AIM LICENSE AGREEMENT
THIS AGREEMENT is made as of the 30th day of December, 1998 (the "Effective
Date") by and between XXX.XXX INTERNATIONAL INC., ("XXX.XXX"), a corporation
having a principal place of business at 0000 Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxx, X0X 0X0 and AMERICAN INTERACTIVE MEDIA, INC. ("AIM"), a
corporation having a place of business at Xxxxx 000, 000 Xxxxxxxx, Xxx Xxxx, XX,
00000.
BACKGROUND:
1. XXX.XXX has developed, and has all necessary rights in, certain electronic
auction software, technology and services (collectively, the "XXX.XXX
Technology" as that term is more fully described in Article I).
2. XXX.XXX uses a portion of the XXX.XXX Technology to operate an online auction
service over the Internet provided at XXX.XXX's website found at URL
"xxx.xxx.xxx".
3. AIM wishes to acquire from XXX.XXX a non-exclusive license to use and
commercially exploit the XXX.XXX Technology to permit cable and broadcast
network television customers and certain affinity group members and in-house
networks produced and distributed by AIM in the United States and (subject to
the prior written consent of Xxxxxx Media Inc.) in Canada to access a co-branded
online auction for retail consumers, as more specifically described herein.
NOW THEREFORE in consideration of the premises, the mutual covenants contained
in this Agreement, and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the Parties agree as follows:
ARTICLE I
INTERPRETATION
1.1 Definitions.
In this Agreement, unless the context otherwise requires, each capitalized term
shall have the meanings indicated below.
"Agreement" means this License and Services Agreement and all schedules annexed
to this Agreement as the same may be amended from time to time in accordance
with the provisions hereof or thereof, "hereof" "hereto" and "hereunder" and
similar expressions mean and refer to this Agreement and not to any particular
article or section; except where the context specifically requires, "Article" or
"Section" means and refers to the specified article or section of this
Agreement;
"AIM E-Commerce Service" means the service to be operated pursuant to this
Agreement which will permit retail consumers in the Territory including, without
limitation, "small office home office" customers ("SOHO") to access an online
auction as currently operated by
XXX.XXX or its subsidiaries at the XXX.XXX site by using their cable modems or
other television based on line enabling devices (or by way of any method of
internet access in the case of members of certain affinity groups and in house
networks produced and distributed by AIM) to participate in on-line auctions of
consumer goods and services, but excluding business to business and liquidation
applications;
"XXX.XXX Site" means the Web site at which XXX.XXX will operate its online
auction service provided for the AIM E-Commerce Service as currently found at
the URL "xxx.xxx.xxx";
"XXX.XXX Technology" means the technology (including cybermall software) and
know-how owned by XXX.XXX in respect of the provision of on-line auction
services generally (and including all Intellectual Property Rights therein), as
more particularly described in Schedules "A" and "I";
"Business Day" means any day from Monday to Friday inclusive, except statutory
or civic holidays observed in Toronto, Ontario;
"Confidential Information" means all information relating to either Party or to
such Party's business, products, sales, customers, trade secrets, technology or
financial position to which access is obtained or granted hereunder, which is
treated by the disclosing Party as being confidential provided, however, that
Confidential Information of the disclosing Party shall not include any data or
information which the receiving Party can demonstrate:
(i) is or becomes publicly available through no fault of the receiving
Party;
(ii) is already in the rightful possession of the receiving Party prior to
its receipt from the other Party;
(iii) is independently developed by the receiving Party;
(iv) is rightfully obtained by the receiving Party from a third party not
subject to an obligation of confidentiality;
(v) is disclosed with the written consent of the disclosing Party whose
information it is; or
(vi) is disclosed pursuant to court order or other legal compulsion,
provided the receiving Party gives the disclosing Party prompt notice
of any such requirement to afford the disclosing Party an opportunity
to obtain a protective order;
"Customer Profile" means all information and data relating to a customer of the
AIM E-Commerce Service, including, without limitation: (i) name, address, e-mail
address, telephone number, and any other personal or demographic information
relating to such customer; (ii) all information and data relating to the
purchase of goods and services by such customer; and (iii)
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any other information relating to such customer's behavior collected while such
customer accesses the AIM E-Commerce Service;
"Data" has the meaning attributed to such term in Section 5.5;
"Deliverables" means the whole of the activities, services, materials, software,
matters and things required to be done, delivered or performed by XXX.XXX in
accordance with the terms of this Agreement, including the Software,
Documentation and Services and including all other rights and things, tangible
or intangible, including Intellectual Property Rights to be provided hereunder
including, without limitation, any of the foregoing as described in Schedule
"A";
"Effective Date" has the meaning attributed thereto on the face page of this
Agreement;
"Intellectual Property Rights" means (A) any and all proprietary rights provided
under (i) patent law, (ii) copyright law, (iii) trademark law, (iv) design
patent or industrial design law, (v) semi- conductor chip or mask work law, or
(vi) any other statutory provision or common law principle applicable to this
Agreement or the XXX.XXX Technology including trade secret law, which may
provide a right in either (a) ideas, formulae, algorithms, concepts, inventions
or know-how generally, or (b) the expression or use of such ideas, formulae,
algorithms, concepts, inventions or know-how; and (B) any and all applications,
registrations, licenses, sub-licenses, franchises, agreements or any other
evidence of a right in any of the foregoing;
"Joint Venture" means the Delaware company to be established and owned by AIM to
provide the AIM E-Commerce Service to third parties on the terms provided in
this Agreement;
"Net Revenue" means the sum of:
(i) aggregate revenue earned by the Parties and the Joint Venture in
connection with the operation of the AIM E- Commerce Service
(including all shipping and handling costs paid by retail customers),
net of sales, use, goods and services, and other similar taxes imposed
by any federal, provincial, municipal or other governmental authority;
and
(ii) aggregate revenue earned by the Parties and the Joint Venture in
connection with the sale of products and services by them to customers
of the AIM E-Commerce Service as part of its database marketing
operations, and not through the AIM E-Commerce Service (including all
shipping costs paid by retail customers), net of sales, use, goods and
services, and other similar taxes imposed by any federal, state,
provincial, municipal or other governmental authority,
less cost of goods or services sold (as invoiced by the supplier of such
products or services, but net of all taxes invoiced by such supplier), ISP
carrier costs, credit card transaction fees paid to or deducted by third
parties, duties, the cost of shipping and handling, and credits for returned
goods, services or bad debts (including shipping and restocking costs, if
applicable). Net
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Revenue shall be calculated in accordance with generally accepted accounting
principles applied in Canada on a consistent basis;
"Net Promotional Revenue" means aggregate revenue and benefits earned by the
Parties and the Joint Venture from sales of advertising or sponsorship,
licensing fees, use of Data or from any other source whatsoever, directly or
indirectly related to the AIM E-Commerce Service, net of all sales, use, goods
and services and other similar taxes imposed by any federal, state, provincial,
municipal or other governmental authority, agency commissions and bad debts. Net
Promotional Revenue shall be calculated in accordance with generally accepted
accounting principles applied in Canada on a consistent basis;
"Parties" means XXX.XXX and AIM collectively and "Party" means either of them;
"Person" includes an individual, company, corporation, partnership, government
or government agency, authority or entity howsoever designated or constituted;
"Reasonable Best Efforts" means that a party shall comply with the obligation to
which the covenant to use Reasonable Best Efforts applies in all cases where
such party has the ultimate discretion, control and ability to do so, and that
such party shall use commercially reasonable efforts to comply with such
obligation in cases where such party does not have such ultimate discretion,
control and ability;
"Software" means that computer software being provided to AIM by XXX.XXX
hereunder to meet AIM's Requirements, including any modifications or
improvements to the Software (whether developed by XXX.XXX, AIM, the Joint
Venture or otherwise);
"Source Code Materials" means:
(1) a complete copy of the source code version of all software required to
allow AIM to independently operate, maintain and support the AIM E-Commerce
Service including the Software, appropriately labeled to denote the version
or release thereof, and the currency date thereof, in each of:
(i) machine-readable form on machine-readable storage medium suitable for
long term storage and compatible with the Software as then being used
by AIM and which, when compiled, will produce the object code version
of the Software; and
(ii) human-readable form with annotations in English on bond paper suitable
for long term archival storage; and
(2) a complete copy, in English, on bond paper, suitable for long term archival
storage, and appropriately labeled to describe the contents thereof, of all
applicable Documentation and other explanatory materials including
programmer's notes, technical or otherwise, for the Software as may be
required by AIM, using a competent computer programmer possessing ordinary
skills and experience, to further develop, maintain and operate such
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software without further recourse to XXX.XXX including, but not necessarily
limited to, general flow-charts, input and output layouts, field
descriptions, volumes and sort sequence, data dictionary, file layouts,
processing requirements and calculation formula and the details of all
algorithms;
"Term", "Initial Term" and "Subsequent Term" have the meanings ascribed in
Section 6.1(a);
"Territory" means the United States of America as presently constituted.
1.2 Schedules.
The following are the schedules attached to and forming part of this Agreement:
Schedule "A" - XXX.XXX Technology (including Third Party Technology)
Schedule "B" - AIM's Requirements
Schedule "C" - Customer Service Standards
Schedule "D" - Response Times
Schedule "E" - Source Code Trust Agreement
Schedule "F" - Site Activity Reporting Requirements
Schedule "G" - Net Revenue Reports
Schedule "H" - Net Promotional Revenue Reports
Schedule "I" - XXX.XXX Marks
1.3 Headings.
The use of headings in this Agreement is for convenience of reference only and
shall not affect its interpretation.
1.4 Extended Meanings.
Words expressed in the singular include the plural and vice-versa and words in
one gender include all genders.
1.5 Entire Agreement.
This Agreement, and any agreements and other documents to be delivered pursuant
to it constitutes the entire agreement between the Parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, oral or written between the Parties. The execution
of this Agreement has not been induced by, nor do either of the Parties rely
upon or regard as material, any representations, warranties, conditions, other
agreements or acknowledgments not expressly made in this Agreement or in the
agreements and other documents to be delivered pursuant hereto.
1.6 Currency.
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Unless otherwise indicated, all dollar amounts referred to in this Agreement are
in Canadian funds.
1.7 Invalidity.
If in any jurisdiction a provision contained in this Agreement is found by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability of the remaining provisions
contained herein, or of such provision in any other jurisdiction affected or
impaired thereby.
1.8 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein and shall be
treated, in all respects, as an Ontario contract. The Parties hereby irrevocably
submit to the exclusive jurisdiction of the courts of Ontario in respect of the
subject matter hereof.
1.9 Provision of Services.
For the purposes of this Agreement, references to the sale of products through
the AIM E-Commerce Service shall be deemed to include the provision of services
as well.
1.10 Consent
Wherever any Party is required to obtain consent from another Party, such
consent shall not be unreasonably withheld or delayed.
ARTICLE II
USE OF AIM E-COMMERCE SERVICE
2.1 AIM E-Commerce Service
Subject to the terms of this Agreement, XXX.XXX hereby grants to AIM the
non-exclusive right to use and commercially exploit the XXX.XXX Technology to
operate the AIM E-Commerce Service through the Joint Venture for customers of
cable and television broadcast networks, for subscribers to its own cable and
television broadcast networks, for customized auctions exclusive to affinity
groups, and for the same applications, to launch a video streaming version
thereof. XXX.XXX may in its discretion, on request and subject to such further
or other terms as may be appropriate in the view of XXX.XXX, permit AIM to offer
all or any of such services to retail cable and television broadcast network
users in Canada. AIM and XXX.XXX acknowledge that the prior written consent of
Xxxxxx Media Inc. may be required to operate any part of the AIM E-Commerce
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Service or to use some or all of the XXX.XXX Technology (including the XXX.XXX
Marks) in Canada. AIM shall exercise the rights granted hereunder solely through
the Joint Venture unless: (i) XXX.XXX breaches its obligations to operate the
AIM E-Commerce Service following the acquisition by AIM of the Joint Venture by
the exercise of its option to purchase the Joint Venture; or (ii) XXX.XXX
prevents the Joint Venture from exercising the rights granted hereunder on
behalf of AIM following the acquisition by AIM of the Joint Venture by the
exercise of its option to purchase the Joint Venture; or (iii) there is an
occurrence of a Release Condition within the meaning given to that phrase in the
Source Code Trust Agreement.
2.2 XXX.XXX/XXX Auction Network
AIM through the Joint Venture, will create new XXX.XXX branded user interfaces
for the AIM E-Commerce Service. The interfaces shall feature a XXX.XXX trademark
or brand as XXX.XXX may elect which shall appear on all screen views and
promotional material as a sub-brand.
2.3 Operation of AIM E-Commerce Service.
XXX.XXX shall operate the AIM E-Commerce Service for the Joint Venture in
accordance with the provisions of this Agreement. Except for those obligations
which AIM shall perform set out in Article 3 hereof, XXX.XXX shall be
responsible for all aspects of operating the AIM E-Commerce Service. Without
limiting the generality of the foregoing, XXX.XXX shall, at its expense:
(i) have sole responsibility for supplying the inventory of products and
services which will be offered as part of the AIM E-Commerce Service.
XXX.XXX acknowledges that affinity groups may wish to offer unique goods
or service. AIM acknowledges and agrees that XXX.XXX shall maintain
ultimate discretion with respect to the choice of products and services
which will be included as part of the AIM E-Commerce Service.
(ii) comply with AIM's Requirements attached as Schedule "B" hereto;
(iii) comply with the Customer Service Standards attached as Schedule "C"
hereto;
(iv) provide tracking reports in accordance with Schedule "D" hereto;
(v) be responsible for the fulfillment of all purchases of products and
services sold by it through the AIM E-Commerce Service;
(vi) be responsible for the processing of all credit card purchases of
products and services through the AIM E-Commerce Service; and
(vii) comply with the site activity reporting requirements set out in Schedule
"F" hereto.
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2.4 Joint Venture
Forthwith after execution of this Agreement, AIM shall incorporate a Delaware
corporation as a wholly owned subsidiary which shall thereupon execute an
addendum to this Agreement in form and content satisfactory to XXX.XXX whereby
the Joint Venture and AIM shall agree to be jointly and severally responsible to
XXX.XXX for the performance of AIM's obligations and liabilities under the
Agreement.
2.5 Promotion of Auction E-Commerce Service
AIM shall operate the Joint Venture in accordance with the provisions of this
Agreement. AIM shall be responsible for content, creation, advertising,
promotional activity, distribution and sales of the AIM E-Commerce Service.
Without limiting the generality of the foregoing, AIM shall:
(i) have sole responsibility for promoting the AIM E-Commerce and securing
cable and television broadcast network and affinity group customers;
(ii) support and finance the operations of the Joint Venture as required under
this Agreement;
(iii) sell up to 100% of the banner advertisements on the AIM E-Commerce
Service;
(iv) in co-ordination with XXX.XXX, integrate the XXX.XXX Technology into the
Joint Venture interfaces including developing all necessary links to the
XXX.XXX Site; and
(v) be responsible for the ongoing creative and entertainment content of the
Joint Venture interfaces, on a cost pass through basis.
2.6 Management of Joint Venture
AIM shall ensure that the Joint Venture is managed in accordance with the
following:
(i) the business of the Joint Venture shall be restricted to the functions
provided for in this Agreement;
(ii) no transfer, assignment, mortgage, charge or pledge shall be permitted or
any equity securities, warrants, options or other rights to acquire equity or
other voting rights in respect of the Joint Venture without the prior written
consent of XXX.XXX which may be withheld in its absolute discretion, except for
any of the foregoing which are necessary for AIM to comply with its present
agreements with Xxxxxxxxx Digital Inc.;
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(iii) XXX.XXX is (or in the event XXX.XXX exercises its option to purchase the
Joint Venture, XXX.XXX and AIM are) granted a security interest (second in
priority only to the existing security interest in favour of Xxxxxxxxx Digital
Inc.) in form and content satisfactory to XXX.XXX in all assets of the Joint
Venture to secure the performance of the Joint Venture's obligations hereunder;
(iv) each of XXX.XXX and AIM shall have equal representation on the board of
directors of the Joint Venture, which shall be chaired by an arm's length person
mutually satisfactory to AIM and XXX.XXX;
(v) key financial and management decisions shall require the prior written
approval of both AIM and XXX.XXX including without limitation any issue or
transfer of stock or rights or options to acquire stock; all borrowing whether
secured or not; the implementation and any changes to an annual business plan;
the terms and conditions for acquiring goods or services from persons not at
arm's length to the parties; the terms and conditions of retaining senior
employees or consultants; the terms and conditions of contracts with users of
the AIM E-Commerce Service and any other transaction which is or may be material
to the operations of the Joint Venture (XXX.XXX acknowledges that certain
decisions may also require approval of Xxxxxxxxx Digital Inc. or Pioneer
Ventures Associates Limited Partnership pursuant to existing agreements):
(vi) XXX.XXX shall fund the Joint Venture to the extent of [Confidential
information filed separately with the SEC] in above the line costs (meaning
talent, director and line producers) and AIM shall fund the Joint Venture for
[Confidential information filed separately with the SEC] below the line costs
(meaning all infrastructure costs required to get the job done) and
[Confidential information filed separately with the SEC] above the line costs to
create a promotional tape of the AIM E-Commerce Service; and
(vii) additional agreed ongoing promotional costs of the Joint Venture shall be
funded [Confidential information filed separately with the SEC] by the parties.
2.7 Payment and Effective Date
In consideration for the grant of the License herein, AIM agrees to share the
Net Promotional Revenue and Net Revenue as provided in Section 4.2. The parties
agree this Agreement is effective December 30,1998
ARTICLE III
RIGHT TO USE XXX.XXX TECHNOLOGY
3.1 Acknowledgment of Title.
(1) AIM acknowledges that ownership of the XXX.XXX Technology and any
customization or enhancements as used in the AIM E-Commerce Service shall
remain with XXX.XXX.
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(2) AIM shall take all reasonable precautions to prevent third parties from
using the XXX.XXX Technology in any way that would constitute a breach of
this Agreement.
3.2 Restriction on Business
During the Term of this Agreement AIM agrees that neither it nor any entity
which controls, is controlled by or is under common control with it will
directly or indirectly use, promote, invest in, or otherwise support in any
manner, any cable or television broadcast network auction properties for the
Term or any renewal thereof.
ARTICLE IV
SERVICES
4.1 Additional Services.
If AIM requests the inclusions of specific functionality or customization
changes to the XXX.XXX Technology, XXX.XXX will use reasonable efforts to assist
AIM, on terms to be mutually agreed upon by the Parties. Such AIM-specific
enhancements will be provided by XXX.XXX on a cost pass through basis, plus
reasonable out-of pocket expenses and all applicable taxes.
4.2 Allocation of Revenue.
(i) XXX.XXX shall pay AIM [Confidential information filed separately with the
SEC] of the Net Revenue. XXX.XXX shall invoice and collect all Net
Revenue. Net Revenue shall be aggregated on a monthly basis, and XXX.XXX
shall pay AIM [Confidential information filed separately with the SEC] of
the Net Revenue within fifteen (15) days of the end of each month.
XXX.XXX shall complete a Net Revenue Report in the form attached hereto
as Schedule "G" for each applicable payment period and shall remit each
such report along with each payment due hereunder.
(ii) AIM shall pay XXX.XXX [Confidential information filed separately with the
SEC] of the Net Promotional Revenue. AIM shall invoice and collect all
Net Promotional Revenue. Net Promotional Revenue shall be aggregated on a
monthly basis, and AIM shall pay XXX.XXX [Confidential information filed
separately with the SEC] of the Net Promotional Revenue within fifteen
(15) days of the end of each month. AIM shall complete a Net Promotional
Revenue Report in the form attached hereto as Schedule "H" for each
applicable payment period and shall remit each such report along with
each payment due hereunder.
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(iii) Notwithstanding the foregoing provisions of Section 4.2 at such time as
the AIM stock issued to XXX.XXX pursuant to the AIM Stock Agreement of
even date herewith (the "AIM Stock") becomes freely trading on a United
States exchange satisfactory to XXX.XXX in the hands of XXX.XXX or its
assigns and maintains an aggregate market value of not less than
[Confidential information filed separately with the SEC] for a minimum of
30 consecutive trading days on such exchange (as measured by the average
trading price of stock traded on each of such trading days), AIM shall
become entitled to a [Confidential information filed separately with the
SEC] share of future Net Revenue and Net Promotional Revenue until the
aggregate of cumulative Net Revenue and Net Promotional Revenue received
by AIM from the Effective Date equals [Confidential information filed
separately with the SEC] whereupon all such revenues thereafter shall be
shared [Confidential information filed separately with the SEC].
(iv) All other gross margin derived by AIM or the Joint Venture from marketing
XXX.XXX services in the cable and television broadcast network industry
in the Territory, including without limitation, from marketing to
affinity groups, shall be shared between AIM and XXX.XXX on a
[Confidential information filed separately with the SEC] basis net of
mutually agreed out of pocket and third party costs, and paid monthly
within fifteen (15) days of the end of each month.
4.3 Audit.
AIM shall keep accurate books and records of all revenues received by AIM and
all information regarding deductions made to calculate Net Promotional Revenues.
XXX.XXX shall keep accurate books and records of all revenues received by
XXX.XXX and all information regarding deductions made to calculate Net Revenues.
Each party has the right, acting reasonably, to audit the books and records of
the other party during normal business hours in respect of financial obligations
under this Agreement. If such audit discloses underpayment by the other party,
the other party shall pay such underpayment forthwith, together with interest
from the date the payment was due until such amount is paid. If an audit
discloses an underpayment of 5% or more, the party in default shall reimburse
the other party on demand for the reasonable out of pocket costs incurred in
conducting such audit.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND INDEMNITIES
5.1 Warranty and Indemnity re: Authority, Title and Proprietary Rights.
(1) XXX.XXX represents and warrants that it has the right to grant the license
hereby granted and that XXX.XXX has the right to provide the AIM E-Commerce
Service.
(2) XXX.XXX agrees to defend and indemnify AIM and hold it harmless from all
losses, claims, damages or liabilities, including court costs and legal
fees, in connection with or arising out of any claim asserted against AIM
based upon a contention that the AIM E-Commerce
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Service, the XXX.XXX Technology or the Software or any of the Deliverables,
or any portion thereof used by AIM or the Joint Venture within the scope of
this Agreement infringe the Intellectual Property Rights of any third Party
provided that:
(i) AIM or the Joint Venture promptly notify XXX.XXX in writing of the
claim and of all material developments in connection with such claim
and provides all assistance otherwise reasonably requested by
XXX.XXX;
(ii) XXX.XXX has the right to control, at its own expense, the defence
and all related settlement negotiations (AIM has the right to
participate at its own expense);
(iii) AIM or the Joint Venture does not pay or settle any such claim
without the express written consent of XXX.XXX; and
(iv) the claim in respect of which indemnity is sought does not arise out
of or in connection with any unauthorized use of the XXX.XXX
Technology by AIM.
In addition, if the XXX.XXX Technology, any of the Deliverables, or any portion
thereof is held to constitute an infringement of another Person's rights, and
use thereof is enjoined, or XXX.XXX enters into a settlement of the claim which
includes an agreement to refrain from the use thereof, XXX.XXX shall, at its
election and expense, either:
(A) procure the right to use the infringing element thereof;
(B) procure the right to an element which performs the same function
without any material loss of functionality; or
(C) replace or modify the element thereof so that the infringing portion
is no longer infringing and still performs the same function without
any material loss of functionality;
and shall make every reasonable effort to correct the situation with minimal
effect upon the operations of AIM or AIM affiliates.
5.2 General Limitation on Liability.
UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) ARISING FROM BREACH
OF THE AGREEMENT, THE USE OR INABILITY TO USE THE XXX.XXX TECHNOLOGY, THE AIM
E-COMMERCE SERVICE, THE SOFTWARE, OR ARISING FROM ANY OTHER PROVISION OF THIS
AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS
OR LOST BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT EACH SUCH
PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED
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DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT
TO SECTION 5.1(2) ABOVE. EXCEPT AS PROVIDED IN SECTION 5.1(2), NEITHER PARTY
WILL BE LIABLE TO THE OTHER PARTY FOR MORE THAN $250,000 PROVIDED THAT EACH
PARTY WILL REMAIN LIABLE FOR THE AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS
OWED TO THE OTHER PARTY.
5.3 Provision of Source Code Materials.
AIM may subscribe, at its own expense, to the existing Source Code Escrow
Agreement attached as Schedule "D" and deposited with Data Securities
International, Inc. which provides for the release to AIM of the source code for
the XXX.XXX Technology for use as provided in Section 2.1 if (i) XXX.XXX
voluntarily declares bankruptcy, becomes insolvent or ceases the operation of
its business; or (ii) XXX.XXX materially fails to maintain or operate the
XXX.XXX Technology or the AIM E-Commerce Service; or (iii) XXX.XXX is in
continuing material breach of this Agreement.
5.4 Confidentiality.
Each Party (hereinafter in this Section, the "Receiving Party") covenants with
the other Party (hereinafter in this Section, the "Disclosing Party") that it
shall keep confidential the Confidential Information of the Disclosing Party to
which the Receiving Party obtains access as a consequence of entering into this
Agreement and that it will take all reasonable precautions to protect such
Confidential Information from any use, disclosure or copying except as expressly
authorized by this Agreement. The Receiving Party shall implement such
procedures as the Disclosing Party may reasonably require from time to time to
improve the security of the Confidential Information of the Disclosing Party in
its possession. This Section shall survive the termination of the Agreement.
Upon termination of this Agreement, the Receiving Party shall, at the choice of
the Disclosing Party, either return to the Disclosing Party or destroy all
copies or partial copies of Confidential Information of the Disclosing Party in
any form which is in the possession of the Receiving Party or under its control,
and certify that all such Confidential Information has been returned or
otherwise destroyed.
5.5 Use of Data.
(1) XXX.XXX retains ownership of the XXX.XXX Technology, but to the extent
permitted by applicable law and subject to any restrictions imposed by
customers of the Joint Venture or subscribers agrees to allow AIM access to
and, subject to the restrictions below, use of any and all Data pertaining
to the purchase and sale of goods or services by United States Television
subscribers (the "Data"). All Data is the property of XXX.XXX.
(2) XXX.XXX shall provide AIM with monthly usage reports that tracks all
elements necessary to allocate revenues in the forms set out in Schedule
"E" and will make all payments required pursuant to such reports within 15
days of each month end. XXX.XXX agrees that it also provide, on a best
efforts basis, information as to how cable
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and television broadcast network users of the XXX.XXX Technology are
navigating through the XXX.XXX Online Auction.
(3) AIM covenants that:
(i) it will not use the Data to operate a competitive auction service
during the Term of this Agreement or any extension thereof or for one
year thereafter; and
(ii) it will not allow third parties to use the Data for any purpose
without the prior written approval of XXX.XXX.
5.6 Ownership of the Software and Online Auction Trade-xxxx.
AIM acknowledges that the Software constitutes commercially valuable trade
secrets and proprietary data of XXX.XXX and is Confidential Information and that
no provision of this Agreement shall be construed to convey title in the
Software, any of XXX.XXX's Intellectual Property Rights or the XXX.XXX URL.
5.7 AIM-Specific Enhancements.
If AIM requests that XXX.XXX develop an AIM-Specific Enhancement, the parties
will mutually agree in writing to terms and conditions respecting the
development of such AIM-Specific Enhancement, including, without limitation,
terms and conditions relating to each parties' respective ownership and
exploitation rights in such AIM-Specific Enhancement. The parties acknowledge
and agree that their respective ownership and exploitation rights in each
AIM-Specific Enhancement shall be determined in accordance with the following
principles:
(i) if an AIM-Specific Enhancement can be used as a severable, standalone
component, then AIM shall own all right, title and interest in and to such
AIM-Specific Enhancement, and XXX.XXX shall be granted perpetual,
royalty-free license rights to use sub-license, exploit and reproduce such
AIM-Specific Enhancement, provided that XXX.XXX may not transfer or license
such AIM-Specific Enhancement to any third party (other than its
Affiliates) without the prior written consent of AIM.
(ii) if an AIM-Specific Enhancement is integrated into the XXX.XXX Technology,
the XXX.XXX Site or the AIM E-Commerce Service in such a way that it cannot
reasonably be used as a severable, standalone component, then XXX.XXX shall
own all right, title and interest in and to such AIM-Specific Enhancement,
and AIM shall be granted perpetual, royalty-free license rights to use,
sub-license, exploit and reproduce such AIM-Specific Enhancement
internally, provided that AIM may not transfer or license such AIM-Specific
Enhancement to any third party without the prior written consent of
XXX.XXX.
-14-
5.8 Limitation on Warranties.
Except for those warranties otherwise provided herein, neither Party makes any
warranties or representations, and there are no conditions, express or implied,
in fact or in law, including without limitation, the implied warranties or
conditions of merchantable quality and fitness for a particular purpose and
those arising by statute or otherwise in law or from a course of dealing or
usage of trade.
ARTICLE VI
DEFAULT AND TERMINATION
6.1 Term.
(1) This Agreement shall commence on the Effective Date and shall continue,
subject to early termination in accordance with the terms hereof, until
June 30, 2001 (the "Initial Term"). Thereafter, the Agreement may be
renewed at the option of AIM (at the end of the Initial Term and the next
following two subsequent Terms, for additional one year periods
("Subsequent Terms") provided the last of the Term and Subsequent Terms
shall expire no later than June 30, 2003. All Renewals shall be subject to
agreement or allocation of Net Revenue and Net Promotional Revenue for the
ensuing Subsequent Term and in default of agreement, the parties shall
submit the determination of such allocation to arbitration pursuant to
Article VII unless either party elects to terminate at least 90 days before
the end of the then current Term.
(2) The extension of the Term of the Agreement into a Subsequent Term shall be
conditional upon the Parties, during the ninety (90) days prior to the end
of the Initial Term, negotiating and agreeing on reasonable values for
renewal metrics for the upcoming Subsequent Term. If the Parties are unable
to reach such an agreement, the Parties agree that they will submit the
determination of such allocation to binding arbitration in accordance with
the terms of Article VII unless either party elects to terminate this
Agreement unless by providing written notice to the other party at least
ninety (90) days prior to the end of the then current term, stating its
intention to terminate the Agreement at the end of such term.
6.2 Termination.
Subject to the time frames set out below, this Agreement may be terminated
forthwith by notice to the either Party on written notice upon the occurrence of
an event of default by the other Party. Each of the following constitutes an
event of default for the purposes of this Agreement:
-15-
(i) if a Party fails to perform any material obligation set forth in
this Agreement and such default, in the case of a default which is
remediable, continues for a period of thirty (30) days after written
notice of such failure has been given by the non-defaulting Party;
(ii) if a Party declares bankruptcy or becomes insolvent or ceases the
operation of its business without a successor acceptable to the
other Party;
(iii) if a Party decides to permanently exit the on line auction business;
or
(iv) AIM or the Joint Venture fails to establish the AIM E-Commerce
Service as a viable business or if the AIM Stock does not become
freely trading in the hands of XXX.XXX or its assigns within twelve
(12) months of the Effective Date.
6.3 Survival.
For a period of ninety (90) days after this Agreement is terminated or expires,
all operative terms of this Agreement with respect to the allocation of Net
Revenue and Net Promotional Revenue will remain in full force and effect and
(except for termination as provided in section 6.2 (ii), (iii) or (iv) in which
event there shall be no survival period) AIM shall retain the right to use the
AIM E-Commerce Service and the XXX.XXX Technology in the same manner it was
entitled to use them as of the date of termination. At the end of a period of
ninety (90) days, AIM will cease to have any right to use the XXX.XXX Technology
or the AIM E-Commerce Service and XXX.XXX will cooperate with AIM in a mutually
agreed transition schedule to a new technology. Except as otherwise provided
herein, the terms of Articles II, III and VII shall survive any termination or
expiry of this Agreement and shall continue in force thereafter for the period
contemplated by the Agreement. Other provisions of this Agreement which, by the
nature of the rights or obligations set out therein, might reasonably be
expected to be intended to so survive, shall survive termination or expiry of
this Agreement until they are satisfied or by their nature expire.
ARTICLE VII
ARBITRATION
7.1 Dispute Resolution Process.
If any dispute, disagreement, controversy or claim arising out of or relating to
this Agreement including, without limitation, its application, interpretation,
performance, breach, termination, enforcement or damages, or remedies arising
out of the breach of or non-compliance therewith, shall be finally determined by
arbitration before a single arbitrator to be commenced and conducted in the
English language in Toronto in accordance with the Arbitration Act (Ontario).
The Parties hereto agree that:
-16-
(1) subject to mutual agreement between the Parties to the contrary, the
arbitrator shall be a person who is legally trained and trained as a
professional arbitrator and who has a minimum of five (5) years experience
in the licensing of computer software;
(2) the Parties shall agree on the identity of the arbitrator within 10 days of
notice of reference to arbitration and in default thereof, either Party may
apply to a Judge of the Supreme Court of Ontario, General Division, to
appoint an arbitrator with the foregoing qualifications;
(3) the Parties shall be required to make written submissions to the arbitrator
within 7 days of appointment and shall not be entitled to make verbal
representations or further submissions unless so requested by the
arbitrator. Any Party who does not comply with the foregoing time period
shall not be entitled to make any submissions without the written approval
of the other Party;
(4) the arbitrator shall be required to render his decision in writing within
10 days of the period mentioned in Subsection 7.1(c);
(5) neither of the Parties shall apply to the Courts of Ontario or any other
jurisdiction to attempt to enjoin, delay, impede or otherwise interfere
with or limit the scope of the arbitration or the powers of the arbitrator
provided for in the Arbitration Act (Ontario)
(6) the award of the arbitrator shall be a final and conclusive award and
judgment with respect to all matters properly before the arbitral tribunal
in accordance with the Arbitration Act (Ontario) and neither Party shall
appeal such award in any manner whatever to any court, tribunal or other
authority; and
(7) the award of the arbitral tribunal may be entered and enforced by any court
in any jurisdiction having jurisdiction over the Parties hereto or the
subject matter of the award or the properties or assets of either of the
Parties hereto.
ARTICLE VIII
MANAGEMENT AND REPORTING
8.1 Management.
The Parties each agree to designate an individual known as a Project Manager
from their respective companies with adequate authority and full technical
competence to deal with matters relating to the implementation of the
Deliverables. Specifically, Project Managers will, on behalf of their respective
Parties, in accordance with the spirit of this Agreement, use reasonable efforts
to coordinate the provision of the AIM E-Commerce Service. Upon such
designations, each of XXX.XXX and AIM shall concurrently provide the other with
details with respect to its Project Manager, including name, address and
telephone number, and each of XXX.XXX and AIM may
-17-
from time to time change its Project Manager with the consent of the other which
will not be unreasonably withheld or delayed.
8.2 Reports.
(1) Subject to Section 5.5, Data obtained in connection with the AIM E-Commerce
Service will be shared with AIM by XXX.XXX to generate co-marketing
opportunities with XXX.XXX, such as (i) customer name; (ii) address; (iii)
e-mail address; (iv) registered credit card information; and (v) purchase
history.
(2) To the extent permitted by applicable law and subject to any restrictions
imposed by contract, Data and information obtained by the Joint Venture and
AIM in promoting the Joint Venture and the AIM E-Commerce Service shall be
shared with XXX.XXX for the purposes described in the preceding section.
(3) XXX.XXX will maintain its ownership of the XXX.XXX Technology, databases
and customer information provided on a voluntary basis to AIM.
(4) The Parties further agree that they will, on request, provide such
information as to weekly or other periodic activity relating to the AIM
E-Commerce Service as is readily available and as can be generated without
unreasonable disruption of business.
ARTICLE IX
GENERAL
9.1 Notice.
Any notice or other communication (a "Notice") required or permitted to be given
or made hereunder shall be in writing and shall be well and sufficiently given
or made if:
(1) delivered in person during normal business hours on a Business Day and left
with a receptionist or other responsible employee of the relevant Party at
the applicable address set forth below;
(2) sent by prepaid first class mail; or
(3) sent by any electronic means of sending messages, including facsimile
transmission, which produces a paper record (an "Electronic Transmission"),
charges prepaid and confirmed by prepaid first class mail;
in the case of a Notice to AIM addressed to it at:
American Interactive Media, Inc.
Xxxxx 000, 000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-18-
Attention: Xxxx Xxxxx
Fax No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle
000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx,
101780061
Attention: Xxxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
and in the case of a Notice to XXX.XXX addressed to it at:
XXX.XXX International Inc.
000 - 0000 Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxx
Fax No.: (000) 000-0000
with a copy to:
Gowling, Strathy & Xxxxxxxxx
Barristers & Solicitors
Xxxxxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxx
Fax No.: (000) 000-0000
Any Notice given or made in accordance with this Section 9.1 shall be deemed to
have been given or made and to have been received:
(a) on the day it was delivered, if delivered as aforesaid;
(b) on the fifth Business Day (excluding each day during which there exists any
general interruption of postal services due to strike, lockout or other cause)
after it was mailed, if mailed as aforesaid; and
-19-
(c) on the day of sending if sent by Electronic Transmission during normal
business hours of the addressee on a Business Day and, if not, then on the first
Business Day after the sending thereof.
Either Party may from time to time change its address for notice by giving
Notice to other Party in accordance with the provisions of this Section 9.1.
9.2 Assignment.
Neither Party may assign its rights and obligations under this Agreement, in
whole or in part, without the prior consent in writing of the other and any
purported assignment made without that consent is void and of no effect (save
and except for an assignment as an incident of security taken in a normal course
financing transaction). No assignment of this Agreement shall relieve either
party from any obligation under this Agreement.
9.3 Binding on Successors.
This Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns.
9.4 Further Assurances.
Each Party agrees that upon the written request of the other Party, it will do
all such acts and execute all such further documents, conveyances, deeds,
assignments, transfers and the like, and will cause the doing of all such acts
and will cause the execution of all such further documents as are within its
power to cause the doing or execution of, as any other Party hereto may from
time to time reasonably request be done and/or executed as may be necessary or
desirable to give effect to this Agreement.
9.5 Independent Contractors.
It is understood and agreed that in giving effect to this Agreement, no Party
shall be or be deemed a partner, agent or employee of another Party for any
purpose and that their relationship to each other shall be that of independent
contractors. Nothing in this Agreement shall constitute a partnership or a joint
venture between the Parties. No Party shall have the right to enter into
contracts or pledge the credit of or incur expenses of liabilities on behalf of
the other Party.
9.6 Waiver.
A waiver by a Party hereto of any of its rights hereunder or of the performance
by the other Party of any of its obligations hereunder shall be without
prejudice to all of the other rights hereunder of the Party so waiving and shall
not constitute a waiver of any such other rights or, in any other instance, of
the rights so waived, or a waiver of the performance by the other Party of any
of its other obligations hereunder or of the performance, in any other instance,
of the obligations so waived. No waiver shall be effective or binding upon a
Party unless the same shall be expressed in writing and executed by the Party to
be bound.
-20-
9.7 Compliance With Law.
Each party shall, in the performance of this Agreement, fully comply with, and
abide by, all laws, regulations, regulatory rulings or directives, court orders,
and decisions of administrative tribunals of competent jurisdiction, that may,
in any manner or extent, concern, govern, or affect either party's respective
performance of, and obligations under, this Agreement.
9.8 Interpretation.
This Agreement has been negotiated by the parties hereto and their respective
counsel and shall be fairly interpreted in accordance with its terms and without
any rules of construction relating to which party drafted the Agreement being
applied in favour or against either party.
9.9 Effective Date.
This Agreement shall not become a valid and binding contract unless and until
each party has duly executed and delivered this Agreement. For greater
certainty, there shall be no agreement, whether oral, written, express, implied
or otherwise notwithstanding any performance between the parties concerning the
subject matter of this document, including, without limitation, by course of
conduct, doctrine of part performance, or otherwise.
9.10 Amendment.
No amendment of any provision of this Agreement shall be effective unless such
amendment is embodied in a written agreement which is: (i) expressly stated to
be intended to amend this Agreement; and (ii) executed by two authorized signing
officers of AIM and an authorized officer of XXX.XXX. For greater certainty, the
parties acknowledge and agree that no representations, warranties, conditions,
covenants or other statements or commitments, whether made orally, in writing,
by course of conduct or otherwise, and whether made prior to the Effective Date
of this Agreement or thereafter, shall be binding on either of the parties.
-21-
9.11 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein and shall be
treated, in all respects, as an Ontario contract. The parties hereby: (i)
irrevocably submit to the exclusive jurisdiction of the courts of Ontario in
respect of the subject matter hereof; (ii) consent to service of process being
effected upon the other party by registered mail sent to the address set forth
in section 8.1 hereof; (iii) agree not to seek, request, claim or pursue trial
by jury; and (iv) agree not to seek, request, claim or pursue any right, claim,
or entitlement to any punitive or exemplary damages whatsoever.
IN WITNESS WHEREOF this Agreement is executed by the Parties as of the date
first written, above.
XXX.XXX INTERNATIONAL INC.
By: ________________________________
(Duly Authorized Officer)
By: ________________________________
(Duly Authorized Officer)
AMERICAN INTERACTIVE MEDIA, INC.
By: ________________________________
(Duly Authorized Officer)
By: ________________________________
(Duly Authorized Officer)
-22-
SCHEDULE "A"
XXX.XXX Technology (including Third Party Technology)
ILI Xxx.xxx Modules
Database: [Confidential information filed
separately with the SEC]
Business Services: "
Data Services: "
Dynmic Export: "
Order Processing
Administrator: "
Credit Card: "
Order Business Services: "
Utilities
Category Builder: "
AdRotatorGenerator: "
AssetMgmt: "
DB Services: "
Notification: "
Supporting S/W: "
Web: "
ILI Xxx.xxx Modules (Dutch)
Business Services: "
Data Services: "
Xxxxxxx Server: "
Dutch Client: "
Internet Web: "
Admin Web: "
Top Bid Auction
[Confidential information filed separately with the Commission]
[Confidential information filed 01-19-98 9:12p [Confidential information filed
separately with the SEC] separately with the SEC]
" 03-06-98 8:19p "
" 03-17-98 3:21p "
" 01-04-98 12:49a "
" 01-19-98 4:05p "
" 04-09-98 8:00p "
" 06-10-98 1:05p "
" 01-04-98 12:49a "
" 03-18-98 11:53a "
" 06-29-98 12:06p "
" 01-21-98 10:53p "
" 06-23-98 8:53a "
" 06-23-98 10:25a "
" 01-19-98 4:05p "
" 01-19-98 4:05p "
" 01-19-98 5:25a "
" 01-04-98 12:49a "
" 04-15-98 5:45a "
" 07-02-98 12:01p "
" 01-23-98 2:36p "
" 06-21-98 10:17p "
" 06-17-98 3:31p "
" 04-15-98 3:03p "
" 06-15-98 11:04a "
" 01-04-98 12:49a "
" 01-04-98 12:49a "
" 01-19-98 9:20p "
" 01-04-98 12:49a "
" 01-26-98 7:58a "
" 03-17-98 3:21p "
" 03-17-98 3:21p "
" 05-04-98 12:15p "
" 07-14-98 11:54a "
" 06-04-98 7:22p "
" 02-25-98 10:51a "
" 05-04-98 7:19p "
" 06-19-98 6:31p "
" 04-15-98 5:45a "
" 01-24-98 6:33p "
" 04-15-98 5:45a "
" 04-17-98 4:45p "
" 01-19-98 4:47a "
" 02-10-98 2:21p "
" 05-07-98 10:14a "
" 03-28-98 10:15a "
" 02-02-98 9:49p "
" 01-19-98 9:32p "
" 01-09-98 1:52p "
" 02-10-98 8:11a "
" 04-08-98 2:58p "
" 02-07-98 1:29p "
" 01-30-98 8:56a "
" 03-03-98 6:15p "
" 02-01-98 5:11p "
" 01-19-98 8:31a "
" 01-19-98 4:05p "
" 01-24-98 6:52p "
" 03-04-98 7:58p "
" 01-20-98 11:00a "
" 01-19-98 9:29p "
" 04-22-98 7:45a "
" 01-04-98 12:49a "
" 04-15-98 5:45a "
" 01-20-98 11:04a "
" 01-04-98 12:49a "
" 06-19-98 9:23a "
" 06-30-98 12:49p "
" 06-10-98 7:30a "
" 01-04-98 12:49a "
" 01-04-98 12:49a "
" "
" 06-24-98 7:02a "
" "
" 02-07-98 1:56p "
" 05-26-98 7:06p "
" 03-30-98 10:29p "
" 03-06-98 8:02p "
" 06-14-98 10:09p "
" 03-06-98 8:02p "
" 06-15-98 7:51p "
" 06-24-98 3:09p "
" 06-03-98 10:01p "
" 06-29-98 7:21p "
" 03-06-98 8:03p "
" 06-09-98 11:08a "
" 03-25-98 1:28p "
" 03-06-98 8:04p "
" 05-04-98 10:41a "
" 06-17-98 10:09p "
" 06-27-98 10:03p "
" 03-27-98 10:11p "
" 06-30-98 10:09p "
" 06-23-98 7:27p "
" 04-06-98 7:34p "
" 04-17-98 7:47a "
" "
" 02-07-98 1:56p "
" 06-12-98 12:39p "
" 03-06-98 7:56p "
" 06-15-98 7:33p "
" 05-29-98 7:26p "
" 06-29-98 7:20p "
" 05-15-98 8:52a "
" 05-30-98 8:55p "
" 03-16-98 5:10p "
" 03-16-98 5:29p "
" 04-27-98 10:33p "
" 06-23-98 11:14a "
" 06-04-98 7:32a "
" 05-14-98 7:30p "
" 05-14-98 7:27p "
" 06-18-98 12:17a "
" 06-21-98 6:35p "
" 06-30-98 10:21p "
" 06-24-98 1:09p "
" "
" 06-21-98 9:50p "
" 03-02-98 2:56p "
" 04-15-98 6:57a "
" 06-29-98 7:08a "
" 01-26-98 7:58a "
" 03-02-98 2:54p "
" 06-30-98 10:08p "
" 07-02-98 1:04p "
" 01-26-98 7:58a "
" 07-01-98 6:00p "
" 01-19-98 4:30a "
" 04-13-98 11:08a "
" 01-04-98 12:49a "
" 01-19-98 4:05p "
" "
" 06-23-98 12:14p "
" 01-04-98 12:50a "
" "
" 06-15-98 4:57p "
" "
" 01-19-98 4:05p "
" 04-09-98 7:21a "
" 01-29-98 5:40p "
" "
" 04-15-98 5:45a "
" 01-04-98 12:49a "
" 03-10-98 5:10p "
" 06-01-98 2:39p "
" 01-04-98 12:49a "
" 01-04-98 12:49a "
" 07-03-98 1:42p "
" 01-04-98 12:49a "
" 01-04-98 12:49a "
" 02-07-98 12:14p "
" 02-09-98 8:08a "
" 01-30-98 11:45a "
" 01-04-98 12:49a "
" 06-01-98 2:27p "
" 04-15-98 5:45a "
" 01-04-98 12:49a "
" "
" 06-19-98 12:52p "
" "
Dutch Auction
[Confidential information filed separately with the SEC]
[Confidential information filed separately
with the SEC]
[Confidential information filed 05-26-98 8:49a [Confidential information filed
separately with the SEC] separately with the SEC]
" 07-08-98 7:17a "
" 05-26-98 9;12a "
" 05-27-98 1:57p "
" 05-22-98 11:51a "
" "
"
" 05-26-98 7:40a "
" 05-28-98 11:50a "
" 05-20-98 12:01p "
" 05-27-98 1:19p "
" 06-03-98 8:27a "
" 05-27-98 12:40p "
" 05-27-98 1:22p "
" 05-27-98 12:51p "
" 05-27-98 2:37p "
" 05-27-98 1:21p "
" 05-22-98 3:45p "
" 05-28-98 11:50a "
" 05-26-98 8:08a "
"
"
" 07-09-98 8:06a "
" 04-30-98 1:54p "
" 07-09-98 9:41a "
" 07-08-98 11:02a "
" 05-27-98 6:15p "
" 07-08-98 7:18a "
"
Xxx.xxx Commerce Site
List of Third Party Tools Incorporated Into Application
1) [Confidential information filed separately with the SEC]
2) [Confidential information filed separately with the SEC]
3) [Confidential information filed separately with the SEC]
4) [Confidential information filed separately with the SEC]
5) [Confidential information filed separately with the SEC]
6) [Confidential information filed separately with the SEC]
7) [Confidential information filed separately with the SEC]
8) [Confidential information filed separately with the SEC]
9) [Confidential information filed separately with the SEC]
10) [Confidential information filed separately with the SEC]
11) [Confidential information filed separately with the SEC]
12) [Confidential information filed separately with the SEC]
13) [Confidential information filed separately with the SEC]
14) [Confidential information filed separately with the SEC]
15) [Confidential information filed separately with the SEC]
SCHEDULE "B"
AIM's Requirements
B.1 Preparation and Delivery of AIM's Requirements. AIM and XXX.XXX covenant and
agree to negotiate in good faith to execute an amendment to this Agreement (the
"Amendment") within thirty (30) days of the Effective Date in order to complete
this Schedule "B" in a manner acceptable to both parties. The Amendment shall
contain detailed performance requirements and specifications for the Television
E-Commerce Service.
B.2 Escalation. In the event that the Amendment has not been executed within
thirty (30) days of the Effective Date, the parties shall review disputes and
use their good faith efforts to complete the Amendment within an additional
thirty (30) day period. If the Amendment has not been completed within such
additional (30) day period, outstanding disputes or issues relating to the
Amendment shall be submitted to dispute resolution in accordance with Article
VII of this Agreement.
SCHEDULE "C"
Customer Service Standards
XXX.XXX shall, at a minimum, comply with the following customer service
standards in its operation of the Television E-Commerce Service.
C.1 Logistics
XXX.XXX shall"
1. appoint sufficient numbers of dedicated employees to provide e-mail online
customer service;
2. receive and respond to email and customer inquiries within two (2) business
days of receipt;
3. install a toll free phone line and communicate the toll free phone number in
the online "Customer Service" area of the XXX.XXX Site;
4. ensure the ability to handle customer service volumes in excess of 25% of
average daily order volumes;
5. monitor the Television E-Commerce Service to minimize out of stock
merchandise;
6. post all customer service policies in an online "Customer Service" area of
the XXX.XXX Site which includes the following information and policies: shipping
information, return policies, product warranties and contact information; and
7. post security and privacy policies in an online "Customer Service" area of
the XXX.XXX Site.
C.2 Process and Fulfillment
In fulfilling purchases by customers of the Television E-Commerce Service,
XXX.XXX shall:
1. process electronic orders within (2) business days of receipt;
2. provide customers with an order confirmation which includes order status (in
stock, temporary back order or out of stock), expected delivery times and total
cost (including all shipping and taxes) within two (2) business days of receipt;
3. ship products at the price displayed and without substitutions, unless such
substitutions are authorized by the customer;
4. deliver all merchandise in appropriate packaging;
5. ensure all packages arrive undamaged, well packed and neat (barring shipping
damage);
6. permit the return of defective or damaged goods to the manufacturers under
warranty; and
7. permit the return of other goods within 30 days of delivery, less a 15%
restocking fee with chronic abuse exclusions.
SCHEDULE "D"
Response Times
D.1 XXX.XXX shall respond to any report that the XXX.XXX Technology, the
Television Commerce Service or the XXX.XXX Site is failing to meet AIM's
Requirements, and shall correct such failure, within the time frames set out in
Section D.2 of this Schedule "D." The severity of any particular failure shall
be reasonably determined by AIM, and communicated to XXX.XXX, based on the
following definitions:
Severity 1: total inability to use any material part of the XXX.XXX
Technology, the E-Commerce Service or the XXX.XXX Site, resulting
in a critical impact on user objectives.
Severity 2: ability to use the XXX.XXX Technology, the Television E-Commerce
Service or the XXX.XXX Site, but user operation is severely
restricted.
Severity 3: ability to use the XXX.XXX Technology, the Television E-Commerce
Service or the XXX.XXX Site; failures relate to functions which
are not critical to overall user operations.
Severity 4: failure has been bypassed or temporarily corrected and is not
affecting customer operations.
D.2 XXX.XXX shall correct failures of the XXX.XXX Technology, the Television
E-Commerce Service and the XXX.XXX Site in order to comply with AIM's
Requirements within the following time frames:
Severity 1: within 24 hours of notification by AIM
Severity 2: within 48 hours of notification by AIM
Severity 3: within 15 days of notification by AIM
Severity 4: within 120 days of notification by AIM
SCHEDULE "E"
Source Code Trust Agreement
MASTER PREFERRED ESCROW AGREEMENT
Master Number __________
This Agreement is effective February 12, 1997 among Data Securities
International, Inc.("DSV"), Internet Liquidators International Inc.
("Depositor"), and any additional party signing the Acceptance Form attached to
this Agreement ("Preferred Beneficiary") who collectively may be referred to in
this Agreement as "the parties."
A. Depositor and Preferred Beneficiary have entered or will enter into a
license agreement in the form attached to such Preferred Beneficiary's
Acceptance Form regarding certain proprietary technology of Depositor
(referred to in this Agreement as "Preferred Beneficiary").
B. Depositor desires to avoid disclosure of its proprietary technology except
under certain limited circumstances.
C. The availability of the proprietary technology of Depositor is critical to
Preferred Beneficiary in the conduct of its business and, therefore,
Preferred Beneficiary needs access to the proprietary technology under
certain limited circumstances.
D. Depositor and Preferred Beneficiary desire to establish an escrow with DSI
to provide for the retention, administration and controlled access of
certain proprietary technology materials of Depositor.
ARTICLE 1 -DEPOSITS
1.1 Obligation to Make Deposit. Upon the signing of this Agreement by the
parties, including the signing of the Acceptance Form, Depositor shall deliver
to DSI the proprietary information and other materials identified on an Exhibit
A. DSI shall have no obligation with respect to the preparation, signing or
delivery of Exhibit A.
1.2 Identification of Tangible Media. Prior to the delivery of the deposit
materials to DSI, Depositor shall conspicuously label for identification each
document, magnetic tape, disk, or other tangible media upon which the deposit
materials are written or stored. Additionally, Depositor shall complete Exhibit
B to this Agreement by listing each such tangible media by the item label
description, the type of media and the quantity. The Exhibit B must be signed by
Depositor and delivered to DSI with the deposit materials. Unless and until
Depositor makes the initial deposit with DSI, DSI shall have no obligation with
respect to this Agreement, except the obligation to notify the parties regarding
the status of the deposit account as required in Section 2.2 below.
1.3 Deposit Inspection. When DSI receives the deposit materials and the Exhibit
B, DSI will give a receipt for the deposit materials to the Depositor in the
form provided by the Depositor and conduct a deposit inspection by visually
matching the labeling of the tangible
media containing the deposit materials to the item descriptions and quantity
listed on the Exhibit B. In addition to the deposit inspection, Preferred
Beneficiary may elect to cause a verification of the deposit materials in
accordance with Section 1.6 below.
1.4 Acceptance of Deposit. At completion of the deposit inspection, if DSI
determines that the labeling of the tangible media matches the item descriptions
and quantity on Exhibit B, DSI will date and sign the Exhibit B and deliver a
copy thereof to Depositor and Preferred Beneficiary. If DSI determines that the
labeling does not match the item descriptions or quantity on the Exhibit B, DSI
will (a) note the discrepancies in writing on the Exhibit B; (b) date and sign
the Exhibit B with the exceptions noted, and (c) provide a copy of the Exhibit B
to Depositor and Preferred Beneficiary. DSI's acceptance of the deposit occurs
upon the signing of the Exhibit B by DSI. Delivery of the signed Exhibit B to
Preferred Beneficiary is Preferred Beneficiary's notice that the deposit
materials have been received and accepted by DSI.
1.5 Depositor's Representations. Depositor represents as follows:
(a) Depositor lawfully possesses all of the deposit materials deposited
with DSI;
(b) With respect to all of the deposit materials Depositor has the right
and authority to grant to DSI and Preferred Beneficiary the rights as
provided in this Agreement;
(c) The deposit materials are not subject to any lien or other encumbrance
other than encumbrances arising in the ordinary cause of Depositor's
business;
(d) The deposit materials consist of the proprietary information and other
materials identified in Exhibit A; and
(e) The deposit materials are readable and useable in their current form
or, if the deposit materials are encrypted, the decryption tools and
decryption keys have also been deposited.
1.6 Verification. Preferred Beneficiary shall have the right, at Preferred
Beneficiary's expense. to cause a verification of any deposit materials. A
verification determines, in different levels of detail, the accuracy,
completeness. sufficiency and quality of the deposit materials. If a
verification is elected after the deposit materials have been delivered to DSI,
then only DSI, or at DSI's election an independent person or company selected
and supervised by DSI, may perform the verification.
1.7 Deposit Updates. Unless otherwise provided by the license agreement,
Depositor shall update the deposit materials within 60 days of each release of a
new version of the product which is subject to the license agreement. Such
updates will be added to the existing deposit. All deposit updates shall be
listed on a new Exhibit B and the new Exhibit B shall be signed by Depositor.
Each Exhibit B will be held and maintained separately within the escrow account.
An independent record will be created which will document the activity for each
Exhibit B. The
processing of all deposit updates shall be in accordance with Sections 1.2
through 1.6 above. All references in this Agreement to the deposit materials
shall include the initial deposit materials and any updates.
1.8 Removal of Deposit Materials. The deposit materials may be removed and/or
exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.
ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING
2.1 Confidentiality. DSI shall maintain the deposit materials in a secure,
environmentally safe, locked facility in the greater Toronto area which is
accessible only to authorized representatives of DSI. DSI shall have the
obligation to reasonably protect the confidentiality of the deposit materials.
Except as provided in this Agreement, DSI shall not disclose, transfer, make
available, or use the deposit materials. DSI shall not disclose the content of
this Agreement to any third party. If DSI receives a subpoena or other order of
a court or other judicial tribunal pertaining to the disclosure or release of
the deposit materials, DSI will immediately notify the parties to this
Agreement. It shall be the responsibility of Depositor and/or Preferred
Beneficiary to challenge any such order; provided, however, that DSI does not
waive its rights to present its position with respect to any such order. DSI
will not be required to disobey any court or other judicial tribunal order. (See
Section 7.5 below for notices of requested orders.)
2.2 Status Reports. DSI will issue to Depositor and Preferred Beneficiary a
report profiling the account history at least semi-annually. DSI may provide
copies of the account history pertaining to this Agreement upon the request of
any party to this Agreement.
2.3 Audit Rights. During the term of this Agreement, Depositor and Preferred
Beneficiary shall each have the right to inspect the written records of DSI
pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.
ARTICLE 3 - GRANT OF RIGHTS TO DSI
3.1 Title to Physical Copies of Deposited Materials.
(a) Depositor transfers to DSI in trust all legal title in and to the
physical copies of the deposit materials provided to DSI from time to time
in accordance with the terms of this Agreement. It is acknowledged by the
parties hereto that such transfer by Depositor to DSI under this Section is
not intended to, nor does it, transfer any intellectual property or other
intangible rights in the deposit materials. DSI agrees to hold the deposit
materials in trust for Depositor and Preferred Beneficiary as provided in
this Agreement.
The expression "in trust" is intended to refer strictly to the issue of
ownership of the deposit materials and not to the level of care which must
be taken by DSI in performing its duties under this Agreement. The duties
of DSI are strictly contractual in nature
and are as set out in this Agreement. It is not intended that DSI is to
have the fiduciary duty of a trustee.
3.2 Right to Make Copies. DSI shall have the right to make copies of the deposit
materials as reasonably necessary to perform this Agreement. DSI shall copy all
copyright, nondisclosure. and other proprietary notices and titles contained on
the deposit materials onto any copies made by DSI. With all deposit materials
submitted to DSI, Depositor shall provide any and all instructions as may be
necessary to duplicate the deposit materials including but not limited to the
hardware and/or software needed
3.3 Right to Transfer Upon Release. Depositor hereby grants to DSI the right to
transfer deposit materials to Preferred Beneficiary upon any release of the
deposit materials for use by Preferred Beneficiary in accordance with Section
4.5. Except upon such a release or as otherwise provided in this Agreement, DSI
shall not transfer the deposit materials.
ARTICLE 4 - RELEASE OF DEPOSIT
4.1 Release Conditions. As used in this Agreement, "Release Conditions" shall
mean the following:
(a) voluntary bankruptcy of Depositor;
(b) involuntary bankruptcy provided that the Depositor is not in good
faith diligently taking steps to contest or set aside such process,
(c) if Depositor becomes insolvent and ceases to continue to carry on its
business;
(d) if Depositor ceases the operation of its business and the business is
not continued by a successor acceptable to the Preferred Beneficiary,
acting reasonably; and
(e) any additional release conditions identified on the attached
Acceptance Form.
4.2 Filing For Release. If Preferred Beneficiary believes in good faith that a
Release Condition has occurred, Preferred Beneficiary may provide to DSI written
notice of the occurrence of the Release Condition and a request for the release
of the deposit materials. Upon receipt of such notice, DSI shall deliver a copy
of the notice to Depositor.
4.3 Contrary Instructions. From the date DSI delivers the notice requesting
release of the deposit materials, if the Release Condition is one defined in 4.
1 (b), 4. 1 (d) or 4. 1 (e) Depositor shall have ten business days to deliver to
DSI Contrary Instructions. If the Release Condition is one defined in 4. 1 (a)
or (c), DSI shall release the deposit materials pursuant to Section 4.4 within
48 hours of giving notice to the Depositor under Section 4.2. "Contrary
Instructions" shall mean the written representation by Depositor that a Release
Condition has not occurred or has been cured. Upon receipt of Contrary
Instructions, DSI shall deliver a copy to Preferred
Beneficiary. Additionally, DSI shall notify both Depositor and Preferred
Beneficiary that there is a dispute to be resolved pursuant to the Dispute
Resolution section of this Agreement (Section 7.3). Subject to Section 5.2, DSI
will continue to store the deposit materials without release pending (a) joint
instructions from Depositor and Preferred Beneficiary, (b) resolution pursuant
to the Dispute Resolution provisions, or (c) order of a court.
4.4 Release of Deposit. If DSI does not receive Contrary Instructions from the
Depositor, DSI is authorized to release the deposit materials to the Preferred
Beneficiary or, if more than one beneficiary is registered to the deposit
materials, to release a copy of the deposit materials to the Preferred
Beneficiary who gave notice under Section 4.2. However, DSI or DSI's authorized
representative is entitled to receive any fees due DSI or DSI's authorized
representative before making the release. This Agreement will terminate with
respect to the Preferred Beneficiary giving notice under Section 4.2 upon the
release of the deposit materials held by DSI.
4.5 Right to Use Following Release. Unless otherwise provided in the license
agreement, upon release of the deposit materials in accordance with this Article
4, Preferred Beneficiary shall have the right to use the deposit materials for
the sole purpose of continuing the benefits afforded to Preferred Beneficiary by
the license agreement. Preferred Beneficiary shall be obligated to maintain the
confidentiality of the released deposit materials.
ARTICLE 5 - TERM AND TERMINATION
5.1 Term of Agreement. The initial term of this Agreement is for a period of one
year. Thereafter, this Agreement shall automatically renew from year-to-year
unless (a) Depositor and Preferred Beneficiary jointly instruct DSI in writing
that the Agreement is terminated, or (b) the Agreement is terminated by DSI for
nonpayment in accordance with Section 5.2. If the Acceptance Form has been
signed at a date later than this Agreement, the initial term of the Acceptance
Form will be for one year with subsequent terms to be adjusted to match the
anniversary date of this Agreement. If the deposit materials are subject to
another escrow agreement with DSI, DSI reserves the right, after the initial one
year term, to adjust the anniversary date of this Agreement to match the then
prevailing anniversary date of such other escrow arrangements.
5.2 Termination for Nonpayment. In the event of the nonpayment of fees owed to
DSI or DSI's authorized representative, DSI shall provide written notice of
delinquency to the parties to this Agreement affected by such delinquency. Any
such party shall have the right to make the payment to DSI or DSI's authorized
representative to cure the default. If the past due payment is not received in
full by DSI or DSI's authorized representative within one month of the date of
such notice, then at anytime thereafter DSI shall have the right to terminate
this Agreement to the extent it relates to the delinquent party by sending
written notice of termination to such affected parties. DSI shall have no
obligation to take any action under this Agreement so long as any payment due to
DSI or DSI's authorized representative remains unpaid.
5.3 Disposition of Deposit Materials Upon Termination. Upon termination of this
Agreement by joint instruction of Depositor and each Preferred Beneficiary, DSI
shall return the deposit materials to the Depositor. Upon termination for
nonpayment, DSI shall return the deposit materials to the Depositor. DSI shall
have no obligation to return or destroy the deposit materials if the deposit
materials are subject to another escrow agreement with DSI.
5.4 Survival of Terms Following Termination. Upon termination of this Agreement,
the following provisions of this Agreement shall survive:
(a) Depositor's Representations (Section 1.5);
(b) The obligations of confidentiality with respect to the deposit
materials;
(c) The rights granted in the sections entitled Right to Transfer Upon
Release (Section 3.3) and Right to Use Following Release (Section
4.5), if a release of the deposit materials has occurred prior to
termination;
(d) The obligation to pay DSI or DSI's authorized representative any fees
and expenses due;
(e) The provisions of Article 7; and
(f) Any provisions in this Agreement which specifically state they survive
the termination or expiration of this Agreement.
5.5 Alternative to DSI. If this Agreement terminates, Depositor and Preferred
Beneficiary agree, at Preferred Beneficiary's request, to appoint a new agent by
mutual agreement. If Depositor and Preferred Beneficiary cannot agree, Preferred
Beneficiary shall appoint a trust company or other company specializing in the
escrow business as the agent provided that such company has appropriate storage
facilities located in or around Toronto and agrees to store the deposited
materials there in accordance with the terms of this Agreement. The new agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named hereunder, without any further assurance,
conveyance, act or deed.
ARTICLE 6 - DSI'S FEES
6.1 Fee Schedule. DSI or DSI's authorized representative is entitled to be paid
its standard fees and expenses applicable to the services provided. DSI or DSI's
authorized representative shall notify the party responsible for payment of
DSI's fees at least 90 days prior to any increase in fees. For any service not
listed on DSI's standard fee schedule, DSI or DSI's authorized representative
will provide a quote prior to rendering the service.
6.2 Payment Terms. DSI shall not be required to perform any service unless the
payment for such service and any outstanding balances owed to DSI or DSI's
authorized representative
are paid in full. All other fees are due upon receipt of invoice. If invoiced
fees are not paid, DSI may terminate this Agreement in accordance with Section
5.2. Late fees on past due amounts shall accrue at the rate of one and one-half
percent per month (18% per annum) from the date of the invoice.
ARTICLE 7 - LIABILITY AND DISPUTES
7.1 Right to Rely on Instructions. DSI may act in reliance upon any instruction,
instrument, or signature reasonably believed by DSI to be genuine. DSI may
assume that any employee of a party to this Agreement who gives any written
notice. request, or instruction has the authority to do so. DSI shall not be
responsible for failure to act as a result of causes beyond the reasonable
control of DSI, subject to Section 2. 1.
7.2 Indemnification. DSI shall be responsible to perform its obligations under
this Agreement and to act in a reasonable and prudent manner with regard to this
escrow arrangement. Provided DSI has acted in the manner stated in the preceding
sentence, Depositor and Preferred Beneficiary each agree to indemnify, defend
and hold harmless DSI from any and all claims, actions, damages, arbitration
fees and expenses, costs, attorney's fees and other liabilities incurred by DSI
relating in any way to this escrow arrangement.
7.3 Dispute Resolution. Any dispute, difference or question arising among any of
the parties concerning the construction, meaning, effect or implementation of
this Agreement or any part hereof will be settled by a single arbitrator
mutually agreed upon by the parties, or failing agreement, an arbitrator
appointed pursuant to the Arbitration Act (Ontario) or similar legislation. The
decision of such arbitrator appointed pursuant to this Agreement or such Act
will be final and binding on the parties and no appeal will lie therefrom.
7.4 Controlling Law. This Agreement is to be governed and construed in
accordance with the laws of the Province of Ontario except any laws which would
refer any matter to the laws of another jurisdiction. All parties irrevocably
attorn to the exclusive jurisdiction of the Courts of Ontario in respect of the
subject matter hereof.
7.5 Notice of Requested Order. If any party intends to obtain an order from the
arbitrator or any court of competent jurisdiction which may direct DSI to take,
or refrain from taking any action, that party shall:
(a) Give DSI at least two business days' prior notice of the hearing;
(b) Include in any such order that, as a precondition to DSI's obligation,
DSI or DSI's authorized representative be paid in full for any past due
fees and be paid for the reasonable value of the services to be rendered
pursuant to such order: and
(c) Ensure that DSI not be required to deliver the original (as opposed to
a copy) of the deposit materials if DSI may need to retain the original in
its possession to fulfill any of its other escrow duties.
ARTICLE 8 - GENERAL PROVISIONS
8.1 Entire Agreement. This Agreement, which includes the Acceptance Form and the
Exhibits described herein, embodies the entire understanding between all of the
parties with respect to its subject matter and supersedes all previous
communications. representations or understandings, either oral or written. No
amendment or modification of this Agreement shall be valid or binding unless
signed by all the parties hereto, except that Exhibit A need not be signed by
DSI, Exhibit B need not be signed by Preferred Beneficiary and the Acceptance
Form need only be signed by the parties identified therein.
8.2 Notices. All notices, invoices, payments, deposits and other documents and
communications shall be given to the parties at the addresses specified in the
attached Exhibit C and Acceptance Form. It shall be the responsibility of the
parties to notify each other as provided in this Section in the event of a
change of address. The parties shall have the right to rely on the last known
address of the other parties. Unless otherwise provided in this Agreement, all
documents and communications may be delivered by First Class mail.
8.3 Severability. In the event any provision of this Agreement is found to be
invalid, voidable or unenforceable, the parties agree that unless it materially
affects the entire intent and purpose of this Agreement, such invalidity,
voidability or unenforceability shall affect neither the validity of this
Agreement nor the remaining provisions herein, and the provision in question
shall be deemed to be replaced with a valid and enforceable provision most
closely reflecting the intent and purpose of the original provision.
8.4 Successors. This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the parties. However, DSI shall have no
obligation in performing this Agreement to recognize any successor or assign of
Depositor or Preferred Beneficiary unless DSI receives clear, authoritative and
conclusive written evidence of the change of parties.
Data Securities International, Inc. Internet Liquidators International Inc.
By:_________________________________ By:___________________________________
Name:_______________________________ Name: ________________________________
Title:______________________________ Title_________________________________
Date:_______________________________ Date: ________________________________
By:_________________________________ By: _________________________________
ACCEPTANCE FORM
Account Number _____________________
American Interactive Media, Inc., hereby (i) acknowledges that it is a Preferred
Beneficiary referred to in the Master Preferred Escrow Agreement effective with
Data Securities International, Inc. as the escrow agent and Xxx.Xxx
International Inc. (formerly Internet Liquidators International, Inc.) as the
Depositor, (ii) agrees to be bound by all provisions of such Agreement, and
(iii) agrees that in addition to the Release Conditions set forth in section 4.1
of this Agreement, a further Release Condition shall exist if the Depositor is
in continuing material breach of the E-Commerce and Promotion Services Agreement
attached hereto as Schedule "A".
American Interactive Media, Inc.
By:_____________________
Name:___________________
Title:__________________
Date:___________________
Notices and communications should be Invoices should be addressed to:
addressed to:
Company Name: __________________________ _____________________________
Address: __________________________ _____________________________
__________________________ _____________________________
__________________________ _____________________________
__________________________ _____________________________
Designated Contact: __________________________ _____________________________
Telephone: __________________________ _____________________________
Facsimile: __________________________ _____________________________
EXHIBIT A
MATERIALS TO BE DEPOSITED
Account Number ______________________
Depositor represents to Preferred beneficiary that deposit materials delivered
to DSI shall consist of the following:
Internet Liquidators Inc. - Code Module Listing
[Confidential information filed [Confidential information filed [Confidential information filed
separately with the SEC] separately with the SEC] separately with the SEC]
" " "
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XXX.XXX International Inc.
Depositor Preferred Beneficiary
By:_____________________________ __________________________________
Name:___________________________ __________________________________
Title:____________________________ __________________________________
__________________________________
Date:____________________________ __________________________________
I certify for Depositor that the above described deposit DSI has inspected and
accepted the above materials materials have been transmitted to DSI: (any
exception are noted above):
Signature:____________________________ Signature:______________________
Print Name:__________________________ Print Name:_____________________
Date:________________________________ Date:___________________________
Exhibit B
Send materials to: DSI, 0000 Xxxxxxxxxx Xxxxx, #000, Xxx Xxxxx, XX 00000
EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIALS
Depositor Company Name: Xxx.xxx International Inc.
-----------------------------------------
Account Number:
-----------------------------------------
PRODUCT DESCRIPTION:
Product Name: [Confidential information Version: [Confidential
filed separately with the information filed
SEC] separately with the SEC]
Operating System: [Confidential information filed separately with the SEC]
Hardware Platform: [Confidential information filed separately with the SEC]
DEPOSIT COPYING INFORMATION:
Hardware required: [Confidential information filed separately with the SEC]
Software required: [Confidential information filed separately with the SEC]
DEPOSIT MATERIAL DESCRIPTION:
Qty Media Type & Size Label Description of Separate Item
--------------------------------------------------------------------------------
(Excluding documentation)
Disk 3.5" or ________
1X DAT tape 4mm No Documentation
CD-ROM
Data Cartridge Tape DAT
24I
TK 70 or _______ tape
Magnetic tape _______
Documentation No Documentation
Other: ____________
Listing Of Xxx.Xxx Source Components
ILI Xxx.xxx Modules
Databases: [Confidential information filed separately with the SEC]
Business Services: "
Data Services: "
Dynamic Export: "
Order Processing "
Administrator: "
Credit Card: "
Order Business Services: "
Utilities:
Category Builder: "
AdRotatorGenerator "
AssetMgmt: "
DB Services: "
Notification: "
Supporting S/W: "
Web: "
ILI Xxx.xxx Modules (Dutch)
Business Services: "
Data Services: "
Dutch Server: "
Dutch Client: "
Internet Web: "
Admin Web: "
SCHEDULE "F"
Site Activity Reporting Requirements
Pursuant to subsection 2.3(VII) of this Agreement, XXX.XXX shall deliver the
following site activity information to AIM with the frequency indicated below:
F.1 Daily Reports
1. number of page views.
F.2 Monthly Reports
1. Number of unique visitors;
2. top 15 domain names from which television traffic to the XXX.XXX Site
originated;
3. number of unique visits by product category offered;
4. average visit duration;
5. number of transactions;
6. average transaction value;
7. number of transactions by category;
8. number of transactions by product.
F.3 Additional Reports
In addition, XXX.XXX shall deliver the following site activity information as
indicated below:
1. purchase history of repeat visitors on a semi-annual basis;
2. advertising statistical reports at the request of AIM; and
3. other statistics as mutually agreed by the parties.
SCHEDULE "G"
Net Revenue Reports
====================================================
Quarter
SUMMARY Month 1 Month 2 Month 3 Total
====================================================
(a) Sales Revenues XXX XXX XXX XXX
(b) Sales Returns and Allowances (XXX) (XXX) (XXX) (XXX)
(c) Cost of Goods Sold (XXX) (XXX) (XXX) (XXX)
Shipping and Handling Costs (XXX) (XXX) (XXX) (XXX)
Credit Card Fees (XXX) (XXX) (XXX) (XXX)
--------- --------- --------- ---------
Gross Margin XXX XXX XXX XXX
Less Revenue Share (XXX) (XXX) (XXX) (XXX)
--------- --------- --------- ---------
Net Margin XXX XXX XXX XXX
--------- --------- --------- ---------
TOP BID AUCTION DETAIL
Product Sales Top Bid Auction XXX XXX XXX XXX (a)
Shipping & Handling Sales Top Bid Auction XXX XXX XXX XXX (a)
Sales Return & Allowances Top Bid Auction (XXX) (XXX) (XXX) (XXX)(b)
Cost of Goods Sold Top Bid Auction (XXX) (XXX) (XXX) (XXX)(c)
--------- --------- --------- ---------
Gross Margin XXX XXX XXX XXX
--------- --------- --------- ---------
DUTCH AUCTION DETAIL
Product Sales Dutch Auction XXX XXX XXX XXX (a)
Shipping & Handling Sales Dutch Auction XXX XXX XXX XXX (a)
Sales Returns & Allowances Dutch Auction (XXX) (XXX) (XXX) (XXX)(b)
--------- --------- --------- ---------
Cost of Goods Sold Dutch Auction (XXX) (XXX) (XXX) (XXX)(c)
--------- --------- --------- ---------
DIRECT SALES DETAIL
Product Sales Direct XXX XXX XXX XXX (a)
Shipping & Handling Sales Direct XXX XXX XXX XXX (a)
Sales Returns & Allowances Direct (XXX) (XXX) (XXX) (XXX)(b)
Cost of Goods Sold Direct (XXX) (XXX) (XXX) (XXX)(c)
--------- --------- --------- ---------
Gross Margin XXX XXX XXX XXX
--------- --------- --------- ---------
SCHEDULE "H"
Net Promotional Revenue Reports
Pursuant to subsection 5.1(ii) of this Agreement, AIM shall provide a report of
Net Promotional Revenue to XXX.XXX in a format similar to the following: For the
calendar quarter beginning ____________, 19_____ and ending ___________, 19
____.
------------------------------------------------------------------------------
Advertiser Status Amount Paid
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
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Total Advertising Revenue $XX,XXX.XX
------------------------------------------------------------------------------
Total Net Promotional Revenue earned by AIM $XX,XXX.XX
Share of Net Promotional Revenue due to XXX.XXX $XXX.XX
SCHEDULE "I"
XXX.XXX Marks
The XXX.XXX Marks licensed to AIM pursuant to this Agreement include:
1. XXX.XXX;
2. XXX.XXX + Design;
3. any derivations or modified versions incorporating the word XXX.XXX; and
4. any other marks mutually agreed between the parties.
