Document:

exv10w7

 

Exhibit 10.7

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

AGREEMENT FOR THE SUPPLY OF MODERATION SERVICES

     This agreement (“Agreement”) is made as of 31 January 2005 (the “Effective Date”) by
and between LiveWorld, Inc. (“LIVEWORLD”), a Delaware corporation, with principal offices at 170
Knowles Drive, Suite 211, Los Gatos, California 95070 and AOL (UK) Ltd (“AOL”), a limited company
registered in England under company number 03462696 with its registered office address at 80
Hammersmith Road, London, W14 8UD. Each of LIVEWORLD and AOL is sometimes referred to herein as a
“Party”.

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

SECTION 1. DEFINITIONS. Unless otherwise specified, capitalized terms used in this
Agreement shall have the meanings attributed to them in Appendix A.

SECTION 2. SCOPE OF MODERATION SERVICES.

     2.1. Moderation Services. LIVEWORLD shall perform the moderation services
relating to AOL Kids and Teens message boards and chat rooms of the AOL UK Service as set out in
Appendix B (collectively “Moderation Services”) in accordance with AOL’s instructions and the terms
and conditions of this Agreement, including without limitation, Appendix B. Additional
services may be requested by AOL during the term of this Agreement (collectively “Additional
Moderation Services”). Any such requests for Additional Moderation Services shall be set forth in
writing and shall be only effective upon the Parties entering into a change order (each a “Change
Order”) amending the scope of services provided by LIVEWORLD and duly signed by the authorised
representatives of both Parties. For the purposes of this Agreement, the Moderation Services and
any Additional Moderation Services shall be collectively referred to as “Services”.

     2.2. Change Orders. Each Change Order, when executed by authorised representatives
of both Parties and attached to this Agreement, shall incorporate, without further reference, the
terms and conditions set forth herein. Each Change Order shall set forth such additional fees as
mutually agreed to reflect the changes to the moderation requirements requested by AOL.

     2.3. Performance of Services. AOL shall require LIVEWORLD’s personnel to observe at
all times the security and safety policies of AOL. LIVEWORLD, in conjunction with its personnel,
will control and direct the method, details and means of performing the Services. LIVEWORLD shall
also furnish all equipment and materials used to perform the Services, including but not limited to
telephone lines, personal computers and modems. AOL shall use commercially reasonable efforts to
make available such information and assistance as the Parties deem necessary to enable LIVEWORLD to
perform the Services hereunder. AOL shall provide or reimburse LIVEWORLD for each secure ID dongle
required for LIVEWORLD to implement any AOL required secure access AOL accounts.

     2.4 Compliance with Applicable Law. LIVEWORLD shall ensure that LIVEWORLD and its
Assistants (as defined in section 3 below) shall comply with all applicable laws and regulations
and AOL’s then-current Conditions of Service (“COS”) in performing the Services, as well as any
other applicable AOL policies as may be notified to LIVEWORLD from time to time.

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

SECTION 3. PERSONNEL. The personnel assigned by LIVEWORLD to perform the
Services will be qualified to perform the assigned duties and available to perform the tasks
assigned them in a timely and responsive manner. In addition, any personnel performing Services
hereunder shall comply with any and all specific requirements set forth in this Agreement and any
subsequent Change Order(s). From time to time, LIVEWORLD may, subject to the terms and conditions
set forth in this Agreement, engage employees, independent contractors, consultants, volunteer
assistants or other persons or entities (collectively, “ssistants”) to aid LIVEWORLD in performing
LIVEWORLD’s duties under this Agreement. AOL has no relationship with or to such Assistants and
such Assistants are not employees, agents, consultants, representatives, assistants or independent
contractors of AOL. LIVEWORLD shall be fully and solely responsible for the supervision and
payment of such Assistants and for all work performed by such Assistants and any third party
subcontractors approved by AOL as provided in this Agreement.

SECTION 4. FEES; REIMBURSEMENT OF EXPENSES.

     4.1 Appendix C and any subsequent Change Order(s) shall set forth the fees due for the
Services to be provided hereunder and LIVEWORLD agrees to invoice AOL in accordance with the basis
as set forth in Appendix C and any applicable Change Order(s).

     4.2 AOL shall pay LIVEWORLD for reasonable, actual out-of-pocket expenses incurred by
LIVEWORLD in its performance of the Services provided that (i) AOL has given its prior written
consent for any such expenses; (ii) the expenses have been detailed on a form acceptable to AOL and
submitted to AOL for review and approval; and (iii) at AOL’s request, LIVEWORLD will provide copies
of supporting documentation as may be reasonably appropriate for AOL or its accountants to confirm
the nature and amount of any such expenses.

SECTION 5. ACCOUNTS; SOFTWARE TOOLS; USE OF AOL NETWORK.

     5.1. Accounts. AOL will provide LIVEWORLD with the AOL accounts for the AOL UK
Service as needed and for the exclusive purpose of enabling LIVEWORLD and its Assistants to perform
LIVEWORLD’s duties under this Agreement. The account(s) shall be of the type determined by AOL to
be necessary for LIVEWORLD to perform its duties hereunder. LIVEWORLD shall be responsible for any
premium charges, transaction charges, communication surcharges or other charges incurred by any
such account(s), other than AOL’s standard monthly subscription charge. LIVEWORLD shall be
responsible for the actions taken under or through its account(s), which actions shall be subject
to AOL’s then-applicable COS. Upon termination of this Agreement, the account(s), and any
associated usage
credits and related screen names or similar rights, shall automatically terminate. AOL shall have
no liability for loss of data or content related to termination of any account.

     5.2. Software Tools. AOL shall determine in its sole discretion, which of its
proprietary software tools (each a “Tool”) shall be made available to LIVEWORLD in order for
LIVEWORLD to perform its duties hereunder. LIVEWORLD shall be granted a non exclusive licence to
use any such Tool, which licence shall be subject to: (i) LIVEWORLD’s compliance with all rules and
regulations relating to use of the Tools as published from time to time by AOL, (ii) AOL’s right to
withdraw or

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	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

modify such licence at any time, and (iii) LIVEWORLD’s express recognition that AOL provides all
Tools on an “as is” basis, without warranties of any kind.

     5.3. Use of AOL Network. In addition to any specific requirements set forth in
Appendix B or any Change Order(s), LIVEWORLD shall not use any AOL Member information except as
specifically required to perform its obligations under this Agreement. Any and all AOL Member
information shall be considered Confidential Information under this Agreement.

SECTION 6. PUBLICITY; STATEMENTS TO THIRD PARTIES; AOL TRADEMARKS.

     6.1. Publicity. LIVEWORLD agrees that it will not, without the prior written consent
of AOL, use in advertising, publicity, or otherwise, the name of AOL, or refer to the existence of
this Agreement in press releases, advertising or materials distributed to prospective customers
Provided however that LIVEWORLD may disclose AOL as a client for the purpose of meeting LIVEWORLD’S
legal obligations as a public company to disclose its clients and material events. Unless
otherwise approved by AOL, this disclosure will only take the form of “AOL (UK) Limited “ being
included in a list of LIVEWORLD clients provided in SEC filings and//or boilerplates of press
releases.

     6.2. Statements to Third Parties and Non-solicitation. (a) During the term of the
Agreement, LIVEWORLD shall not make, publish or otherwise communicate, or cause to be made,
published or otherwise communicated, any deleterious remarks whatsoever to any third parties
concerning AOL or its affiliates, directors, officers, employees or agents, including without
limitation AOL’s business projects, business capabilities, performance of duties and services or
financial position. (b) Each party hereto agrees that throughout the term of this Agreement, and
any extensions or renewals of this Agreement, and for a period of twelve (12) months after the
latest of expiration or termination of this Agreement or any extensions or renewals thereof,
neither party shall solicit or attempt to induce any employees of the other party to work for it or
any of its affiliates, in any capacity.

     6.3. AOL Trademarks. LIVEWORLD shall have no right to use any AOL trade name,
trademark or service mark without AOL’s prior written consent.

SECTION 7. PROPRIETARY RIGHTS.

     7.1 Unless otherwise specified in Appendix B or any Change Order(s), all Work Product is the
property of AOL and all title and interest therein shall vest in AOL and shall be deemed to be made
in the course of the Services rendered hereunder. To the extent that title to any Work Product may
not, by operation of law, vest in AOL, LIVEWORLD hereby irrevocably assigns to AOL all right, title
and interest in and to any Work Product. All Work Product shall belong exclusively to AOL, and AOL
shall have the right to obtain and to hold in its own name, copyrights, registrations, patents, or
such other
protection as may be appropriate to the subject matter, and any extensions and renewals thereof.
LIVEWORLD agrees to give AOL and any person designated by AOL such reasonable assistance, at AOL’s
request and expense, as is required to perfect, secure and protect AOL’s intellectual property and
other rights set forth in this Section 7, including but not limited to executing all documents
necessary to perfect, secure and protect such rights.

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	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

SECTION 8. REPRESENTATIONS AND WARRANTIES.

     8.1. LIVEWORLD’s Representations and Warranties.

     (a) LIVEWORLD represents and warrants that it has all requisite power and authority to
execute and deliver this Agreement and to perform the Services hereunder and that the
execution and delivery of this Agreement will not cause a default under an agreement with
any third party. This Agreement constitutes a valid and binding obligation of LIVEWORLD and
is enforceable against LIVEWORLD in accordance with its terms and conditions.

     (b) LIVEWORLD represents and warrants that the Services shall be performed in good and
work-person like manner and with professional diligence and skill by qualified and competent
professional, in accordance with the highest industry standards.

     (c) LIVEWORLD further represents and warrants to AOL that (i) LIVEWORLD is not under
any pre-existing obligation inconsistent with the provisions of this Agreement; and (ii) the
Services to be performed under this Agreement and the results thereof, including without
limitation Work Product, will be the original work of LIVEWORLD, free and clear of any
claims or encumbrances of any kind, and will not infringe any patent or copyright or other
proprietary right or violate any trade secret right of any person or entity; and (iii) any
Work Product provided in electronic form will not include any computer instructions whose
purpose is to disrupt or damage or interfere with the use of computer and telecommunications
facilities or to perform functions which are not an appropriate part of the functionality of
the Deliverables and whose intended result is to disrupt processing.

     8.2. AOL’s Representations and Warranties. AOL represents and warrants that it has
all requisite power and authority to execute and deliver this Agreement and that the execution and
delivery of this Agreement will not cause a default under an agreement with any third party. This
Agreement constitutes a valid and binding obligation of AOL and is enforceable against AOL in
accordance with its terms and conditions.

SECTION 9. INDEMNIFICATION.

     9.1 Indemnification by LIVEWORLD. LIVEWORLD shall indemnify, defend and hold harmless
AOL and its officers, directors, employees, affiliates, distributors, franchisees, and agents
against and from any and all loss and third party claims, demands, liabilities, costs or expenses,
including without limitation reasonable attorneys’ fees and expenses (collectively, “Liabilities”)
resulting from (a) actual or alleged infringement by any Work Product of any copyright, patent,
trade secret, trademark or other proprietary rights of any third party; (b) the payment of
compensation or salary asserted by any Assistant of LIVEWORLD; (c) any determination that LIVEWORLD
or its Assistants is/are not an independent contractor or litigation determining a change of
LIVEWORLD’s independent contractor
status, including liability for taxes and other penalties assessed upon AOL because of LIVEWORLD’s
change or lack of independent contractor status.; (d) LIVEWORLD’s material breach of any
obligation, duty, representation or warranty contained in this Agreement or any Change Order(s);
and (e) the negligence of LIVEWORLD and/or its Assistants.

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	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

Indemnification by AOL. AOL shall defend, indemnify and hold harmless LIVEWORLD, its
officers, directors, agents, affiliates, distributors, franchisees and employees from any and all
Liabilities resulting from actual or alleged infringement of any patent, copyright or other
property right (including, but not limited to misappropriation of trade secrets) based on any
proprietary materials with respect to which AOL has a copyright, patent or trademark right
furnished by AOL to LIVEWORLD specifically for inclusion in the Work Product or materials
(excluding any claim for infringement arising out of the combination of such proprietary AOL
materials with LIVEWORLD’S materials, software, programs or services or otherwise not relating
exclusively to such AOL provided materials).

     9.2 Indemnification Procedures. In connection with any claim that is subject to
indemnification under Section 9.1, AOL reserves the right, at its own cost, to assume the exclusive
defence and control of any matter otherwise subject to indemnification by LIVEWORLD hereunder.

     9.3 Additional Procedure in Connection with Infringement Claims. If LIVEWORLD
determines, in its sole discretion, that a claim of infringement is likely or if infringement is
held to exist, or if injunctive relief is granted to a claimant, LIVEWORLD may, at its own expense
and at its option, either (i) supply to AOL revisions to the infringing material so as to make it
no infringing while retaining like capability or substitute other no infringing material of like
capability, or (ii) procure for AOL, at no additional expense to AOL, the right to continue using,
reproducing, adapting, distributing, performing and displaying the infringing material to the
extent permitted by this Agreement, or (iii) if LIVEWORLD is not reasonably able to supply
revisions or otherwise secure AOL the right to continue using, reproducing, adapting, distributing,
performing and displaying infringing material, terminate the licence to the applicable infringing
material without liability except that in connection with such termination LIVEWORLD shall refund
to AOL any applicable fees paid hereunder for such infringing material.

SECTION 10. TERM AND TERMINATION.

     10.1. Term. The term of this Agreement shall commence on the Effective Date and shall
continue for a period of [***] months from the Launch Date (the “Initial Term”).
Thereafter this Agreement shall renew automatically for subsequent [***] month periods
until terminated in accordance with the terms of this Agreement unless either Party provides the
other with a written notice of non-renewal not less than [***] days prior to the end of
the Initial Term or subsequent terms (as appropriate).

     10.2. Termination.

	(a)	 	Either Party may terminate this Agreement immediately if one or more of the following events
occur: (i) the other Party materially breaches this Agreement and fails to cure such breach
within [***] days of written notice to the breaching Party of such breach, including
without limitation, failure to make any required payments hereunder; (ii) the other Party
becomes insolvent, files a petition in bankruptcy, or makes an assignment for the benefit of
its creditors.
	 
	(b)	 	Notwithstanding anything to the contrary herein or in any Schedule, after the expiry of the
first [***] months of the Initial Term, either party may terminate this Agreement or
any Change Order(s) for any reason by giving LIVEWORLD [***] days’ prior written
notice.

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	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

     10.3. Effect of Termination. Upon termination of this Agreement for any reason,
LIVEWORLD shall promptly deliver to AOL all work-in-progress, including without limitation any Work
Product, and all tangible embodiments of Confidential Information (as defined in clause 12.10
below). Within [***] days of termination, LIVEWORLD will submit to AOL an itemized
invoice for any unpaid fees or expenses properly payable by AOL in accordance with the Agreement.
AOL, upon payment of amounts so invoiced, shall thereafter have no further liability or obligation
to LIVEWORLD whatsoever for any further fees or expenses arising under the Agreement. In
preparation for termination of this Agreement, LIVEWORLD shall, at AOL’s request, (i) provide
commercially reasonable assistance, free of charge, to ensure a smooth and timely transition of
AOL’s moderation requirements for AOL’s Kids and Teens to AOL or another provider of moderation
services; and (ii) continue to provide the Services at the charges then in effect up to the date of
termination of this Agreement.

SECTION 11. LIMITATION OF LIABLITY. NEITHER PARTY OR ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, OR PARTNERS SHALL BE LIABLE TO THE OTHER, OR ANY OTHER PARTY, FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING IN ANY MANNER FROM THE ACTIVITIES
CONTEMPLATED BY THIS AGREEMENT, WHETHER UNDER CONTRACT, TORT, OR ANY OTHER CAUSE OF ACTION, EVEN IF
THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS
OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.

SECTION 12. MISCELLANEOUS PROVISIONS.

     12.1 Notices. All notices, requests and other communications called for by this Agreement
shall be given in writing and will be deemed to have been delivered and given for all purposes (i)
on the delivery date if made by confirmed facsimile, personal delivery to the Party to whom the
same is directed; (ii) one (1) business day after deposit with a commercial overnight carrier, with
written verification of receipt; or (iii) five (5) business days after the mailing date, whether or
not actually received, if sent by U.S. mail, return receipt requested, postage and charges prepaid,
or any other means of rapid mail deliver for which a receipt is available. In the case of AOL,
such notices shall be provided to the Senior Vice President for Business Affairs and to the General
Counsel (fax no. +44 (0) 20 7348 8663), at the address set forth in the first paragraph of this
Agreement. In the case of LIVEWORLD, such notices shall be provided to Peter Friedman, CEO,
LiveWorld, Inc, 170 Knowles Drive, Suite 211, Los Gatos, California 95032, Fax: (1 (408) 871-5300)
or to such other contact points as either Party shall specify by written notice to the other.

     12.2 Independent Contractors. Nothing in this Agreement shall be construed to
establish any kind of employee-employer, franchise, joint venture, agency, or partnership
relationship between the Parties. Each Party will bear sole responsibility for payment of
compensation to its employees and independent contractors. Each Party shall pay and report, for
each of its employees, all applicable income tax withholding, social security taxes, and
unemployment insurance. Each Party shall bear sole
responsibility for the payment of any benefits to any of its employees. Except as otherwise
provided herein, each Party shall bear sole responsibility and liability for its employees.

     12.3. Binding Effect and Assignment. LIVEWORLD shall not assign this Agreement or any
right, interest or benefit under this Agreement without the prior written consent of AOL.
Assumption of the Agreement by any successor to LIVEWORLD (including, without limitation, by way of
merger,

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AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

consolidation or sale of all or substantially all of LIVEWORLD’s stock or assets) shall be
subject to AOL’s prior written approval. Subject to the foregoing, this Agreement will bind and
inure to the benefit of each Party’s permitted successors and assigns. Any attempt to assign this
Agreement other than in accordance with this provision shall be null and void.

     12.4. Resolution of Disputes. Each Party will act in good faith to resolve disputes
and will promptly notify the other Party in the event of any potential claim against such Party.

     12.5. Governing Law; Jurisdiction. This Agreement will be governed by and construed
in accordance with the laws of England and Wales. Each Party irrevocably consents to the exclusive
jurisdiction of the courts of England and Wales in connection with any action to enforce the
provisions of this Agreement, to recover damages or other relief for breach or default under this
Agreement, or otherwise arising under or by reason of this Agreement.

     12.6. Severability. If any provision of this Agreement is found to be invalid or
unenforceable, that provision will be enforced to the maximum extent permissible and the other
provisions of this Agreement will remain in force.

     12.7. Waiver. No waiver, modification or supplement to the terms of this Agreement,
the Moderation Requirements or a Services Supplement or any Change Order shall have any force or
effect unless in writing and signed by duly authorized representatives of each Party (appropriate
email exchanges will be acceptable). Failure or delay of either Party to this Agreement to
enforce, at any time, any of the provisions hereof, or to require at any time performance of any of
the provisions hereof or of an applicable Change Order, shall in no way be construed to be a wavier
of any provision of this Agreement, the Moderation Requirements or a Services Supplement or a
Change Order.

     12.8. Entire Agreement. This Agreement, its Appendices and any duly authorized
Services Supplements or Change Orders are the complete and exclusive agreement between the Parties
with respect to the subject matter hereto, superseding and replacing any and all prior agreements,
communications, and understandings, both written and oral, regarding such subject matter.

     12.9. Counterparts. This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute a single instrument. Execution and delivery of this
Agreement may be evidenced by facsimile transmission.

     12.10 Confidentiality

     (a) Definition of Confidential Information. The term “Confidential Information” means
any information in any form relating to or disclosed in the course of the Agreement, which is or
should be reasonably understood to be confidential or proprietary to the disclosing Party (the
“Disclosing Party”), including, but not limited to, the material terms of this Agreement,
information about AOL Members,
technical processes and formulas, source codes, product designs, sales, cost and other unpublished
financial information, product and business plans, projections, and marketing data. A Receiving
Party may use for any purpose or disclose any material or information that it can demonstrate (i)
is or becomes publicly known through no fault of the Receiving Party; (ii) is already lawfully
known to or developed independently by the Receiving Party; or (iii) is rightfully obtained by the
Receiving Party from a third

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	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

party not obligated to preserve its confidentiality who did not
receive the material or information directly or indirectly from the Disclosing Party.

     (b) Use of Confidential Information. A Receiving Party shall not use the Disclosing
Party’s Confidential Information for any purpose other than in connection with this Agreement and
shall not disclose Confidential Information to any person other than its employees and its
independent contractors subject to a non disclosure obligation comparable in scope to this
subsection 12.10, which employees and independent contractors have a need to know such Confidential
Information. In addition, a Receiving Party shall take reasonable precautions to prevent the
unauthorized use or disclosure of Confidential Information, which precautions are no less rigorous
than the precautions the Receiving Party takes to prevent the unauthorized use or disclosure of
similar information of its own. When a Receiving Party no longer needs Confidential Information
for use in connection with this Agreement or upon the Disclosing Party’s request, the Receiving
Party shall return to the Disclosing Party or destroy tangible embodiments of Confidential
Information.

     (c) Disclosure Conditions. A Receiving Party may disclose Confidential Information
to the extent required by a court or other governmental authority, provided that (a) the Receiving
Party gives the Disclosing Party notice of the disclosure as soon as possible, (b) the Receiving
Party uses reasonable efforts to resist disclosing the Confidential Information, (c) the Receiving
Party cooperates with the Disclosing Party on request to obtain a protective order or otherwise
limit the disclosure.

     12.11 Survival. The following sections shall survive termination of this Agreement:
Section 9 (Indemnification); Section 11 (Limitation of Liability); and this Section 12.

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly
authorized representatives as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	AOL (UK) LIMITED	 	 	 	LIVEWORLD, INC.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 

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	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX A

DEFINITIONS

     “AOL Member” means an authorized user of the AOL Network, including any sub-accounts
using the AOL Network under an authorized master account.

     “Assistant” shall have the meaning set forth in Section 3 of this Agreement.

     “AOL Network” means (i) the AOL UK Service and (ii) any other product or service
owned, operated, distributed or authorized to be distributed by or through AOL or its affiliates
worldwide (which may include, without limitation, Internet sites promoting AOL products and
services and any “offline” information browsing products of AOL or its affiliates).

     “AOL UK Service” means the member only standard UK version of the “AOL” branded
service marketed by AOL and provided by AOL affiliates.

“Deliverables” means any deliverable work product and documentation produced by LIVEWORLD
for AOL hereunder.

     “Launch Date” means [***] or such other date as mutually agreed to by the Parties and
set out in writing.

     “Term” shall mean the period beginning on the Effective Date and ending upon the
expiration or earlier termination of this Agreement.

     “Work Product” means all work, services and materials performed or created under this
Agreement including Appendix B and any Change Order(s), including but not limited to (i) names,
characters, protectible organizational structures, “look and feel”, other “brand” components, and
(ii) all materials, writings, products, deliverables developed or prepared for AOL by LIVEWORLD or
provided or delivered to AOL by LIVEWORLD or its Assistants pursuant to this Agreement including
all moderation manuals and supporting documentation relating to AOL Kids and AOL Teens user groups.

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AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX B

MODERATION, VETTING AND TRAINING REQUIREMENTS

[***]

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	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX C

Fees, Invoicing & Payment

Subject to LIVEWORLD’S compliance with its obligations under this Agreement, AOL agrees to pay
LIVEWORLD the fees set out below (collectively the “Fees”):

Fees

	 	1)	 	Monthly Management Fee

AOL agrees to pay LIVEWORLD a monthly management fee amounting to US[***] (the “Monthly
Management Fee”);

	 	2)	 	Minimum Monthly Moderation Fee

AOL agrees to pay LIVEWORLD a minimum monthly moderation fee of US $[***]/month (the
“Minimum Monthly Moderation Fee”) which shall include LIVEWORLD’s provision of up to [***]
hours/month of moderation. For the avoidance of doubt, if AOL does not schedule and
therefore LIVEWORLD does not deliver a full [***] hours/month, then AOL shall still pay
LIVEWORLD the Minimum Monthly Fee of US $[***].

	 	3)	 	Overage Rate

AOL agrees to pay LIVEWORLD an overage rate (where applicable) amounting to US $[***] per
hour (“Scheduled Overage Hours Rate”) for additional moderation hours above the base [***]
hours /month (collectively “Scheduled Overage Hours”). AOL acknowledges that additional
moderation hours above the base [***] hours /month shall only qualify as Scheduled Overage
Hours where AOL has provided LIVEWORLD with an updated and committed schedule of required
moderation hours with not less than [***] days lead time.

Where AOL requests additional moderation hours above the base [***] hours /month but
such request for additional hours does not qualify as Scheduled Overage Hours (collectively
“Unscheduled Overage Hours”), AOL agrees to pay LIVEWORLD an overage rate (where applicable)
amounting to US$[***] per hour (“Unscheduled Overage Hours Rate”). The Parties acknowledge
that the Unscheduled Overage Hours Rate is payable for hours that exceed the scheduled
minimum and Scheduled Overage Hours in any month as the Parties acknowledge that unscheduled
hours involve more management work and potential overtime labour charges.

Invoicing

LIVEWORLD agrees that all invoices to be sent to AOL are due on the first day of the month for the
coming month in respect of the Services to be performed by LIVEWORLD. On each month’s invoice
LIVEWORLD will provide a true up charge or credit as appropriate for any over or under prior
billing for the prior month’s Services. If an invoice, or any part thereof, is in bona fide
dispute, AOL may only withhold payment of the amount in dispute until such time as the dispute is
resolved provided that AOL shall settle all other amounts which are not the subject of a bona fide
dispute in accordance with the terms of this Agreement.

- 11 -

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

Payment

Subject to AOL’s rights set out above in “Invoicing” section, invoices shall be settled by AOL
within [***] days of receipt of each applicable valid and correctly submitted invoice via
electronic transfer of funds (with LIVEWORLD to provide AOL with all necessary bank account
details).

Fee Increases

For the second year of this Agreement (beginning [***]) and third year of this
Agreement (beginning [***]), LIVEWORLD’s fees shall be increased at the maximum rate of [***] from
the previous year’s fees.

- 12 -exv10w7w1

 

Exhibit 10.7.1

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

THIS CHANGE ORDER No. 1 is made on 28 September 2006

BETWEEN

	(1)	 	AOL (UK) Limited, a company incorporated in England (registered number 03462696) with its
registered office at 80 Hammersmith Road, London W14 8UD (“AOL”); and
	 
	(2)	 	Live World, Inc. a Delaware corporation, with principle offices at 170 Knowles Drive, Suite
211, Los Gatos, California 95070 (“LIVEWORLD”) (each a “Party” and collectively the
“Parties”).

WHEREAS

AOL and LIVEWORLD entered into an agreement dated 31 January 2005 relating to the provision by
LIVEWORLD of certain moderation services to AOL (the “Original Agreement”). Both parties wish to
modify the Original Agreement, as described below in this Change Order No. 1, pursuant to Clause
2.1 of the Original Agreement.

THE PARTIES AGREE as follows:

	1.	 	General

	 	(a)	 	This Change Order No. 1 shall be deemed to have come into effect on 7 August 2006.
	 
	 	(b)	 	Save as expressly modified by this Change Order No. 1, the Original Agreement shall
remain in full force and effect. References in the Original Agreement to “this Agreement”
shall be deemed to refer to that agreement as amended by this Change Order No. 1, unless
the context otherwise requires.
	 
	 	(c)	 	Defined terms in the Agreement shall have the same meaning in this Change Order No.
1, unless the context otherwise requires.

	2.	 	Amendments 

	 	(a)	 	Appendix A to the Original Agreement (Definitions) shall be deleted in its entirety
and replaced with Appendix A1 as set out in this Change Order No. 1.

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	1

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

	 	(b)	 	References in the Original Agreement to “AOL Member” (including but not limited to
references in Clauses 5.3 and 12.10(a)) shall be amended accordingly to read “AOL User” as
defined in Appendix A1 to this Change Order No. 1.
	 
	 	(c)	 	The Parties further agree that, pursuant to Clause 2.1. of the Original Agreement,
LIVEWORLD shall provide the Additional Moderation Services relating to all AOL message
boards and chat rooms on the AOL Network as further set out in Appendix B1 to this
Change Order No. 1 .
	 
	 	(d)	 	Appendix B to the Original Agreement (Moderation, Vetting and Training Requirements)
shall be deleted and replaced with a new Appendix B1 to this Change Order No. 1.
	 
	 	(e)	 	Appendix C to the Original Agreement (Fees, Invoicing & Payment) shall be deleted and
replaced, pursuant to Clauses 2.2 and 4.1 of the Original Agreement, with a new Appendix
C1 as set out in Change Order No. 1.
	 
	 	(f)	 	The Parties acknowledge and agree that the Fees for Services relating to
moderation of AOL UK Kids & Young Teens Regular Chat Rooms, as set out in Part 1 of
Appendix C1 to this Change Order, shall be deemed to have been in effect as of 1 February
2006.
	 
	 	(g)	 	Clause 10.2 (b) of the Original Agreement shall be deleted in its entirety and
replaced with the following Clause 10.2(b) wording:

	 	 	 	“Subject to Clause 10.2 (c), either party may service written notice to the other
to terminate the moderation services of (a) the AOL Kids and Teens message boards
and chat rooms and/or (b) the Additional Moderation Services on 120 days notice in
writing to the other. In the event that both the moderation of the AOL Kids and
Teens message boards and chat rooms and the Additional Moderation Services are
terminated in accordance with this Clause 10.2(b) then the Original Agreement shall
automatically terminate.”

	 	(h)	 	A new Clause 10.2 (c) shall be added to the Original Agreement with the following
Clause 10.2 (c) wording:

	 	 	 	“Notice for the termination of Additional Moderation Services pursuant to
clause 10.2 (b) above shall not effect a termination of the Additional Moderation
Services prior to 7 August 2007.”

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	2

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

	 	(i)	 	Clause 12.3 of the Original Agreement shall be deleted in its entirety and replaced
with the following Clause 12.3 wording:

	 	 	 	“Binding Effect and Assignment. LIVEWORLD shall not assign this
Agreement or any right, interest, benefit or obligation under this Agreement
without the prior written consent of AOL. Assumption of the Agreement by any
successor to LIVEWORLD (including, without limitation, by way of merger,
consolidation or sale of all or substantially all of LIVEWORLD’s stock or assets)
shall be subject to AOL’s prior written approval. For the avoidance of doubt AOL
may assign the Original Agreement (as modified by this Change Order No.1) or any
right, interest, benefit or obligation, under it to any AOL Group company or AOL
Affiliate or to any successor of AOL by way of merger, consolidation or the
acquisition of all or substantially all of the business and assets of AOL relating
to the Agreement. Provided that where AOL wishes to assign the Original Agreement
(as amended) to any successor of AOL which is not within the AOL Group, by way of
merger, consolidation or the acquisition of all or substantially all of the
business and assets of AOL such assignment shall require LIVEWORLD’S prior
approval, such approval not to be unreasonably withheld or delayed. Subject to the
foregoing, this Agreement will bind and inure to the benefit of each Party’s
permitted successors and assignees. Any attempt to assign this Agreement other than
in accordance with this provision shall be null and void.”

Law and jurisdiction

This Change Order No. 1 shall be governed by and construed in accordance with English law and both
parties submit to the non-exclusive jurisdiction of the English courts for all purposes connected
with it.

Executed by the parties:

For and on behalf of AOL (UK) Limited

	 	 	 	 	 	 	 	 	 
	Signed:

	 	 	 	Printed:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 	 	Dated:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

For and on behalf of Live World Inc

	 	 	 	 	 	 	 	 	 
	Signed:

	 	 	 	Printed:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 	 	Dated:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	3

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

APPENDIX A1

DEFINITIONS

     “AOL Affiliate” means any person or entity which provides, facilitates, manages
or administers access to or markets or promotes the AOL Network including without limitation AOL
Europe Services Sarl, AOL LLC, CompuServe Interactive Services Inc., CompuServe Interactive
Services Limited and Netscape Communications Corporation.”

     “AOL Group” means AOL (or any holding company of it) and each subsidiary (both
“holding company” and “subsidiary” as defined in the Companies Act 1985 as amended by the Companies
Act 1989) from time to time of AOL (or any holding company of it) and any company of which AOL or
any of its subsidiaries owns up to fifty percent of the assets or shares from time to time,
including without limitation AOL LLC., CompuServe Interactive Services Inc., CompuServe Interactive
Services Limited and Netscape Communications Corporation.

     “AOL Network” means (i) The AOL UK Service; (ii) AOL Website and (iii) any other
product, service or property owned, operated, distributed or authorized to be distributed by or
through AOL or any other AOL Group member worldwide (which may include, without limitation,
internet sites promoting AOL products and services and any offline information browsing products of
AOL or AOL Affiliates or any other AOL Group member worldwide.

     “AOL Website” means the “AOL” branded Internet based interactive site marketed and
distributed by AOL and/or AOL Group members under the “AOL.co.uk” brand or any successor or related
URL’s thereof. 

     “AOL UK Service” means the member only standard UK version of the “AOL” branded
service marketed by AOL and provided by AOL Affiliates.

     “AOL User” means any user of the AOL Network, including without limitation users of
the AOL UK Service (including any sub-accounts under an authorised master account) and the AOL
Website.

     “Assistant” shall have the meaning set forth in Section 3 of this Agreement.

     “Deliverables” means any deliverable work product and documentation produced by
LIVEWORLD for AOL hereunder.

     “Launch Date” means [***] or such other date as mutually agreed to by the Parties and
set out in writing.

     “Term” shall mean the period beginning on the Effective Date and ending upon the
expiration or earlier termination of this Agreement.

     “Work Product” means all work, services and materials performed or created under this
Agreement including Appendix B1 and any Change Order(s), including but not limited to

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	4

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

(i) names, characters, protectible organizational structures, “look and feel”, other “brand”
components, and (ii) all materials, writings, products, deliverables developed or prepared for AOL
by LIVEWORLD or provided or delivered to AOL by LIVEWORLD or its Assistants pursuant to this
Agreement including all relevant moderation manuals and supporting documentation.

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	5

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

APPENDIX B1

MODERATION, VETTING AND TRAINING REQUIREMENTS

[***]

Part B: Moderation — Additional Moderation Services 

LIVEWORLD shall also provide the Services in respect English language chat rooms and message
boards to on the AOL Website and AOL UK Services, in addition to and independent of the Services
which shall be provided in respect of the Kids & Teens Message Boards and Chat Rooms as set out in
Appendix B1, Part A to this Agreement (respectively the “AOL Chat Rooms” and “AOL Message Boards”)
(collectively the “Additional Moderation Services”) as AOL shall notify to LIVEWORLD in written
schedules on the Effective Date and from time to time (respectively the “AOL Chat Schedule” and
“AOL Message Schedule”).

	 	•	 	LIVEWORLD shall assign moderators and moderate AOL Chat Rooms and AOL Message Boards in
accordance with the AOL Chat Schedule and AOL Message Schedule (or as otherwise agreed
between the Parties in writing) delivered to LIVEWORLD by AOL in writing from time to
time. If the AOL Chat Rooms and / or the Message Rooms cannot be opened and/or moderated
according to the relevant schedule in force at that time LIVEWORLD must notify AOL as soon
as practicable and in any event with a minimum of [***]-hours prior notice.
	 
	 	•	 	The AOL Chat Schedule and AOL Message Schedule shall set out the AOL Chat Rooms and AOL
Message Boards (respectively) which shall be moderated and how many moderators must be
assigned and at which times during the day, as applicable. If AOL change the AOL Chat
Schedule and/or the AOL Message Schedule, AOL shall give LIVEWORLD [***] days notice of
such change;
	 
	 	•	 	[***]

Part C: LIVEWORLD shall perform the Services pursuant to this Agreement and as set out in Part
A and Part B above in accordance with the following obligations:

	 	•	 	[***]
	 
	 	•	 	LIVEWORLD shall procure that Moderators will abide by AOL’s Conditions of Service (COS)
and have a clean COS record. The client will immediately replace moderators if they
receive a COS warning.
	 
	 	•	 	LIVEWORLD shall procure that moderators will not enter any other chat rooms or post on
any other message boards within the AOL Network while in their kids and teens moderator
name.

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	6

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

	 	•	 	LIVEWORLD shall reply to any communication from AOL within [***] working days unless a
shorter period of response is specifically demanded by AOL.
	 
	 	•	 	LIVEWORLD shall procure that moderators will not engage in any private IM, email or
other conversations with any AOL User they believe to be kids or teens.
	 
	 	•	 	LIVEWORLD shall procure that moderators shall not engage in any one-to-one
communication with AOL User except where noted in AOL’s policies and training material.
	 
	 	•	 	LIVEWORLD will adhere to AOL’s policies and training guidelines.

(c) Decreases in moderation hours 

AOL will
provide [***] days advance notice for any decreases in moderation hours. If the
schedule is decreased with less than [***] days notice, then LIVEWORLD will
invoice for the hours as if they had not been decreased and AOL will pay the associated invoice.
Provided however that if AOL decreases the schedule below the minimum hours and associated fees
specified in this Agreement, AOL shall continue to pay those minimum fees as described in this
Agreement.

TRAINING AND VETTING REQUIREMENTS

[***]

REPORTING

Periodic reports will be delivered, as more specifically set forth below, providing the following
information:

Weekly Reports - Weekly reports shall include the number of message board posts for previous week
(new posts and responses) and chat room traffic for the previous week.

Monthly Reports - Monthly reports shall include number of posts hidden or deleted; number of posts
reported to AOLUKCOS; number of escalations within chat; traffic trends and patterns (e.g.,
increase in traffic to any particular chat room or board, spikes in traffic during particular
times/days); “hot topics” discussed during the previous month; and trends in discussion topics and
products mentioned by participants in message boards. General trends will be reported for chat
room activity.

Annual Reports - Annual reports shall include a summary of traffic trends for the previous year and
year-over-year comparisons of traffic trends.

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	7

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

APPENDIX C1

Fees, Invoicing & Payment

Fees

Subject to LIVEWORLD’S compliance with its obligations under this Agreement, AOL agrees to pay
LIVEWORLD the fees set out below (collectively the “Fees”):

     (a) Monthly Management Fee

     In consideration of the Services provided by LIVEWORLD:

	 	(i)	 	as set out in Appendix B1, Part A to this Agreement AOL agrees to pay
LIVEWORLD a Monthly Management Fee amounting to US$[***] per month; and
	 
	 	(ii)	 	as set out in Appendix B1, Part B, to this Agreement; AOL agrees to pay
LIVEWORLD a Additional Moderation Services Monthly Management Fee amounting to
US $[***] per month; or
	 
	 	(iii)	 	In the event that, for any reason, the Services in as set out in Appendix
B1, Part A to this Agreement cease to be provided pursuant to this Agreement, the
Monthly Management Fees as set out in this clause (a)(i) and (a)(ii) above shall cease
to be payable by AOL. AOL agrees to pay an Additional Moderation Services Monthly
Management Fee amounting to US $[***] per month from the month following that
in which the Services in as set out in Appendix B1, Part A to this Agreement cease to
be provided.

	(b)	 	Fees payable for Services provided in relation to the Moderation of AOL Kids and
Teens Message Boards and Chat Rooms

	1)	 	Minimum Monthly Moderation Fee

AOL agrees to pay LIVEWORLD a minimum monthly moderation fee of US $
[***] per
month (the “Minimum Monthly Moderation Fee”) which shall include LIVEWORLD’s provision of
up to [***] hours/month of moderation Services (“Minimum Monthly Moderation”).
For the avoidance of doubt, if AOL does not schedule and therefore LIVEWORLD does not
deliver a full [***] hours per month, then AOL shall still pay LIVEWORLD the
Minimum Monthly Fee of US $ [***] in respect of Services provided in that month.
	 
	2)	 	Overage Rate

Where AOL requests moderation hours above the Minimum Monthly Moderation in any month, AOL
agrees to pay LIVEWORLD an additional moderation fee for the additional

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	8

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

	 	 	hours in excess of Minimum Monthly Moderation (“Overage Rate”), which shall be calculated
as follows:

	 	(i)	 	where AOL has provided LIVEWORLD with an updated and committed
schedule of required additional moderation hours above Minimum Monthly Moderation
the with not less than [***] days notice (collectively “Scheduled Overage Hours”)
the Overage Rate shall be US $[***] per hour (“Scheduled Overage Hours Rate”); and
	 
	 	(ii)	 	where AOL requests additional moderation hours in any month in excess
of the Minimum Monthly Moderation and provides LIVEWORLD with more than [***]
hours notice but fails to provide LIVEWORLD with the requisite minimum of [***]
days notice such that the request for additional hours does not qualify as
Scheduled Overage Hours (collectively “Unscheduled Additional Moderation Services
Overage Hours”), AOL agrees to pay LIVEWORLD an overage rate (where applicable)
amounting to US$ [***] per hour (“Unscheduled Overage Hours Rate”); and
	 
	 	(iii)	 	where AOL requests Unscheduled Overage Hours on less than
[***] hours notice, then the Unscheduled Overage Hours Rate will be
charged (as applicable) at a rate of $ [***].

	(c)	 	Fees payable for the Services provided in relation to the Additional Moderation Services
as Set out in appendix B1, Part B. 
	 
	1)	 	Additional Moderation Services Minimum Monthly Moderation Fee

AOL agrees to pay LIVEWORLD the minimum monthly moderation fee of US $ [***] per
month pursuant to the provision of the Additional Moderation Services (the “Additional
Moderation Services Minimum Monthly Moderation Fee”) which shall include LIVEWORLD’s
provision of up to [***] hours per month of Additional Moderation Services
(“Additional Moderation Services Minimum Monthly Moderation”). For the avoidance of doubt,
if AOL does not schedule and therefore LIVEWORLD does not deliver a full [***]
hours per month, then AOL shall still pay LIVEWORLD the Additional Moderation Services
Minimum Monthly Moderation Fee of US $ [***] in respect of Services provided in
that month.
	 
	2)	 	Additional Moderation Services Overage Rate

Where AOL requests additional hours of Additional Moderation Services above the Minimum
Monthly Moderation in any month, AOL agrees to pay LIVEWORLD an additional moderation fee
for the additional hours in excess of Additional Moderation Services Minimum Monthly
Moderation (“Additional Moderation Services Overage Rate”), which shall be calculated as
follows:

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	9

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

	 	(i)	 	where AOL has provided LIVEWORLD with an updated and committed
schedule of required additional moderation hours above Additional Moderation
Services Minimum Monthly Moderation the with not less than [***] days
notice (collectively “Scheduled Additional Moderation Services Overage Hours”) the
scheduled Additional Moderation Services overage rate shall be US $ [***]
per hour (“Scheduled Additional Moderation Services Overage Hours Rate”);
	 
	 	(ii)	 	where AOL requests additional moderation hours in any month in excess
of the Additional Moderation Services Minimum Monthly Moderation and provides
LIVEWORLD with more than [***] hours notice but fails to provide
LIVEWORLD with the requisite minimum of [***] days notice such that the
request for additional hours does not qualify as Scheduled Overage Hours
(collectively “Unscheduled Additional Moderation Services Overage Hours”), AOL
agrees to pay LIVEWORLD an overage rate (where applicable) amounting to
US$ [***] per hour (“Unscheduled Additional Moderation Services Overage
Hours Rate”); and
	 
	 	(iii)	 	where AOL requests Unscheduled Additional Moderation Services
Overage Hours on less than [***] hours notice, then the Unscheduled
Additional Moderation Services Overage Hours Rate will be charged (as applicable)
at a rate of US$ [***].

Invoicing

LIVEWORLD agrees that all invoices to be sent to AOL are due on the first day of the month for the
coming month in respect of the Services to be performed by LIVEWORLD. On each month’s invoice
LIVEWORLD will provide a true up charge or credit as appropriate for any over or under prior
billing for the prior month’s Services. If an invoice, or any part thereof, is in bona fide
dispute, AOL may only withhold payment of the amount in dispute until such time as the dispute is
resolved provided that AOL shall settle all other amounts which are not the subject of a bona fide
dispute in accordance with the terms of this Agreement.

Payment

Subject to AOL’s rights set out above in “Invoicing” section, invoices shall be settled by AOL
within [***] days of receipt of each applicable valid and correctly submitted invoice via
electronic transfer of funds (with LIVEWORLD to provide AOL with all necessary bank account
details).

Fee Increases

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	10

 

 

	 	 	 
	 

	 	PORTIONS DENOTED WITH [***] HAVE
	 

	 	BEEN OMITTED AND FILED SEPARATELY
	 

	 	WITH THE SECURITIES AND EXCHANGE
	 

	 	COMMISSION PURSUANT TO A REQUEST
	 

	 	FOR CONFIDENTIAL TREATMENT

For the second year of this Agreement (beginning [***]) and third year of this Agreement (beginning
[***]), LIVEWORLD’s Fees shall be increased at the maximum rate of [***] from the
previous year’s fees.

			
	 	 	 
	Live World. Change Order No. 1. Execution copy.28.09.06. FINAL
	 	11

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