Exhibit 10.6
This (the "Agreement") is entered into as of the 16th
day of August, 1999 (the "Effective Date") by and between xxxxxx.xxx inc., a
Texas corporation, located at 0000 Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx Xxxxx, Xxxxxx,
Xxxxx 00000 ("xxxxxx.xxx"), and Nutrisystem, a [Pennsylvania] corporation,
located at 000 Xxxxx Xxxx, Xxxxxxx, XX 00000 ("Sponsor").
RECITALS
WHEREAS, xxxxxx.xxx inc develops, markets and maintains an integrated suite
of Internet enabled, consumer oriented software applications and services,
including but not limited to, xxxxxx.xxx, electronic data interchange services,
and advertising and promotional services on the Internet at the website
xxxx://xxx.xxxxxx.xxx (the "xxxxxx.xxx Website");
WHEREAS, Sponsor markets and sells weight loss management systems.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
SPONSORSHIP SERVICES
During the term of this agreement, xxxxxx.xxx agrees to provide Sponsor
with the advertising and/or sponsorship services described in Appendix A.
ARTICLE I.
SPONSORSHIP POLICY
1.1. Content. Sponsor shall provide advertising and logo content (the
"Advertising Content") in accordance with the specifications set forth on
Exhibit B attached hereto. XXXXXX.XXX reserves the right, without liability, and
at its sole discretion, to exclude any Advertisement Content or to terminate
any links that xxxxxx.xxx deems inappropriate.
1.2. Changes and Cancellations. Any cancellations or change orders must be
made in writing and acknowledged by XXXXXX.XXX. Sponsor shall not be required
to change Advertising Content more often than once per month. Sponsor shall
provide XXXXXX.XXX with Advertising Content artwork at least five business days
in advance of the publication date.
1.3. Statistics. XXXXXX.XXX shall provide Sponsor with Sponsor usage
statistics on a monthly basis. Sponsor shall have the right to use such data for
its internal business purposes, but may not provide such data for use by third
parties.
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1.4. Publication Error. In the event of a publication error in the
Advertising Content arising exclusively from the fault of XXXXXX.XXX, Sponsor
shall notify XXXXXX.XXX of such error and XXXXXX.XXX will use reasonable efforts
to promptly correct the error. XXXXXX.XXX 's sole obligation and liability for
such publication errors shall be to use reasonable efforts to promptly correct
such errors.
1.5. Payment.
1.5.1. Fees. In consideration for the Services, Sponsor shall pay
XXXXXX.XXX the fee of $[ ] (the "Fees") as follows. Such Fees shall be paid
in one payment of $[ ] at the effective date of the agreement term and
twelve (12) consecutive monthly installments of $[ ], with the first monthly
payment due and payable one month from the commencement of delivery of
advertising services.
1.5.2. Taxes. Sponsor shall be responsible for the collection of any and
all value added, consumption, sales, use or similar taxes and fees payable with
respect to the Services and shall pay such collected taxes to the relevant tax
authorities.
ARTICLE II.
OWNERSHIP OF DATA
2.1. User Data. Xxxxxx.xxx requests its users ("Individual Users"), to
provide personal information when they sign up for certain services including
requesting information on a specific disease, chat rooms and forums ("User
Data"). Such User Data is owned by each Individual User and xxxxxx.xxx does not
use or disclose any such User Data without the consent of the Individual User.
2.2. Data Release to Sponsor. Xxxxxx.xxx shall provide to Sponsor any and
all User Data for which the Individual User has specifically authorized release
to Sponsor. All other user data would be available on an aggregate basis. In the
event that an Individual User grants rights to Sponsor for use of his User Data,
Sponsor shall use its best efforts to keep User Data confidential and shall only
use such data in an ethical manner. Sponsor may use User Data for its own
purposes, but User Data may not be disclosed, sold, assigned, leased or
otherwise disposed of to third parties by Sponsor.
2.3. Data Confidentiality. The User Data shall be xxxxxx.xxx Confidential
Information under Article 5 and shall in addition be subject to the terms of
this Article 3. Sponsor shall be liable for the conduct of its employees, agents
and representatives who in any way breach this Amendment. Sponsor's obligations
to treat the User Data as Confidential Information under Article 5 and this
Article 3 shall continue in perpetuity following termination of this Amendment.
ARTICLE III.
LICENSE
3.1. License. Sponsor grants to xxxxxx.xxx a non-exclusive, limited right
and license to use and display the Advertising Content for the sole purpose of
providing the Services. Sponsor
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shall retain all right, title, and interest (including all copyrights, service
marks, trademarks and other intellectual property rights) in the Advertising
Content and xxxxxx.xxx shall not acquire any interest therein.
3.2. Intellectual Property Ownership. Xxxxxx.xxx shall retain all right,
title and interest (including all copyrights, patents, service marks, trademarks
and other intellectual property rights) in the xxxxxx.xxx Web Site. Except for
the license granted pursuant to this Agreement, Sponsor shall not acquire any
interest in the xxxxxx.xxx Web Site or any other services or materials, or any
copies or portions thereof, provided by xxxxxx.xxx pursuant to this Agreement.
3.3. Use of Name and Likeness. Sponsor shall not have any right to use the
name and/or likeness of Dr. C. Xxxxxxx Xxxx or to make any statements, whether
written or oral, which state or otherwise imply, directly or indirectly, any
endorsement from or affiliation with Xx. Xxxx in any manner whatsoever without
the prior written consent of XXXXXX.XXX, which consent may be withheld in
XXXXXX.XXX's sole discretion.
ARTICLE IV.
CONFIDENTIALITY
4.1. Confidentiality. For the purposes of this Agreement, "Confidential
Information" means non-public information about the disclosing party's business
or activities that is proprietary and confidential, which shall include, without
limitation, all business, financial, technical and other information of a party
marked or designated "confidential" or by its nature or the circumstances
surrounding its disclosure should reasonably be regarded as confidential.
Confidential Information includes not only written or other tangible
information, but also information transferred orally, visually, electronically
or by any other means. Confidential Information will not include information
that (i) is in or enters the public domain without breach of this Agreement,
(ii) the receiving party lawfully receives from a third party without
restriction on disclosure and without breach of a nondisclosure obligation or
(iii) the receiving party knew prior to receiving such information from the
disclosing party or develops independently.
4.2. Exclusions. Each party agrees (i) that it will not disclose to any
third party or use any Confidential Information disclosed to it by the other
except as expressly permitted in this Agreement and (ii) that it will take all
reasonable measures to maintain the confidentiality of all Confidential
Information of the other party in its possession or control, which will in no
event be less than the measures it uses to maintain the confidentiality of its
own information of similar importance.
4.3. Exceptions. Notwithstanding the foregoing, each party may disclose
Confidential Information (i) to the extent required by a court of competent
jurisdiction or other governmental authority or otherwise as required by law or
(ii) on a "need-to-know" basis under an obligation of confidentiality to its
legal counsel, accountants, banks and other financing sources and their
advisors. Except as set forth in this Section 5.3, the terms and conditions of
the Agreement will be deemed to be the Confidential Information of each party
and will not be disclosed without the prior written consent of the other party.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
5.1. Sponsor Warranty. Sponsor represents and warrants for the benefit of
XXXXXX.XXX that the Advertising Content is true and correct and does not and
will not for the term of this Agreement infringe upon or violate: (i) any
copyright of any third party and does not and will not constitute a defamation
or invasion of the rights of privacy or publicity of any kind of any third
party, (ii) any applicable law, regulation or non-proprietary third-party right.
Sponsor further represents and warrants for the benefit of XXXXXX.XXX that the
Advertising Content does not contain any material which is unlawful, harmful,
abusive, hateful, obscene, threatening or defamatory and Sponsor is not an
entity or an affiliate of any entity which engages in the manufacture or
wholesale distribution of tobacco or tobacco products (such activities are
collectively referred to herein as "Tobacco Industry Affiliation").
5.2. Indemnification By Sponsor. Sponsor agrees to indemnify and hold
harmless XXXXXX.XXX, its officers, directors, employees, and agents from and
against any claims, demands, causes of action and judgments (including
reasonable attorneys' fees and court costs) (collectively, "XXXXXX.XXX Claims")
by any third party rising out of any breach or alleged breach of any of Sponsor'
representations and warranties contained in this Section 6.1, provided that
XXXXXX.XXX gives Sponsor prompt written notice of the assertion of any such
XXXXXX.XXX Claim Sponsor shall have the option to undertake and control the
defense and settlement of any such XXXXXX.XXX Claim; provided, however, that (i)
XXXXXX.XXX may participate in any such proceeding at its own expense with
counsel of its own choosing, and (ii) Sponsor shall not settle any such
XXXXXX.XXX Claim in a manner that adversely affects XXXXXX.XXX unless XXXXXX.XXX
agrees to such settlement in writing.
ARTICLE VI.
LIMITATION OF LIABILITY
6.1. Warranty. XXXXXX.XXX will use commercially reasonable efforts to
maintain the XXXXXX.XXX Website available and display the Advertising Content
twenty four hours per day each day during the term of the Agreement. XXXXXX.XXX
shall install and maintain a commercially acceptable system of collecting
information about Impressions and other data relating to the use of the
Advertising Content. XXXXXX.XXX warrants to Sponsor that it will make reasonable
effort to perform the Services in a competent manner.
6.2. Exclusion of Warranty. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, XXXXXX.XXX MAKES NO WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF
THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL WARRANTIES WITH REGARD TO
XXXXXX.XXX'S WEBSITE AND SERVICES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF NONINFRINGEMENT AND THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN PARTICULAR, AND NOT BY
WAY OF LIMITATION, XXXXXX.XXX DOES NOT WARRANT THAT ITS WEBSITE WILL OPERATE
ERROR-FREE OR WITHOUT INTERRUPTION.
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6.3. Damages. IN NO EVENT SHALL XXXXXX.XXX BE LIABLE TO SPONSOR FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS
AGREEMENT OR ITS TERMINATION, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT
(INCLUDING NEGLIGENCE) STRICT LIABILITY OR OTHERWISE AND IRRESPECTIVE OF WHETHER
XXXXXX.XXX HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.
Notwithstanding the foregoing, in no event shall XXXXXX.XXX's cumulative
liability under this Agreement exceed the amount actually paid by Sponsor to
XXXXXX.XXX in the immediately preceding six (6) month period.
ARTICLE VII.
TERM AND TERMINATION
7.1. Term; Termination. This Agreement will remain in effect from the
effective date to one year after implementation of advertising services to
sponsor. Implementation of advertising services will commence on October 1,
1999. Upon completion of the agreement term, sponsor retains the right of first
refusal for the premier sponsorship of the weight management center on
xxx.xxxxxx.xxx.
7.2. Termination for Tobacco Industry Affiliation. Upon commencing any
activities relating to Tobacco Industry Affiliation (as defined in Section 6.1),
Sponsor shall promptly notify XXXXXX.XXX of its intent to undertake Tobacco
Industry Affiliation. Upon receipt of such notice or upon learning of any such
Tobacco Industry Affiliation from a third party, XXXXXX.XXX shall have the right
to terminate this Agreement immediately on written notice to Sponsor without
liability of any kind.
7.3. Termination for Cause. Either party may terminate this Agreement upon
thirty (30) days' written notice of a breach by the other party, provided such
breach is not cured within such thirty-day period.
7.4. Termination by Insolvency. Either party may terminate this Agreement
by providing written notice to the other party if the other party ceases to
function as a going concern, becomes insolvent, makes an assignment for the
benefit of creditors, files a petition in bankruptcy, permits a petition in
bankruptcy to be filed against it, or admits in writing its inability to pay its
debts as they mature, or if a receiver is appointed for a substantial part of
its assets.
7.5. Survival. The following Sections shall survive termination of this
Agreement: Section ___, Article 5 (Confidentiality), Article 6
(Indemnification), Article 6 (Limitation of Liability), Section 7.5 (Effect of
Termination) and Article 9 (General). [NEED TO UPDATE]
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ARTICLE VIII.
GENERAL
8.1. Publicity. Except as may be required by applicable laws and
regulations or a court of competent jurisdiction, or as required to meet credit
and financing arrangements, or as required or appropriate in the reasonable
judgment of either party to satisfy the disclosure requirements of an applicable
securities law or regulation or any applicable accounting standard, neither
party shall make any public release respecting this Agreement and the terms
hereof without the prior consent of the other party.
8.2. Arbitration. Any and all disputes, controversies and claims arising
out of or relating to this Agreement or concerning the respective rights or
obligations of the parties hereto shall be settled and determined by arbitration
in Austin, Texas before one (1) arbitrator pursuant to the Commercial Rules then
in effect of the American Arbitration Association. Each party shall have no
longer than three (3) days to present its position. Judgment upon the award
rendered may be entered in any court having jurisdiction or application may be
made to such court for a judicial acceptance of the award and an order of
enforcement. The parties agree that the arbitrators shall have the power to
award damages, injunctive relief and reasonable attorneys' fees and expenses to
any party in such arbitration.
8.3. Assignment. Neither party may assign this Agreement, in whole or in
part, without the other party's written consent, which consent will not be
unreasonably withheld, except that a party's rights hereunder may be transferred
to a successor of all or substantially all of the business and assets of the
party regardless of how the transaction or series of related transactions is
structured.
8.4. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, but without giving effect to
its laws or rules relating to conflicts of laws.
8.5. Notice. All notices, statements and reports required or permitted by
this Agreement shall be in writing and deemed to have been effectively given and
received: (i) five (5) business days after the date of mailing if sent by
registered or certified U.S. mail, postage prepaid, with return receipt
requested; (ii) when transmitted if sent by facsimile, provided a confirmation
of transmission is produced by the sending machine and a copy of such facsimile
is promptly sent by another means specified in this section; or (iii) when
delivered if delivered personally or sent by express courier service. Notices
shall be addressed as follows:
For XXXXXX.XXX: For Sponsor:
Xxxxxx.xxx Inc. Nutrisystem
0000 Xxxxxxxx Xxxx Xxxxx 000 Xxxxx Xxxx
Xxxxxx, XX 00000
Attn: Chief Financial Officer Xxxxxxx, XX 00000
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Attn: Xxxxx Xxxxxxx
President
Either party may change its address for the purpose of this paragraph by notice
given pursuant to this paragraph.
8.6. No Agency. The parties are independent contractors and will have no
power or authority to assume or create any obligation or responsibility on
behalf of each other. This Agreement will not be construed to create or imply
any partnership, agency or joint venture.
8.7. Severability. In the event that any of the provisions of this
Agreement are held to be unenforceable by a court or arbitrator, the remaining
portions of the Agreement will remain in full force and effect.
8.8. Entire Agreement. This Agreement is the complete and exclusive
agreement between the parties with respect to the subject matter hereof,
superseding any prior agreements and communications (both written and oral)
regarding such subject matter. This Agreement may only be modified, or any
rights under it waived, by a written document executed by both parties.
8.9. Counterparts. This Agreement may be signed in counterparts which, when
signed, shall constitute one document.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
ACCEPTED BY:
Xxxxxx.xxx inc.
By: /s/ Xxxxx Xxxxxxx-Xxxx
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Name: Xxxxx Xxxxxxx-Xxxx
Title: CFO
Nutrisystem
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President
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EXHIBIT A
Advertising Services
1. Nutrisystem shall be the premier sponsor of 75% of the content within the
Weight Management Center on xxx.xxxxxx.xxx public site.
2. Xxxxxx.xxx shall not display banner advertising on the Weight Management
Center from any direct competitor. Xxxxxx.xxx shall not display a direct
competitor's logo button on the xxxxxx.xxx home page when the sponsor's logo
is simultaneously being presented. As used herein, "Director Competitor"
shall xxxxx any company whose primary function is the administration of
weight loss programs. This does not include companies whose primary function
is to manufacture or distribute nutritional products that may be used as a
part of a weight management program. Sponsor has designated that "Direct
Competitors" will include but are not limited to: 1) Xxxxx Xxxxx Inc., 2)
Xxxxxx.xxx 3) Weight Watchers International, Incorporated.
3. Nutrisystem will be noted as sponsor of the Weight Management Center on 75%
of the content within the Weight Management Center on xxx.xxxxxx.xxx public
site.
4. Xxxxxx.xxx will deliver the following number of advertising impressions over
the sponsorship term.-15,952,000. If xxxxxx.xxx does not deliver the
designated amount of impressions in the weight management center, agreement
term will be extended till impressions have been delivered.
5. Sponsor advertising impressions will be distributed in the following areas:
- Category Placements - 468 x 60 banners and linkable sponsor logos located
in the Weight Management Center - 6,984,000
- Community Placements - 468 x 60 banners in Chat group areas, promotion of
spotlight events. Text links in spotlight events. - 166,200
- Value Added Placements - Home page logo buttons, Sponsorship of xxxxxx.xxx
newsletter (2), 468 x 60 banners in Xx. Xxxxx Xxxxxxxxx, Health and
Wellness and Women's health content areas. - 7,577,000
- Run of Site placements - 120 x 60 and 468 x 60 banners placed throughout
xxxxxx.xxx at the discretion of xxxxxx.xxx. - 1,200,000
- Pre launch impressions - 120 x 60 and 468 x 60 banners on the xxxxxx.xxx
home page and fitness center. - 175,000
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EXHIBIT B
TECHNICAL SPECIFICATIONS FOR ADVERTISING ELEMENTS
File Formats
Naming Convention: (lowercase only, 8.3)
Alternate Text: Use ALT tag; ten words or less
Image Dimensions:
Sponsor Banner: 468 pixels by 60 pixels, 120 pixels by 60 pixels (no animation
on 120 x 60 banners)
Home page logo: 88 pixels by 31 pixels, (size subject to change with
reformatting of home page)
Image File Format: [GIF/JPEG]
Image File Size: 12 k maximum file size
File Names: Use Sponsor name.: [Sponsor].gif]
Delivery of GIFs
Email - xxxxxx@xxxxxx.xxx, cc: xxxxxx@xxxxxx.xxx
We accept [,CompactPro, zip, gzip, and UNIX tar or compress] format tiles. All
formats must be mailed in [ASCII encoding(uuencode, mmencode)].
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