Exhibit 10.19
BULK SUBSCRIPTION SALES AGREEMENT
This Bulk Subscription Sales Agreement ("Agreement") is entered into as of
the 1st day of December, 2000, by and between XxxxxxxxXxx.xxx, Inc.
("PurchasePro") and America Online, Inc. ("AOL").
WHEREAS, the Parties are currently jointly developing an e-commerce
marketplace for subscribers to the services of AOL and its affiliates, including
its Netscape subsidiary ("Subscribers") for use in conjunction with
PurchasePro's global marketplace (the "Global Marketplace"); and
WHEREAS, to encourage use of the e-marketplace being jointly developed by
the Parties by Subscribers, AOL desires to purchase on behalf of such
Subscribers subscriptions to the Global Marketplace with full access for
Subscribers to all rights and benefits available to members of the Global
Marketplace, a description of which is attached hereto as Exhibit B;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Bulk Subscriptions. Subject to the terms and conditions set forth
herein, AOL hereby purchases from PurchasePro, and PurchasePro sells to AOL, a
sufficient number of subscriptions to the Global Marketplace ("Promotional
Subscriptions") for AOL to allocate among Subscribers as AOL determines in its
sole discretion, at a price of $49.00 per Subscriber per month. A Promotional
Subscription shall provide Subscribers with access to rights and benefits at
least a great as to any other PurchasePro premium marketplace service. Without
limiting the foregoing and at a minimum, Subscribers receiving Promotional
Subscriptions shall have access to all of the services set forth on Exhibit B.
After the Promotional Period (as defined below), PurchasePro shall, in an opt-in
format reasonably acceptable to AOL, offer Subscribers the opportunity to
continue with the premium membership referenced in Exhibit B at PurchasePro's
standard rates. PurchasePro shall provide all Subscribers, including holders of
the premium membership or a standard membership, with all telephone and online
customer support available to other members holding the same or similar
memberships.
2. Schedule of Purchases. AOL shall purchase 100,000 Promotional
Subscriptions to the Global Marketplace hereunder for the period between
December 1, 2000 and December 31, 2000, and shall have the option to purchase
Promotional Subscriptions to the Global Marketplace for additional monthly
periods upon notice to PurchasePro no later than 5 days after the beginning of
such monthly period (all such monthly periods shall be referred to herein
collectively as the "Promotional Period").
3. Distribution of Promotional Subscriptions Sharing of Subscription Fee
Revenue. The Parties acknowledge that AOL will offer the Promotional
Subscriptions to the Global Marketplace to Subscribers. The Parties agree
that after the initial two month free subscription period (or such large
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period as mutually agreed by the Parties) included as part of such
Promotional Subscriptions, AOL shall have no liability for any
subscription fee (subscription fees collected from Promotional Subscribers
shall be referred to herein as "Subscription Fee Revenue"). After the
Promotional Period, PurchasePro shall pay AOL in perpetuity fifty (50%)
percent of all Subscription Fee Revenue received and owed to AOL as
described herein and paid on a quarterly basis within thirty (30) days
following the end of the quarter in which such amounts were generated. All
payments shall be accompanied by a report in a format and substance
reasonably acceptable to AOL setting forth all relevant financial
information supporting such payment.
4. Term. The term of this Agreement shall commence as of the date hereof and
continue until January 31, 2001; provided that Section 3 and 7 and the
provisions set forth in Section 7 of Exhibit A shall survive any
termination hereof
5. Obligations.
A. At such times as AOL shall determine, AOL shall notify Subscribers
selected by AOL that such Subscribers have been chosen to receive a
Promotional Subscription to the Global Marketplace hereunder and
become a full Member thereon for the periods set forth in Section 2.
AOL may notify its Subscribers thereof in any manner determined by
AOL in its sole discretion, including notification by transmission
of e-mails thereto.
B. PurchasePro shall make available user ID's and passwords for each
such Subscribers selected by AOL necessary to access the Global
Marketplace, coded to identify such users as a Subscriber and Member
of the AOL-branded marketplace on the Global Marketplace. Any
PurchasePro messaging to Promotional Subscribers during the
Promotional Period shall be subject to AOL's prior approval, which
approval shall not be unreasonably withheld, conditioned or delayed.
6. Manner and Method of Payment to PurchasePro. For each month during the
Promotion Period with respect to which AOL is purchasing Promotional
Subscriptions pursuant to Section 2 hereunder, AOL shall pay $4,900,000 to
PurchasePro, due on or before the last day of such month. In no event
shall AOL's liability for the purchase of Promotional Subscriptions
hereunder in any one month during the Promotional Period exceed a total of
four million nine hundred thousand dollars ($4,900,000) for such month.
7. Auditing Rights. PurchasePro will maintain complete, clear and accurate
records of all expenses, revenues and fees in connection with the
performance of this Agreement. For the sole purpose of ensuring compliance
with this Agreement, AOL (or its representative) will have the right to
conduct a reasonable and necessary inspection of portions of the books and
records of PurchasePro which are relevant to PurchasePro's performance
pursuant to this Agreement. Any such audit may be conducted after 20
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business days prior written notice is given by AOL to Purchase Pro;
provided, however, that such audits may not be conducted more than once in
any given twelve (12) month period and the same time period may not be
audited more than once. The audit report and all of the books and records
reviewed by AOL shall be Purchase Pro's Confidential Information. AOL
shall bear the expense of any audit conducted pursuant to this Section 7
unless such audit shows an error in AOL's favor amounting to a deficiency
to AOL in excess of 5% of the actual amounts paid and/or payable to it
under this Agreement, in which event Purchase Pro shall bear the
reasonable expenses of the audit. Purchase Pro shall pay AOL the amount of
any deficiency or AOL shall pay Purchase Pro the amount of any overpayment
finally determined as a result of such audit within 30 days after such
final determination.
8. Standard Terms and Condition. PurchasePro's Standard Marketplace Services
Terms and Conditions, a copy of which is attached hereto as Exhibit A, are
hereby incorporated herein by reference in their entirety. In the event of
any conflict between this Agreement and such Standard Marketplace Services
Terms and Conditions, the terms of this Agreement shall govern. All
capitalized terms used herein and not defined shall have the meaning
ascribed to such terms in such Standard Marketplace Services Terms and
Conditions.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed by a duly authorized representative thereof, effective as of the date
first written above.
XxxxxxxxXxx.xxx, Inc. America Online, Inc.
By By
Its Its
XxxxxxxxXxx.xxx, Inc. America Online, Inc.
0000 Xxxxx Xxxxxxx Xxxxx 00000 XXX Xxx
Xxx Xxxxx, Xxxxxx 00000 Xxxxxx, Xxxxxxxx 00000
Telephone No. 000-000-0000 Fax no. 000-000-0000
With a copy to:
XxxxxxxxXxx.xxx, Inc.
0000 Xxxxx Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telephone No. 000-000-0000
Attention: General Counsel
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EXHIBIT A
XxxxxxxxXxx.xxx
Marketplace Services Standard Terms and Conditions
1. CONFIDENTIALITY. AOL agrees that the Marketplace Services described in the
agreement to which these Standard Terms and Conditions are attached
("Agreement"), and the Marketplace Software Product with respect to which the
Marketplace Services are being provided, are based upon proprietary information
which is the exclusive property of and owned by PurchasePro and are treated as
confidential ("Confidential Information"). AOL shall, and shall cause its
employees and agents to, strictly maintain the confidentiality of the
Confidential Information and not disclose, disseminate or otherwise give
Confidential Information to any other person, firm, organization or third party,
except for an employee or agent of AOL who has a reasonable need to obtain
access thereto in connection with the establishment and operation of AOL's
Marketplace and who has agreed in writing to not disclose, and not to use for
any other purpose, the Confidential Information. Notwithstanding the foregoing,
the obligations of confidentiality set forth in this Section 1 with respect to
Confidential Information shall not apply to any information that: (i) is or
becomes publicly known without violation by AOL of the Agreement; (ii) is
already known to AOL without restrictions at the time of its disclosure by
PurchasePro, as evidenced by the written records of AOL; (iii) after its
disclosure to AOL by PurchasePro, is made known to AOL without restrictions by a
third party having the right to do so; or (iv) is legally required to be
disclosed by AOL pursuant to a judicial order from a court of competent
jurisdiction (provided that AOL promptly informs PurchasePro of the requirement
and affords PurchasePro a reasonable opportunity to contest the required
disclosure). AOL's obligations under this Section 1 shall survive expiration or
termination of the Agreement for any reason.
2. LIMITED WARRANTIES, INDEMNITY AND DISCLAIMER. PurchasePro warrants and
represents that it has full title and ownership of intellectual property
delivered in conjunction with the Marketplace Services and has the full power
and authority to perform its obligations under the Agreement. PurchasePro will
defend AOL from and against any claim or action brought against AOL alleging
that its performance of the Marketplace Services infringe any valid U.S. patent,
copyright, trade secret or proprietary right of a third party, provided that AOL
(a) promptly gives written notice to PurchasePro of any such claim or action,
(b) gives PurchasePro the right to control and fully cooperates with PurchasePro
in the defense of such claim or action, (c) has not made or caused to be made
any modifications to the Marketplace Services, and (d) has not used the
Marketplace Services other than as specified in the Agreement or in any
documentation delivered in connection with the Marketplace Software Product, and
PurchasePro will pay any final award of damages against AOL resulting from such
claim or action, including any attorneys fees and costs awarded, or any
settlement amount agreed to by PurchasePro. AOL's sole and exclusive remedy for
any breach of warranty shall be commercially reasonable efforts to correct the
non-conformity or, if incapable of being corrected, termination of the Agreement
and refund of any consideration paid by AOL pursuant to the Agreement. EXCEPT AS
EXPRESSLY PROVIDED HEREIN, THE MARKETPLACE SERVICES ARE PROVIDED TO AOL "AS IS",
PURCHASEPRO MAKES NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, REGARDING THIS
AGREEMENT OR THE MARKETPLACE SERVICES AND, TO THE MAXIMUM EXTENT PERMITTED BY
LAW, SPECIFICALLY DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR AGAINST INFRINGEMENT, AND THE FOREGOING STATES
PURCHASEPRO'S ENTIRE LIABILITY AND AOL'S SOLE AND EXCLUSIVE REMEDY FOR ANY
BREACH OF WARRANTY.
3. ASSIGNABILITY. AOL may not assign the Agreement, whether by operation of law
or otherwise, without the prior written consent of PurchasePro, not to be
unreasonably withheld. For purposes of the foregoing, any conveyance or other
transfer of any capital securities of AOL, or any other transaction whatsoever,
the effect of which is to confer upon the recipient or recipients thereof the
ability to determine a majority of members of AOL's board of directors or
otherwise control the affairs of AOL shall be deemed an assignment hereunder.
4. OWNERSHIP OF INTELLECTUAL PROPERTY. AOL understands and agrees that
PurchasePro owns and retains all right, title and interest in any services,
software products, intellectual property rights, source code, documentation, any
future modifications and all related materials that may be provided under the
terms of the Agreement.
5. OWNERSHIP AND USE OF DATA. Information obtained from AOL Users (as defined in
that certain Interactive Marketing Agreement, dated as of March 15, 2000,
referred to herein as the "IMA") shall be deemed User Information under section
13 of Exhibit F of the IMA and shall be governed by such Section.
6. TERMINATION UPON DEFAULT. If either party shall violate or breach any
material term, condition or covenant contained herein and shall not remedy such
violation or breach within thirty (30) days after receipt of written notice
thereof from the other party, the party not in violation or breach may terminate
this Agreement, effective immediately upon written notice to the party in
violation or breach.
7. EFFECT OF EXPIRATION OR TERMINATION. The following Sections shall survive any
expiration or termination of this Agreement: Sections 1, 2, 4, 5, 6, 7, 8, 10,
11 and 13.
8. RESOLUTION OF DISPUTES. Disputes arising under this Agreement shall be
resolved in accordance with the dispute resolution procedures set forth in
Section 8 of the IMA.
9. FORCE MAJEURE. Each party to the Agreement shall be excused from any delay or
failure in its performance thereunder, other than for payment of money, caused
by any disruption or slow speed of the Internet, break-downs of security or
introduction of computer viruses (and the like) by third parties, any labor
dispute, government requirement, act of God, or any other cause beyond its
control. Such party shall use best efforts to cure any such failure or delay in
performance arising from a force majeure condition, and shall timely advise the
other party of such efforts. If such delay continues for more than ten (10)
days, the party injured by the inability of the other to perform may upon ten
(10) days prior written notice terminate the Agreement.
10. LIMITATIONS ON LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY
KIND OR AMOUNT, REGARDLESS OF LEGAL THEORY (INCLUDING TORT, BREACH OF CONTRACT
OR STRICT LIABILITY) ARISING OUT OF OR IN CONNECTION WITH THE AGREEMENT. THE
MAXIMUM LIABILITY OF PURCHASEPRO TO AOL HEREUNDER SHALL NOT EXCEED, IN THE
AGGREGATE AND IN ANY CIRCUMSTANCES, THE TOTAL CONSIDERATION PAID TO PURCHASEPRO
BY AOL PURSUANT TO THE AGREEMENT.
11. DEFINITIONS. To the extent any capitalized term is used but not defined in
the Agreement, such term shall have the meaning ascribed to it below:
A. Global Marketplace. PurchasePro is the owner of a computer based
network, the Global Marketplace.
B. Supplier. An entity that offers a product or service for sale.
Suppliers create and maintain their on-line company profiles,
product listing, pricing, web sites and electronic catalogs on the
Global Marketplace.
C. AOL's Marketplace. The marketplace established for AOL pursuant to
and by means of the Marketplace Software Product developed by
PurchasePro.
D. Marketplace Software Product. PurchasePro's proprietary computer
program, utilities, and accompanying user documentation (which in no
event includes any source code) for creation and operation of a
web-based application through which multiple prospective
buyers/suppliers of products and/or services who have been
registered into such marketplace have access to other
buyers/suppliers for the purpose of transacting purchases and/or
sales of products and/or services within such marketplace.
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E. Effective Date. The date the Agreement is signed by PurchasePro as
set forth below its signature in the Agreement.
F. Marketplace Services. The services provided by PurchasePro for the
AOL's Marketplace Software Product as set forth under the terms of
the Agreement.
G. Net Revenue. Any one-time or recurring revenue of PurchasePro
generated by e-commerce marketplace fees including but not limited
to subscription fees, license fees, transaction fees, advertising,
classified, bid and auction fees that relate to the PurchasePro
Global Marketplace and originate from AOL's Members, AOL's Internet
sites or other AOL marketing activities (excluding subscription
fees), excluding any and all payments by AOL to PurchasePro under
the Agreement or any other agreement or arrangement, and minus any
and all sales or other commissions and royalties, sales or use taxes
(and similar taxes, such as VAT) and credits that are payable with
respect to such one-time or recurring revenue.
H. AOL User. An individual user ID/password in order to buy and/or sell
on behalf of AOL.
I. AOL Administrative User. A AOL User authorized by AOL to administer
AOL's Marketplace.
J. Member. An entity authorized to access and use AOL's Marketplace by
having properly enrolled with PurchasePro.
K. Member User. An individual user ID/password in order to buy and/or
sell on behalf of Member.
L. Member Administrative User. A Member User authorized by Member to
administer Member's participation in AOL's Marketplace.
M. External Marketplace Member. A Member of the Global Marketplace but
not a Member of AOL's Marketplace.
N. External Marketplace Member User. An individual user ID/password in
order to buy and/or sell on behalf of External Marketplace Member.
O. External Marketplace Member Administrative User. An External
Marketplace Member User authorized by External Marketplace Member to
administer External Marketplace Member's participation in Global
Marketplace.
12. PUBLIC STATEMENTS. Neither party will issue any press release, excluding
statements that are mandated by state and federal securities laws, regarding the
terms and conditions of the Agreement and/or the details of the relationship
between the parties contemplated hereby without the prior written approval of
the other party (which will not be unreasonably conditioned, withheld, or
delayed).
13. GENERAL. The relationship of the parties under the Agreement is that of
independent contractors, and neither party's personnel shall be considered
employees or agents of the other party to the Agreement. If any term, clause or
provision of the Agreement is at any time judged to be invalid for any reason,
such invalidity shall not affect the validity or operation of any other term,
clause or provision and such invalid term, clause or provision shall be
considered to have been deleted from the Agreement. No party to the Agreement
shall be deemed to have waived any rights under, or as the result of any default
under or breach of, the Agreement unless the waiver is set forth in a writing
signed by the party. Any waiver of any default or breach of the Agreement shall
not be construed to constitute a waiver of any other default or breach whether
similar or not. The Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without regard to conflicts of laws
principles). The Agreement and any attached Exhibits, including these Standard
Terms and Conditions, contain the entire agreement of the parties and supercede
any and all prior representations or agreements, whether oral or written,
relating to the subject matter of the Agreement. The Agreement may be amended or
modified only by a writing signed by an authorized representative of each party.
14. NOTICES. All notices and other communications under the Agreement shall
begoverned by the terms of Section 16 of Exhibit F of the IMA.
15. U.S. DOLLARS. All payments hereunder by either party shall be made in U.S.
dollars.
16. MEMBERSHIP AND EXPORT RESTRICTIONS. AOL shall comply with all applicable
laws, rules and regulations, including without limitation the United States
Foreign Corrupt Practices Act and all applicable United States export control
laws and regulations, in connection with its performance of this Agreement and
the establishment and operation of AOL's Marketplace. Without limiting the
preceding sentence, AOL shall not permit any residents of any countries to which
the export or import of commodities and technical data is prohibited by the
Export Administration Regulations of the U. S. Department of Commerce, the
international Traffic In Arms Regulations of the U. S. Department of State or
the Enhanced Proliferation Control Initiative (collectively, "U.S. Export
Controls") to become members or to conduct any transactions on AOL's
Marketplace, and AOL shall not export or re-export or permit the export or
re-export of the Marketplace Software Product in violation of any U.S. Export
Control.
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EXHIBIT B
Description of Premium Global Marketplace Services
SUPPLIERS o Profile in Marketplace - allows suppliers to be sourced
o PSM "lite" (Product Service Manager) - unlimited number of products
uploaded one at a time
o Three tiered quantity pricing (first tier is list price)
o Ability to enter Sale price (enters into classifieds)
o Ability to enter products into auctions/classifieds
o Full CMU (includes pricing engine)
o Ability to create contract and private catalogs
o Ability to participate in private networks, if invited
BUYERS o All purchasing functions
o Quotes and/or Purchase Orders can be sent to an unlimited number of
Internal Users with registration of each user
o General Reporting
o The "lite" administration utility - ability to set spending limits
and workflow based on members' business rules
o Advanced Reporting (based on AU)
All fees for such services are waived for such recipients of such Premium
Subscriptions during the term of this Agreement. Thereafter, recipients electing
to continue their Premium Subscriptions shall be charged at PurchasePro's
standard rates.
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