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EXHIBIT 10.41
TENANCY AND PROMOTION AGREEMENT
TENANCY AND PROMOTION AGREEMENT, dated as of June 12, 2000 (this
"Agreement"), by and between Xxxxxxxxx.xxx, Inc., a Delaware corporation with
offices at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx, 00000 ("DCOM") and
Xxxx.xxx, Inc., a Delaware corporation with offices at 000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Company").
R E C I T A L S
WHEREAS, the Company is an online retailer of pet products, information
and resources;
WHEREAS, Xxxxxxxx.xxx, Inc., a Delaware corporation ("Petstore"), and
the Company are parties to that certain Asset Purchase Agreement dated of even
date herewith (the "Purchase Agreement"), pursuant to which the Company is
purchasing the assets of Petstore (the "Purchase");
WHEREAS, on April 6, 2000 DCOM terminated that certain (a) Content and
Trademark Sublicense and Services Agreement between DCOM and Petstore, dated as
of October 27, 1999, and (b) Advertising and Promotion Agreement between DCOM
and Petstore, dated as of October 27, 1999; and
WHEREAS, DCOM and Company have agreed, strictly conditioned and
effective solely upon the closing of the Purchase in accordance with the
Purchase Agreement, to enter into this Tenancy and Promotion Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. GENERAL DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
1.1 "Ad Placement" shall have the meaning set forth in Paragraph
2.2(b).
1.2 "Ad Spots" shall have the meaning set forth in Paragraph
2.2(a)(i).
1.3 "Affiliate" shall mean any Person that directly or indirectly
(through one or more intermediaries) controls, is controlled by, or is under
common control with such Person concerned.
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1.4 "Animal Planet Network" shall mean the television network
owned by an affiliate of DCOM and currently known as "Animal Planet."
1.5 "Co-branded Ads" shall have the meaning set forth in
Paragraph 2.2(a)(ii).
1.6 "Company Competitors" shall mean the following entities: [*]
and [*]. The exclusivity that accrues to the Company hereunder with respect to
the Company Competitors shall also apply with respect to wholly-owned
subsidiaries and successors of the Company Competitors, only to the extent that
substantially all of the retail pet supplies business of a Company Competitor
accrues to such subsidiary or successor and/or that the retail pet supplies
business of such a subsidiary or successor is the principal business operated by
such subsidiary or successor. (Example 1: if Bloomingdale's buys [*] pet home
furnishings business, Bloomingdale's will not be deemed a successor because it
has not purchased substantially all of [*] retail pet supplies business. Example
2: if Procter & Xxxxxx acquires [*] and is therefore a "successor" of [*], P&G
does not become a Company Competitor hereunder, because the retail sale of pet
supplies is not P&G's principal business.) Upon written notice to DCOM, the
Company may from time to time substitute in the current list of Company
Competitors other entities for whom the retail sale of pet supplies constitutes
at least 20 percent of the total revenues of such entity, subject to approval of
DCOM, which such approval shall not be unreasonably withheld.
"Confidential Information" shall have the meaning set forth in
Paragraph 9.12.
1.8 "Content" shall mean the written and graphical content
provided by the Company to DCOM relating to pets and animals and as further
described in Attachment E.
1.9 "Contract Year" shall mean each annual period during the Term
beginning on the date of this Agreement and ending on the anniversary of such
date.
1.10 "Discovery Networks" shall mean the following Discovery
Communications, Inc. network properties: Discovery Channel, TLC, Animal Planet,
Travel Channel, Discovery Health Channel and Digital Networks.
1.11 "Exclusivity Period" shall have the meaning set forth in
Paragraph 4.1.
1.12 "Indemnified Party" shall have the meaning set forth in
Paragraph 7.2.
1.13 "Indemnifying Party" shall have the meaning set forth in
Paragraph 7.2.
1.14 "Internet" shall mean a global network of interconnected
computer networks, each using the Transmission Control Protocol/Internet
Protocol and/or such other standard network interconnection protocols as may be
adopted from time to time, which is used to transmit content that is directly or
indirectly delivered to a computer or other digital electronic device for
display to an end-user, whether such content is delivered through on-line
browsers,
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off-line browsers, or through "push" technology, electronic mail, broadband
distribution, satellite, wireless or otherwise.
1.15 "Internet Site" or "website" shall mean any site or service
delivering content on or through the Internet, including, without limitation,
any on-line service such as America Online, CompuServe, Prodigy and the
Microsoft Network.
1.16 "Merger" shall have the meaning set forth in the Recitals.
1.17 "Person" shall mean any individual, partnership, corporation
or organized group of persons, including agencies and other instrumentalities of
governments and states.
1.18 "Petstore" shall have the meaning set forth in the Recitals.
1.19 "Prevailing E-commerce Tenancy Market Rate" shall have the
meaning set forth in Paragraph 4.3.
1.20 "Prevailing Market Rate" shall have the meaning set forth in
Paragraph 2.2(b).
1.21 "Promotion" shall have the meaning set forth in Paragraph
2.1.
1.22 "Share Price Floor" shall have the meaning set forth in
Paragraph 9.1.
1.23 "Tenancy Period" shall have the meaning set forth in
Paragraph 4.1.
1.24 "Term" shall have the meaning set forth in Paragraph 3.
1.25 "Website" shall mean the Company's website Xxxx.xxx
accessible through the URL xxxx://xxx.xxxx.xxx, and any successors thereof
subject to Section 9.1 hereof.
2. COMMITMENT.
2.1 DCOM Commitment of Advertising and Promotion.
DCOM hereby covenants and commits to deliver to the
Company advertising time and related promotion of the Website (collectively,
"Promotion"), in an aggregate value of [*] per Contract Year of the Term. The
timing and placement of promotion of the Website shall be subject to
availability and shall be at the reasonable discretion of DCOM. The actual costs
incurred by DCOM or paid by DCOM to third parties for producing any
advertisements or promotions, if any are incurred by DCOM, shall be at a
mutually agreed upon (between DCOM and the Company) written rate and shall be,
as agreed upon in writing by the parties, either (i) reimbursed by the Company
on a fairly allocated basis taking into consideration the overall message of the
advertisement and the portion thereof directed toward the promotion of the
Website, or (ii) shall be applied on a fairly allocated basis to the aggregate
value of the
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Promotion delivered to the Company by DCOM pursuant to this Agreement. DCOM will
not incur any such production costs without the prior written approval of
Company, provided Company may not withhold approval of such costs solely in an
effort to cause DCOM to breach its obligations under this Agreement. It is
understood that such production costs will be incurred by DCOM only to the
extent that the Company and DCOM agree to develop new creative for either the
Co-branded Ads or the Ad Spots or the parties agree to integrate the Xxxx.xxx
brand, trademarks or other messaging into the Co-branded Ads in a new or
non-traditional format.
2.2 Delivery of Advertising and Promotion.
(a) The Promotion to be delivered pursuant to this
Agreement shall be delivered as follows:
(i) Approximately [*] per Contract Year in
Company-branded interstitial advertising spots for Company and the Website shall
be provided on the Discovery Networks (the "Ad Spots"). The value of each such
Ad Spot shall be determined based on the Prevailing Market Rate (as defined
below) for such Promotions. Subject to the terms and conditions of the Discovery
Networks' standard network sponsorship contracts and any other standard
advertising terms and conditions, the content of such Ad Spots shall be at the
discretion of the Company. Determinations regarding placement of the Ad Spots
shall be subject to availability of inventory and to DCOM's reasonable
discretion.
(ii) Approximately [*] per Contract Year in
co-branded interstitial advertising (the "Co-branded Ads") shall be provided on
the Discovery Networks and/or other broadcast media outlets, including without
limitation, broadcast or cable television and radio. The Co-branded Ads shall be
produced by DCOM and shall promote the pets content and commerce portion of the
Xxxxxxxxx.xxx website, including promotion of the Company as the provider of pet
supplies. Each Co-branded Ad shall be valued at [*] of the Prevailing Market
Rate for such Promotion. The content and placement of the Co-branded Ads shall
be at the sole discretion of DCOM.
(b) The value of all Promotion provided hereunder shall be
charged at the "Prevailing Market Rate" for such Promotion, excluding barter,
which will be the market rate less any agency or other commissions (where
applicable) for spots purchased on the Discovery Networks and such other
broadcast stations, networks, cable networks, radio stations or print media
during the time period in which the Promotion occurs. With respect to the
Promotion delivered on the Discovery Networks and DCOM's websites, DCOM will use
commercially reasonable best efforts to obtain marketplace rates at least as
favorable as those provided to third parties making comparable purchases. DCOM
will provide the Company within thirty (30) days after the end of each Contract
Year a statement, certified by an officer of DCOM, summarizing the value of the
Promotion DCOM has delivered for the Website (the "Ad Placements") during such
Contract Year. Each such report shall summarize the Ad Placements delivered over
the
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previous Contract Year, the Prevailing Market Rate for such Promotion and the
total value of the Ad Placements provided during such Contract Year. The
Prevailing Market Rate of any particular Ad Placement will be demonstrated by
DCOM upon the Company's request, provided such requests shall not be of an
unreasonable frequency or require an unreasonable level of detail.
2.3 Subject to availability of inventory (and in the event
designated inventory is unavailable, substitution of substantially equivalent
inventory), the interstitial advertising plan for the first Contract Year is
attached hereto as Attachment A. The parties acknowledge and agree that the
information contained in Attachment A is proprietary and confidential and the
parties agree to maintain it in strict confidence, provided however, the Company
may publish Attachment A to the extent explicitly required by a governmental
agency, in which such event, the Company shall promptly notify DCOM, and the
parties shall cooperate to obtain as much confidential treatment as possible for
Attachment A under the circumstances.
2.4 Each party agrees to designate and maintain a primary point
of contact regarding interstitial advertising under this Agreement within 30
days of execution of this Agreement.
2.5 The parties agree to discuss the following additional mutual
promotional initiatives, it being understood that neither party is obligated to
implement any such promotional initiative: e-mail offers to the parties'
respective customer lists, catalog inserts in the Discovery Channel Catalog and
the Company's magazine, in-store promotions, inclusion of in-box promotions in
DCOM and Company boxes and joint sponsorships.
3. TERM.
The term of this Agreement (the "Term") shall begin only upon the
closing of the Purchase provided such closing takes place on or before July 31,
2000 and shall continue in full force and effect for a period of four (4)
consecutive years, unless this Agreement is terminated earlier in accordance
with the terms and conditions stated herein. In the event the closing of the
Purchase does not take place on or before July 31, 2000, or in the event the
Purchase Agreement is terminated in accordance with its terms, this Agreement
shall automatically terminate and the parties shall have no further liability or
obligation to one another in any respect.
4. EXCLUSIVE PET SUPPLIES E-COMMERCE TENANCY.
4.1 DCOM shall provide the Company with a one-year exclusive pet
supplies tenancy (the "Exclusivity Period") pursuant to which the Company shall
be the exclusive retail provider of pet supplies on the websites Xxxxxxxxx.xxx
and XxxxxxXxxxxx.xxx, with three (3) twelve (12)-month renewal options,
exercisable at the Company's option, upon written notice to DCOM at least ninety
days prior to the end of the preceding twelve (12) month period (the Exclusivity
Period, as may be extended by the Company, is referred to as the "Tenancy
Period"). DCOM shall not include advertisements (advertisements being defined as
buttons or banner advertisements), branded content or promotions (promotions
being defined as gift-with-purchases, dollar- or percentage-off discounts and
free give-aways) of any Company Competitor
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on the [*] during the Tenancy Period or on the [*] under (but apart from) the
Xxxxxxxxx.xxx web portal solely during the first year of the Term; provided,
however, that the foregoing prohibition shall not apply to (a) run-of-site
banner advertisements of Company Competitors or (b) sponsorships of
network-related programming or content areas by Company Competitors.
4.2 Except as explicitly provided in Section 4.1, it is
understood and agreed that nothing contained herein shall preclude or in any way
limit DCOM or its affiliated entities, including without limitation the
Discovery Networks, from accepting paid advertising or sponsorships from any
third party advertiser whatsoever, on any media of DCOM or its affiliated
entities. For purposes of the exclusivity described in Section 4.1 above, it is
understood that DCOM may merchandise and sell on Xxxxxxxxx.xxx or
XxxxxxXxxxxx.xxx animal and pet related: books, videos, clothing, merchandise or
novelty items, including but not limited to such items that contain Discovery
television network or program related logos, trademarks or slogans (for example,
pet training videos and books, Animal Planet Sports frisbees or Travel Channel
pet carriers), provided, however, that such merchandise shall not promote, or
contain branding of, any Company Competitor except to the extent any such item
also contains a trademark or logo of DCOM or its parent or affiliates. Such
animal or pet-related sales by DCOM or its contractors/partners shall be
incidental, i.e., not the principal line of products offered in any area of
Xxxxxxxxx.xxx or XxxxxxXxxxxx.xxx. The Company acknowledges and agrees that one
of the services provided by Xxxxxxxxx.xxx, currently in the Web Express area, is
to identify and provide links to other leading websites, including pet
e-commerce sites.
4.3 The tenancy payment during the first Contract Year will be at
a [*] discount off the "Prevailing E-commerce Tenancy Market Rate" for such
tenancy. The tenancy payment in years [*] of the Tenancy Period, if the
Exclusivity Period is extended by the Company pursuant to Section 4.1, will be
as follows:
[*]
The "Prevailing E-commerce Tenancy Market Rate" as used in this
paragraph shall be the then-prevailing CPM market rate for the actual number of
impressions delivered (subject to the cap described below). The tenancy payment
in years two through four shall be made annually within 30 days of the end of
the applicable Contract Year based on the actual number of impressions delivered
during the preceding 12-month period. The tenancy payment in years two through
four will be capped at the then-prevailing CPM market rate multiplied by the
number of projected impressions set forth in the agreed marketing plan for each
upcoming Contract Year as specified in Section 4.4 below, discounted as
described above in this Section 4.3.
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4.4 During the first Contract Year, DCOM will place promotional
buttons, text links and product promotions throughout Xxxxxxxxx.xxx and
XxxxxxXxxxxx.xxx as set forth in Attachment B. The parties acknowledge and agree
that the information contained in Attachment B is proprietary and confidential
and the parties agree to maintain it in strict confidence, provided however, the
Company may publish Attachment B to the extent explicitly required by a
governmental agency, in which such event, the Company shall promptly notify
DCOM, and the parties shall cooperate to obtain as much confidential treatment
as possible for Attachment B under the circumstances. The Company acknowledges
and agrees that the specific form, placement and positioning of such buttons,
text links and product promotions may be subject to change, such modifications
to be in DCOM's reasonable discretion, provided that such changes are made in
consultation with the Company and that at any given time during the Tenancy
Period, the volume and configuration of such promotional buttons, text links and
product promotions remain comparable in scope to those listed in Exhibit B. At
least 120 days prior to the end of each Contract Year, DCOM will provide the
Company with a proposed online marketing plan for the upcoming Contract Year.
The parties will negotiate in good faith with respect to such online marketing
plan for the upcoming Contract Year with the goal of finalizing such marketing
plan prior to the latest date by which the Company must exercise its right to
extend the Exclusivity Period for an additional year under Section 4.1, it being
understood that the scope of the proposed online marketing plan for the [*]
Contract Years will be at least as broad in scope as the plan attached hereto as
Exhibit B. The parties acknowledge and agree that the ultimate decisions with
respect to general website design and layout and the specific form, placement
and positioning of the online Company promotions hereunder shall be determined
by DCOM in its reasonable discretion in accordance herewith. In the event
promotional inventory more desirable than the promotional inventory set forth in
the online marketing plan for any Contract Year becomes generally available on
Xxxxxxxxx.xxx and XxxxxxXxxxxx.xxx, DCOM will consult in good faith with the
Company regarding an opportunity to substitute such promotional inventory.
4.5 During the Tenancy Period, the Company shall be included as a
branded department [*], appearing throughout Xxxxxxxxx.xxx. While DCOM may in
its sole discretion modify the placement of the [*] box throughout Xxxxxxxxx.xxx
and this placement will be subject to change over time, the [*] box currently
has the following placements: [*].
4.6 DCOM currently anticipates that the [*], including a branded
partner link, will also be added, at DCOM's sole discretion, to other prominent
areas of Xxxxxxxxx.xxx including the: [*].
4.7 The promotions set forth in Exhibit B will generally direct
users directly to the Website (except that the unbranded "pets" tab will direct
users to the XxxxxxXxxxxx.xxx website where the Company will have a branded
presence), provided however, the parties agree that DCOM may frame the Website
displaying the top hat and bottom hat navigational bars of
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the Xxxxxxxxx.xxx website when end-users click-through the Company promotions on
Xxxxxxxxx.xxx to the Website. In addition, with respect to specific product
offers that have been integrated into Xxxxxxxxx.xxx (including without
limitation XxxxxxXxxxxx.xxx) content pages by mutual agreement of the parties,
DCOM may in its sole discretion create and host bridge pages, product pages or
special offer pages (to be shown to the Company in advance of transmission to
the public) to which the above-described links will direct users (the "Bridge
Pages").
4.8 Third-party advertising will not be sold on the Bridge Pages
unless and until such Bridge Pages account for at least 5 percent of the total
page views on Xxxxxxxxx.xxx, in which such event DCOM shall have the sole right
to sell and serve all advertising on the Bridge Pages, provided, however, that
no advertising from a Company Competitor will run on such Bridge Pages except
for any run-of-site banners. All page views on the Bridge Pages shall be
attributed to DCOM.
4.9 Each party agrees to designate and maintain a primary point
of contact regarding online promotion under this Agreement within 30 days of
execution of this Agreement.
5. OBLIGATIONS OF THE COMPANY.
5.1 User Data. During the Tenancy Period, the Company shall
provide DCOM with all available aggregate data regarding customers driven to the
Website from Xxxxxxxxx.xxx (including without limitation XxxxxxXxxxxx.xxx). Such
aggregate data shall include the total number of purchasers and the items
purchased and, to the extent such information is gathered by the Company,
information regarding products and services purchased by such users and
demographic information, such as age, gender, education level, survey and
promotion responses and any other information concerning such users as may be
provided by the Company to any other third party. The Company shall further
exert commercially reasonable efforts during the Tenancy Period to implement an
opt-in option for users driven to the Website from Xxxxxxxxx.xxx (including
without limitation XxxxxxXxxxxx.xxx) whereby such users would be given the
option of allowing the Company to provide their personally identifying
information to DCOM, which such information (including customer name, e-mail
address, street address, survey data and any other data provided by such user)
shall be jointly owned by DCOM and the Company, and the Company shall deliver
such jointly-owned data on a quarterly basis to DCOM during the Tenancy Period.
The Company shall also [*] upon [*] per [*] during the Tenancy Period to all of
the [*] to the [*] from Xxxxxxxxx.xxx (including without limitation
XxxxxxXxxxxx.xxx), such [*] to be [*] in DCOM's [*] as to [*], provided however,
that DCOM [*] with the Company with respect to the [*] of such [*] and that any
such [*] DCOM desires to [*] between [*] during any [*] shall be [*] only upon
the [*] of the parties. The Company further agrees that if during the Tenancy
Period the Company amends its privacy policy such that personally identifying
customer data of users of the Website could be provided to a third party, or if
the Company provides any such data to any third party, it will also provide such
data to the same extent to DCOM hereunder. DCOM shall own and have rights to use
customer data of customers driven to the Website from Xxxxxxxxx.xxx and of
customers who opt in to data
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disclosure pursuant to this Section 5.1 to the same extent as the Company
currently or in the future may agree with respect to such ownership and use
rights to comparable user data for any third party.
5.2 [*] The Company acknowledges that DCOM is in the process of
creating an [*] that will enable users of Xxxxxxxxx.xxx to make purchases [*].
The Company agrees to take reasonable steps to implement Xxxxxxxxx.xxx's [*]
subject to satisfactory technology discussions and review by the Company.
5.3 Customer Service and Order Fulfillment. The Company shall be
solely responsible for (a) processing and fulfilling all orders made through the
Website, (b) all accounting with respect to such orders, and (c) all customer
service and support with respect to such orders, purchases and returns. The
Company shall provide all of the foregoing services at a very high level of
quality consistent with the Discovery and Animal Planet reputation. The Company
is and shall be solely responsible for the security of any transactions
initiated within the Website. During the Term, the Company shall achieve and
maintain the performance, customer service levels, site reliability requirements
and order fulfillment rates set forth in Attachment C, attached hereto and
incorporated by reference. During the Tenancy Period, DCOM shall achieve and
maintain the site reliability requirements set forth in Attachment D, attached
hereto and incorporated by reference. The Company shall not override the browser
back button functionality to prevent users who link to the Website from
Xxxxxxxxx.xxx (including without limitation XxxxxxXxxxxx.xxx) from returning to
Xxxxxxxxx.xxx.
5.4 Company Content.
(a) The Company shall deliver to DCOM the Content
described in Attachment E on a regular basis throughout the Tenancy Period in
accordance herewith. The Company will deliver the Content to DCOM in HTML format
or in such other electronic format as may be mutually agreed, via modem or
Internet access (e.g. Internet ftp or Internet e-mail). The initial delivery of
Content hereunder shall include all items specifically listed on Attachment E
and shall be made by the Company no later than July 31, 2000. The Company will
provide additional Content and update existing Content consistent with the scope
of Content described in Attachment E from time to time during the Tenancy
Period. The Company shall cooperate and assist DCOM by promptly responding to
complaints regarding the Content.
(b) DCOM shall integrate the Content into Xxxxxxxxx.xxx
and XxxxxxXxxxxx.xxx so that it reflects the design, look and feel of the
site/pages where the Content is being integrated, and DCOM shall host the
Content. DCOM shall have the right to edit and make technical and other
alterations to the Content provided that DCOM shall not alter the substantive
meaning of any such Content, except in the event DCOM determines that such
Content requires such substantive modification in order to be accurate, in which
event, DCOM shall notify the Company of such modification. The decision to use
or transmit, the frequency of
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transmission and actual placement of the Content shall be at the sole discretion
of DCOM, and DCOM shall have sole editorial control over Xxxxxxxxx.xxx,
XxxxxxXxxxxx.xxx and DCOM's affiliated websites, including the right to approve
any and all Content displayed on Xxxxxxxxx.xxx (including without limitation
XxxxxxXxxxxx.xxx) in its sole discretion. DCOM shall post a static textual
attribution to the Company at the top-level page where Content is displayed on
Xxxxxxxxx.xxx and a dynamic link textual attribution at the lowest-level page or
end of such item of Content. (For example, an article provided to DCOM by the
Company hereunder would carry a static textual attribution at the beginning of
the article on Xxxxxxxxx.xxx, as well as a dynamic "Find Out More" link at the
end of such article.) Such link would direct users to the Website.
(c) Pageviews of the Content on Xxxxxxxxx.xxx and
XxxxxxXxxxxx.xxx shall be attributed to DCOM, and DCOM shall have the right to
sell all advertising, serve all advertising and retain all revenues earned from
advertising on such pages. DCOM will not place or accept advertisements from
Company Competitors on pages of Xxxxxxxxx.xxx or XxxxxxXxxxxx.xxx containing
Company Content, provided however that such restriction shall not apply to (a)
run-of-site banner advertisements of Company Competitors or (b) sponsorships of
network-related programming or content areas by Company Competitors.
(d) The parties shall each promptly inform the other party
of any material claims that arise with respect to the Content, and provide to
the other party all information in its possession pertaining to such claim.
(e) DCOM shall have the right to utilize synopses,
excerpts, headlines or teasers from the Content, for the sole purpose of
advertising, promoting or publicizing the Content, DCOM or Xxxxxxxxx.xxx
(including XxxxxxXxxxxx.xxx) worldwide, in any media, it being understood that
this promotional right shall not be construed as a right on the part of DCOM to
sublicense the Content to third parties for uses not explicitly set forth in
this Agreement.
6. LICENSES.
6.1 Subject to the terms and conditions of this Agreement, the
Company hereby grants to DCOM and its affiliated entities, including without
limitation Discovery Networks, a fully-paid, worldwide (to the extent necessary
to implement this Agreement), limited, non-exclusive, non-transferable right and
license, without right to sub-license, to use, reproduce, incorporate,
integrate, transmit and distribute the Company's trade names, trade dress, and
trademarks solely as is necessary to deliver the advertising and promotion in
accordance with the terms of this Agreement during the Term. Except with respect
to the Co-branded Ads, the Company shall have the right to approve in advance
any such use by DCOM of such intellectual property, and the right to prohibit
any improper use of such intellectual property if the same occurs. With respect
to the Co-branded Ads, the Company shall approve the appearance of its name
and/or logo and such appearance shall be deemed approved for subsequent
Co-branded Ads until such time as the Company may wish to change the appearance
of such name or logo, in which such case adequate notice shall be provided to
DCOM. The
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Company may not withhold approval of the use of its intellectual property solely
in an effort to cause DCOM to breach its obligations under this Agreement. DCOM
acknowledges that, except as expressly set forth above, it may not use the
names, logos, trademarks or other intellectual property of Company and its
Affiliates without the Company's prior written consent.
6.2 Subject to the terms and conditions of this Agreement, the
Company hereby grants to DCOM and its affiliated entities during the Tenancy
Period, a fully-paid, worldwide, non-exclusive, right and license, without the
right to sublicense, to use, reproduce, incorporate, integrate and distribute on
the web portal Xxxxxxxxx.xxx (including without limitation XxxxxxXxxxxx.xxx) the
Content listed on Attachment E, attached hereto and incorporated by reference,
and a license and right to use Company's trade names, trade dress, and
trademarks as reasonably necessary with respect to the display and use of the
Content in accordance with the terms of this Agreement. The Company also grants
to DCOM and its affiliated entities during the Tenancy Period, a fully-paid,
worldwide, non-exclusive, right and license, without the right to sublicense, to
use, reproduce, incorporate, integrate and distribute synopses, excerpts,
headlines or teasers from the Content, for the sole purpose of advertising,
promoting or publicizing the Content, DCOM or Xxxxxxxxx.xxx (including
XxxxxxXxxxxx.xxx) worldwide, in any media in accordance with Section 5.4(e)
hereof.
6.3 Neither party shall gain any right, title or interest in or
to the other party's intellectual property by virtue of these limited licenses
and any use thereof and all good will inuring to such intellectual property by
virtue of use hereunder shall inure to the owner of such intellectual property.
After the Term, each party shall have a reasonable period of time to dispose of
materials containing the name and marks of the other party, but in no other
event may the parties use such names and marks of the other party after the
Term.
7. REPRESENTATIONS AND WARRANTIES; INDEMNITIES.
7.1 (a) DCOM hereby represents and warrants that:
(i) it has full power and authority to enter into and
fully perform this Agreement;
(ii) this Agreement has been duly authorized and is
enforceable in accordance with its terms; and
(iii) at all times, it will comply, and the Promotions
which are the subject matter of this Agreement, when and in the form provided by
DCOM to the Company, will be in compliance with all applicable federal, state,
local and foreign laws and regulations.
(b) The Company represents, warrants and covenants that:
(i) it has full power and authority to enter into and
fully perform this Agreement;
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(ii) this Agreement has been duly authorized and is
enforceable in accordance with its terms;
(iii) the Website shall at all times be produced,
advertised and transmitted in accordance with all applicable federal, state,
local and foreign laws and regulations;
(iv) at all times, it will maintain the Website in a
professional and workmanlike manner consistent with generally accepted industry
standards for a leading e-commerce website. The Website will at all times
present accurate content developed by or obtained from reliable sources,
although the Company will not be responsible for problems associated with the
World Wide Web in general;
(v) it is the owner of the Content and/or has the right to
grant all rights granted herein, including but not limited to all necessary
literary, artistic, musical and/or intellectual property rights;
(vi) the exercise of rights granted herein and the
intellectual property licenses provided by the Company and the use of such
Content and intellectual property by DCOM will not infringe on any rights of any
third party, including but not limited to copyright, trademark, unfair
competition, contract, defamation, privacy or publicity rights, and, to the best
of the Company's knowledge after due inquiry, the Content is true, lawful,
accurate and does not contain material omissions; and
(vii) neither products sold by the Company on the Website,
nor use or reliance on the Content and other content transmitted on the Website
shall cause injury to any person or property.
7.2 Each party to this Agreement (the "Indemnifying Party") shall
at all times indemnify, hold harmless and defend the other party, and in the
case of indemnification of DCOM, including its parent, Discovery Communications,
Inc. ("DCI"), and subsidiaries of DCI, and their respective officers, directors,
members, partners employees and agents and each other Person, if any,
controlling such party (collectively, the "Indemnified Party") from and against
any loss, cost, liability or expense (including court costs and reasonable
attorneys' fees) arising out of or resulting from any third party claim based on
a breach by the Indemnifying Party of any representation, warranty or covenant
contained herein. In the event of any third party claim, the Indemnified Party
shall: (a) promptly notify the Indemnifying Party of the claim; (b) allow the
Indemnifying Party to direct the defense and settlement of such third party
claim with counsel of the Indemnifying Party's choosing; and (c) provide the
Indemnifying Party, at the Indemnifying Party's expense, with information and
assistance that is reasonably necessary for the defense and settlement of the
third party claim. The Indemnified Party reserves the right to retain counsel,
at the Indemnified Party's sole expense, to participate in the defense of any
such claim. The Indemnifying Party shall not settle any such claim or alleged
claim without first obtaining the Indemnified Party's prior written consent,
which consent shall not be unreasonably withheld, if the terms of such
settlement would adversely affect the Indemnified Party's rights under this
Agreement or otherwise. If the Indemnifying Party assumes the defense and
settlement of the
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claim as set forth above, then the Indemnifying Party's only obligation is to
satisfy the claim, judgment or approved settlement.
8. REMEDIES.
8.1 DCOM shall have the right to suspend and/or withdraw
placement of Promotion, and all purchases and sales of advertising and
promotion, and DCOM shall have the right to terminate this Agreement if the
Company: (a) materially breaches this Agreement; (b) becomes insolvent or unable
to pay its debts as they mature or makes an assignment for the benefit of its
creditors; (c) is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing; (d) becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within sixty (60)
days of filing; or (d) is liquidated or dissolved.
8.2 The Company shall have the right to terminate this Agreement
if DCOM: (a) materially breaches this Agreement; (b) becomes insolvent or unable
to pay its debts as they mature or makes an assignment for the benefit of its
creditors; (c) is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing; (d) becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within sixty (60)
days of filing; or (e) is liquidated or dissolved.
9. GENERAL.
9.1 Except as set forth herein, neither party may assign or
otherwise transfer this Agreement, or its respective rights and obligations
hereunder, in whole or in part without the other party's prior written consent.
Any attempt to assign this Agreement (including without limitation transfers by
operation of law or that otherwise result in the rights or obligations of a
party being enjoyed or fulfilled by a third party) without such consent shall be
void and of no effect ab initio; provided, however, that notwithstanding the
foregoing, DCOM may assign this Agreement to an Affiliate thereof without the
Company's prior approval, and, with DCOM's prior written approval, such approval
not to be unreasonably withheld, the Company may assign or otherwise transfer
this Agreement, in whole, solely in connection with a merger, acquisition or
asset sale of all or substantially all of the Company's business, provided
further that Company may assign this Agreement, in whole, solely in a merger,
acquisition or asset sale of all or substantially all of the Company's business
to Xxxxxx.xxx, provided that there has not occurred a material change in the
business or ownership structure of either Xxxxxx.xxx or DCOM between the date of
execution of this Agreement and the date of such requested transfer that would
adversely impact DCOM in the event of such transfer. In the event DCOM does not
approve an assignment or transfer by the Company of this Agreement pursuant to a
sale or
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merger with Xxxxxx.xxx under this Section 9.1, and the Company proceeds with
such merger or sale to Xxxxxx.xxx, this Agreement shall automatically terminate
without further obligation on the part of either of the parties, provided
however, that in full consideration therefor DCOM may elect in its discretion
either to (a) deliver for the benefit of Xxxxxx.xxx's pet supplies business the
remainder of the then-remaining Ad Spots due to the Company under Section
2.2(a)(i) hereof; (b) return that number of shares of the Company then held by
DCOM in an amount the share price of which (on the public market, subject to the
Share Price Floor described below) is equal in value to the dollar value then
remaining of DCOM's obligations under Section 2.2(a)(i) hereof, as such
advertising is valued under this Agreement, provided however, (i) the shares to
be returned by DCOM shall be valued for purposes of this Section 9.1 at no less
than the public market price of the Company's shares on the date of this
Agreement (the "Share Price Floor"), and (ii) DCOM shall be required to return
no more than the total amount of shares of the Company then held by DCOM; or (c)
pay to the Company cash for the dollar value then remaining of DCOM's
obligations under Section 2.2(a)(i) hereof, as such advertising is valued under
this Agreement. In addition, DCOM may, at its election, fulfill any obligation
under the immediately preceding sentence with any combination of the options
described in subsections (a), (b) and (c) thereof.
9.2 If any provision of this Agreement (or any portion thereof)
or the application of any such provision (or any portion thereof) to any Person
or circumstance shall be held invalid, illegal or unenforceable in any respect
by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other Persons or
circumstances.
9.3 All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(a) if to the Company:
Xxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
with a copy to:
Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
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(b) if to DCOM:
Xxxxxxxxx.xxx, Inc.
c/o Discovery Communications, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Manager,
XxxxxxXxxxxx.xxx
with a copy to:
General Counsel
(at the same address)
and a copy to:
Xxxxxxxxx Traurig
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
9.4 The parties to this Agreement are independent contractors.
There is no relationship of partnership, joint venture, employment, franchise,
or agency between the parties. Neither party shall have the power to bind the
other party or incur obligations on the other party's behalf without the other
party's prior written consent.
9.5 No failure of either party to exercise or enforce any of its
rights under this Agreement shall act as a waiver of such right.
9.6 This Agreement, together with any Exhibits hereto, contains
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof, and supersedes all prior agreements and
understandings relating to such subject matter. Neither party shall be liable or
bound to any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth
herein.
9.7 This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to each of the other parties.
9.8 This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
9.9 This Agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
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9.10 This Agreement is for the sole benefit of the parties hereto
and their permitted assigns and nothing herein expressed or implied shall give
or be construed to give to any Person, other than the parties hereto and such
assigns, any legal or equitable rights hereunder.
9.11 The headings contained in this Agreement or in any Exhibit
or Schedule hereto are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Any capitalized terms used in
any Schedule or Exhibit but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this Agreement
to a Paragraph, Exhibit or Schedule, such reference shall be to a Paragraph of,
or an Exhibit or Schedule to this Agreement unless otherwise indicated.
9.12 (a) For purposes of this Agreement, "Confidential
Information" means: (i) business or technical information of either party,
including, but not limited to, any information relating to either party's
product plans, designs, costs, product prices and names, finances, marketing
plans, business opportunities, personnel, research, development or know-how;
(ii) any written information designated by either party as confidential or
proprietary or, if orally disclosed, designated as confidential at the time of
disclosure or reduced to writing by the disclosing party within thirty (30) days
of such disclosure; and (iii) the terms and conditions of this Agreement.
(b) Neither party shall disclose to any third party any
Confidential Information, unless such Confidential Information (i) is already in
the public domain except as a result of a breach of confidentiality by the
disclosing party, (ii) is at any time disclosed by a third party without any
obligation of confidentiality with respect to such Confidential Information,
(iii) has been developed independently by the other party without use of or
access to Confidential Information of the disclosing party, or (iv) is required
to be disclosed by law, government authority or court of competent jurisdiction,
in which such event the disclosing party shall promptly notify the party whose
Confidential Information is subject to such disclosure.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
XXXXXXXXX.XXX, INC. XXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxx Xxxxx
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Name: Michela English Name: Xxxx Xxxxx
--------------------------- ---------------------------
Title: President and COO Title: CFO
--------------------------- ---------------------------
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