Exhibit 6.7
SYMPATICO ISP AFFINITY PROGRAM AGREEMENT
This Agreement made as of this 7th day of September, 2000.
BETWEEN: XXXX ACTIMEDIA INC., a corporation incorporated under the laws of
Canada, having a principal place of business at 000 Xxxxx'x Xxxx,
Xxxx, Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 ("BAI")
AND: INNOFONE CANADA INC., a corporation incorporated under the laws of
Canada, having its principal place of business at 000 Xxxxxxxxx
Xxxxxxxx Xxxxx 0 Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 ("Distributor")
1. APPOINTMENT. BAI hereby appoints Distributor to distribute and market to
CIBC Classic, Aerogold and Visa Desjardins cardholders (the "Members") residing
in the provinces of Ontario and Quebec (the "Territory") the service(s)
described in Appendix A hereto (the "Services") at the rates set forth therein,
subject to the terms and conditions of this Agreement. BAI may upon notice to
Distributor modify the list of Services in order to add new services or
territories or to remove services that are no longer offered to the general
public. Distributor acknowledges that BAI reserves the right at any time to
modify the terms and conditions, including the price of the Services, under
which the Services are offered to Members and further reserves the right to
terminate provision of any or all of the Services.
2. TERM. This Agreement shall come into force and effect on November 1, 2000
and shall continue in full force and effect for a period of 3 years, unless
terminated earlier in accordance with this Agreement.
3. EXCLUSIVITY IN FAVOUR OF BAI. In consideration of the compensation to
Distributor as set forth in Appendix B hereto, Distributor shall not, during the
term of this Agreement, promote, sell, advertise, market or otherwise offer to
the Members and the potential customers residing in the Territory any services
similar or equivalent to the Services.
4. DISTRIBUTION OF SERVICES. As part of the Distributor's bundled product
offering expected to be launched by the Fall of 2000, Distributor shall use its
best efforts to market the Services actively to the Members. BAI reserves the
right to deal with any or all of Distributor's customers in all matters related
to the provisioning of the Services, including technical support on a 24 hour, 7
days per week basis.
5. COMPENSATION TO DISTRIBUTOR. BAI shall compensate Distributor in accordance
with Appendix B hereto. No compensation will be due to the Distributor if for
technical reasons BAI is unable to provide the Services to the Member. Further,
there shall be no compensation to Distributor where a service is purchased by a
Member other than through BAI or Distributor.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES & EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED BY
A "*".
6. USE OF MARKS. Distributor shall not use any of the trademarks, service
marks, trade names and any other right in the BAI identity, including without
limitation the name and design marks for the Services ("the Marks") without
prior written authorization of BAI. Distributor acknowledges that the goodwill
associated with the Marks is a property right belonging to BAI and that BAI is
the owner or licensed user of the Marks. BAI makes no warranties regarding its
ownership of any rights in or the validity of any of the Marks. BAI shall not
use any trademarks, service marks, trade names and any other rights in
Distributor's identity without prior written authorization of Distributor.
7. TERMINATION. Notwithstanding anything to the contrary in this Agreement,
either party may, at any time, for any cause whatsoever, terminate this
Agreement upon sixty (60) days written notice to the other. Upon termination of
this Agreement, Distributor shall complete all orders in process, including the
transmittal of orders to BAI.
8. MARKETING. Distributor hereby undertakes to carry out to the best of its
ability all necessary marketing initiatives (including any advertisement or
promotion with regard to the Services) to promote the Services to the Members.
Distributor agrees to obtain the prior approval of BAI in respect of any and all
marketing and promotional materials, including without limitation advertisements
and press releases. Notwithstanding the foregoing, for greater certainty,
Distributor shall be responsible for all aspects including the costs associated
thereto, relating to client relationship management, customer development,
product development and execution of contracts, if any, with Members pursuant to
this Agreement.
9. CONFIDENTIALITY. The protection of the confidential information exchanged
between parties, including customer-related confidential information, shall be
as specified in Appendix C. Neither party shall issue or make any public written
statements concerning the arrangement set out herein without the prior written
consent of the other party. BAI shall execute confidentiality agreements with
the Distributor and it's clients, as provided by the Banks.
10. NO EXCLUSIVITY. Distributor hereby acknowledges that BAI does not grant
any exclusivity to Distributor and that nothing in this Agreement shall be
construed to prohibit BAI from entering into similar arrangements with any third
party. BAI shall not actively persue or engage in any discussions or agreements
with the Distributors clients during the term of this agreement or for 6 months
after termination of the agreement.
11. NOTICES. Any notice, demand, request, statement or other writing required
or permitted by this Agreement to either party hereto shall be in writing and
addressed to the other party as set forth below or at such other address as
shall have been furnished in writing by one party to the other party. Notice
hereunder shall be deemed given when personally delivered or when mailed by
certified or registered mail, postage prepaid:
Notice to: Xxxx ActiMedia Inc. Notice to: Innofone Canada Inc.
F6, 000 Xxxxx'x Xxxx, Xxxx 000 Xxxxxxxxx Xxxxxxxx Xxxxx 0
Xxxxxxx, Xxxxxxx Xxxxxxx,Xxxxxxx Xxxxxx
X0X 0X0 X0X 0X0
12. VARIOUS OBLIGATIONS. The parties hereby agree to their respective
obligations set forth in Appendix D hereto.
13. IT IS UNDERSTOOD AND AGREED BY THE PARTIES THAT IN THE EVENT THAT XXXXXX
INC. (OR ONE OF ITS AFFILIATES) EXERCISES ITS RIGHT OF FIRST REFUSAL TO ACQUIRE
AN EQUITY INTEREST IN THE SHARE CAPITAL OF THE DISTRIBUTOR, ALL MEMBERS WHO HAVE
PURCHASED THE SERVICES AS A RESULT OF THIS AGREEMENT WILL BE IMMEDIATELY
ASSIGNED TO BAI AND ALL REVENUES FROM THESE MEMBERS WILL THEREAFTER BECOME BAI
REVENUES AND NO COMPENSATION WHATSOEVER WILL BE PAID TO INNOFONE. ALL CUSTOMER
INFORMATION RELATED TO THESE MEMBERS WILL ALSO BECOME BAI PROPERTY. HOWEVER, BAI
AGREES THAT IT WILL CONTINUE TO PROVIDE THE AFOREMENTIONED MEMBERS WITH THE
SERVICE ACCORDING TO THE SAME TERMS AND CONDITIONS AS THOSE SPECIFIED IN
APPENDIX B. FURTHERMORE, DISTRIBUTOR UNDERTAKES TO NOT SOLICIT,
DIRECTLY OR INDIRECTLY, SAID MEMBERS FOR A PERIOD OF SIX (6) MONTHS FOLLOWING
SAID ASSIGNMENT.
14. GENERAL PROVISIONS. It is expressly understood and agreed that the
contractual relationship created herein as a distributorship is limited by the
terms of this Agreement. Distributor shall have only those rights specifically
set out in this Agreement as an independent contractor and not as employee or
servant of BAI. Neither this Agreement nor the rights or obligations hereunder
may be transferred, assigned, delegated or otherwise disposed of by one party
without the prior written consent of the other party. The law governing this
Agreement shall be the law of Ontario and the laws of Canada applicable therein.
This Agreement, together with the Appendices attached hereto, shall constitute
the entire Agreement between the parties with respect to the distribution of the
Services and hereby replaces and supersedes any previous agreements, oral or
written, between BAI and Distributor relating to the subject matter hereof.
IN WITNESS WHEREOF the parties have executed this Agreement by their duly
authorized representatives.
XXXX ACTIMEDIA INC. INNOFONE CANADA INC.
------------------------------------- -------------------------------------
Signature - Authorized Representative Signature - Authorized Representative
Name: Xxxxxx Xxxxxxxxxx Name: Xxxxx Xxxx
Title: Associate Director VOL Sales Title: CEO
Date: September 22, 2000 Date: September 07,00
APPENDIX A - SERVICES AND RATES
SERVICES
The Services that this Agreement refers to are the following:
(i) The Sympatico Dial-Up access service currently being marketed
at the monthly rates of 1st 3 months $19.95 and $22.95 per
month thereafter for unlimited access; no free first month.
(ii) The Sympatico High-Speed Edition access service ("HSE")
currently being marketed at the monthly rates of 1st 3 months
@$29.95, 4th month and beyond @$39.95 , no free first month,
free installation.
BAI agrees to provide Members with a discount of 10% off the monthly rate for
the unlimited Dial-Up access service and 10% off the monthly rate for the HSE
service. Furthermore, BAI agrees to provide Members with a discount of 10% off
the most favorable mass-market rate for the installation charges related to the
Services.
Distributor acknowledges that the Services are currently offered by BAI in the
Territory. Distributor agrees not to market or distribute such Services outside
the Territory, until such time as it has received written notice from BAI
indicating otherwise.
For Members, such activities as customer cancellation and changes in credit card
billing, mailing address and email address will be handled by the Distributor's
call center with an appropriate flow of information back to BAI to ensure both
parties have the information required to manage their operations. No penalties
or surcharges will be imposed for cancellations of accounts at any time. Future
consideration will include the Members being able to provide both parties with
this type of information on-line (via eService).
The billing for the Services will appear on the Member's invoice in a manner
agreeable to both parties. Distributor will provide best efforts in providing
BAI the co-branding with its other partners. For Distributor's partners who
choose not to co-brand with BAI on the Member's invoice, BAI reserves the right
to refuse to participate in said partner's portion of the program.
APPENDIX B - COMPENSATION
COMPENSATION
BAI will invoice Distributor on a monthly basis for all active Members enrolled
by Distributor pursuant to this Agreement. Such invoice may be transferred in an
electronic format via FTP or some other file transfer medium.
BAI agrees to pay the Distributor compensation in the form of monthly residuals,
which shall be calculated as follows:
*% of BAI's collected net xxxxxxxx (exclusive of all taxes) in respect of usage
of one of the Services (at the rates mentioned herein) by a Member for the
duration of this Agreement or for the 4 year period commencing after the first
full month of registered usage by said Member, whichever period expires first,
for Members who maintain their enrollment in the Distributor's Affinity Program.
A Member cannot be involved in more than one BAI Affinity Program. If such
situation arises, the Member will have to choose one particular BAI Affinity
Program.
No compensation shall be due to the Distributor if a Member chooses a BAI
Affinity Program other than the one provided for in this Agreement or if a
Member purchases one of the Services through any of BAI's retail distribution
channels.
Using BAI's new billing platform, which is supposed to be operational by
October 1, 2000, the parties undertake to measure the churn improvement rate
and to modify on a going-forward basis the residual paid to Distributor,
according to the chart listed below, if said churn rate is lower or greater
than 20%. The churn improvement shall be measured at 6-month intervals and,
as it moves up or down from the 20% rate, the residual would scale accordingly.
However, notwithstanding the above, it is agreed between the parties that if
BAI's billing platform is not ready before October 1, 2000, BAI will pay
Innofone a flat residual of *% until such billing platform is ready
PROPOSED BAI / INNOFONE COMMISSION RATES AND TERMS
-----------------------------------------------------------------
Churn Improvement Rate % Residual to Innofone %
-----------------------------------------------------------------
5
10 *
20
40
60
80
APPENDIX C - CONFIDENTIAL INFORMATION
1. "Confidential Information" means all oral, written or machine-readable data
and information that is not generally known to competitors of the disclosing
party and is identified as confidential at the moment of disclosure and shall
include any support materials and documentation disclosed directly or indirectly
by the disclosing party and related to disclosing party's present or future
development of business activities regarding the Services and all
customer-related information obtained by the Distributor under this Agreement
and related to the Services. Confidential Information shall also include such
business or technical information related to the Services which by nature of the
circumstances surrounding the disclosure, ought to, in good faith, be treated as
confidential as well as any notes, summaries, extracts or compilations of
disclosing party's Confidential Information regardless of whether same was made
or compiled by receiving party or furnished by disclosing party.
2. During the course of performance of this Agreement, each party (disclosing
party) may, directly or indirectly, disclose to the other party (receiving
party) or permit receiving party access to certain Confidential Information, on
the basis of that, unless specifically authorized in writing by the disclosing
party, receiving party will:
(a) use such Confidential Information solely for the purposes related to
performance of this Agreement;
(b) hold such Confidential Information in confidence, with the same degree
of care with which it protects its own confidential or proprietary
information, and at a minimum in accordance with reasonably prudent
standards;
(c) restrict disclosure of the Confidential Information solely to its
employees, professional advisors, and agents with a need to know the
Confidential Information and who are bound to maintain such
Confidential Information in confidence under terms and conditions
similar to and no less stringent than those set out herein and advise
such persons of their obligations under this Agreement;
(d) promptly return to the disclosing party, upon its request, or certify
as destroyed Confidential Information in whatever form, including all
electronic and magnetic copies and notes thereof, regardless of
whether such Confidential Information was made or compiled by
receiving party or furnished by disclosing party.
3. The foregoing obligations shall not apply to any Confidential Information
that:
(a) shall become generally known through no act of the receiving party or
is in the public domain or subsequently enters the public domain other
than through unauthorized disclosure by receiving party;
(b) was disclosed to receiving party on a non-confidential basis by a
third party having lawful possession and the right to make such
disclosure and who was not under any obligation of confidence
regarding the Confidential Information;
(c) was in legitimate possession of the receiving party prior to its
disclosure hereunder or is independently developed by the receiving
party in the future without use of the Confidential Information, as
evidenced by appropriate records; or
(d) receiving party is required by law to disclose provided that prior to
disclosing any Information, receiving party promptly notifies
disclosing party. Receiving party shall cooperate with disclosing
party to lawfully limit and/or obtain appropriate protective orders or
any other similar orders with respect to the portion(s) of such data
or information as is/are the subject of any such required disclosure;
4. Additionally the aforesaid obligations shall not apply to any Confidential
Information after the expiration of a period of five (5) years following the
date of disclosure. Notwithstanding anything to the contrary in the Agreement,
both BAI and the Distributor shall not be relieved of any of the above
obligations regarding any and all customer-related information obtained under
this Agreement.
APPENDIX D - VARIOUS OBLIGATIONS
BY BAI:
BAI will render available to Distributor marketing programs and initiatives
relating to BAI's mass marketl offerings for the Services, of which the terms
and conditions shall not be more advantageous than those offered by Distributor
pursuant to this Agreement. Furthermore, BAI will provide current l Sympatico
customers the opportunity to maintain their current e-mail address, at no
additional cost, should they opt to enroll in Distributor's Affinity Program.
All Sympatico High Speed Edition starter kits will be distributed by BAI.
BAI will provide Distributor the opportunity to have a sticker affixed to
co-brand its offering to Members.
BAI will provide Distributor with similar marketing relationship components so
as to position the Distributor's Service offerings as equal to or better than
BAI massl market offers. BAI will provide existing Sympatico customers the
opportunity to maintain their current Sympatico e-mail address while enrolling
in the Distributor's Affinity Program. There will be no additional cost
associated with this feature.
BAI hereby represents and warrants that the prices for the Services marketed by
the Distributor shall be lower than BAI's mass market service offerings.
Notwithstanding the above, Distributor hereby acknowledges that such mass
marketing offerings do not include BAI's service offerings which may be marketed
in retail establishments or through other affinity programs.
BY DISTRIBUTOR:
Distributor will supply the Members with, and coordinate the shipping of, the
applicable Sympatico Dial-Up promotional kits. All Sympatico Dial-Up promotional
kits will have a sticker affixed to co-brand the offering the Members , BAI will
provide best efforts to ensure that a Member could only activate the Service
through the Distributor's wholesale billing platform in the registration
process.
Distributor will refer Members who have purchased the HSE service to BAI for
complete service installation requirements and scheduling.
Distributor hereby agrees to take complete call to action for the Dial-Up
Service and to link back to BAI's call center for HSE until such time that it is
feasible for Distributor to do complete HSE call to action.
