CO-PROMOTION AGREEMENT
THIS CO-PROMOTION AGREEMENT (the "Agreement") is made as of December
21, 1999 by and between iParty Corp., a Delaware corporation ("iParty"), with an
address at 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 10003 and
Margaritaville Holdings, LLC, a Delaware limited liability company ("MV"), with
an address at Suite QR, 000 Xxxxx Xxx., Xxxx Xxxxx, Xxxxxxx 00000.
WHEREAS, iParty is the owner and operator of the Internet web site
located at xxxx://xxx.xxxxxx.xxx, and all subsidiary pages thereof (the "iParty
Site"); and
WHEREAS, MV is one of the operators of the Internet web site located at
xxxx://xxx.xxxxxxxxxxxxxx.xxx, and all subsidiary pages thereof (the
"Margaritaville Site"), the registrant of the domain name for which is Global
Audience Providers, which is an agent of The Margaritaville Store, Inc., a
company under common control with MV; and
WHEREAS, both parties wish to cooperate with each other in the
promotion of each other's products and web sites on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Term. This Agreement shall have a term (the "Term") of three years
commencing on December 21, 1999 and ending on December 20, 2002, unless
terminated prior to such date in accordance with Section 8 hereof.
2. Consideration.
2.1 Royalty. Within forty-five (45) days after each calendar quarter,
iParty shall pay to MV a royalty (the "Royalty Payment") equal to six (6)
percent of the gross dollar amount actually received by iParty from customers
with respect to products sold on the iParty Site which bear the "MARGARITAVILLE"
trademark (one (1) percent of which shall be paid by MV to Xxxxx Xxxxxxx
("Xxxxxxx") pursuant to a License Agreement between MV and Buffett dated as of
December 22, 1999). For the purposes of this Section 2.1 "gross dollar amount
actually received by iParty" shall not include funds relating to any shipping
charges, sales or other taxes or duties which iParty may collect, unless such
amounts exceed iParty's actual out-of-pocket costs for such items. The amount of
a Royalty Payment may be adjusted, dollar for dollar, to account for any
refunds, chargebacks, returns or similar occurrences.
2.2 Warrant. Upon execution of this Agreement, iParty shall issue to MV
a five-year warrant (the "Warrant"), substantially in the form attached hereto
as Exhibit A.
3. Establishment of "Margaritaville Channel." On or before April 1, 2000,
iParty shall establish a distinct area on the iParty Site known as
"Margaritaville" or the "Margaritaville
Channel" which shall be used to aggregate and offer for sale such number of
products as iParty shall determine in its sole but reasonable discretion, which,
as of the date hereof, is attached hereto as Exhibit B. The products shall
remain reasonably consistent with themes associated with Buffett, his music and
live performances ("Buffett Themes") and shall not duplicate, compete with or be
similar to any products that are being offered by MV as of the date hereof
("iParty Products"). During the Term, MV shall not add any products to or sell
any products, directly or indirectly through, the Margaritaville Site that
duplicate, compete with or are similar to the iParty Products.
4. Margaritaville Exclusive License.
4.1 MV hereby grants iParty, to the full extent of MV's rights therein
and thereto, an exclusive, worldwide, fully paid license, during the Term, to
use the trademark "MARGARITAVILLE", in the party supply industry. MV hereby
grants iParty, to the full extent of MV's rights therein and thereto, exclusive,
worldwide marketing and distribution rights to the materials provided by MV and
created by Buffett pursuant to Article 6, below.
4.2 Subject to the next sentence, MV represents and warrants that (i)
it possesses, itself or through agreement with Buffett, the right and ability to
grant the rights granted in Section 4.1, above in the United States and has no
knowledge of any worldwide limitation or restriction which would conflict with
the full enjoyment by iParty of its rights under this Agreement, (ii) the
granting of these right does not conflict with or violate any other agreement,
written or oral, that MV or Buffett have entered into and, (iii) it covenants
that it will not grant any rights under any future agreement that will conflict
with the full enjoyment by iParty of its rights under this Agreement. iParty
acknowledges that MV has granted certain rights to Seagram Americas, an
unincorporated division of Xxxxxx X. Xxxxxxx & Son, Inc. ("Seagram") and
Universal City Development Partners ("Universal") which may be inconsistent with
the exclusive rights granted in the first sentence of Section 4.1, above. MV
covenants that, during the Term, it will not grant, or permit to be granted, any
additional rights to Seagram, Universal or any other party which are
inconsistent with the exclusive rights granted in the first sentence of Section
4.1, above. Except as provided in the next sentence, MV further represents,
warrants and covenants that no entity which controls, is controlled by or under
common control with MV, The Margaritaville Store, Inc. or Buffett has entered or
will enter into any agreement which is inconsistent with the rights granted to
iParty herein.
4.3 In any use by iParty of the MARGARITAVILLE trademark or of the
name, image or voice of Buffett, or, if permitted by Buffett, in his sole
discretion, any other trademarks or rights that he may own or otherwise control
(collectively, the "Materials") pursuant to this Agreement, iParty shall not
alter the color, proportional size or similar attributes (as applicable) of the
Materials as provided or approved by MV without the prior written consent of MV.
The right of iParty to place advertising, promotional or any other information
or materials visible with, near or surrounding the Materials is limited to those
which will not impair or adversely affect the name, reputation or goodwill of MV
or Buffett, and those which will not tarnish, dilute or be confusingly similar
to the Materials. iParty shall provide MV with samples of any iParty
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Products to which iParty wishes to affix any of the Materials, which shall be of
high quality. MV shall have two (2) business days after receipt of such sample
to object to such use of the Materials, following which, if any such objection
has not been received by iParty from MV, such use shall be deemed to have been
approved by MV. Provided that any use of the Materials is substantially similar
to any use previously approved by MV, iParty may apply such use to future iParty
Products without the necessity of obtaining MV's prior consent.
5. Web Site Links.
5.1 On or before April 1, 2000, iParty and MV shall place HTML (or
successor protocol) links to each others web sites on the entry/home page for
each party's own web site, each at the uniform resource locator (URL) set forth
in the recitals to this Agreement, or any successor URL.
5.2 The textual and graphic content of the links required pursuant to
Sections 5.1 and 5.2 above will be in the forms mutually agreed to by the
parties, will be provided to the linking party as a computer-readable file in a
compatible file format and within a commercially reasonable time following such
mutual agreement. The inability of the parties to so agree as required in this
Section 5.3, without the occurrence of a fact or event that, existing on its
own, would be considered a breach of this Agreement, shall not be considered a
breach of this Agreement.
5.3 In any identification of the other party (the "Linked Party") or of
their products or offerings included anywhere within the web site of each party
(the "Linking Party") pursuant to this Agreement, the Linking Party shall not
alter or otherwise impair the branding or other identification of the Linked
Party, nor alter or remove any copyright, trademark or other protective notices
of the Linked Party. Neither party shall, acting as Linking Party, alter the
color, size or similar attributes of the materials provided by the Linked Party
without the prior written consent of the Linked Party. Each party further agrees
that it shall not, acting as Linking Party, mask, frame, overlay, impair or
otherwise materially alter, affect or impair the images, information,
perception, service quality or security obtained from the Linked Party once the
link or equivalent pathway to the Linked Party is selected or initiated. The
right of each party, acting as Linking Party, to place advertising, promotional
or any other information or materials visible with, near or surrounding
materials provided by the Linked Party is limited to those which will not impair
or adversely affect the name, reputation or goodwill of the Linked Party or
Buffett, and those which will not tarnish, dilute or be confusingly similar to
the materials provided by the Linked Party or (in the case of iParty) by
Buffett. The parties agree that they shall not, acting as Linking Party, impose
any cost, charge, fee, restriction or requirement in order to permit access to
any aforementioned link or any other link contained in or to the Linked Party's
web site.
6. Product Creations by Buffett.
6.1 On or before May 1, 2000, MV shall provide to iParty, for sale
through the Margaritaville Channel, a videotape that will contain at least three
songs performed by Buffett
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and appropriate for children, the sale and distribution of which will be
exclusive to iParty. The aforementioned videotape shall be sold by iParty
without any alteration whatsoever and as a package with other party-related
merchandise. Such videotape shall not be sold by iParty as a "stand alone"
product. Pre-approved production costs in the creation of songs will be paid by
iParty. Buffett shall retain all intellectual property rights in the videotape,
the songs contained therein, and the materials related to the videotape and the
songs. During the Term, the parties may agree on additional products, subject to
mutually agreeable terms and conditions.
6.2 On or before April 1, 2000, MV shall provide to iParty the initial
installment of written work related to Buffett, such as current information
about Buffett or his activities, or Buffett's advice, observations or wisdom,
the length of which shall be approximately one paragraph, that iParty shall have
the exclusive right to use as content on its web site. Such material will be
replaced with new material on a monthly basis. The material described in this
Section 6.2 may be used by iParty as stand-alone content on its web site, or may
be aggregated with other quotations from prior works written or performed by
Buffett and displayed as content on iParty's web site, subject to the prior
approval of MV, which such approval shall not be unreasonably withheld or
delayed. In the event that any proposed use by iParty of any written work
pursuant to the previous sentence requires the consent of any third party (e.g.,
a publisher), MV shall provide iParty with reasonable assistance regarding the
obtaining of such permission. No use of any material pursuant to this Section
6.2 shall constitute any transfer of any intellectual property rights by or on
behalf of iParty, MV or Buffett.
6.3 The parties agree to proceed in good faith so that on or before
June 1, 2000, Buffett and/or MV and/or iParty shall create an electronic
greeting that iParty shall use, in its commercially reasonable discretion, in
connection with a greeting or invitation sold or otherwise used by iParty
through or in connection with the iParty Site. Such electronic greeting shall
contain icons or materials which represent Margaritaville and/or Buffett Themes
but shall not include Buffett's image and/or voice without Buffett's written
consent which may be withheld for any reason. The content and appearance of such
electronic greeting shall be subject to MV's approval, which such approval shall
not be unreasonably withheld or delayed.
7. Marketing and Co-Promotions.
7.1 During the Term, MV shall arrange for Buffett, at his
convenience, to meet with Xxx Xxxxxxxx, the CEO of iParty (or
such other iParty representative as shall be determined by
iParty), and marketing personnel from iParty to define overall
marketing and co-promotion activities between MV and iParty.
Such meetings shall be held no less frequently than twice each
year during the Term.
7.2 MV shall arrange for Buffett to attend and participate in a
public relations event in New York to, among other things,
announce the launch of the iParty and MV relationship.
Buffett's appearance pursuant to the preceding sentence shall
be for no less than one half (1/2) hour. Thereafter, MV shall
arrange for Buffett to
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attend at least one (1) other public relations event on an
annual basis. The timing, concept and theme of such events
shall be subject to MV's reasonable approval, iParty shall
provide Buffett with no less than two (2) months advance
notice of each such event and no such event shall be scheduled
on any date that Buffett is scheduled to perform a concert.
7.3 During the Term, MV and iParty shall each have the right to
utilize the other party's mailing list (which, in the case of
MV, shall mean the mailing list used by and for the "Coconut
Telegraph" and owned by The Margaritaville Store, Inc.) to
send information, one (1) time each year, to any or all of the
addresses contained on such mailing lists. In addition, MV and
iParty shall each have the right, three (3) times each year,
to use the e-mail lists of the other party (which, in the case
of MV, shall mean the e-mail list used by and for the "Coconut
Telegraph" and owned by The Margaritaville Store, Inc.) to
send information to each address on such e-mail lists.
Additionally, MV shall cause the "Coconut Telegraph" to
mention iParty in each issue published during the Term,. In
the event that iParty, during the Term, releases or provides a
direct mail piece to be sent to customers of iParty via U.S.
mail, iParty will cause such piece to mention the availability
of the iParty Products, subject to the terms and conditions of
this Agreement.
7.4 iParty shall be allowed to create advertising that will
promote the Margaritaville Channel in print, broadcast, cable,
radio and online media, and any other medium now known or
hereafter known, subject to the approval of MV, which approval
shall not be unreasonably withheld or delayed. All such
advertising and promotion by iParty shall include other
trademarks or products not related to MV or Buffett, as
determined by iParty in its sole but commercially reasonable
discretion. Notwithstanding the foregoing, however, approval
for the use of Buffett's image and name may be withheld for
any reason.
7.5 iParty and MV shall cooperate in developing and executing
additional plans to cross-promote their respective production.
8. Termination.
8.1 This Agreement may be terminated by either iParty, on the one hand,
or MV on the other, in the event of any material default in, or material breach
of, any of the terms or conditions of (a) this Agreement by MV, or (b) the
obligations of Buffett hereunder or (c) iParty (in the case of MV), which
default is not remedied within thirty (30) days after the defaulting party has
been provided with written notice of such default.
8.2 If Buffett or MV commit any act or become involved in any situation
or occurrence which brings him/it into public disrepute, scandal or ridicule, or
shocks or offends the community, or derogates from the public image or reflects
unfavorably upon iParty or any of its products or services, iParty shall have
the right to terminate this Agreement at any time
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following the time that iParty becomes aware of such act or involvement,
provided that iParty shall have given MV and Buffett fourteen (14) days written
notice of such default and such default has not been cured, if curable, during
such fourteen (14) day period. If iParty commits any act or becomes involved in
any situation or occurrence which brings it into public disrepute, scandal or
ridicule, or shocks or offends the community, or derogates from the public image
or reflects unfavorably upon Buffett or MV or any of their products or services,
MV shall have the right to terminate this Agreement at any time following the
time that MV becomes aware of such act or involvement, provided that MV shall
have given iParty fourteen (14) days written notice of such default and such
default has not been cured, if curable, during such fourteen (14) day period.
Upon termination pursuant to this Article 8, all rights, duties and obligations
of the parties shall cease and each party shall return to the other party all
property and Confidential Information of the such party or, alternatively, as
appropriate, certify its destruction or deletion. For the avoidance of doubt,
warrant shares which have vested prior to the effective date of are the property
of MV.
8.3 Termination or expiration of this Agreement shall not cancel or
terminate any rights and/or obligations which arose prior to the effective date
of termination and which must continue to give effect to their meaning at the
time such right and/or obligation arose.
9. Limitations of Liability/Warranty Disclaimer.
9.1 EXCEPT FOR OBLIGATIONS ARISING OUT OF ARTICLE 10 OR A BREACH BY
EITHER PARTY OF SECTION 11, THE MAXIMUM LIABILITY OF EITHER PARTY TO THE OTHER
FOR DAMAGES FOR ANY AND ALL CAUSES WHATSOEVER, AND EACH PARTY'S MAXIMUM REMEDY,
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL
BE LIMITED TO $50,000.
9.2 EXCEPT FOR OBLIGATIONS ARISING OUT OF SECTION 10 OR A BREACH BY
EITHER PARTY OF SECTION 11, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
LOST DATA, LOST PROFITS, BUSINESS INTERRUPTION, OR FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING
TO THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
9.3 EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
10. Indemnification. Each party (the "Indemnifying Party") shall indemnify,
defend and hold harmless the other party (the "Indemnified Party") from any and
all claims, costs, expenses, damages or other liability, including reasonable
attorney's fees, which is the result of infringement or misappropriation claims
arising out of or related to the use of the materials
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provided to the Indemnified Party by the Indemnifying Party. The Indemnified
Party shall notify the Indemnifying Party, in writing, in the event of any such
claim, and grant to the Indemnifying Party the right, at the Indemnifying
Party's expense, to control the defense thereof, including the right to settle
any such claim or suit on such terms as the Indemnifying Party shall deem
desirable.
11. Confidentiality. The term "Confidential Information" means information
or data, including without limitation, names and expertise of employees and
consultants, know-how, processes, ideas, inventions, (whether patentable or
not), trade secrets and other technical, business and customer information,
financial and product development plans, forecasts and strategies, furnished by
one party to the other hereunder. Each party shall (i) hold all Confidential
Information of the other party in confidence and take all reasonable precautions
to protect such Confidential Information (including, without limitation, all
precautions such party employs with respect to its own confidential materials of
a similar nature), (ii) not divulge any such Confidential Information of such
other party or any information derived therefrom to any third person except to
its employees or independent contractors that have a need to know such
information to further the permitted use thereof, that are informed of the
non-disclosure obligations contained herein, (iii) not make any use whatsoever,
at any time, of any Confidential Information of the other party except to the
extent necessary to exercise any right or license granted under, or perform any
obligations under this Agreement, and (iv) not copy (except as reasonably
necessary to exercise the rights or obligations under this Agreement) or reverse
engineer or reverse compile any Confidential Information of the other party
which is computer code. For purpose of this Section 11, MV and Buffett shall be
considered one and the same party. Without granting any right or license, the
foregoing obligations shall not apply to the extent that the receiving party can
demonstrate that the Confidential Information of the such other party (A) is in
the public domain and is available at the time of disclosure or which thereafter
enters the public domain and is available through no improper action or inaction
by the receiving party, or (B) was in its possession or known by the receiving
party prior to receipt from the disclosing party, or (C) was rightfully
disclosed to the receiving party by a third party without restriction, or (D) is
independently developed by the receiving party without reference to such
Confidential Information of the disclosing party, or (E) is required to be
disclosed pursuant to any statutory or regulatory authority or court order,
provided the disclosing party is given prompt notice of such requirement and the
scope of such disclosure is limited to the maximum extent consistent with
compliance with such authority or order. Information shall not be deemed known
to the receiving party or publicly known for purposes of the above exceptions
(x) merely because it is embraced by more general information in the prior
possession of such person or others, or (y) merely because it is expressed in
public material in general terms not specifically the same as the Confidential
Information.
12. Year 2000 Compliance. MV represents to iParty that the Margaritaville
Site is Year 2000 Compliant. iParty represents and warrants to MV that the
iParty Site is Year 2000 Compliant. For purposes of this Section 12, the term
"Year 2000 Compliant" means that such web site is designed to be used before,
during and after the year 2000. Specifically, such web site will (i) represent
all calendar years with four digits as opposed to two (e.g., 2001 instead of
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01); (ii) correctly identify and process all dates, including those in
calculations which reference one or more centuries; (iii) operate without any
errors, aborts or invalid results related to any date; and (iv) correctly
identify and process leap years.
13. Notice. Any notice required or permitted by this Agreement shall be in
writing and shall be sent by courier or telefax confirmed in writing, addressed
to the signatory of this Agreement at the address listed in the preamble to this
Agreement, or at such other address for which either of the parties gives notice
hereunder. All notices shall be deemed to have been given upon receipt. As of
the date hereof, the facsimile number of the parties are as follows:
iParty: (000) 000-0000 MV: (000) 000-0000
14. Entire Agreement; Amendment. This Agreement and the Warrant to be
issued in connection herewith contain the entire understanding of the parties
with respect to the subject matter herein and supersedes all prior agreements
and understandings between them with respect to the subject matte hereof. No
amendment of this Agreement will be effective unless embodied in a written
instrument executed by all parties.
15. Assignment. This Agreement will not be assignable by either party
without the other's written consent, which will not be unreasonably withheld or
delayed, except that either party shall have the right to assign this Agreement
to any parent, subsidiary or affiliate or to an entity which acquires all or
substantially all of the assets or equity of such party through an acquisition,
merger, consolidation or otherwise..
16. Waiver of Breach. The failure of any party hereto at any time to
enforce any of the provisions of this Agreement will not be deemed or construed
to be a waiver of any such provisions, or in any way to affect the validity of
this Agreement or any provisions hereof or the right of any party hereto to
thereafter enforce each and every provision of this Agreement. No waiver of any
breach of any of the provisions of this Agreement will be effective unless set
forth in a written instrument executed by the party against which enforcement of
such waiver is sought; and no waiver of any such breach will be construed or
deemed to be a waiver of any other or subsequent breach.
17. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflict of laws rules of such state.
18. Submission to Jurisdiction. The parties agree to submit to the
exclusive jurisdiction of the federal and state courts located in Wilmington,
Delaware with regard to any disputes arising under this Agreement.
19. Severability. All of the provisions of this Agreement are intended to
be distinct and severable. If any provision of this Agreement is or is declared
to be invalid or unenforceable in any jurisdiction, it will be ineffective in
such jurisdiction only to the extent of such invalidity or
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unenforceability. Such invalidity or unenforceability will not affect either the
balance of such provision, to the extent it is not invalid or unenforceable, or
the remaining provisions hereof, or render invalid or unenforceable such
provision in any other jurisdiction.
20. Independent Contractors. The relationship of the parties hereunder
shall be that of independent contractors. Nothing herein shall be construed to
constitute a partnership or other relationship between or joint venture of the
parties, nor shall either party be deemed the agent of the other or have the
right to bind the other in any way without the prior written consent of the
other.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, and all of which
together will constitute one and the same Agreement. This Agreement may be
executed and delivered by electronic facsimile transmission with the same force
and effect as if it were executed and delivered by the parties simultaneously in
the presence of one another.
22. Certain Dispute Resolution. With respect to any dispute which may arise
regarding Section 6.3 and/or Section 7.5 above, the parties agree that such
dispute shall not constitute a breach unless a party fails to comply with an
arbitration award entered against it. The parties further agree that, should any
dispute arise regarding Section 6.3 and/or Section 7.5, the following procedure
shall be used, unless they agree in writing to the contrary:
(a) The President of iParty and the President of MV shall, within
seventy-two (72) hours of either party notifying the other in writing of a
particular dispute described above, discuss by telephone the resolution of that
dispute for a minimum of one (1) hour, or until the dispute is resolved;
(b) If the telephone conference described in subsection (a) above does
not resolve the dispute, the parties shall request the American Arbitration
Association to appoint a mediator to mediate the dispute, such mediation to take
place in Wilmington, Delaware. The mediation shall occur with seventy-two (72)
hours after the mediator is appointed, unless the mediator is not available
within that time frame, in which case, the mediator shall set a date for the
mediation on the earliest possible day, based on the schedule of the mediator,
who shall take into account the schedule of the President of iParty and the
President of MV; and
(c) If the mediation described in subsection (b) above fails to resolve
the dispute, the parties shall request the American Arbitration Association to
appoint one (1) arbitrator to resolve the dispute, such mediation to take place
in Wilmington, Delaware. The arbitration shall be governed by the then-existing
rules of the American Arbitration Association.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the date first written above.
iPARTY CORP. MARGARITAVILLE HOLDINGS, LLC
By: /s/ Xxx Perissano By: Xxxx Xxxxxx
----------------- ---------------------------
Name: Xxx Xxxxxxxx Name: Xxxx Xxxxxx
Title: Chief Executive Officer Title: CEO
I, Xxxxx Xxxxxxx, agree to do those things required of me (or indicated as being
delivered or created by me) pursuant to Article 6 and Article 7 of this
Agreement.
/s/ Xxxxx Xxxxxxx
----------------------------
Xxxxx Xxxxxxx, an individual
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