EXHIBIT 10.1
ADVERTISING AGREEMENT
This Advertising Agreement (this "Agreement"), dated as of ________________
1999, is made by and between XxxxXxxxxx.xxx. Inc., a Delaware corporation
("HomeGrocer") and Xxxxxx.xxx LLC ("Xxxxxx.xxx"), a Delaware limited liability
company. In consideration of the mutual promises contained in this Agreement,
HomeGrocer and Xxxxxx.xxx hereby agree as follows:
1. Advertising Activities. During the Term, in consideration of
HomeGrocer's making the payments specified in Section 2 below, Xxxxxx.xxx will
conduct the advertising activities specified on Exhibit A.
2. Payments. HomeGrocer will pay Xxxxxx.xxx an aggregate sum of ten
million dollars ($10,000,000) (the "Aggregate Payment"), as follows: As of the
last day of each of the eight (8) calendar quarters following December 31, 1999
(i.e., each of March 31, 2000; June 30, 2000; September 30, 2000; December 31,
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2000; March 31, 2001; June 30, 2001; September 30, 2001; and December 31, 2001),
HomeGrocer will pay Xxxxxx.xxx the sum of one million two hundred and fifty
thousand dollars ($1,250,000); provided, however, that notwithstanding the
foregoing, if at any time prior to September 30, 2001, Xxxxxx.xxx has delivered
two million (2,000,000) Advertising Mailings (as defined on Exhibit A) to
existing Xxxxxx.xxx customers, and Xxxxxx.xxx so notifies HomeGrocer, HomeGrocer
will pay Xxxxxx.xxx the entire outstanding balance of the Aggregate Payment as
of the last day of the calendar quarter in which Xxxxxx.xxx has delivered the
two millionth (2,000,000th) Advertising Mailing, and thereafter HomeGrocer shall
have no obligation to make any further payments pursuant to this Agreement.
3. License. HomeGrocer hereby grants Xxxxxx.xxx a non-exclusive,
worldwide license to use, reproduce, publish, publicly perform and publicly
display HomeGrocer's trademarks, tradenames, other proprietary marks and
copyrighted materials supplied by HomeGrocer, during the term of this agreement
solely in connection with the performance of the advertising activities
specified on Exhibit A. All goodwill arising out of any use of any trademarks,
tradenames or proprietary marks of HomeGrocer by Xxxxxx.xxx will inure solely to
the benefit of HomeGrocer.
4. HomeGrocer Records and Reporting. During the Term and for a period of
six (6) months thereafter: (a) HomeGrocer will use commercially reasonable
efforts to ensure that its ordering mechanism tracks, and HomeGrocer maintains
accurate and complete records of the unique individual URL and the identity of
each recipient of any Advertising Mailing who accesses the web site located at
xxx.xxxxxxxxxx.xxx (or any successor or replacement thereto) (the "HomeGrocer
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Site") and any other person or entity who accesses the HomeGrocer Site by reason
of any links, advertising placements or other advertising efforts undertaken by
Xxxxxx.xxx in its sole discretion (collectively,"Amazon.com-Delivered Users");
and (b) HomeGrocer will use commercially reasonable efforts to maintain accurate
and complete records of the number of Amazori.com-Delivered Users who place any
order on or through the HomeGrocer Site (including, without limitation, as a
percentage of the total number of Amazon.com-Delivered Users), the dates of any
such orders by Amazon.com-Delivered Users in the aggregate (the information and
data specified in subparagraphs (a) and (b) above,
collectively, the "HomeGrocer Customer Information"). Beginning January 1, 2000,
within 30 days after the end of each quarter of the Term, HomeGrocer will
deliver to Xxxxxx.xxx a written statement setting forth: (aa) the HomeGrocer
Customer Information in the aggregate for the preceding quarter and for the Term
to date; (bb) all other aggregated tracking information collected by HomeGrocer
relating to Amazon.com-Delivered Users to the extent permissible under the
parties' respective privacy policies; and (cc) such other aggregated information
regarding purchases and other activity on the HomeGrocer Site by Amazon.com-
Delivered Users as Xxxxxx.xxx may reasonably request to the extent permissible
under the parties' respective privacy policies. Xxxxxx.xxx may, at its expense,
examine or audit HomeGrocer's records related to Amazon.com-Delivered Users no
more than once every twelve months. Any such audit will be conducted, to the
extent possible, in a manner that does not unreasonably interfere with
HomeGrocer's business operations.
5. Term and Termination. The term of this Agreement (the "Term") shall
commence as of date set forth above and shall continue until January 1, 2002.
Either party may terminate this Agreement upon not less than thirty (30) days'
prior written notice to the other party of any breach by such other party which
is not cured within such thirty (30) day period. Upon any termination or
expiration of this Agreement, only the rights and obligations of the parties
under Sections 6, 7, 8, 9, 10, 11, 12 and 13 will survive such termination or
expiration.
6. Indemnification. HomeGrocer or Xxxxxx.xxx, as applicable (in either
case, the "Indemnifying Party") will defend and indemnify the other party and
its affiliates against any third party claim, to the extent arising out of or in
connection with (a) the operation of the web site located at the URL
xxxx://xxx.xxxxxx.xxx (in the case of Xxxxxx.xxx as the Indemnifying Party) or
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the HomeGrocer Site (in the case of HomeGrocer as the Indemnifying Party), or
(b) any breach of this Agreement by the Indemnifying Party. The Indemnifying
Party will pay any award against the other party and any costs and attorneys'
fees reasonably incurred by the other party and its affiliates resulting from
any such claim; provided, that the party seeking indemnification (a) gives the
Indemnifying Party prompt written notice of the claim, (b) cooperates with the
Indemnifying Party (at the Indemnifying Party's expense) in connection with the
defense and settlement of the claim, and (c) permits the Indemnifying Party to
control the defense and settlement of the claim, provided that the Indemnifying
Party may not settle the claim without the indemnified party's prior written
consent (which will not be unreasonably withheld). The indemnified party (at
its cost) may participate in the defense and settlement of the claim.
7. Warranty Exclusion; Limitation of Liability. NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES IN RELATION TO THIS AGREEMENT, ANY WEB SITES OWNED
OR OPERATED BY IT OR ITS PERFORMANCE HEREUNDER, INCLUDING (WITHOUT LIMITATION)
IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A
PARTICULAR PURPOSE, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AMAZON,
COM SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING THE AMOUNT
OF REVENUES OR OTHER ECONOMIC OR NON-ECONOMIC BENEFITS THAT HOMEGROCER MAY
OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT. NEITHER PARTY WILL BE LIABLE
TO THE
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OTHER FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT.
8. Independent Contractors. The parties are independent contractors, and
this Agreement will not be construed to create a partnership, joint venture or
other relationship. Neither party will have, or hold itself out to third parties
as having, any authority to bind or enter into any agreement on the other
party's behalf.
9. Compliance with Laws. In performing this Agreement, each party will
comply with all applicable laws, regulations, orders and other requirements of
any governmental authority, now or hereafter in effect. Without limiting the
generality of the foregoing, each party will be responsible for collection and
payment of such taxes as may be imposed upon such party in the first instance
with respect to any compensation paid or received or transactions under this
Agreement.
10. Notices. Any notice or other communication under this Agreement given
by a party to the other party must, in order to be effective, be in writing and
be sent to the intended recipient by registered letter, receipted commercial
courier, or electronically receipted facsimile transmission (acknowledged in
like manner by the intended recipient) at its address specified below, and with
a copy to the same address addressed Attn: General Counsel. Either party may
change its address for notices by delivery of written notice in accordance with
this Section 10.
11. Assignment. Except as provided in the next sentence, neither party
may assign this Agreement or its rights hereunder, in whole or in part, or
delegate any of its obligations under this Agreement, without the other party's
prior written consent, except that either party may assign this Agreement to any
of its corporate affiliates or in connection with any merger, consolidation,
reorganization, sale of all or substantially all of its assets or similar
transaction, provided that the assignee agrees in writing to be bound by all the
terms and conditions of this Agreement. Notwithstanding the foregoing,
Xxxxxx.xxx may assign its rights to receive payments hereunder to any person or
entity without restriction. No assignment or delegation of this Agreement or
any rights or obligations hereunder shall relieve the assigning or delegating
party of its obligations under this Agreement in the event of non-performance by
its assignee or delegate. Subject to the foregoing, this Agreement will be
binding on and enforceable by the parties and their respective successors and
permitted assigns.
12. Confidentiality. The terms of this Agreement are the confidential and
proprietary information of Xxxxxx.xxx, and HomeGrocer will maintain the same in
strict confidence and not disclose the same to any third party (except as
required in filings with the Securities and Exchange Commission, provided that
HomeGrocer, in consultation with Xxxxxx.xxx, uses reasonable efforts to seek
confidential treatment of the material terms and conditions of this Agreement).
The HomeGrocer Customer Information is confidential and proprietary information
of XxxxXxxxxx.xxx, and Xxxxxx.xxx will maintain the same in strict confidence
and not disclose the same to any third party other than Xxxxxx.xxx's 100% owned
subsidiaries (except as required by applicable law or regulation, provided that
Xxxxxx.xxx, in consultation with HomeGrocer, uses reasonable efforts to seek
confidential treatment of the same), unless such information enters the public
domain through no fault of Xxxxxx.xxx. Neither party will issue
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any press releases, make any other public disclosures regarding this Agreement
or the relationship of the parties, or, except as permitted by Section 3, use
any of the other party's trademarks, tradenames, other proprietary marks or
copyrighted materials without such other party's prior written consent.
13. Miscellaneous. This Agreement (a) represents the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
previous or contemporaneous oral or written agreements regarding such subject
matter, (b) may be amended or modified only by a written instrument signed by a
duly authorized agent of each party, and. (c) will, be governed by the laws of
the State of Washington, without reference to its choice of law rules. No
failure or forbearance by either party to insist upon or enforce performance by
the other party of any of the provisions of this Agreement or to exercise any
rights or remedies under this Agreement or otherwise available at law or equity
shall be construed as a waiver or relinquishment to any extent of such party's
right to assert or rely upon any such provision, right, or remedy in that or any
other instance; rather the same shall be and remain in full force and effect.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
later date set forth below.
XXXXXX.XXX: HOMEGROCER:
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Xxxxxx.xxx LLC XxxxXxxxxx.xxx, Inc.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxx Xxxxx Xxxxxx
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Title: VP of Business Development Title: Chairman and CEO
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Date: 11/18/99 Date: 11/18/99
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Address: Address:
0000 00/xx/ Xxxxxx Xxxxx 00000 XX Xxxxxx Xxxxx
Xxxxxxx, XX 00000 Xxxxxxxx, XX 00000
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