrees that Hearst may syndicate all or portions of the Websites anywhere on the Internet, including Works based on IV Appplications (as those terms are defined at paragraph 3(c) hereunder, and provided any Works based on IV Applications will be run exclusively on IV's servers), and in addition may itself place, or may license third parties to place, content branded by any of the subject magazines anywhere on the Internet, including without limitation creating "mini-sites", without obligation to IV, provided however that, except in the case of termination of this Agreement for IV's breach, Hearst may not during the Term of this Agreement or any Renewal Term, terminate the services provided by IV hereunder with respect to one or all of the Websites and thereafter maintain such Website(s) elsewhere throughout the Internet.


(d) Privacy Policies, Terms of Service and Compliance. The Websites will be governed by Hearst's privacy policies and terms of service. The parties intend for the Websites to at all times be in compliance with all applicable laws, regulations, and industry guidelines, whether now existing or subsequently enacted, including without limitation, the Children's Online Privacy Protection Act ("COPPA"), American Society of Magazine Editors' Guidelines on Best Practices for Digital Media, CARU guidelines on advertising to children, and all applicable federal or state anti-spamming statutes.


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Unless otherwise agreed upon by the parties, the parties shall consult on how to best comply with such laws, regulations and guidelines and IV will institute, subject to commercial reasonableness, such measures, such as cookies, blocking mechanisms based on age, and other tools and functions as Hearst requests (collectively "Compliance Tools") to comply with such laws, regulations and guidelines. IV agrees to delete any postings (should it become aware of any such posting) that it believes, or that Hearst believes in its reasonable judgment could give rise to liability of any nature whatsoever. It is agreed and understood however that IV will not monitor user content posted to any message boards on the website. With respect to the conduct and contests and sweepstakes, the conduct of e-commerce, the collection and management of personally identifiable information, and management and dissemination of e-mail/mailing lists (collectively the "Compliance Hotspots") it shall be the responsibility of the party in a position to control and direct the activity involved to ensure that such Compliance Hotspot does not give rise to any legal liability. For example, Hearst shall have the responsibility to ensure that contests conducted by third party vendors or advertisers contracted by Hearst are conducted in compliance with applicable laws, and IV shall have such responsibility for contests conducted by IV. Similarly, with respect to list management, to the extent that IV's customer service department has responsibility for managing opt-ins and opt-outs, IV shall have responsibility to ensure that requests are handled in a fashion that does not give rise to legal liability.


3. Intellectual Property Rights.


(a) Marks. Hearst hereby grants IV a non-exclusive, non-sublicenseable worldwide license to use Hearst's trademarks and logos associated with the, magazines as Hearst may from time to time specify (collectively, "Marks") only as necessary to perform its obligations in accordance with the terms of this Agreement. All goodwill attributed to the Marks will inure to the benefit of Hearst exclusively and IV agrees that it will not during or after the Term attack or challenge the validity of the Marks. IV agrees that a breach of the foregoing would cause the other irreparable injury not compensable in money damages and therefore IV agrees that in the event of a breach or threatened breach by IV of the foregoing, the other party shall have the right to immediate injunctive relief.


(b), Derivative Works. Hearst hereby grants to IV, and IV accepts from Hearst, during the Term and any Renewal Term of this Agreement, the non-exclusive worldwide license and right to do any or all of the following, solely for the purposes described in this Agreement and subject in all cases to the prior approval of Hearst which shall be deemed denied if not granted affirmatively in a writing or oral conversation: (i) adapt, edit, change, modify and alter the Licensed Property or otherwise create derivative works based upon the Licensed Property (the "Derivative Works") on or as part of the Websites or promotion thereof; (ii) utilize and reproduce the Licensed Property and Derivative Works in digital form of display on the Websites alone or in combination with other works, including, but not limited to, text, data, images, advertisements, photographs, illustrations, animation, graphics, video or audio segments, and hypertext links, on or as part of the Websites or the marketing and promotion thereof; (iii) reproduce, record, rerecord, translate, digitally or electronically transmit, transfer, communicate, display, broadcast, perform, distribute, or synchronize in timed relation, or otherwise use the Licensed Property and Derivative Works, in whole or in part, on or as part of the Websites; and (iv) use the Licensed Property and Derivative Works in whole or in part in connection with the packaging, promotion, or advertising of the Websites.


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(c) Work for Hire. Any and all materials of any kind developed by or on behalf of IV solely in connection with this Agreement, including but not limited to Derivative Works, domain names, URL's, artwork, logos, graphics, video, text, data, and other materials supplied by or on behalf of IV to Hearst in connection with this Agreement but excepting only materials supplied by subcontractors and third party vendors as to which such third parties retain rights (collectively, the "Hearst Property"), shall be deemed to be "works for hire" and shall be the sole and exclusive property of Hearst. To the extent any Hearst Property may for any reason not be deemed a work for hire, IV does hereby grant and assign to Hearst all right, title and interest which IV may have now or in the future acquire in and to such Hearst Property, including but not limited to all copyrights and other intellectual property rights. IV shall not post any Hearst Property to the Websites without the prior approval of Hearst which shall be deemed denied if not granted affirmatively in a writing or oral conversation. The Licensed Property and the Hearst Property shall collectively be known as the "Works." Notwithstanding the foregoing, Hearst acknowledges that IV has or will provide pursuant to this Agreement certain proprietary technology and other materials (as may be determined in IV's discretion) including but not limited to any underlying software, tools, scripts, programming code, subroutines processes, architecture, hardware, data information, third party software, HTML code, content, graphics, multimedia files, program applications and functionality (collectively "IV Applications"), and all such IV Applications shall be the exclusive property of IV and Hearst Property shall not include any IV Applications unless IV agrees to create a new application solely and exclusively for Hearst. By way of example, the text (e.g., clues) and page graphics apparent to a viewer of a quiz shall, as between the parties, be the property of Hearst. The underlying graphic template and the application that runs the quiz shall be an IV Application. Subject to the terms hereof, IV hereby grants to Hearst a non-exclusive, non transferable, revocable, worldwide license to use during the term hereof, the IV Applications that IV actually supplies or provides to Hearst hereunder. The IV Applications shall be used only as specified and approved by IV and shall not be modified in any material manner by Hearst or Hearst's third party vendors, without prior written approval of IV. The parties acknowledge and agree that said limited license granted to Hearst shall terminate upon the termination or expiration of this Agreement. All rights specifically not granted to Hearst are reserved by IV. Hearst agrees not to decompile, decrypt, reverse engineer, disassemble or otherwise reduce any of the IV Applications. Accordingly, but without limiting the generality of the foregoing, Hearst may, in its sole discretion, modify, edit, add to, delete from, distribute, license, duplicate, use, and otherwise exploit the Works in any manner and by any means, media, method, device, process or medium now known or hereafter developed. Hearst, at its sole expense, shall have the sole right to register such Works for copyright protection (provided however, to the extent a Work contains an IV Application, Hearst will so indicate on the registration form and will make no claim to ownership of such IV Application, and Hearst will comply with the restrictions on use of such IV Applications set forth herein). IV agrees that it will not at any time do or cause to be done any act or thing contesting or impairing or intended to impair the foregoing ownership rights of Hearst and IV will execute and deliver any additional documents which Hearst deems necessary to further evidence Hearst's ownership of copyright or other rights described herein. If IV fails or neglects to execute such additional documents, Hearst may do so in IV's name and IV hereby appoints Hearst as its irrevocable attorney-in-fact solely for the purposes described herein.


4. Advertising and User Trafficking


(a) Ad Serving. During the Term and any Renewal Term, iVillage will provide ad serving (including exit pop-ups) for up to 100,000,000 impressions (in the aggregate across all the Websites) per month (exclusive of rich media, as hereafter defined) and will provide personnel as set forth in paragraph 1(d) to handle ad trafficking. Impressions in exc ...