Exhibit 10.20
CONFIDENTIAL
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
INTERNET SERVICES AGREEMENT
BY AND BETWEEN
XXXXXXXXX.XXX AND
HOME ENTERPRISES, INC.
This agreement ("Agreement") is entered into as of the 7th day of September,
1999 ("Effective Date"), by and between Xxxxxxxxx.xxx, Inc. ("xxxxxxxxx.xxx"), a
Delaware Corporation with headquarters located at 0000 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, XX, and Home Enterprises Inc. ("HEI"), a Delaware corporation with
headquarters located at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX.
This Agreement sets forth the terms and conditions between the parties.
RECITALS
A. Xxxxxxxxx.xxx is an online retailer of furniture and home furnishings,
and maintains a site on the Internet known as xxxxxxxxx.xxx with the URL
XXXX://XXX.XXXXXXXXX.XXX.
B. HEI produces the syndicated "HAVEN" television show ("the Show") and
publishes HAVEN magazine ("the Magazine").
C. Xxxxxxxxx.xxx shall be a sponsor of the Show, and shall have access to
HEI Content and the Show for the purpose of promoting furniture and home
furnishings purchasing, and the Show on the World Wide Web.
1. DEFINITIONS
1.1 "Xxxxxxxxx.xxx site" means the web pages with the URL
XXXX://XXX.XXXXXXXXX.XXX.
1.2 "HEI Content" means all the articles, show segments, images,
photographs or audiovisual material to which HEI controls the
digital rights, including all Show episodes from January 1,
1997 forward, with the exception of celebrity segments.
1.3 "HFC" means the Home Furnishings Council.
CONFIDENTIAL
1.4 "Home Page" means the first page served to a user who comes to
the Xxxxxxxxx.xxx site.
1.5 "Link" means the electronic functionality located on a web
site that connects a user to another web site, another place
in the same web site or the WWW.
1.6 "Online Furniture Company" means a company for which more than
50% of its sales come from its presence on the World Wide Web,
or which does not provide a printed catalogue nor owns or
leases retail space.
1.7 "Pod" means that portion of the Show which is devoted to
advertising or other messages. Pods are ordered by the
sequence in which they occur in the Show, i.e., Pod 1 is the
first Pod so on.
1.8 "the Show" means the nationally syndicated "HAVEN" television
show.
2. Description of Services
HEI shall provide, as part of the sponsorship, the following
services:
2.1 Advertising. For the term of the Agreement, HEI shall provide
one (1) thirty (30) -second advertising position per week. HEI
and Xxxxxxxxx.xxx agree that the Show is broadcast one (1)
time per week, and HEI shall only be required to produce 22
original shows (as opposed to reruns or rebroadcasts) during
the term of this Agreement ("the Broadcast Schedule"). The
spots will receive either Pod 2 or Pod 3 placement. The
advertising spots shall be produced by Xxxxxxxxx.xxx, at its
sole cost and expense, and shall be subject to the reasonable
approval of HEI. Notwithstanding the foregoing, the Show shall
be produced, including but not limited to, its content,
writing and editing by HEI in its sole discretion.
2.1.1 If, in any six month period for the term of the
Agreement, the total Gross Rating Point rating ("GRP")
falls below 20.6 as determined by the X.X. Xxxxxxx
rating, HEI shall run make-up thirty-second
advertising spots such that the total GRP for the
Xxxxxxxxx.xxx advertising spots mentioned in section
2.1 shall equal 20.6 (the "Make Good Spots").
Notwithstanding the above, HEI shall continue to be
required to deliver 20.6 GRP per six month period, and
the Make
2
CONFIDENTIAL
Good Spots shall not be considered towards this goal.
Make Good Spots shall be provided at no additional
charge.
2.2 Billboard: One ten (10)-second billboard per show for fifty
two (52) weeks with voice over stating "This portion of HAVEN
is brought to you by Xxxxxxxxx.xxx." The billboards shall be
positioned at either Pod 2 or Pod 3 of the Show but not back
to back with 30 second advertising spots. HEI and
Xxxxxxxxx.xxx agree that the Broadcast Schedule set forth in
section 2.1 shall apply to the Billboard ads as well.
2.3 "Shopping on the Web" Segments: A featured role in connection
with the segment of the Show entitled "Furniture Shopping on
the Web" as set forth below, which segment will last for
approximately three (3) minutes in either Pod 2 or Pod 3.
Xxxxxxxxx.xxx shall provide a guest "expert" to appear in
conjunction with five (5) of such "Furniture Shopping on the
Web" segments to be designated by HEI ("the Xxxxxxxxx.xxx
Segments") per year. Such five (5) Xxxxxxxxx.xxx Segments
shall be rebroadcast at least once per year during the term of
the Agreement for a total of at least ten (10) viewings. Two
(2) of the Xxxxxxxxx.xxx Segments will be video taped in High
Point, North Carolina on Tuesday, September 14, 1999 and three
(3) of the Xxxxxxxxx.xxx Segments will be videotaped in
February, 2000 at a location to be designated. Editorial
content of the Xxxxxxxxx.xxx Segments will be proposed by
Xxxxxxxxx.xxx subject to the reasonable approval of HEI
Xxxxxxxxx.xxx and HEI shall mutually agree upon arrangements
for taping Segments for years two and three of this Agreement.
2.4 Database Marketing: HEI shall, on Xxxxxxxxx.xxx's behalf send
direct mail or other promotional pieces, the content of which
shall be subject to HEI's reasonable approval, to the entire
HEI subscriber list of approximately 125,000 names at least
four times per year during the term of the Agreement.
Xxxxxxxxx.xxx will pay expenses for these mailings, excluding
any use charges for the list.
2.5 Print.
2.5.1 Xxxxxxxxx.xxx shall have a one page editorial segment,
written by Xxxxxxxxx.xxx and subject to HEI's
reasonable approval in each HAVEN Magazine (the
"Magazine").
3
CONFIDENTIAL
2.5.2 In addition, with every edition of the Magazine,
Xxxxxxxxx.xxx shall have the opportunity to produce at
its sole cost and expense, a Supplemental
Advertisement which HEI will insert into each Magazine
distributed to the HEI subscriber list of
approximately 125,000 people. HEI will evaluate other
retail environments where this may be distributed at
its discretion. Xxxxxxxxx.xxx will pay all out of
pocket expenses in connection with the cost of
producing the Supplemental Advertisement and the
Xxxxxxxxx.xxx advertising.
2.6 Newsletter. HEI shall offer a half page section in the Haven
Newsletter, which Xxxxxxxxx.xxx will use to provide content
including, but not limited to, designing tips, expert advice
on decorating and home furnishing, and special offers to Haven
readers, subject to HEI's reasonable approval.
2.7 Contests. HEI and Xxxxxxxxx.xxx will jointly develop
co-sponsored contests at least once per year for the term of
the Agreement. The Show will include an announcement of the
contest, and the selection and announcement of the winner, and
may, at HEI's discretion, include a special segment featuring
the contest.
3. Xxxxxxxxx.xxx Responsibilities:
3.1 Xxxxxxxxx.xxx will promote the Show on the Xxxxxxxxx.xxx web
site by the following methods:
(i) Home Page promotion of any episodes of the Show with
Xxxxxxxxx.xxx content for at least two weeks prior to
airing;
(ii) At Xxxxxxxxx.xxx's sole discretion, Home Page
promotion of Show episodes or Home Furnishing Council
events;
(iii) Home Page placements, no less than twice per year for
at least one month prior to airing, for the term of
the agreement, promoting special joint
Haven/Xxxxxxxxx.xxx contests and special offers.
(iv) A permanent placement on the "YourHome" Magazine
section of the Xxxxxxxxx.xxx site, or an area
materially similar to the "YourHome" Magazine. The
size and location of the placement will be at
4
CONFIDENTIAL
Xxxxxxxxx.xxx's sole discretion, provided that the
size of the placement shall be no smaller than that of
similar Content providers.
(v) A Link to Haven's website (XXX.XXXXXXX.XXX) each time
the Show's name is found on the Xxxxxxxxx.xxx site.
HEI shall make commercially reasonable efforts to
provide a Link back to Xxxxxxxxx.xxx for users who
visit Haven's website via the Link described above.
3.2 Xxxxxxxxx.xxx retains the right, in its sole discretion, to
modify at any time the presentation and Content of any of its
Web Sites and any and all pages contained therein. HEI
acknowledges that such modifications by Xxxxxxxxx.xxx, if any,
may change the location and/or placement of the Links on a
particular page.
4. Other HEI Obligations
4.1 To assist Xxxxxxxxx.xxx in its efforts to build strategic
merchandising relationships, HEI and Xxxxxxxxx.xxx may host an
event at the North Carolina Furniture Market, scheduled to
occur in April and October of each year. This event, which may
be a dinner, an open house, a press conference or a lunch at
Xxxxxxxxx.xxx's sole discretion, will be jointly promoted by
Xxxxxxxxx.xxx and HEI. Xxxxxxxxx.xxx will cover all expenses
associated with this event.
4.2 HEI shall make regular mention of its presence on
Xxxxxxxxx.xxx in all printed materials and on the Show.
4.3 HEI shall provide a mutually agreed upon decorating, interior
design or furnishings expert to host a live chat on
Xxxxxxxxx.xxx no less than once per month for the term of the
Agreement.
4.4 HEI shall provide "Designer's Picks", meaning one item which
in the sole judgment of HEI is of particular value to its
audience, at least once per month for the term of the
Agreement. Xxxxxxxxx.xxx will promote the Designer's Pick on
the Xxxxxxxxx.xxx site.
4.5 HEI shall make reasonable efforts to introduce the CEO of
Xxxxxxxxx.xxx to members of the Board of Directors of the HFC.
5. Exclusivity
5
CONFIDENTIAL
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
5.1 For the term of the Agreement, Xxxxxxxxx.xxx shall be the sole
Online Furniture Company to be a Show Sponsor. Competing
Online Furniture Companies are included but not limited to
those referenced in Exhibit A, which will be updated quarterly
by Xxxxxxxxx.xxx, subject to HEI's reasonable approval.
Xxxxxxxxx.xxx acknowledges that HEI may enter into sponsorship
arrangements with furniture manufacturers and retailers who
operate Web sites through which online sales and purchases are
performed, provided that such online sales and purchases do
not represent a signficant part of the business of these
manufacturers and retailers.
6. Payment and Schedule
6.1 General. Xxxxxxxxx.xxx shall pay HEI an annual sponsorship fee
in the amount of [**] per year for the term of the Agreement.
The Sponsorship Fee shall be due and payable in quarterly
installments, with the first payment due upon signing of the
agreement.
6.2 All payments shall be payable in U.S. dollars by check or wire
transfer to such U.S. bank account as directed in writing.
6.3 If either party fails to pay any amounts when due and payable
and such amounts are not disputed in good faith, then said
party shall pay the other a late payment charge of one and a
half percent (1.5%) per month, but not in excess of the lawful
maximum, on any past due balance which is not subject to a
good faith dispute.
7. Proprietary Rights:
7.1 Xxxxxxxxx.xxx: As between Xxxxxxxxx.xxx and HEI, Xxxxxxxxx.xxx
shall own all right, title and interest in and to the
Xxxxxxxxx.xxx Web Site and the editorial content referenced in
section 2.5.1, including without limitation all successor
products thereof and any current or future intellectual
property rights embodied in the foregoing.
7.2 As between Xxxxxxxxx.xxx and HEI, HEI shall own all right,
title and interest in and to the HEI Content.
6
CONFIDENTIAL
7.3 No Implied License. Except for the license rights granted
herein, neither party grants the other rights in or to each
other's respective intellectual property.
7.4 Trademarks: Each party grants the other a non exclusive, non
transferable, royalty free right to display the trademarks and
logos made available by such party, subject to the terms of
this Agreement and such party's standard trademark usage
guidelines. In the event either party determines that the
others use of the applicable trademarks or service marks is
inconsistent with the applicable Trademark or Service Xxxx
holders quality standards, then upon written request and
within a reasonable time the applicable party shall conform
such trademark or service xxxx use to the appropriate party
standards. If either party fails to conform the applicable
trademark use or service xxxx usage, then the owner of the
marks shall have the right to suspend use under the terms of
this Agreement.
7.5 HEI grants Xxxxxxxxx.xxx a license to distribute and post the
HEI content on the Xxxxxxxxx.xxx site for the sole purpose of
fulfilling its obligations under this Agreement. For the term
of the Agreement, Xxxxxxxxx.xxx shall be the sole licensee of
the HEI Content for use or publication online. Xxxxxxxxx.xxx
acknowledges that HEI will continue to provide video content
to two Web sites, xxxxxxxx.xxx, owned by HEI's parent
corporation, and xxxxxxx.xxx, under existing agreements, for a
period extending no later than December 31, 2000.
8. Confidentiality and Publicity:
8.1 Xxxxxxxxx.xxx and HEI agree to hold in the strictest
confidence and not use or disclose to any person, firm or
corporation, without the written authorization of the other
Party, except as required by law, any "Confidential
Information" (as defined below). Each Party and their
respective employees, officers, directors, shareholders and
agents agree not to use any of the Confidential Information
for the purpose of competing with the other Party either
directly or indirectly or to assist third persons or entities
to compete with the other Party. For purposes of this
Agreement, "Confidential Information" means all information,
documents and materials provided by one Party to the other
Party before or during the term of this Agreement relating to
or in connection with the Project, including, without
limitation, technical data, specifications, communication
protocols, trade information, customer or client lists and
records, business and marketing plans,
7
CONFIDENTIAL
schematics, reports and technical and marketing data;
provided, however, that neither Party shall be under any
obligation to maintain in confidence any portion of the
information it has received which (a) is now, or which becomes
hereafter, through no act or failure to act on the part of the
recipient party, generally known or available to the public,
(b) is known by the recipient party at the time of the
disclosure of such information, provided that the source of
such information was not known by the receiving party to be
prohibited from disclosing such information by a contractual,
legal or fiduciary obligation or (c) is hereafter fumished to
the recipient party by a source other than the other Party,
provided that such source is not known by the receiving party
to be prohibited from disclosing such information by a
contractual, legal or fiduciary obligation. Neither Party
shall disclose the Confidential Information of the other Party
to its employees except on a need-to-know basis, and the
recipient party shall be responsible for the unauthorized
disclosures of Confidential Information by its employees.
No express or implied rights or license is granted by any
disclosure of Confidential Information to the recipient party
in connection with this Agreement. The recipient party
understands that the disclosing party makes no representations
or warranties, expressed or implied (including those of
merchantability and fitness for purpose) with respect to the
Confidential Information.
8.2 Within 30 days of the Effective Date of this Agreement,
Xxxxxxxxx.xxx and HEI shall issue a joint press release
announcing the Sponsorship. Neither party will issue any press
releases or other public statements regarding this Agreement
without the other party's prior written approval.
8.3 Upon termination or expiration of this Agreement either party
is permitted to issue a press release solely to the effect the
Agreement has either expired or was terminated. Neither party
is permitted to disclose any business terms of this Agreement
with respect to such press release or any other communication.
9. Warranties, Indemnification and Limitation of Liability:
9.1 Xxxxxxxxx.xxx warrants and represents:
9.1.1 That it has the full corporate right, power and
authority to enter into this Agreement;
8
CONFIDENTIAL
9.1.2 That the execution of this Agreement and the
performance of the obligations and duties hereunder,
do not and will not violate any agreement to which
Xxxxxxxxx.xxx is a party or which it is otherwise
bound; and
9.2 HEI warrants and represents:
9.2.1 That it has the full corporate right, power and
authority to enter into this Agreement;
9.2.2 That the execution of this Agreement and the
performance of the obligations and duties hereunder,
do not and will not violate any agreement to which HEI
is a party or which it is otherwise bound; and
9.3 EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY MAKES ANY
REPRESENTATIONS, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, REGARDING SUCH PARTY'S
SERVICES OR ANY PORTION THEREOF, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AS WELL AS IMPLIED WARRANTIES ARISING FROM COURSE OF
DEALING OR COURSE OF PERFORMANCE.
9.4 Indemnification:
9.4.1 Each party (the "indemnifying party") will indemnify,
defend and hold harmless the other party and its
corporate parent or affiliates (collectively "the
indemnified party") from and against all claims, suits
and proceedings, and any and all related liabilities,
losses, expenses, damages and costs (including without
limitation, reasonable attorney fees), including,
without limitation, any third party claims alleging
infringement of any copyright, trademark or other
intellectual property right or alleging libel,
defamation or invasion of privacy, arising from the
use of any content, products, services, software,
trademarks, logos or other materials or information
(collectively "Materials") (a) provided by the
indemnifying party or (b) accessible on the
indemnifying party's Website or via a link from the
indemnifying party's Website, unless such Materials
were originally provided by the indemnified party.
9
CONFIDENTIAL
9.4.2 The indemnified party will: promptly notify the
indemnifying party of any claim, suit, or proceeding
for which indemnity is claimed; cooperate reasonably
with the indemnifying party at the latter's expense;
and allow the indemnifying party to control the
defense or settlement thereof. The indemnified party
will have the right to participate in any defense of a
claim and or to be represented by counsel of its own
choosing at its own expense. The indemnifying party's
obligations under this section shall not apply to any
claims based upon the use of Materials that have been
altered by any third party other than the indemnifying
party, the combination of any Materials with any items
not provided by the indemnifying party, or the display
of any Materials in a manner not approved by the
indemnifying party, if and to the extent such claim
would not have arisen but for such alterations,
combinations or display.
9.5 Limitation of Liability:
9.5.1 EXCEPT FOR A BREACH OF EITHER PARTIES INTELLECTUAL
PROPERTY RIGHTS AND THE INDEMNIFICATION IN SECTION
9.4, THE LIABILITY OF EITHER PARTY FOR DAMAGES OR
ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT
OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT
EXCEED THE AMOUNTS PAID OR OWED BY XXXXXXXXX.XXX TO
HEI HEREUNDER. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS,
IN ANY WAY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, EVEN IN THE EVENT SUCH PARTY HAS BEEN
ADVISED AS TO THE POSSIBILITY OF SUCH DAMAGES.
10. Term and Termination:
10.1 The term of this Agreement shall be three years from the date
of execution ("Effective Date"), unless termination in
accordance with the provisions of this Section. Thereafter,
this Agreement will automatically renew on a year-to-year
basis unless either party notifies the other at least thirty
(30) days prior to the applicable renewal term.
10
CONFIDENTIAL
10.2 After the first year of the Agreement, either party may
terminate the Agreement upon three (3) months written notice
to the other party. In the event that HEI terminates the
contract prior to September 14, 2002, no other Online
Furniture Company as defined in section 5.1 shall be allowed
to license Content or be featured as a Show Sponsor for a
period of six (6) months following termination.
10.3 Either party may terminate this Agreement or any renewal term
thereof at any time (a) in the event of a material breach by
the other party that has not been cured within thirty (30)
days of written notice thereof or (b) within thirty (30) days
prior to a renewal period, provided such notice is given in
writing.
10.4 Subsequent to Termination by either party or expiration of
this Agreement, such Termination or expiration shall not act
as a waiver of either party's rights or payment obligations
under this Agreement or release either party from any
liability for breach of such party's obligations under this
Agreement.
10.5 Any termination or expiration of this Agreement shall mean
that each party shall no longer use any trademarks or service
marks licensed under the terms of this Agreement or continue
to provide the services described herein, and shall terminate
all links and references in all media, including online, print
and in the Show.
10.6 Should the Show not be broadcast, this Agreement shall
terminate automatically, and Xxxxxxxxx.xxx shall receive a
pro-rata refund for the portion of the quarter for which the
Show is no longer broadcast.
11. General
11.1 No Joint Venture: The sole relationship between the parties is
that of independent contractors. Each party is an independent
contractor and neither is an agent of the other. Each party
shall be solely responsible for the actions of their
respective employees, agents, and representatives.
11.2 Governing Law: This Agreement shall be interpreted and
construed in accordance with the laws of the State of
Delaware, without regard to the principles of conflicts of
laws. The parties specifically exclude the terms of the United
Nations International Convention of Contracts.
11
CONFIDENTIAL
11.3 Non Assignment: Neither party shall transfer or assign any
rights or delegate any of its obligations hereunder, whether
in whole or in part, voluntary or by operation of law without
the prior written consent of the other, whose consent shall
not be unreasonably withheld or delayed.
11.4 Notices: All notices, requests, demands, reports or other
communications under this Agreement shall be in writing and
shall be sent either by a nationally recognized overnight
delivery service or certified mail, return receipt registered
and shall be deemed given upon receipt. Notices hereunder
shall be directed to:
If to HEI:
1) Xxxxxx X. Xxxxxxxxxxx, Xx.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx Xxxxxxxx, xxxxx 000
Xxxxxxxxxx, XX 00000
with a copy in like manner to:
2) Xxxxxxx Xxxx Xxxxxx
Xxx Xxxxxx Xxxx
Xxx Xxxxxxxx, XX 00000
11.5 Waiver: Any of the provisions of this Agreement maybe waived
by the party entitled to benefit thereof. Neither party shall
be deemed to have waived any of its rights or remedies
hereunder unless such waiver is in writing and signed by the
waiving party, and then only to the extent specifically set
forth in such writing.
11.6 No Third Party Beneficiaries. Nothing contained in this
Agreement implies or is intended to confer upon any person
other than the parties and respective successors or assigns of
the parties, any rights remedies, obligations or liabilities
whatsoever.
11.7 Survival. The respective rights and obligations between the
parties under the provisions of Sections 8, 9, 10 (9.4 only
for one year after the termination of the Agreement), and 11
hereof shall survive expiration or termination of this
Agreement.
12
CONFIDENTIAL
11.8 Entire Agreement. This Agreement (including the Exhibits,
Attachments and or Addenda, if any,) represents the entire
agreement of the parties with respect of the subject matter
hereof and supersedes all prior and or contemporaneous
agreements or understandings, written or oral between the
parties with respect to the subject matter hereof. This
Agreement may not be modified except by written Amendment
signed by both parties.
11.9 Counterparts/ Facsimiles. This Agreement may be executed in
any number of counterparts, each of which when executed and
delivered shall be deemed an original, and such counterparts
together shall constitute one and the same instrument. For the
purposes hereof, a facsimile copy of this Agreement including
the signature pages hereto, shall be deemed an original.
IN WITNESS WHEREOF, the parties to this Agreement by their duly
authorized representatives have executed this Agreement as of the date first
written above.
XXXXXXXXX.XXX Home Enterprises, Inc.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxxx, Xx.
----------------------- ---------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxxx X. Xxxxxxxxxxx, Xx.
-------------------------------
Title: V.P., Business Development Title: President
Date: 9/29/99 Date: 10/1/99
13
CONFIDENTIAL
Exhibit A
Competing Online Furniture Companies
xxxxxxxxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxxx.xxx and affiliated properties
xxxxxxxxxxxxx.xxx
xxxxxx.xxx
xxxxxx.xxx
14
