EXHIBIT 10.19
CONTENT AND CO-MARKETING AGREEMENT
THIS AGREEMENT (AGREEMENT) is dated as of the 23rd day of October 1998 (the
EFFECTIVE DATE), by and between ROWECOM INC. ("RCI"), a Delaware corporation,
---
and PUBLICATIONS RESOURCE GROUP, INC. ("PRG"), a Massachusetts corporation.
---
PREAMBLE
--------
WHEREAS, RCI provides business-to-business electronic commerce services to
businesses and not-for-profit institutions interested in purchasing
Subscriptions, books and other knowledge products and services of a professional
nature and, in connection therewith, RCI collaborates with such entities to
enhance existing intranet networks to enable such entities to purchase
Subscriptions, books and other knowledge products and services via their
intranets; and
WHEREAS, PRG markets and sells market research reports, newsletters and
other services to consumer-based affinity groups; and
WHEREAS, RCI and PRG desire to develop, market and sell publications and
services through the other party's distribution channels, including through the
Internet.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
1.0 DEFINITIONS
1.1 DEFINED TERMS. For purposes of this Agreement, the following terms have the
respective meanings set forth below:
DEVELOPMENT PLAN means the plan to be jointly prepared by RCI and PRG
regarding the provision of an integrated electronic service and payment process,
as described in Section 2.6 below.
-2-
FEE SCHEDULE means the payments payable to each party as set forth on the
chart attached hereto as Exhibit A.
------- -
GROSS FEE means the ***/1/
---
HANDLING CHARGE means the fee charged by RCI to its customers, as adjusted
from time to time, but shall exclude any fees payable by RCI to merchants or
credit card companies in connection with the sale of Titles to customers.
MERCHANT FEE means the fee charged by a credit card company or other
merchant (other than the Handling Charge) in connection with the sale of Titles
to a customer.
PRG CATALOG means the list of PRG Titles and list prices, as updated from
time to time, attached hereto as Exhibit B.
------- -
PRG CHANNEL means all distribution channels for PRG Titles, including but
not limited to PRG online web site(s), (including but not limited to the hyper
link to the RoweCom web page) direct marketing channels, and catalogs, as agreed
to by the parties from time to time.
PRG TITLE means any Title authorized for sale through PRG Channels by a
publisher, and listed on the PRG Catalog, as updated from time, but excluding
any Titles listed on the RCI Catalog.
PRG TITLE ORDER means any order received by RCI for PRG Titles.
PROPRIETARY INFORMATION means all patents, trade secrets, copyrights,
trademarks, industrial designs and other intellectual property specified or
supplied by each party to market, sell or use the RCI Catalog or PRG Catalog.
RCI CATALOG means the list of RCI Titles, as updated from time to time, and
attached hereto as Exhibit C.
------- -
--------------------------------
/1/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
-3-
RCI CHANNEL means all distribution channels for RCI Titles, including but
not limited to the internet and intranet distribution channels for RCI Titles,
as agreed to by the parties from time to time.
RCI TITLE means any Title authorized for sale through RCI Channels by a
publisher, and listed in the RCI Catalog, as updated from time to time, but
excluding any Titles listed on the PRG Catalog.
RCI TITLE ORDER means any order received by PRG for RCI Titles.
TERM means the period beginning on the Effective Date and ending upon
termination of this Agreement.
TERRITORY means the United States of America.
TITLES means any magazines, subscriptions, serials, books, or other
publications, embodied in paper or magnetic media.
TRADEMARK means names, trademarks, services marks, trade names, labels,
logos, designs or other designations and all goodwill associated therewith.
1.2 OTHER DEFINED TERMS. Each of the following terms have the meanings ascribed
to it in the section set forth opposite such term:
AGREEMENT Preamble
AUDITING PARTY Section 5.4
AUDITED PARTY Section 5.4
CHANGE OF CONTROL Section 8.2(c)
CLAIMANT Section 9.2(b)
CONFIDENTIAL INFORMATION Section 7.1
CONTINUOUS SERVICE Section 5.1(b)
DISCLOSER Section 7.1
EFFECTIVE DATE Preamble
HOME PAGE Section 3.2
IMAGE Section 3.1
PRG Preamble
PRG KSTORE Section 3.1
INDEMNITOR Section 9.2(a)
INDEMNITEES Section 9.2(a)
INITIAL TERM Section 8.1
LOSSES Section 9.2(a)
RCI Preamble
-4-
RECIPIENT Section 7.1
URL Section 3.2
2.0 MARKETING, DEVELOPMENT, AND DISTRIBUTION
2.1 PRG PROMOTION OF RCI TITLES.
(a) APPOINTMENT. During the Term hereof and subject to the terms of this
Agreement, RCI hereby retains and authorizes PRG to market, promote,
and sell any RCI Title to PRG customers through PRG Channels in the
Territory.***/2/
---
(b) LIMITED AGENCY. PRG's authority to act on behalf of RCI shall be
limited to the activities and services set forth in this Section 2.1.
(c) LICENSE. Subject to the terms set forth herein, RCI hereby grants to
PRG a non-exclusive, non-assignable, royalty-free right and license
(excluding the right to sublicense) to use the RCI Catalog in the
Territory to (i) offer RCI Titles to PRG customers through PRG
Channels; (ii) take orders from PRG customers for RCI Titles; (iii)
maintain the database containing information regarding such customer
orders; (iv) xxxx and collect from such customers the amount of the
order; and (v) fulfill the order by remitting to RCI the amount due
for such order. PRG may use the RCI Catalog and the information
contained therein only in connection with the marketing and promoting
of RCI Titles as described in this Section 2.1. In addition, RCI
hereby grants to PRG a non-exclusive, non-assignable, royalty-free
right and license (excluding the right to sublicense) to use the RCI
Trademarks in the Territory to promote and market the RCI Titles
solely in accordance with the terms of this Agreement. PRG agrees
that, upon reasonable notice from RCI, PRG shall permit RCI to visit
all locations
------------------------------
/2/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
-5-
where PRG delivers services using the RCI Trademarks to
ensure that (i) such services are delivered in a manner consistent
with the service standards employed by RCI and (ii) the RCI Trademarks
used in connection with such services are in compliance with the
specifications provided to PRG from time to time. It is understood
that, under certain circumstances, PRG may need third party consents
to effectuate the visitation by RCI. In such circumstances, RCI will
work with PRG to facilitate the review of the usage of the PRG
Trademarks.
(d) MARKETING SERVICES PROVIDED BY PRG. Subject to the terms set forth
herein, PRG hereby agrees to ***/3/ to (1) market, promote, and sell
---
RCI Titles in the Territory through PRG Channels; (2) market and
promote the RCI Trademarks in the Territory through all PRG Channels;
(3) provide to RCI, upon mutual agreement by the parties, without
charge, an introduction to any then current PRG customer for the
purpose of promoting and marketing RCI Titles.
2.2 RCI PROMOTION OF PRG TITLES.
(a) APPOINTMENT. During the Term hereof, subject to the terms of this
Agreement, PRG hereby retains and authorizes RCI to exclusively
market, promote, and sell any PRG Title to RCI customers through RCI
Channels in the Territory. It is understood and agreed by the parties
that RCI may purchase PRG Titles from a third party from time to time.
(b) LIMITED AGENCY. RCI's authority to act on behalf of PRG shall be
limited to the activities and services set forth in this Section 2.2
------------------------------
/3/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
-6-
(c) LICENSE. Subject to the terms set forth herein, PRG hereby grants to
RCI the non-exclusive, non-assignable, royalty-free right and license
(excluding the right to sublicense) during the Term of this Agreement
to use the PRG Catalog in the Territory to (i) offer PRG Titles to RCI
customers through RCI Channels; (ii) take orders from RCI customers
for PRG Titles; (iii) maintain the database containing information
regarding such customer order; (iv) xxxx and collect from such
customers the amount of the order; and (v) fulfill the order by
remitting to PRG the amount due for such order. RCI may use the PRG
Catalog and the information contained therein only in connection with
the marketing and promoting of PRG Titles as described in this Section
2.2. In addition, PRG hereby grants to RCI a non-exclusive, non-
assignable, royalty-free right and license (excluding the right to
sublicense) to use the PRG Trademarks in the Territory to promote and
market the PRG Titles solely in accordance with the terms of this
Agreement. RCI agrees, that upon reasonable notice from PRG, RCI
shall permit PRG to visit all locations where RCI delivers services
using the PRG Trademarks and to ensure that (i) such services are
delivered in a manner consistent with the service standards employed
by PRG and (ii) the PRG Trademarks used in connection with such
services are in compliance with the specifications provided to RCI
from time to time. It is understood that, under certain circumstances,
PRG may need third party consents to effectuate the visitation by RCI.
In such circumstances, RCI will work with PRG to facilitate the review
of the usage of the PRG Trademarks.
(d) MARKETING SERVICES PROVIDED BY RCI. Subject to the terms set forth
herein, RCI hereby agrees to use best reasonable efforts to (1)
market, promote, and sell PRG Titles in the Territory through RCI
Channels; (2) market and promote the PRG Trademarks in the Territory
through all RCI Channels.
2.3 UPDATES ON CATALOGS. From time to time during the Term, PRG shall promptly
notify RCI in writing of any corrections, enhancements, revisions, updates,
upgrades and similar changes PRG's catalog. Upon such notification, RCI,
may at its sole discretion, include any such newly added PRG Titles in RCI
-7-
Channels. The parties acknowledge and agree that RCI may, at its sole
discretion, make corrections, enhancements, revisions, updates, or other
similar changes to the RCI Catalog, and that such changes shall become a
part of the RCI Catalog as provided to PRG customers from time to time.
2.4 PUBLICITY; USE OF NAMES.
(a) Neither party shall originate or allow to be issued any publicity or
news release or otherwise make any public announcement or statements,
written or oral, with respect to this Agreement or the terms hereof or
the transactions contemplated hereby unless mutually agreed by the
parties in writing, which release shall not be unreasonably withheld,
except as required under securities laws or other applicable laws
(including in connection with an initial public offering). Neither
party shall use the name of the other party or any adaptation thereof
or any of such other party's Trademarks in any advertising,
promotional or sales literature, or in any other form of publicity
without prior written consent (which consent will not be unreasonably
withheld or delayed) obtained from the other party in each case.
(b) Each party agrees to protect from disclosures to any third party any
and all information received from the other party that identifies an
individual customer, including but not limited to names, telephone
numbers, e-mail addresses, postal addresses, and user names. Each
party agrees to remove, upon request by the other party, from its
databases and all other records, electronic or otherwise, such
customer identifying information, subject to each party's ability to
maintain a copy of such customer information for purposes of complying
with such party's obligations under this Agreement.
2.5 INTELLECTUAL PROPERTY. Subject to the terms hereof, each party shall take
such actions as are reasonably required to maintain their respective
Trademarks in effect, and shall inform the other party of any changes in or
additions to the Trademarks. Each party shall use commercially reasonable
efforts to correctly reference the other party's Trademarks and other
proprietary rights in any marketing, advertising, promotional materials,
sales literature or other publicity, as required by law or as
-8-
reasonably requested by the other party. Each party's Trademarks and other
proprietary rights shall remain the sole and exclusive property of such
party and the other party shall have no rights thereto, except as otherwise
provided herein, and the goodwill associated therewith shall inure to the
benefit of the owner of such Trademark. Upon any expiration or termination
of this Agreement, the license to use the Trademarks shall terminate.
Except as otherwise provided herein, nothing contained in this Agreement
shall be deemed to transfer ownership of copyrightable material from one
party to the other.
2.6 DEVELOPMENT PLAN. No later than December 31, 1998, RCI and PRG, shall, in
accordance with the Development Plan and implementation schedule, jointly
develop an electronic system for processing customer orders received by PRG
or RCI and effecting payments in respect of the same. Each party shall bear
its own costs related to such development efforts, as set forth in the
Development Plan. Either party may terminate this Agreement upon 30 days
written notice if the parties fail to agree upon a Development Plan by
December 31, 1998.
2.7. SALES COLLATERAL. Each party shall furnish at no cost to the other party
reasonable quantities of promotional materials, such as sales literature
and similar promotional material relating to the RCI Catalog and the PRG
Catalog, including such information as is necessary or appropriate for each
party to formulate any marketing materials used in connection with
marketing activities under Sections 2.1 and 2.2 respectively. Each party
hereby grants to the other party a license to reproduce and use such
promotional materials, provided that, neither party shall edit, modify or
-------- ----
otherwise alter the form or content of such promotional materials; and
provided, further, that each party may convert such promotional materials
--------
into analog or digital format as required to make use of them.
3.0 LINKING ARRANGEMENTS.
3.1. SITE LINKS. Subject to the terms of this Agreement, PRG will place a
hypertext link to web page co-branded by both RCI and PRG (the "PRG kStore")in a
----------
prominent position on the Home Page (as defined below) and index page to PRG's
Web Site. Textual and graphic content of these links will be in the form
specified in the Development
-9-
Plan, and will be provided to RCI by PRG as a computer readable file in a
compatible HTML file format (such file is the "Image").
-----
3.2. LOCATION. The Image shall appear on the home or default result page
("Home Page") of PRG's Web Site, which is the page that any user's web browser
---------
will generate as the result of requesting the following Uniform Resource Locator
("URL"): http//xxx.xxxxxxxx.xxx or any new URL with which linking party replaces
---
the above-stated URL.
3.3. WEB SITE CHANGES. PRG shall notify RCI of any significant changes to the
content or structure of PRG's Web Site within five (5) days following such
change. RCI may terminate this Agreement within fifteen (15) days prior written
notice to PRG following any such change in the event that RCI reasonable
believes that the change is adverse to its interests or reputation.
3.4. LICENSE. Subject to the terms of this Agreement, RCI hereby grants the PRG
a non-exclusive right and license to establish a link to RCI's web page, as
described more fully in this Section 3 and PRG hereby grants to RCI a
non-exclusive right and license to use in connection with such web link the
intellectual property rights (if any) embodied in the Image file delivered by
the PRG under Section 3.1. Such license is limited to the purposes of
establishing the link described in this Section 3.
3.5. EXPENSES. Each party shall pay its expenses in performing its obligations
under this Agreement and neither party shall be responsible for payment of any
portion of the other party's expenses.
4.0 SALES AND CUSTOMER SERVICE.
4.1 SALES AND CUSTOMER SERVICE PROCEDURES. Sales of Titles to customers shall
be made as follows:
(a) If the Title is distributed through an RCI Channel, RCI will
(i) sell the Title to the customer and initiate the order;
(ii) RCI will maintain the database containing information
regarding the publisher and customer's order;
-10-
(iii) RCI will close the sale for the Title ordered by the customer
and xxxx the customer the Gross Fee (such fee may include the
Handling Charge and/or Merchant Fee). For PRG Titles, RCI will
electronically transmit the customer's order to PRG for
fulfillment by PRG. The PRG Catalog shall include a price list
for each PRG Title. RCI may determine any additional fees that
may be charged to RCI customers for PRG Titles, including but
not limited to the Handling Charge and the Merchant Fee,
provided however that, PRG shall pay for all Merchant Fees in
-------- ----
connection with an order placed though an RCI Channel, and
provided further that, such Merchant Fees shall not be
included in the calculation of the Commission payable to RCI
pursuant to Section 4 and Schedule A hereto.
----------
(iv) RCI shall fulfill the order once received by such party by
collecting all amounts due from the customer and remitting
electronically to PRG (in the case of a PRG Title) the amount
due to PRG pursuant to the Fee Schedule, less any amounts
----
attributable to commissions payable to RCI. All amounts due
and payable by RCI pursuant to Section 4 and the Fee Schedule
shall be paid by RCI to PRG on or about the last day of each
calendar month.
(v) RCI shall provide the "front-end" (i.e., the initial contact
with a customer) customer service and support, as required, to
customers whose order has been placed through an RCI Channel.
Once received, all customer questions, complaints, and
requests pertaining to PRG Titles shall be promptly
transmitted electronically to PRG for resolution. RCI shall
bear no further responsibility for customer questions,
complaints, and requests pertaining to PRG Titles. Customer
questions, complaints, and requests pertaining to RCI Titles
are the responsibility of RCI. Each party shall bear its own
expenses in resolving any such customer inquiries; and
-11-
(vi) RCI shall provide to PRG information regarding each customer
order, order processing and fulfillment, and amount billed per
order by promptly transmitting such information to PRG
electronically at the address specified in Section 10.4 hereof
(b) If the Title is distributed through a PRG Channel:
(i) PRG shall sell the Title to the customer and initiate the order;
(ii) PRG shall maintain the database containing information regarding
the customer's order unless such order is placed through the PRG
kStore, in which case the database shall be maintained by RCI);
(iii) on an order placed through a PRG Channel other than the PRG
kStore, PRG shall close the sale for the Title ordered by the
customer and xxxx the customer a Gross Fee. For RCI Titles, PRG
will electronically transmit the customer's order to RCI for
fulfillment by RCI. PRG shall fulfill the order by collecting all
amounts due from the customer and remitting electronically to RCI
(in the case of an RCI Title) the amount due to such party, less
----
any amount attributable to commissions payable to PRG pursuant to
the Fee Schedule. All amounts due and payable by PRG pursuant to
Section 4 and the Fee Schedule shall be paid by PRG to RCI on or
about the last day of each calendar month;
(iv) on an order placed through the PRG kStore, RCI shall close the
sale for the RCI Title and follow the procedures set forth in
Section 4(a)(iii) and 4(a)(iv) hereto regarding order fulfillment
and remittance;
(v) PRG shall provide the "front-end" (i.e., the initial contact with
a customer) customer service and support, as required, to
customers whose order has been placed through an PRG Channel.
Once received, all customer questions, complaints, and requests
pertaining to RCI Titles shall be promptly
-12-
transmitted electronically to RCI for resolution. PRG shall bear
no further responsibility for customer questions, complaints, and
requests pertaining to RCI Titles. Customer questions,
complaints, and requests pertaining to PRG Titles are the
responsibility of PRG. Each party shall bear its own expenses in
resolving any such customer inquiries; and
(vi) PRG shall provide to RCI information regarding each customer
order, order processing and fulfillment, and amount billed per
order by promptly transmitting such information to RCI
electronically at the address specified in Section 9.4 hereof.
4.2 CONTACT PERSONS. Each party shall designate a contact person to coordinate
the transfer of information between RCI and PRG and to be available to respond
to inquiries during the normal business hours of such party.
4.3 CHANGE IN SERVICES The parties agree and acknowledge that (a) the sales and
customer service procedures set forth in Section 4.1 hereof reflect the complete
understanding of the parties as to sales, order fulfillment, billing, and
customer service; and (b) any changes to the provisions, if reasonable,
regarding order processing, fulfillment, or customer service set forth in
Section 4.1 shall be negotiated in good faith by both parties with a
corresponding change in the Fee Schedule.
4.4. REFUNDS AND CANCELLATIONS Each party guarantees to the other party that it
will honor the policy regarding cancellations and refunds provided by the
publisher of the applicable Title. Each party shall inform the other party
within a reasonable time of any changes to such party's internal refund policy
or to a publisher's refund policy (upon notification by such publisher), as
applicable.
5.0 PAYMENT & AUDITS
5.1 PAYMENTS PURSUANT TO THE FEE SCHEDULE. On or about the last day of each
calendar month, each party shall make payments to the other party in an amount
equal to the percentage of Gross Fee or Handling Charge (as applicable) as set
forth on the Fee Schedule attached hereto as Exhibit A. Each party shall make
------- -
payments
-13-
required pursuant to this Agreement electronically and in immediately-available
funds delivered to the other party at the address set forth in Section 10.4.
5.2 LATE PAYMENTS. In the event that any payment due to a party under this
Agreement is not made when due, the amount due shall accrue interest at a rate
of one-and-a-half percent (1.5%) per month from the due date until the entire
amount, including interest, shall be paid. Interest, including payment and
acceptance of interest, shall not negate or waive the right of a party to any
other remedy, legal or equitable, to which it may be entitled because of the
delinquency of any payment.
5.3 RECORDS. Each party shall keep and maintain, during the term of this
Agreement and for a period of at least two (2) years following any termination
or expiration thereof, records (prepared in accordance with generally accepted
accounting principles, consistently applied) sufficient to determine the amounts
of revenue and payments due under this Agreement. Within thirty (30) days
following each March 31, June 30, September 30 and December 31 during which
payments are due under this Agreement, commencing December 31, 1998, each party
shall provide the other party with a report including at least (a) the number
and names of the other party's Titles sold to customers through such party's
distribution channel during the immediately preceding quarter; (b) the monetary
amount collected with respect to such Titles; (c) the name of the party
fulfilling the order for each such Title; and (d) the calculation of the
payments due to such other party in respect of each sale. A report shall be
submitted to the other party whether or not any Title have been sold to
customers during such period.
5.4 AUDITS. Each party (for purposes of this Section 5.4 only, the "Auditing
--------
Party") shall have the right, not more than once in any twelve (12)-month
-----
period, to have the relevant books and records of the other party (the "Audited
-------
Party") audited by an independent certified public accountant of the Auditing
-----
Party's choosing, to ascertain the accuracy of the Audited Party's reports under
this Agreement. Such audits shall be scheduled within thirty (30) days following
delivery of a notice by the Auditing Party to the Audited Party, and conducted
during normal business hours, in a manner that does not unreasonably interfere
with the Audited Party's normal business activities. In the event that any audit
determines that the reported payments paid to the Auditing Party under this
Agreement was less than the amount due to the Auditing Party, the Audited Party
shall pay the Auditing Party the amount of such underpayment and all accrued
interest thereon from the date that such payment was due. In addition, if any
audit determines that the reported payments paid to the Auditing Party under
this Agreement
-14-
was less than ninety five percent (95%) of the actual amount due to the Auditing
Party for the period in question, the actual out-of-pocket cost of such audit
shall be borne by the Audited Party; otherwise, the cost of the audit shall be
borne by the Auditing Party.
5.5 TAXES. All taxes and charges that may be imposed by any governmental taxing
authority on any sales of Titles pursuant to this Agreement shall be paid by the
party assessed such taxes or charges.
6.0 REPRESENTATIONS AND WARRANTIES
6.1 AUTHORIZATION, ETC. Each party hereby represents and warrants to the other
that: (a) it has the requisite power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby;
(b) this Agreement has been duly authorized, executed and delivered by such
party, constitutes the legal, valid and binding obligation of such party and is
enforceable against such party in accordance with its terms, except to the
extent such enforceability may be limited by bankruptcy, reorganization,
insolvency or similar laws of general applicability governing the enforcement of
the rights of creditors or by the general principles of equity (regardless of
whether considered in a proceeding at law or in equity); and (c) to the best of
its knowledge, it has provided the other party with the information known to it
that materially affects the other party's ability to perform the other party's
obligations under this Agreement;.
6.2 PROPRIETARY INFORMATION. Each party hereby represents and warrants to the
other party that: (a) the provision by such party of Proprietary
Information hereunder does not violate any proprietary or intellectual
property right of any third party; (b) each party shall promptly inform the
other party in the event that any third party files or threatens any suit
based on any alleged violation of any such proprietary or intellectual
property rights of such party in respect of the Proprietary Information;
and (c) each party holds title or license rights to the Proprietary
Information sufficient to permit it to grant the license granted under
Section 2 hereof.
-15-
6.3 THIRD PARTY RIGHTS. Each party represents and warrants to the other party
that: (a) it is not bound by any agreement or obligation (and will not
enter into any agreement or obligation) that could materially interfere
with the performance of its obligations under this Agreement; and (b) no
approval, authorization or consent of any governmental or regulatory
authority is required to be obtained or made by it in order for it to enter
into and perform its obligations under this Agreement;
6.4 DISCLAIMER. EXCEPT FOR THE WARRANTIES SET FORTH IN THIS SECTION 6, EACH
PARTY DISCLAIMS ALL WARRANTIES WITH RESPECT TO THE PRODUCTS AND SERVICES
CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR USE.
7.0 CONFIDENTIALITY
7.1 DEFINITION. CONFIDENTIAL INFORMATION means all financial, business,
marketing, operations, technical, and economic information, whether
tangible or intangible, that is disclosed by either party (the DISCLOSER)
or any of Discloser's suppliers, employees, contractors or customers to the
other party (the RECIPIENT), if such information is disclosed (i) in
writing or by way of any other media that is marked as confidential or (ii)
orally or visually, provided that, such oral or visual disclosure is
-------- ----
followed by written confirmation by the Discloser within 3 days of such
disclosure; provided that (A) Confidential Information excludes any
--------
information or portion thereof that (1) was known to the Recipient before
receipt thereof under this Agreement; (2) is disclosed to the Recipient by
a third person who has a right to make such disclosure without any
obligation of confidentiality to the Discloser; (3) is or becomes generally
known in the trade without violation of this Agreement by the Recipient;
(4) is independently developed by the Recipient or Recipient's employees to
whom the Discloser's information was not disclosed; or (5) is approved in
writing by the Discloser for release; (B) only the specific information
that meets the exclusions shall be excluded, and not any other information
that happens to appear in proximity to such excluded portions (for example,
a portion of a document may be excluded without affecting the confidential
nature of those portions that do not themselves qualify for exclusion) and
(C) Confidential Information includes summaries and other materials
prepared
-16-
by or on behalf of a Recipient that restate, summarize or otherwise use any
Confidential Information of a Discloser. Notwithstanding anything to the
contrary, Confidential Information shall specifically include the RCI
Catalog, the PRG Catalog, and information supplied by a party regarding RCI
Channels and PRG Channels.
7.2 NONDISCLOSURE & LIMITATIONS ON USE. Each Recipient agrees (a) to keep
secret and maintain the Confidential Information as confidential and to
hold the Confidential Information in trust for the exclusive benefit of the
Discloser; (b) to use or copy the Confidential Information solely to
perform its obligations under this Agreement; (c) to segregate the
Confidential Information from the Recipient's other information and from
that of third parties; (d) not to copy the Confidential Information unless
necessary to perform services under this Agreement; (e) to notify promptly
the Discloser upon learning about any court order or other legal
requirement that purports to compel disclosure of any Confidential
Information and to cooperate with the Discloser in the exercise of the
Discloser's right to protect the confidentiality of the Confidential
Information before any tribunal or governmental agency; (f) not to disclose
the Confidential Information to any person or entity not a party to this
Agreement other than such of Recipient's contractors, agents or employees
who (i) have a need to know the Confidential Information for a purpose
permitted hereunder; and (ii) are apprised of the confidential nature of
the Confidential Information; and (g) to return promptly to the Discloser
at any time upon the Discloser's request, any and all materials pertaining
to or containing any Information. Each party shall (1) promptly notify the
other party of any actual or suspected unauthorized use or disclosure of
the other party's Confidential Information of which it has knowledge and
will cooperate in the investigation of such unauthorized use or disclosure;
(2) be liable for breaches of confidentiality by its employees, contractors
or agents; and (3) include the other party's reasonable proprietary rights
notices on any media or products embodying the other party's Confidential
Information, including partial copies thereof. Nothing contained herein
shall prevent a Recipient from disclosing Confidential Information to any
tribunal or governmental agency, so long as the notice in this Section 7.2
is promptly given; provided that such disclosure shall not alter the status
of such information hereunder for all
-17-
other purposes as Confidential Information unless and until such
information is actually made public by the tribunal or agency.
8.0 TERM AND TERMINATION
8.1 TERM. This Agreement shall commence upon the Effective Date and, subject to
early termination pursuant to Section 8.2, shall continue in effect until the
second anniversary of the Effective Date (the INITIAL TERM) and shall be
automatically renewed for successive one (1) year periods after the expiration
of the Initial Term unless either party provides the other party with written
notice of its intent not to renew this Agreement at least ninety (90) days prior
to the expiration of the then current term.
8.2 TERMINATION.
(A) BREACH. Either party may terminate this Agreement upon thirty (30)
days' written notice to the other party if the other party breaches
any of its material obligations under this Agreement and such breach
remains uncured for a period of 30-days after receipt of such notice.
(B) Either party may terminate this Agreement upon 30 days written notice
if the parties are unable to agree upon a Development Plan as set
forth in Section 2.6 hereto.
(C) Either party may terminate this Agreement upon six months prior
written notice to the other party given at any time within six months
following the occurrence of a Change of Control of the other party;
provided that, the party subject to such Change of Control notifies
-------- ----
the other party of such event no later than the effective date
thereof. Change of Control shall mean a merger or consolidation of the
Company with or into another entity (other than a merger or
reorganization involving only a change in the state of the
incorporation of the company, or the acquisition by the company of
other businesses where the company survives as a going concern), the
sale of all or substantially all of a party's assets to any other
person, or the issuance of shares of capital stock of the company in a
transaction or series of related transactions in which the persons
acquiring such shares acquire more than 50% voting control of the
company. Notwithstanding the
-18-
foregoing, an initial public offering shall not be deemed to be a
Change of Control.
(D) Any notice given pursuant to this Section 8.2(a) must set forth with
specifically the alleged material obligations breached by the other
party.
8.3. EFFECT OF TERMINATION.
(A) THEN CURRENT ORDERS. Upon termination of this Agreement, the
provisions of Section 2.1 and 2.2 regarding the obligations of each
party shall terminate, provided however, that the parties will
-------- -------
continue to perform all obligations on pending orders for the purchase
of Titles and customer services on such Titles in accordance with the
terms of this Agreement.
(B) CONFIDENTIAL INFORMATION. Promptly after all obligations to existing
customers are performed pursuant to clause (a) hereof, each party
shall return to the other party or certify in writing to the other
party that it has destroyed all documents and other tangible items it
or its employees or agents have received or created pertaining,
referring or relating to the Confidential Information of the other
party.
(C) OTHER OBLIGATIONS. The provisions of Section 7 (Confidentiality),
Section 8 (Termination), Section 9 (Risk Allocation) and Section 10
(Miscellaneous) shall survive any expiration or termination of this
Agreement.
8.4 TERMINATION/NONRENEWAL RIGHTS ABSOLUTE. It is expressly understood and
agreed that the rights of termination and nonrenewal set forth in this
Section 8 are absolute, and that the parties have considered the
possibility of such termination or nonrenewal and the possibility of loss
and damage resulting therefrom, in making expenditures pursuant to the
performance of this Agreement. It is the express intent and agreement of
the parties that neither shall be liable to the other for damages or
otherwise by reason of the termination of this Agreement as hereinabove
provided. The parties expressly agree that the notice periods in this
Agreement are reasonable under the contemplated circumstances.
-19-
9.0 RISK ALLOCATION
9.1 LIMITATION OF LIABILITY. EXCEPT IN RESPECT OF THE PARTIES' RESPECTIVE
OBLIGATIONS UNDER SECTION 7 (CONFIDENTIALITY), IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR SIMILAR DAMAGES OF ANY KIND, WHETHER SUCH LIABILITY IS
PREDICATED ON CONTRACT, STRICT LIABILITY, STATUTE, REGULATION, OR ANY OTHER
THEORY.
9.2 INDEMNIFICATION.
(A) OBLIGATION. Subject to the provisions of this Section 9.2 each party (each
an INDEMNITOR) hereby agrees to indemnify, defend and hold the other party
and its affiliates, directors, officers, employees, contractors and agents
(each an INDEMNITEE) harmless, from, against and in respect of any and all
assessments, damages, deficiencies, judgments, losses, obligations and
liabilities, including costs of collection and reasonable attorneys' fees
and expenses (collectively, LOSSES) incurred by the Indemnitee(s) arising
from or directly related to any breach by Indemnitor under this Agreement.
(B) DEFENSE OF CLAIMS. Indemnitor may assume the defense of any claim for
Losses. If Indemnitor assumes the defense of any claim for Losses, then, at
Indemnitor's expense, the Indemnitee and its counsel shall cooperate fully
in the defense against, or compromise of, at Indemnitor's option, such
asserted liability. The Indemnitee shall have the right to employ separate
counsel in any such action or claim, but the fees and expenses of such
counsel shall not be an expense of Indemnitor unless employment of such
counsel has been specifically authorized by Indemnitor. If there is a final
judgment in any such action, or if there is a settlement of any such action
effected with the consent of Indemnitor, Indemnitor shall indemnify and
hold harmless the Indemnitee from and against any loss or liability by
reason of such judgment or settlement.
9.3 DISPUTE RESOLUTION
(A) MEDIATION. Any dispute among or between the parties or any of them arising
under or in connection with this Agreement and the transactions and
relationship between the parties
-20-
contemplated hereby will first be mediated by a telephone conference or
meeting, in which counsel for the respective parties will attempt to aid
the parties in negotiating a mutually acceptable resolution.
(B) ARBITRATION. If mediation pursuant to the foregoing paragraph fails to
resolve any dispute arising or in connection with this Agreement and the
transactions and relationship between the parties contemplated hereby,
either party may provide 30 days prior written notification to the other
party of such failure to resolve the dispute. Upon such notification, the
parties shall enter into arbitration pursuant to this Section 9.2(b). Such
dispute will be finally settled by a single arbitrator, having at least
five years of experience as an arbitrator and otherwise mutually acceptable
to the parties to such dispute, in arbitration administered by American
Arbitration Association in accordance with its commercial arbitration rules
then in effect and the internal laws of the Commonwealth of Massachusetts.
Any demand for arbitration hereunder must be made before the running of the
legal statute of limitations applicable to the claim at issue. Any such
arbitration will take place in the Commonwealth of Massachusetts, unless
otherwise agreed by the parties. The arbitrator will not have any right,
power, or authority to award any punitive or exemplary damages or other
damages in excess of purely compensatory damages. Each of the disputing
parties will be responsible for an equal portion of the fees and expenses
of the arbitrator, and all of such party's own costs and expenses, in
connection with any such arbitration. Judgment upon any award rendered by
the arbitrator, if such award is in accordance with applicable law and the
terms of this Agreement, may be entered in any court of competent
jurisdiction.
10.0 MISCELLANEOUS
10.1 INDEPENDENT CONTRACTORS. For all purposes of this Agreement, each party
shall be and act as an independent contractor or and not as partners, joint
venturers, employees or agents of the other. No franchise is created hereby.
Neither party shall have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other party or to bind
the other party to any other contract, agreement or undertaking with any third
party except as specifically provided for herein.
-21-
10.2 FORCE MAJEURE. Neither party shall be liable or responsible in any manner
for failure or delay in performance of any obligation under this Agreement when
such failure or delay is due to the result, in whole or in substantial part, to
any cause beyond the reasonable control of the party whose performance is
delayed or rendered impossible thereby if reasonable steps are taken to resolve
the reason for such failure or delay and the reason for such failure or delay is
promptly transmitted to the other party. If the delay exceeds one hundred twenty
(120) days from the initial occurrence each party shall have the right to
terminate this agreement upon 30 days prior written notice to the other party.
10.3 ASSIGNMENT. This Agreement and the provisions hereof shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
successors and assigns. Neither party may assign, transfer, or sublicense its
rights or obligations under this Agreement without the prior written consent of
the other party (which consent shall not be unreasonably withheld or delayed.
10.4 NOTICES. Any notices, waivers and other communications required or
permitted hereunder shall be in writing and shall be deemed to be fully given
when delivered by hand or dispatched (with reasonable evidence of receipt) by
telex, telegraph or other means of facsimile transmission, or twenty-four (24)
hours after being dispatched by recognized overnight courier or mail service,
addressed to the party to whom the notice is intended to be given at the
following or such other address as either party may designate by like notice:
RCI: RoweCom, Inc.
000 Xxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Fax: 000-000-0000
PRG: 000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxx
Fax: (000) 000-0000
10.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with substantive laws of the Commonwealth of Massachusetts, without
regard for any choice or conflict of law rule or principle that would result in
the application of the substantive law of any other jurisdiction.
-22-
10.6 SEVERABILITY. If any term or provision of this Agreement or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of such term
or provisions to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected, and each term and provision
of this Agreement shall be valid and be enforced to the fullest extent permitted
by law.
10.7 NO THIRD-PARTY BENEFICIARIES. No person(s) not a party to this Agreement is
an intended beneficiary of this Agreement, and no person(s) not a party to this
Agreement shall have any right to enforce any term of this Agreement.
10.8 WAIVER. No provision of this Agreement shall be deemed to have been waived
unless such waiver is in writing signed by the waiving party. No failure by any
party to insist upon the strict performance of any provision of this Agreement,
or to exercise any right to remedy consequent upon a breach thereof, shall
constitute a waiver of any other provision of this Agreement or a waiver of such
provision with respect to any subsequent breach, unless expressly provided in
writing.
10.9 ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the parties relating to the subject matter hereof and supersedes all prior or
contemporaneous oral or written agreements on the same subject matter. This
Agreement may not be amended, supplemented, or otherwise modified except by an
agreement in writing signed by both parties.
10.10 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
10.11 FURTHER ASSURANCES. Each of the party's covenants and agrees that,
subsequent to the execution and delivery of this Agreement and without any
additional consideration, it will execute and deliver any further legal
instruments and perform any acts which are or may become reasonably necessary to
effectuate the purposes of this Agreement.
10.12 CAPTIONS. Titles and headings in this Agreement are for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
-23-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
ROWECOM, INC. PUBLICATION RESOURCE
GROUP, INC.
By: By:
--------------------------- ---------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------ ------------------------
EXHIBIT A
---------
FEE SCHEDULE
------------
RCI TITLE ORDERS AND PRG TITLE ORDERS
---------------------------------------------------------------------------------------------------------------------
CHANNEL TITLE ORDER DATABASE XXXX FULFILL/ CUSTOMER COMMISSION COMMISSION
------- ----- ----- ------- ---- -------- -------- ---------- ----------
INITIATION REMIT SERVICE RCI PRG
---------- ----- ------- --- ---
---------------------------------------------------------------------------------------------------------------------
1. RCI RCI RCI RCI RCI RCI RCI ***/4/ ***/5/
--- ---
---------------------------------------------------------------------------------------------------------------------
2. RCI PRG RCI RCI RCI RCI RCI ***/6/ ***/7/
--- ---
---------------------------------------------------------------------------------------------------------------------
3. PRG RCI PRG PRG PRG RCI PRG ***/8/ ***/9/
--- ---
---------------------------------------------------------------------------------------------------------------------
4. PRG PRG PRG PRG PRG PRG PRG -- ***/10/
----
---------------------------------------------------------------------------------------------------------------------
* Represents ***/11/
----
/4/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
/5/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
/6/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
/7/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
/8/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
/9/ Confidential treatment has been requested for this portion of this exhibit.
---
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
/10/ Confidential treatment has been requested for this portion of this exhibit.
----
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
-25-
(A) Includes ***/12/
----
--------------------------
(footnote continued from previous page)
/11/ Confidential treatment has been requested for this portion of this exhibit.
----
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
/12/ Confidential treatment has been requested for this portion of this exhibit.
----
A complete copy of this exhibit, including the redacted portion, has been filed
with the Securities and Exchange Commission separately.
EXHIBIT B
---------
PRG CATALOG
-----------
EXHIBIT C
---------
RCI CATALOG
-----------
[PROVIDED ELECTRONICALLY TO PRG]
