Exhibit 10.1
Sales and Services Agreement
This Sales and Services Agreement (this “Agreement”) is entered into as of
July 16, 2010, by and between LaRoss Partners, LLC, a New York limited liability
company (“LaRoss”), with its principal office at 1 Expressway Plaza, Suite 114,
Roslyn Heights, NY 11577, and Local.com Corporation, a Delaware corporation
(“Local.com”), with its principal office at One Technology Drive, Building G,
Irvine, California 92618. Local.com and LaRoss shall collectively be referred to
herein as the “Parties” and each a “Party”.
Recitals
WHEREAS, Local.com desires to engage LaRoss to sell certain of Local.com’s
advertising products in accordance with certain established customer acquisition
criteria, as more particularly described in the Agreement;
WHEREAS, Local.com desires to retain LaRoss to provide certain billing,
settlement, reporting and other services to Local.com for the customers acquired
by LaRoss and other customers of Local.com on Local.com’s behalf pursuant to
this Agreement, each as more specifically described in the Agreement;
     NOW, THEREFORE, in consideration of the foregoing and the covenants set
forth herein and other good and valuable consideration, the sufficiency of which
is hereby acknowledged, LaRoss and Local.com hereby agree as set forth below.
Section 1. Customer Acquisition.
(a) During the Term (as defined below), LaRoss will sell certain of its own and
Local.com’s advertising products on behalf of Local.com, including the initial
products described in Exhibit A-1 and Exhibit A-2 attached hereto and such other
products as may be added to Exhibit A-1 and Exhibit A-2 by the Parties upon
mutual written agreement from time to time (the “Products”), subject at all
times to Local.com’s early termination rights set forth below. The Products will
be sold directly to small business customers at the prices set opposite the
description of such Product on Exhibit A-1 or Exhibit A-2, as may be modified by
the Parties from time to time upon subsequent written agreement.
(b) LaRoss will sell the Products via telesales efforts, either directly or via
outsourced sales channels, to potential customers meeting the following
criteria:

  (i)   lead must be a business or service offering located in the United
States;     (ii)   lead must not be an existing customer of Local.com or a
previous customer of Local.com that has cancelled within the last six (6) months
and provided that Local.com provides the information necessary for LaRoss to
make this determination in a manner as may be agreed by the Parties from time to
time;

 

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  (iii)   lead must be capable of being billed via their phone bill (“LEC
billed”); and     (iv)   lead’s contact information must not be on the Do Not
Call lists of either Local.com or LaRoss or any national Do Not Call list;
(collectively, “Leads” and each, a “Lead”).

As between Local.com and LaRoss, LaRoss will be solely responsible for sourcing
and developing all Leads necessary to meet the Sales Targets (as defined below).
Local.com shall be responsible for providing LaRoss with a file of its existing
LEC customers, existing, non-LEC customers, Do-Not-Calls, cancellations, and
similar groups that will inform LaRoss’s development of its Lead list on behalf
of Local.com. LaRoss is responsible for managing its Lead list so as not to
contact existing Local.com customers, Do-Not-Calls, cancellations and such other
groups of individuals as may be specified by Local.com from time to time.
(c) LaRoss will ensure that all sales efforts under this Agreement, whether
undertaken directly by LaRoss or by outsourced sales channels:

  (i)   Comply with generally accepted marketing practices in line with the
Direct Marketing Association Guidelines for Ethical Business Practices;     (ii)
  Comply with the federal law of the United States of America relative to
Telemarketing, including without limitation (1) the Federal Trade Commission
(“FTC”) Act, 15 U.S.C. §§ 41-58, as amended, dealing with unfair or deceptive
acts or practices, and FTC Regulations promulgated thereunder; (2) the FTC’s
Telemarketing Sales Rule as set forth in FTC’s publication “Complying with
Telemarketing Sales Rule” and FTC’s “Mail or Telephone Order Merchandise Rule”
Telemarketing and Consumer Fraud and Abuse Prevention Act; (3) the most current
FTC Handbook on telemarketing; and (4) adherence to the United States Federal
“Do Not Call List” as posted by the National Do Not Call Registry;     (iii)  
Comply with all laws of the jurisdictions in which LaRoss operates, and all
applicable privacy policies in such jurisdictions, including with respect to
LaRoss’s transmission, storage and use of customer information, including
without limitation the identification of the Customer by name, address,
telephone number, e-mail address and billing information (collectively “Customer
Information”);     (iv)   Comply (where appropriate and where LaRoss is
transacting via credit cards) at all times with the Payment Card Industry Data
Security Standard (PCI DSS) and agrees to implement and maintain reasonable
security measures to protect cardholder data in its possession;

 

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  (v)   Comply with all applicable national and foreign laws, treaties and
regulations in connection with this Agreement, including those related to data
privacy, international communications and the transmission of technical or
personal data; and     (vi)   Will, in no instance, involve fraudulent or
deceptive practices.

(d) LaRoss will ensure that all sales efforts under this Agreement are
undertaken and completed using selling and support scripts tailored, where
appropriate, to Local.com’s specific Product offering(s) identified in
Exhibit A-1 or A-2, and as approved in writing (email sufficing) by Local.com
from time to time. Unless otherwise set forth in this Agreement, all sales
efforts and management of outsourced sales channels will be performed by LaRoss
in accordance with the processes and methodologies used by LaRoss for its own
proprietary product offerings LaRoss will ensure that all sales efforts under
this Agreement are undertaken and completed in accordance with such quality
control criteria as specified in the LEC application and approval (including
third party verification) on a Product by Product basis and as are set forth in
Exhibit B attached hereto, as such exhibit may also be modified from time to
time by the Parties upon subsequent written agreement.
(e) Local.com agrees to provide LaRoss with such of its marketing, sales and
training materials as it deems necessary and appropriate to train the LaRoss
sales team about Local.com and its Products. Local.com agrees to train LaRoss’s
U.S.-based telesales trainers and service managers regarding Local.com’s
Products, value proposition, customer service requirements and similar matters
at a time and in a manner to be agreed upon by the Parties.
(f) Each of the foregoing subsections (a) through (e) may be further defined or
modified by the Parties by subsequent schedule mutually adopted by the Parties
in writing from time to time.
(g) Local.com may suspend or terminate the sale of any Product that Local.com
fulfills and supports at any time for any reason upon written notice to LaRoss.
Notwithstanding anything to the contrary set forth in this Section 1, Local.com
shall not be required to accept from LaRoss any Leads that have agreed to
purchase the Products, except as follows:
     (i) from June 9, 2010 to June 23, 2010, Local.com shall accept from LaRoss
up to *** Leads a week that have agreed to purchase the Products in accordance
with Section 1 hereof and otherwise meet the requirements of this Agreement;
     (ii) from June 24, 2010 to July 23, 2010, Local.com shall accept from
LaRoss up to *** Leads a week that have agreed to purchase the Products in
accordance with Section 1 hereof and otherwise meet the requirements of this
Agreement;
 

***   - Portions of this page have been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission

 

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     (iii) From July 24, 2010 to August 23, 2010, Local.com shall accept from
LaRoss up to *** Leads a week that have agreed to purchase the Products in
accordance with Section 1 hereof and otherwise meet the requirements of this
Agreement; and
     (iv) From and after August 24, 2010, Local.com shall not be required to
accept any additional Leads that have agreed to purchase the Products in
accordance with Section 1 hereof from LaRoss, except as set forth in Section
1(h) below.
(h) Notwithstanding Section 1(g)(iv) above, Local.com agrees to purchase from
LaRoss on the first day of each calendar quarter during the Initial Term
starting October 1, 2010 a maximum of up to *** Leads that:
     (i) have agreed to purchase certain of the Products listed on Exhibit A-2
in accordance with Section 1 hereof;
     (ii) otherwise meet the requirements of this Agreement;
     (iii) have been billed at least four (4) consecutive months by LaRoss prior
to purchase by Local.com and have not been acquired from any other third party;
     (iv) are billed at no less than the prices set opposite the Products set
forth in Exhibit A-2; and
     (v) are capable of being transferred to a billing entity (sub-CIC) that
already services existing Local.com Customers (as defined below).
Section 2. Fulfillment and Administration Services.
(a) During the Term, LaRoss will provide certain administrative services to
Local.com and on behalf of the Leads that agree to purchase the Products in
accordance with Section 1 hereof as well as such other customers as may be
identified by Local.com from time to time (each, hereinafter, a “Customer”),
including the following:

  (i)   LaRoss shall provide Local.com with account management services for all
Customers, providing at a minimum, those services set forth in Exhibit C hereof,
including those services as may be set forth on a Product by Product basis;    
(ii)   Where necessary or appropriate, LaRoss shall undertake follow-up calls
and communications with Customers, provided that a follow-up call shall be made
to a Customer on the third (3rd) day after such Customer converts from being a
Lead in order to ascertain any information necessary to complete the order of a
Product for such Customer; and     (iii)   Undertaking a Quality Assurance check
on each Customer with respect to Product order details, in accordance LaRoss’s
current Quality Assurance

 

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confidential treatment and filed separately with the Securities and Exchange
Commission

 

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      processes and procedures within two (2) days following conversion of a
Lead into a Customer, as such processes and procedures may be modified by the
Parties upon written agreement from time to time.

(b) During the Term, LaRoss will provide certain fulfillment and provisioning
services where it ensures timely delivery of the Product sold to the Customers
including the following:

  (i)   Where applicable, consistent with the LaRoss’s own sales and fulfillment
processes and procedures, and consistent with the LEC approvals per product,
providing fulfillment of welcome kits (electronic or paper based fulfillment
where appropriate) to Customers within fourteen (14) days of such Customer
converting from a Lead;     (ii)   Managing any and all communication with the
Customer required to provision the Product;     (iii)   Provisioning the Product
per the agreement with the applicable LEC;     (iv)   Securing all approvals
from the Customer (if required) that the Product has been successfully
provisioned and accepted by the Customer;     (v)   Providing any administrative
or support function directly or indirectly through third parties to provision
the Product as required;     (vi)   Establishing any and all reporting to be
provided to the Customer per the agreement with the Customer with respect to the
Product;     (vii)   Providing Local.com with any and all required information
required by it where Local.com is fulfilling the Product;     (viii)  
Maintaining records of all provisioning activity and any changes to the
Customers’ version of any Product;     (ix)   Delivering, where appropriate, a
daily new Customer order file, pre Quality Assurance, and providing Local.com
with real time reporting capabilities that provide visibility of all new
Customer orders;     (x)   LaRoss will provide Local.com with access to the
LaRoss CRM that contains a Customer master file, which file with contain all of
the information per entry specified in Exhibit D attached hereto and necessary
for immediate processing by Local.com for Product fulfillment;

(c) During the Term, LaRoss will provide certain reporting services to Local.com
with respect to the Customers and otherwise, including the following:

 

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  (i)   LaRoss will provide Local.com with an updated version of it current
management dashboard by which Local.com can manage and monitor its Customers;  
  (ii)   LaRoss will provide Local.com with access to the LaRoss CRM system
where all Customer Information will be stored by LaRoss on behalf of Local.com;
    (iii)   LaRoss will provide Local.com, upon Local.com’s request, with access
to any third party reporting or management systems that LaRoss uses to fulfill,
manage or report on the product or service for Local.com’s customers     (iv)  
Upon request from Local.com and reimbursement for all expenses associated with
same by Local.com, LaRoss will provide CRM access to daily sales reports
necessary to support the use of SalesForce.com as Local.com’s CRM of record;    
(v)   LaRoss will provide access to all relevant clearinghouse accounts and
other accounts as appropriate and necessary for Local.com to review and audit
settlement, billing and credit information;     (vi)   LaRoss will provide
Local.com with an operational dashboard that is materially similar to the
operational dashboard currently used by LaRoss for its own internal operations,
including access to core operating metrics for the entire Customer lifecycle;  
  (vii)   Such other reports as Local.com may reasonably request from time to
time and that are reasonably prepared by LaRoss; and     (viii)   LaRoss will
provide Local.com with such other base Lead information as Local.com may request
from time to time.

(d) During the Term, LaRoss will provide certain billing, settlement and
financial reporting services to Local.com, including the following:

  (i)   LaRoss will on a monthly basis, facilitate the billing of each Customer
for the price ascribed to the Product or Products purchased by such Customer, as
set forth in Exhibit A-1 or A-2 attached hereto as may be amended from time to
time by the Parties upon mutual written consent (email sufficing), in accordance
with the billing method agreed to by the Customer, subject to cancellation
and/or termination of such Product or Products by the Customer, provided that in
performing the foregoing billing services LaRoss will use commercially
reasonable efforts to achieve an overall settlement percentage that is within a
percentage range as may be mutually agreed upon by the Parties;

 

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(ii)   where, in accordance with the other provisions of this Agreement, LaRoss
is no longer providing the services set forth in Section 2(c)(i) hereof, LaRoss
will provide Local.com with a billing file in accordance with Local.com’s
specifications;   (iii)   LaRoss will provide Local.com with access to one or
more LEC billing entities in order to bill those Customers that have selected to
be billed on a LEC based payment, including having sufficient capacity to handle
current needs, as well as contingent and/or projected needs;   (iv)   Within
ninety (90) days of the date first set forth above, LaRoss will assist Local.com
in establishing a lockbox account arrangement with its LEC billing entities,
naming Local.com as the sole beneficiary of the account into which payment
received attributable to Customers will be paid solely at the direction of
Local.com;   (v)   LaRoss will proactively review cancellations, credits and
complaints by Customers consistent with its current operations, and will respond
on behalf of Local.com to all attorney general and LEC inquiries in accordance
with the direction of Local.com, including the development of improvement plans
and submission of same. LaRoss will provide notice to Local.com of any such
inquiries within two (2) business days of receipt of same. The foregoing
requirement applies to any LEC billing entities for which LaRoss is providing or
managing billing service whether owned by LaRoss or Local.com.   (vi)  
Local.com will provide LaRoss with any official communications sent to or
received by Local.com or any of its LEC billing entities or their nominees of or
relating to Customers;   (vii)   In the event any LEC billing entity is
prohibited from operating, LaRoss will use commercially reasonable efforts to
migrate impacted Customer accounts to an alternative LEC billing entity.

(e) During the Term, LaRoss will provide certain customer service functions to
the Customer on behalf of Local.com, including the following:

  (i)   Handling inbound call inquiries from Customers regarding the Product,
billing, Customer Information inquiries and such other information requests as
may be appropriately made by a Customer;     (ii)   Processing change requests
related to the Product or Products subscribed for by a Customer, including
updating information, adding, deleting or modifying the Product or Product(s) a
Customer has subscribed for and other similar fulfillment requests;

 

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  (iii)   Attempting to retain a Customer in the event of a cancellation by such
Customer of a Product or Product(s), using such methods and offers as may be
mutually agreed upon by the Parties;     (iv)   Manage and where possible,
attempt to minimize, refunds and credits to Customer as may be mutually agreed
upon by Local.com and LaRoss, tracking Customer reasons for churn and
cancellation, and using best practices to retain Customer;     (v)   Update and
keep current the CRM system provided to Local.com by LaRoss with respect to all
Customer communications.

(f) Each of the foregoing subsections (a) through (e) may be further defined or
modified by the Parties by subsequent schedule mutually adopted by the Parties
in writing from time to time.
Section 3. Additional Local.com Obligations.
     During the Term, in addition to its other obligations, as set forth herein,
Local.com will also fulfill the following obligations:
(a) Local.com will regularly, and in no case less than once per week, undertake
quality assurance on samplings of Leads and Customers to ensure that LaRoss is
performing properly its obligations under this Agreement.
(b) Local.com will fulfill Customer’s purchases of the Products in a
commercially reasonable manner in accordance with its current Product
fulfillment policies and procedures.
(c) Local.com will provide LaRoss sales management staff and call center
management with information pertaining to Local.com Products, fulfillment and
such other information as is reasonably necessary to assist LaRoss’s sales and
delivery efforts pursuant to this Agreement.
Section 4. Compensation.
(a) As the sole and exclusive consideration for the services to be provided by
LaRoss pursuant to Section 1 of this Agreement, Local.com agrees to pay LaRoss a
one-time acquisition fee equal to the fee set opposite the Product in
Exhibit A-1 or A-2 attached hereto (as applicable) per Product sold to a
Customer (the “Acquisition Fee”), provided the following criteria have been met:

  (i)   In the case of those Products listed on Exhibit A-1 only, Customer has
agreed to and completed a thirty (30) day trial period for the Product, as

 

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      evidenced by the audio recordings required pursuant to Section 4(a)(iii)
hereof;     (ii)   LaRoss has provided Customer with proper disclosure of the
billing terms for the Product as evidenced by the audio recordings required
pursuant to Section 4(a)(iii) hereof;     (iii)   LaRoss shall have made an
audio recording of the call with the Lead pursuant to which the Lead agrees to
buy the Product on the disclosed term and, in so doing, converts to a Customer
in the case of those Products listed on Exhibit A-1 or becomes a customer of
LaRoss in the case of those Products listed on Exhibit A-2 or alternatively,
LaRoss will provide remote call monitoring where audio recording of the call is
not possible, and an audio recording of the subsequent verification of such
commitment by the Customer or LaRoss customer, which recordings will be
accessible by Local.com upon request;     (iv)   In the case of those Products
listed on Exhibit A-1 only, Customer is successfully billed for the Product at
least one time, following the passage of the trial period set forth in
Section 4(a)(i) above;     (v)   In the case of those Products listed on
Exhibit A-2 only, the satisfaction of those criteria set forth in Section 1(h)
hereof;     (vi)   LaRoss successfully completes its quality control process
with respect to the sales process;     (vii)   LaRoss successfully completes all
fulfillment requirement required within the first thirty days of a Customer’s
purchase of a Product through LaRoss’ efforts in accordance with this Agreement
in a timely manner, in accordance with the requirement set forth above,
including without limitation, the electronic or postal delivery of a welcome
kit, the placement of a follow-up call to a new Customer and the delivery of a
final written pre-bill communication to such new Customer, where necessary or
agreed upon with Local.com; and     (viii)   the satisfactory completion, at the
option of Local.com, of a sampling of sales calls through remote call monitoring
and an audit of sales verification recordings, provided that in the case of
those Products listed on Exhibit A-1 such audit is completed within five
(5) calendar days of the date of sale and does not and will not interfere with
the timely billing of Customer and, in the case of those Products listed on
Exhibit A-2, such audit is completed within ten (10) days prior to the date of
sale to Local.com pursuant to Section 1(h) hereof.

 

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Each of the foregoing (a)(i) through (a)(viii) shall hereinafter be referred to
as a “Sales Criterion.” In the event that any of the Sales Criteria in
Sections 4(a)(i) through 4(a)(v) are not met, then LaRoss will not be eligible
to receive the Acquisition Fee for the sale of the Product to such Customer. In
the event that any of the Sales Criteria in Sections 4(a)(vi) through 4(a)(viii)
are not met then LaRoss will be deemed to be in material breach of this
Agreement and, in addition, Local.com may reduce the aggregate amount of all
Acquisition Fees owed to LaRoss for a calendar month by ten percent (10%) for
each Sales Criterion not met by LaRoss during such calendar month. It is
understood and agreed that LaRoss will be solely responsible for any and all
expenses associated with the services it provides pursuant to Section 1 hereof
and that the Acquisition Fee shall be the sole and exclusive fee paid for such
services.
(b) As the sole and exclusive consideration for the services to be provided by
LaRoss pursuant to Section 2 of this Agreement, Local.com agrees to pay LaRoss a
recurring monthly service fee as more specifically set forth in Exhibit E
attached hereto on a per Product basis (collectively, the “Monthly Service
Fee”). It is understood and agreed that LaRoss will be solely responsible for
any and all expenses associated with the services it provides pursuant to
Section 2 hereof and that the Monthly Service Fee shall be the sole and
exclusive fee paid for such services.
Notwithstanding the foregoing, no Monthly Service Fee will be paid with respect
to any month in which Customer does not pay for the Product. As such, no Monthly
Service Fee will be paid during the initial trial period nor in any month in
which Customer fails to pay for the Product for any reason or no reason at all.
(c) The Acquisition Fee and Monthly Service Fees payable hereunder are inclusive
of all services offered by LaRoss pursuant to this Agreement unless otherwise
set forth herein. Notwithstanding the foregoing, Local.com will be responsible
for reimbursing LaRoss for all expenses agreed to by Local.com in writing and in
advance (email sufficing).
(d) LaRoss may invoice Local.com for Acquisition Fees and Monthly Service Fees
earned by LaRoss in accordance with this Agreement as frequently as weekly.
Local.com will pay all undisputed invoices within seven (7) calendar days of
delivery of such invoice or thirty (30) calendar days in connection with
Acquisition Fees earned pursuant to Section 1(h).
(e) Notwithstanding anything to the contrary set forth in Section 4(a) through
4(d) above, Local.com may be required to engage a third-party to provide certain
Customer service functions and such services may result in an additional charge
to Local.com, but only where subsequently agreed to by LaRoss and Local.com in
writing, provided that Exhibit E set forth herein establishes those additional
third-party services for which Local.com has already agreed to assume pursuant
to this Agreement.
Section 5. LaRoss Warranties and Representations.

 

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(a) LaRoss represents and warrants that it is duly organized and validly
existing under the laws of its jurisdiction and it has the full corporate power
and authority to execute and deliver this Agreement, or perform its obligations
hereunder and to consummate the transactions contemplated hereby.
(b) LaRoss represents and warrants that the execution, delivery and performance
of this Agreement by it has been duly authorized by all necessary corporate
action, has been duly executed and delivered by it and constitutes a legal,
valid and binding obligation of it enforceable against it in accordance with its
terms and the execution, delivery and performance of this Agreement does not and
will not violate its certificate of incorporation or by-laws, or any applicable
statute, law, ordinance, rule or regulation, or any term or provision of any
agreement or other instrument or any judicial or administrative order or decree
to which it is a party or by which it may be bound.
(c) LaRoss represents and warrants that there are no suits, actions, claims,
proceedings (including, without limitation, arbitral or administrative
proceedings) or investigations (i) pending or threatened against LaRoss or any
of their respective properties, assets (including, without limitation, LaRoss’s
intellectual property necessary to perform all of the services provided for in
this Agreement (hereinafter, the “LaRoss Intellectual Property”)) or business
or, to the best knowledge of LaRoss, (ii) pending or threatened against any of
the officers, directors, employees, agents or consultants of LaRoss in
connection with the business of LaRoss or (iii) pending or threatened
challenging the validity or propriety of the transactions contemplated by this
Agreement. There is no judgment, order, injunction, decree or award (whether
issued by a court, an arbitrator or an administrative agency) to which LaRoss is
a party, or involving any of LaRoss’s properties, assets (including, without
limitation, the LaRoss Intellectual Property) or business, which is unsatisfied
or which requires continuing compliance therewith by LaRoss.
(d) LaRoss represents and warrants that it is in compliance with all applicable
laws of any governmental authority having jurisdiction over the conduct of its
business or the ownership or use of its properties, the noncompliance with which
is reasonably likely to have a material adverse effect on the LaRoss
Intellectual Property.
(e) LaRoss represents and warrants the information and statements regarding
LaRoss and the LaRoss Intellectual Property contained herein do not contain any
untrue statement of a material fact or omit to include any material fact
necessary to make such information or statements not misleading. LaRoss
represents and warrants that no order for relief or similar order has been
entered in a bankruptcy proceeding that orders relief of any kind that has or
would result in a finding that LaRoss is bankrupt, that a trustee or interim
trustee should be appointed, or that in any other way would interfere with
LaRoss’s ability to provide the services and perform its obligations to
Local.com hereunder, including the use of the LaRoss Intellectual Property by
Local.com to the extent provided for herein.

 

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(f) LaRoss represents and warrants that the LaRoss Intellectual Property
necessary for LaRoss to perform its obligations hereunder or any technology used
in or related thereto (other than permitted third party software) does not
infringe any copyright, valid claims of a presently existing registered patent
or trademark, nor does it constitute an unlawful disclosure, use or
misappropriation of another person’s trade secret.
(g) LaRoss represents and warrants that it is not a party to or bound by any
agreement that would restrict or limit its right to carry on its business as now
conducted or to solicit business from any person or any geographical area or
otherwise conduct its business as contemplated under this Agreement.
(h) LaRoss represents and warrants that the CRM system, billing system, Lead
generation system and all other systems and software utilized by LaRoss to
provide the services set forth in this Agreement do not, and shall not,
infringe, violate or misappropriate the Intellectual Property Rights (as defined
below) or any other rights of any third party. “Intellectual Property Rights”
mean any and all rights existing from time to time under patent, copyright,
trademark, trade secret, unfair competition, publicity rights, or privacy rights
laws, and any and all other proprietary rights.
(i) LaRoss represents and warrants that the CRM system, billing system, Lead
generation system and all other systems and software utilized by LaRoss to
provide the services set forth in this Agreement will not contain any defects,
viruses, worms, Trojan horses or other harmful components at any time during the
Term of the Agreement.,
(j) LaRoss represents and warrants that the CRM system, billing system, Lead
generation system and all other systems and software utilized by LaRoss to
provide the services set forth in this Agreement will at all times during the
Term of this Agreement be available for use by Local.com as contemplated by this
Agreement.
(k) LaRoss represents and warrants that all customers acquired by Local.com
pursuant to Section 1 hereof were obtained and acquired in accordance with the
Anti-Cramming Best Practices Guidelines, available at
http://www.fcc.gov/Bureaus/Common_Carrier/Other/cramming/cramming.html.
(l) LaRoss represents and warrants that no third party billing agent (sub-CIC)
used by LaRoss to fulfill its obligations under this Agreement, including
without limitation the billing of customers to be aged prior to acquisition
pursuant to Section 1(h) hereof, has ever received any complaints above
allowable LEC-established complaint thresholds or have otherwise been subject to
shut down, termination, or suspension proceedings.
Section 6. Local.com Warranties and Representations.
(a) Local.com represents and warrants that it is duly organized and validly
existing under the laws of its jurisdiction and it has the full corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.

 

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(b) Local.com represents and warrants that the execution, delivery and
performance of this Agreement by it has been duly authorized by all necessary
corporate action, has been duly executed and delivered by it and constitutes a
legal, valid and binding obligation of it enforceable against it in accordance
with its terms and the execution, delivery and performance of this Agreement
does not and will not violate its certificate of incorporation or by-laws, or
any applicable statute, law, ordinance, rule or regulation, or any term or
provision of any agreement or other instrument or any judicial or administrative
order or decree to which it is a party or by which it may be bound.
(c) Local.com represents and warrants that there are no suits, actions, claims,
proceedings (including, without limitation, arbitral or administrative
proceedings) or investigations (i) pending or threatened against Local.com or
any of their respective properties, assets (including, without limitation,
Local.com’s intellectual property) or business or, to the best knowledge of
Local.com, (ii) pending or threatened against any of the officers, directors,
employees, agents or consultants of Local.com in connection with the business of
Local.com or (iii) pending or threatened challenging the validity or propriety
of the transactions contemplated by this Agreement. There is no judgment, order,
injunction, decree or award (whether issued by a court, an arbitrator or an
administrative agency) to which Local.com is a party, or involving any of
Local.com’s properties, assets (including, without limitation, Local.com’s
intellectual property) or business, which is unsatisfied or which requires
continuing compliance therewith by Local.com.
(d) Local.com represents and warrants that no consent, order, approval, permit
or authorization or notification of, or registration, declaration or filing
with, any court, arbitrator or governmental entity or other person or entity is
required for the valid execution, delivery or performance by it of this
Agreement.
(e) Local.com represents and warrants that no order for relief or similar order
has been entered in a bankruptcy proceeding that orders relief of any kind that
has or would result in a finding that Local.com is bankrupt, that a trustee or
interim trustee should be appointed, or that in any other way would interfere
with Local.com’s ability to perform its obligations hereunder, including the use
of Local.com’s intellectual property by Local.com.
(f) Local.com represents and warrants that Local.com’s intellectual property
necessary for Local.com to perform its obligations hereunder or any technology
used in or related thereto (other than permitted third party software) does not
infringe any copyright, valid claims of a presently existing registered patent
or trademark, nor does it constitute an unlawful disclosure, use or
misappropriation of another person’s trade secret.
(g) Local.com represents and warrants that it is not a party to or bound by any
agreement that would restrict or limit its right to carry on its business as now
conducted

 

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or to solicit business from any person or any geographical area or otherwise
conduct its business as contemplated under this Agreement.
Section 7. Intellectual Property
(a) LaRoss acknowledges and agrees that any and all information provided by or
gathered from Customers (“Customer Information”) will be co-owned by Local.com.
LaRoss may use the Customer Information solely to provide the services
contemplated by this Agreement in accordance with this Agreement. LaRoss must
partition and keep the Customer Information separate from the information of its
other customers. Within 5 days of termination or expiry of this agreement,
LaRoss must make available to Local.com all Customer Information in LaRoss’s
possession, power or control for download from a secure site in a format this is
accessible to and capable of manipulation and further use by Local.com.
(b) Each Party hereto shall use the other Party’s licensed marks as set forth in
Exhibit F hereto only in accordance with the manner and form stipulated by such
Party and shall conform to and observe such standards as such Party shall from
time to time approve, including, without limitation, standards relative to the
size, design, position, appearances, marking and color of such licensed marks,
and the manner, disposition and use of the licensed marks and accompanying
designations, on any document or other media. All goodwill associated with each
Party’s licensed marks will inure solely to the benefit of, and is the property
of, such Party. Upon termination of this Agreement, no monetary amount will be
assigned or attributed to any goodwill associated with either Party’s interest
in the other Party’s licensed marks.
(c) Each Party acknowledges that the other Party’s licensed marks and all
registrations and applications for registration thereof that such Party owns or
hereafter acquires are valid and that such Party is the owner of same. Neither
Party will (i) contest the validity of the other Party’s licensed marks or any
registrations or applications for registration thereof or assist anyone in doing
so; (ii) claim any property interest in the other Party’s licensed marks other
than as itself; (iii) use the other Party’s licensed marks in any form or manner
inconsistent with this Agreement and/or on or in connection with any goods,
services or products other than those approved by such other Party; or (iv) use
any mark, name, design, label or other device identical or similar to the other
Party’s licensed marks except as permitted herein..
Section 8. Indemnification.
(a) LaRoss agrees to promptly defend, indemnify and hold Local.com and its
directors, officers, employees, agents and advisors (hereinafter called
collectively the “Local.com Indemnities”) harmless from and against, and pay or
reimburse the Local.com Indemnities for, any and all claims, liabilities,
obligations, fines, costs, expenses, charges, royalties, proceedings,
deficiencies, or damages (whether absolute, accrued, conditional or otherwise
and resulting from third party claims), including, without limitation,
reasonable attorney’s and accountants’ fees incurred in the

 

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investigation of defense of any of the same or in asserting any of their
respective rights thereunder (hereinafter called collectively the “Losses”),
resulting from or arising out of (i) any inaccuracy of any representation or
warranty made by LaRoss herein or in connection herewith; (ii) any failure of
LaRoss to perform any covenant or agreement hereunder; or (iii) any alleged or
actual infringement or wrongful use attributable to Local.com Indemnities’ use
of the LaRoss Intellectual Property. The indemnification obligations set forth
in this Section 8(a) shall survive indefinitely or, if indefinite survival is
not enforceable under applicable law, for the maximum period of time permitted
by applicable law.
(b) Local.com agrees to defend, indemnify and hold LaRoss, its directors,
officers, employees, agents and advisors (hereinafter called collectively the
“LaRoss Indemnities”) harmless from and against any and all Losses resulting
from or arising out of: (i) any inaccuracy of any representation or warranty
made by Local.com herein or in connection herewith; or (ii) any failure of
Local.com to perform any covenant or agreement hereunder or fulfill any other
obligation in respect hereof. The indemnification obligations set forth in this
Section 8(b) shall survive indefinitely or, if indefinite survival is not
enforceable under applicable law, for the maximum period of time permitted by
applicable law.
(c) For purposes of Sections 8(a) through this 8(c), the Party seeking
indemnification will be known as the “Indemnified Party” and the Party from whom
indemnification is sought will be known as the “Indemnifying Party”.

  (i)   The Indemnified Party will provide written notice to the Indemnifying
Party of any Loss in respect of which an Indemnifying Party may be liable under
Section 8(a) or 8(b) (hereinafter called an “Indemnification Notice”). Such
Indemnification Notice will be dispatched by the Indemnified Party as soon as
reasonably practicable after receipt by the Indemnified Party of notice of any
Losses, but in no event later than 90 days after the Indemnified Party’s
discover of such Loss. The Indemnification Notice will (i) reference this
Agreement and (ii) set forth in reasonable detail the facts and circumstances
justifying such claim.     (ii)   The Indemnifying Party will pay for any Loss
promptly in cash once its responsibility has been finally determined. In the
case of a Loss arising out of a claim by a third party, the Indemnified Party
will permit the Indemnifying Party, at its option and expense, to assume the
defense of such claim by counsel reasonably satisfactory to the Indemnified
Party and to settle or otherwise dispose of the same; provided, however, that
the Indemnified Party may in its discretion at all times participate in such
defense by counsel of its own choice, but the fees, expenses and other charges
of such counsel will be for the account of the Indemnified Party, unless;
(i) the employment of counsel by the Indemnified Party has been authorized in
writing by the Indemnifying Party, (ii) there is a conflict or potential
conflict (based on advice of counsel to the Indemnified Party

 

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      reasonably acceptable to the Indemnifying Party) between the Indemnified
Party and the Indemnifying Party, or (iii) the Indemnifying Party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of this commencement of the action; and provided
further that the Indemnified Party will be entitled to control such defense
jointly with the Indemnifying Party in the case of any litigation referred to in
clause (ii) of the immediately preceding proviso to this sentence.     (iii)  
The Indemnifying Party will not, in defense of any such claim, except with the
prior written consent of the Indemnified Party, enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff in question to the Indemnified Party a release of all liabilities in
respect of such claims.

Section 9. Limitation of Liabilities.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR OTHERWISE, EXCEPT
FOR A PARTY’S INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTION 8 OF THIS
AGREEMENT OR DAMAGES ARISING FROM A PARTY’S BREACH OF SECTION 11 HEREOF, NEITHER
PARTY SHALL HAVE ANY LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS
AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY, SPECIAL, INDIRECT OR
PUNITIVE DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITIES OF
SUCH DAMAGES.
Section 10. Term and Termination
(a) This Agreement shall become effective upon the date first set forth above
and, unless sooner terminated as provide in this Agreement, shall remain
effective until the date that is two year from the date first set forth above
(the “Initial Term”) and shall automatically renew for subsequent one (1) year
periods thereafter (each, a “Subsequent Term” and together with the Initial
Term, the “Term”), unless earlier terminated in accordance with Section 10(b)
hereof. Notwithstanding the foregoing, Local.com may suspend LaRoss’ performance
pursuant to Section 1 of this Agreement and Local.com’s obligations in light of
that performance pursuant to Section 4 of this Agreement upon at least
forty-five (45) days prior written notice to LaRoss.
(b) Local.com may terminate this Agreement upon ninety (90) days prior written
notice to LaRoss prior to the end of the then-current term. Both Parties may
terminate this Agreement at any time upon the mutual written consent of LaRoss
and Local.com. Either Party may terminate this agreement upon six (6) months
written notice prior to the end of the then-current term of this Agreement.
(c) Either Party (hereinafter called the “Terminating Party”), without prejudice
to any other right or remedy available to the Terminating Party under this
Agreement or any

 

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applicable law, shall have the right to terminate this Agreement upon the
happening of any of the following events:

  (i)   The other Party initiates or consents to proceedings relating to it,
under any bankruptcy, reorganization, insolvency, moratorium, intervention law
or law with similar effect, or under any law for the relief of, or relating to,
debtors, or makes or enters into a conveyance, assignment, arrangement, or
composition with or for the benefit of its creditors or appoints or applies for
the appointment of an administrator, receiver, trustee, intervener, or assignee
for the benefit of creditors (or other similar official) to take possession or
control of a substantial part of all its undertaking property, revenue or
assets, or takes any proceeding under any law for a readjustment or deferment of
all or a material and significant portion of its indebtedness;     (ii)   The
proceedings are initiated against the other Party under any applicable
bankruptcy, reorganization, insolvency, moratorium or intervention law or law
with similar effect, or under any other law for the relief of, or relating to,
debtors, or an administrator, receiver, trustee, intervener or assignee for the
benefit of creditors (or other similar official) is appointed to take possession
of control of part or all of the undertaking or assets of the other Party, and
any such proceedings shall not have been successfully contested, dismissed or
any such appointment shall not have been terminated within 60 days after
commencement or appointment, as the case may be;     (iii)   An order is made or
an effective resolution passed for winding-up, liquidation or dissolution of the
other Party;     (iv)   The other Party becomes insolvent or is generally unable
to pay its debts as and when they are due;     (v)   The other Party defaults in
performance or observance of, or compliance with, any of its obligations,
covenants or warranties set out in this Agreement, which default is material and
is incapable of remedy or, if such default is capable of remedy, is not remedied
within fifteen (15) days after notice of such default shall have been given to
the other Party, or any representation or warranty referred to in Section 5 or 6
hereof proves to have been incorrect or untrue in any material respect when made
or deemed made and materially and adversely affects performance under this
Agreement.

(d) Neither Party to this Agreement may assign this Agreement or any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of the other, which consent shall not be unreasonably withheld.

 

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(e) In the event this Agreement is terminated by Local.com or LaRoss pursuant to
Section 10(b), in its sole discretion, or by Local.com pursuant to
Section 10(c), LaRoss shall continue to provide upon written request from
Local.com only such of the services set forth in Section 2 hereof as it shall be
permitted to by law and which shall be necessary for Local.com to properly
service and bill its Customers and to arrange for a successful transition of the
services performed by LaRoss pursuant to Section 2 to Local.com or its
designated third party service provider, provided that (i) such transition
period shall not exceed 6 months and (ii) Local.com shall pay the Monthly
Service Fees to LaRoss during such terms pursuant to Section 4(b) hereof. During
such transition period, LaRoss shall do any and all things reasonably necessary
to facilitate and assist Local.com in transitioning the Customers and the
billing of the Customers to Local.com or its third party designee. ***
(f) Except as set forth herein, no termination of this Agreement will affect the
Parties’ rights and obligations with respect to events occurring prior to such
termination.
Section 11. Confidentiality, Publicity and Non-Disparagement
(a) Each of the Parties agrees, for itself and its officers, directors,
employees and other representatives that, except as expressly permitted by this
Agreement, (i) it will not use or disclose any Confidential Information of the
other Party that it receives from the other Party or that it learns about the
other Party in the course of performance of this Agreement, except for use
reasonably necessary for the performance of this Agreement, and (ii) it will
take all reasonable measures to maintain the confidentiality of all Confidential
Information of the other Party in its possession or control, which will in no
event be less than the measures it uses to maintain the confidentiality of its
own information of similar importance. Notwithstanding the foregoing, each Party
may disclose the Confidential Information of the other Party (i) to the extent
required by a court or other governmental authority or otherwise as required by
law, or (ii) on a “need-to-know” basis under an obligation of confidentiality to
its directors, officers, or those of its affiliates and to its legal counsel,
accountants and banks and other financing sources which are not known to the
receiving Party to be a person that competes (or has stated its intention to
compete) with the other Party in the provision of services similar to those
provided hereunder, provided that the receiving Party shall be responsible for
any unauthorized use or disclosure by any such Person. The foregoing
restrictions shall not apply in a circumstance where any of the services set
forth in this Agreement are to be transferred to a third party for any reason.
(b) The obligation of confidentiality under Section 11(a) shall survive any
termination or expiration of this Agreement for a period of 2 years after such
termination or expiration.
(c) Except as provided herein, no public statements concerning the existence or
terms of this Agreement shall be made or released in any medium except with the
prior written approval of Local.com and LaRoss or as required by law. Local.com
may (i) make public statements concerning the existence of this Agreement, and
(ii) disclose
 

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confidential treatment and filed separately with the Securities and Exchange
Commission

 

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information regarding the number of Customers, revenue generated by such
Customers and similar performance information as it deems necessary or
appropriate.
(d) The Parties and their respective directors, officers and employees, agree to
refrain from any disparagement, defamation, or slander of the other Party
hereto, its subsidiaries or parent company, if any, and their respective
directors, officers, employees, Products, services, or Customers. This provision
will not apply to conduct as to which this provision would be unlawful. This
provision will survive the termination of the Agreement for any reason.
Section 12. Dispute Resolution
(a) Any controversy, claim or dispute (hereinafter called a “Dispute”) arising
out of or in connection with, or relating to this Agreement, its validity,
interpretation, performance, or termination, which cannot be settled by mutual
good faith discussion between the executives of Local.com and LaRoss without
undue delay, may be submitted to arbitration by either Party and if so submitted
by such Party, shall be finally settled by arbitration conducted in accordance
with the International Arbitration Rules of the American Arbitration Association
in effect at the time of arbitration except as modified therein or by mutual
agreement of the Parties. Any such arbitration shall take place in the city of
Irvine, California, Unites States of America, provided that, the arbitrators may
hold hearings in such other locations as the arbitrators determine to be most
convenient and efficient for all of the Parties to such arbitration under the
circumstances.
(b) The arbitration will be conducted by three arbitrators. The Party initiating
arbitration (hereinafter called the “Claimant”) will select its arbitrator in
its request for arbitration (hereinafter called the “Request”). The other Party
(hereinafter called the “Respondent”) will select its arbitrator within 30 days
of receipt of the Request and will notify the Claimant of such selection in
writing. If the Respondent fails to select an arbitrator within such 30-day
period, the arbitrator named in the Request will decide the Dispute as a sole
arbitrator. Otherwise, the two arbitrators selected by the parties will select a
third arbitrator within 30 days after the Respondent has notified the Claimant
of the selection of the Respondent’s arbitrator. When the arbitrators selected
by the Claimant and the Respondent have selected a third arbitrator, and the
third arbitrator has accepted the selection, the two arbitrators will promptly
notify the Parties of the selection of the third arbitrator. If the two
arbitrators selected by the Parties fail or are unable to select a third
arbitrator or so to notify the Parties, then the American Arbitration
Association will select the third arbitrator and will promptly notify the
Parties of the selection of the such arbitrator. The third arbitrator will act
as chairman of the panel.
(b) In addition to the authority conferred on the arbitration tribunal by the
rules specified above, the arbitration tribunal will have the authority (i) to
order such production of documents as may reasonably be requested by either
Party or by the tribunal itself, including the depositions of witnesses, and
(ii) to make awards, orders and rulings (hereinafter called collectively the
“Awards”) for interim relief, including injunctive relief. The Parties agree
that (a) any Award by the arbitration tribunal on

 

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interim measures will be deemed to be a final award with respect to the subject
matter of the Award and will be fully enforceable as such and (b) a request for
the interim measures to a court by any Party to the arbitration will not be
deemed incompatible with, or a waiver of, the agreement to arbitrate set forth
in this Section 12. The arbitration tribunal may, at its option, appoint one or
more experts to advise it with respect to any issue in the arbitration. If any
expert is so appointed, the parties will have the right to examine such expert’s
report to the tribunal and to question such expert at an oral hearing.
(c) All proceedings in connection with any arbitration, including its existence,
the content of the proceedings and any decision, will be kept confidential,
except (a) as may be lawfully required in judicial proceedings relating to the
arbitration, including judicial proceedings to enforce an Award, or (b) as may
be otherwise required by applicable laws.
(d) The foregoing agreement to arbitrate will be specifically enforceable. Any
award rendered by the arbitrators will be in writing and will be final and
binding upon the Parties, and may include an award of costs, including
reasonable attorneys’ fees and disbursements. The Parties waive any right to
challenge the arbitration Award. Judgment upon the Award rendered may be entered
by any court having jurisdiction thereof or having jurisdiction over the parties
or their assets.
(e) For purposes only of enforcing the agreement to arbitrate set forth in this
Section 12, enforcing any arbitration Award, obtaining interim relief necessary
to protect the Parties pending arbitration, or resolving claims, if any, found
not to be legally capable of arbitration, each Party irrevocably and
unconditionally submits to the non-jurisdiction of any state or federal court
located in the State of California.
Section 13. Miscellaneous
(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of California without giving effect to any choice or conflict
of law, provision or rule (whether of the State of California or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the state of California.
(b) This Agreement, including exhibits and schedules, constitutes the entire
agreement and understanding between the parties regarding the subject matter
hereof and supersedes all prior discussions, agreements and understandings, oral
or written, of any nature between them related to its subject matter. Except as
and to the extent expressly set forth in this Agreement, neither Party makes or
has made any representation, warranty, covenant, or agreement whatsoever
regarding the subject matter of this Agreement and each Party disclaims all
liability and responsibility for any other representation, warranty, covenant,
agreement, or statement made or information regarding such subject matter
communicated (orally or in writing) by any other Person. No amendment to, or
modification of any of the terms of, this Agreement will be valid unless in
writing and signed by an authorized representative of each Party.

 

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(c) Local.com may assign this Agreement at any time. LaRoss may not assign this
Agreement nor any rights or obligations hereunder without the prior written
consent of the Local.com, which shall not be unreasonably withheld.
Notwithstanding the foregoing, either Party may, without written consent of the
other Party, assign and delegate its rights and obligations hereunder to its
wholly-owned subsidiary or parent corporation. Except as otherwise provided in
this Agreement, this Agreement will be binding upon and inure to the benefit of
the Parties and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, there are no third-party beneficiaries of
this Agreement and this Agreement shall not provide any third party with any
remedy, claim, liability, reimbursement, claim of action, or other right in
excess of those existing without reference to this Agreement.
(d) All notices required or permitted hereunder must be given in writing
addressed to the respective Parties at the respective addresses first set forth
above to the attention of General Counsel in the case of Local.com and to the
attention of Mark Magnozzi at Magnozzi and Kye at 1 Expressway Plaza, Suite 114,
Rosslyn Heights, NY 11577, Facsimile (516) 299-5598 in the case of LaRoss. All
notices shall either be (a) personally delivered; (b) transmitted by postage
prepaid certified mail, return receipt requested; or (c) prepaid express or
overnight deliver service, or (d) transmitted by confirmed facsimile, and shall
be deemed to have been given on the date of receipt of delivered personally, or
two business days after deposit in mail or one business day after transmission
of facsimile, as the case may be. Either Party may change its address for
purposes hereof by written notice to the other in accordance with the provisions
of this Section 13(d).
(e) Except as otherwise provided in this Agreement, no failure or delay of
either Party in exercising any power, right or remedy under this Agreement will
operate as a waiver thereof, nor will any single or partial exercise of any such
right or power, or any power, preclude any other or further exercise thereof or
the exercise of any other right, power, or remedy.
(f) This Agreement is to be interpreted in accordance with the following rules
of construction:

  (i)   All definitions of terms apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter terms.     (ii)   The
words “include”, “includes” and “including” are deemed to be followed by the
phrase “without limitation”. The words “herein”, “hereof”, and “hereunder” and
words of similar import refer to this Agreement (including all Exhibits) in its
entirety and are not limited to any part hereof unless the context shall
otherwise require. The word “or” is not exclusive and means “and/or”.

 

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  (iii)   All references in this Agreement to Sections and Exhibits are,
respectively, references to Sections of and Exhibits attached to, this
Agreement, unless otherwise specified.     (iv)   Any references in this
Agreement to a “day” or number of “days” (without the explicit qualification
“business”) is a references to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a business day, then such action or notices may be
taken or given on the next business day. The Term “business day” means any day
other than a Saturday, a Sunday or a day on which banking institutions in
Irvine, California are required or authorized by law or executive order to be
closed for business.     (v)   Both Parties and their respective legal counsel
have participated, or had the opportunity to participate, in the drafting of
this Agreement, and this Agreement shall be construed simply and according to
its fair meaning and not strictly for or against either Party.     (vi)   The
headings to the Sections of this Agreement are included merely for convenience
of reference and shall not affect the meaning of the language included therein.

(g) Except as otherwise set forth in this Agreement, the provisions of this
Agreement are severable, and if any one or more such provisions are determined
to be invalid, illegal or unenforceable in whole or in part by a court of
competent jurisdiction, the validity, legality and enforceability of any of the
remaining provisions or portions thereof will not in any way be affected thereby
and shall nevertheless be binding between the Parties. Such court of competent
jurisdiction may substitute a suitable and equitable provision of any such
invalid, illegal or unenforceable provision or portion thereof in order to carry
out, so far as may be valid and enforceable, the intent and purpose of the
invalid, illegal or unenforceable provision and, if such court shall fail or
decline to do so, the Parties shall negotiate in good faith in an effort to
agree upon such a suitable and equitable provision.
(h) Neither Party will be liable to the other Party for failure to perform its
obligations hereunder because such performance is prevented by an event of
“Force Majeure”. Force Majeure shall mean an act of God, war (whether declared
or not), riot, embargo, act of government or military authority, strike, labor
dispute, fire, a vendor’s inability to supply necessary equipment, or similar
cause beyond the Party’s control.
(i) This Agreement may be executed in two or more counterparts, each of which
will be deemed an original, but all of which together shall constitute one and
the same instrument. For purposes hereof, a facsimile copy of this Agreement,
including the signature pages hereto shall be deemed to be an original.
Notwithstanding the foregoing,

 

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the Parties shall deliver original execution copies of this Agreement to one
another as soon as practicable following execution thereof.
(j) LaRoss will not solicit, for itself or any third party, the Customers or any
other customers of Local.com that it learns about in the course of performance
of this Agreement (e.g., there shall be no solicitation against the existing
customer file provided to LaRoss for de-duplication of any Lead file it may
create) during the Term and for a period of two (2) years thereafter.
     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives or officers as the day and year first
written above:

                      Local.com Corporation       LaRoss Partners, LLC    
 
                   
By:
  /s/ Richard Szatkowski
 
      By:   /s/ Thomas Rossi
 
   
 
                   
 
  Richard Szatkowski           Thomas Rossi                   Printed Name:    
  Printed Name:    
 
                   
 
  SVP and General Manager           Managing Director                   Title  
    Title    

 

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Exhibit A-1
Products and Prices

                          Acquisition Fee per Product     Product   Retail Sales
Price   Per Customer
1. 2.
  Web hosting
Google Business Card   ***
***   ***
***

Exhibit A-2
Products and Prices

                          Acquisition Fee per Product     Product   Retail Sales
Price   Per Customer
1. 2.
  Web hosting
Google Business Card   ***
***   ****
****

 
*    Once Local.com has the results from at least *** months of settlements with
respect to the sale of Products pursuant to Exhibit A-2, the following
adjustments will be made to the Acquisition Fee per Product Per Customer with
respect to those Products set forth in Exhibit A-2:

  (A)   the Acquisition Fee per Product Per Customer shall be adjusted upward by
*** per each *** decline in the average churn rate over the *** month period
immediately preceding the purchase of a block of Leads pursuant to Section 1(h)
hereof (the “Measurement Period”) compared to the average churn rate over the
*** month period immediately preceding the Measurement Period (using *** as the
initial baseline churn percentage);     (B)   the Acquisition Fee per Product
Per Customer shall be adjusted downward by *** dollars *** per each *** increase
in the average churn rate over the Measurement Period compared to the average
churn rate over the *** month period immediately preceding the Measurement
Period (using *** as the initial baseline churn percentage);     (C)   the
Acquisition Fee per Product Per Customer shall be adjusted upward by *** per
each *** increase in the average settlement percentage rate over the Measurement
Period compared to the average churn rate over the *** month period immediately
preceding the Measurement Period (using *** as the initial baseline settlement
percentage rate); and

 

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Commission

 

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  (D)   the Acquisition Fee per Product Per Customer shall be adjusted downward
by *** per each *** decrease in the average settlement percentage rate over the
Measurement Period compared to the average churn rate over the *** month period
immediately preceding the Measurement Period (using *** as the initial baseline
settlement percentage rate).

Notwithstanding the foregoing, the minimum Acquisition Fee per Product Per
Customer shall be *** and the maximum Acquisition Fee per Product Per Customer
shall be *** for Products listed on Exhibit A-2.
 

***   - Portions of this page have been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission

 

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Exhibit B
Quality Control Criteria
[LaRoss to Subsequently Attach QC Criteria on a product by product basis]

 

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Exhibit C
Account Management Services
LaRoss will provide Account Management Services under this agreement. The
services to be provided include but are not limited to the following:
For all Products and Customers Account Management Services include:

  •   Billing:

  •   Provision and post billing files at clearinghouses     •   QC Billing
files     •   Process billing results and adjust records accordingly     •  
Audit billing settlements and forward receipts

  •   Regulatory and Compliance:

  •   Ensure telemarketing filings are current     •   Respond to all AG, PSC,
PUC FTC and other regulatory agencies letters and requests     •   Respond to
all customer letters

  •   Customer Service:

  •   Handle overflow from clearinghouse of customer inquiry calls     •  
Provide technical support.

For Web Hosting Customers the following additional Account Management Services
are included:

  •   Marketing:

  •   Provide call center     •   Pay call center for new acquisitions     •  
Provide sales scripts     •   Provide data     •   Data wash     •   Send
welcome letter     •   Third Party Verification (TPV)     •   TPV Quality
Control

  •   Fulfillment:

  •   Provide product or service for re-sale     •   Host, maintain and support
product or service

For Google Business Card Customers the following additional Account Management
Services include:

  •   Marketing:

  •   Provide call center     •   Pay call center for new acquisitions     •  
Provide sales scripts     •   Provide data     •   Data wash     •   Send
welcome letter

 

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  •   TPV     •   TPV Quality Control

  •   Fulfillment:

  •   Provide product or service for re-sale     •   host, maintain and support
product or service

 

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Exhibit D
Customer Master File Requirements
LaRoss will provide the following Customer Master File data for each Customer:
[To be subsequently added.]

 

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Exhibit E
Monthly Service Fee Schedule by Product

     
Offshore:
  Listing product
 
  Local.com sold
 
  LaRoss Account Management Fee *** per month
 
   
LiveDeal:
  Listing product
 
  Acquired base
 
  LaRoss Account Management Fee *** per month
 
   
Web Hosting:
  Webhosting product ***
 
  Acquired base
 
  *** Rev Share
 
   
Web Hosting (Turner/ISW):
  Webhosting product
 
  Acquired base
 
  LaRoss Account Management Fee *** per month
 
  LaRoss Fulfillment Fee *** per month
 
   
Web Hosting (Turner 3):
  Webhosting product
 
  Acquired base
 
  LaRoss Account Management Fee *** per month
 
  LaRoss Fulfillment/Cust Serv Fee *** per month
 
  Fulfillment Fee for Turner *** per month
 
   
Web Hosting (new/LR2):
  Webhosting product
 
  Acquired base
 
  LaRoss Account Management Fee *** per month
 
  LaRoss Fulfillment Fee *** per month
 
   
Business card:
  Additions at ***
 
  LaRoss Account Management Fee *** per month
 
  LaRoss Fulfillment Fee *** per month
 
   
Web Hosting:
  Additions at ***
 
  LaRoss Account Management Fee *** per month
 
  LaRoss Fulfillment Fee *** per month

Unless subsequently agreed by the Parties in writing:
All LaRoss Fulfillment Fee’s for the Business Card product will be *** per month
All LaRoss Fulfillment Fee’s for the non-Rev Share Web Hosting product will be
*** per month
All LaRoss Account Management Fee’s for non-Rev Share products will be *** per
month.
 

***   - Portions of this page have been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission

 

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Exhibit F
Licensed Marks
(LOCAL.COM LOGO) [a56770a5677000.gif]
(LOCAL.COM LOGO) [a56770a5677001.gif]
(LOCAL.COM LOGO) [a56770a5677001.gif]
(LOCAL.COM LOGO) [a56770a5677001.gif]
(LOCAL.COM LOGO) [a56770a5677000.gif]