Exhibit 10.2
"Pages where confidential treatment has been requested are stamped 'Confidential
Treatment Requested and the Redacted Material has been separately filed with the
Commission', and the confidential section has been marked in the margin with a
star (*)."
SUPPLY AND DELIVERY AGREEMENT
This Agreement ("Agreement"), dated as of March 13, 2000 ("Effective
Date"), is made and entered into by and between Xxxxxx.xxx LLC (doing business
in Washington state as Xxxxxx.xxx Washington LLC), a Delaware limited liability
Company ("LLC"), and Xxxxx.xxx, Inc., a Delaware corporation ("Company"). LLC
and Company are sometimes referred to collectively herein as the "Parties" and
individually as a "Party."
RECITALS
A. LLC is engaged in the business of selling book, music and toy
products over the Internet and desires to purchase such products from Company
for delivery to LLC's customers.
B. Company wishes to provide such products to LLC on the terms and
conditions set forth in this Agreement.
LLC and Company agree as follows:
SECTION 1. DEFINITIONS
Whenever used in this Agreement with initial letters capitalized, the
following terms shall have the following specified meanings:
"AFFILIATE" means, with respect to any person or entity (including
either Party), any other person or entity that directly or indirectly controls,
is controlled by or is under common control with that person or entity, or which
that person or entity beneficially owns at least fifty percent (50%) of the
equity interests therein (provided, however, that with respect to the Parties,
no individual or entity as to which the ultimate parent entity of a Party does
not directly or indirectly control the operations or management thereof (e.g.,
in the case of LLC as of the date of this Agreement, Xxxx.xxx, Inc.) shall be
deemed to be an Affiliate of such Party for purposes of this Agreement).
"CHANGE OF CONTROL" means, with respect to Company, a transaction or
series of related transactions that results in (a) a sale of all or
substantially all of the assets of Company, (b) the transfer of fifty percent
(50%) or more of the outstanding voting power of Company (other than directly or
indirectly to a parent or wholly-owned subsidiary of Company), or (c) the
acquisition by a person or entity, by reason of any contractual arrangement or
understanding with one or more persons or entities, of the right or power to
directly or indirectly appoint or cause to be appointed a majority of the
directors or officers of Company.
"CLAIM" means claim, action or proceeding instituted by a third party
(other than an Affiliate of a Party), including, without limitation, any
governmental authority.
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"COMPANY DERIVATIVE WORK" means any Derivative Work (whether created
by LLC, Company, or the Parties jointly) of any Company Existing Intellectual
Property or Company Future Intellectual Property.
"COMMENCEMENT DATE" means the earlier of (a) the date on which the
Parties agree to the contents of Exhibits A, B and C, and (b) 90 days after the
Effective Date.
"COMPANY DELIVERY OPTION" means the Company Service as made available
through the LLC Site as an option for delivery of Exclusive Products pursuant to
the terms and conditions of this Agreement.
"COMPANY EXISTING INTELLECTUAL PROPERTY" means, collectively, all of
the following existing as of the Effective Date: (a) the Trademarks of Company
and its Affiliates; (b) the Company Site, including, without limitation, any and
all content, data, URLs, domain names, technology, software, code, user
interfaces, "look and feel," Trademarks and other items posted thereon or used
in connection or associated with any of the foregoing.
"COMPANY FUTURE INTELLECTUAL PROPERTY" means, collectively, all of the
following which are invented, created, developed or first reduced to practice by
Company or its Affiliates after the Effective Date without the participation of
LLC or its Affiliates and without use of or reference to any LLC Confidential
Information, LLC Existing Intellectual Property and/or LLC Future Intellectual
Property: (a) any Trademarks; and (b) any content, data, URLs, domain names,
technology, software, code, user interfaces, "look and feel" or other items (but
excluding any LLC Derivative Works).
"COMPANY INTELLECTUAL PROPERTY" means, collectively, any Company
Existing Intellectual Property, Company Future Intellectual Property, and
Company Derivative Works, but excluding any Joint Works.
"COMPANY SERVICE" means Company's one-hour delivery service (whether
accessed through the Company Site, the LLC Site, any third party Web Site or any
other means), through which customers may order products for hand delivery
(including any successor, replacement or enhancement to or of such service).
"COMPANY SITE" means that Web Site, the primary Home Page for which is
identified by the URL xxx.xxxxx.xxx (and any successor or replacement Web Site).
"CONFIDENTIAL INFORMATION" means, with respect to either Party, all
information relating to such Party or its Affiliates that is designated as
confidential or that, given the nature of the information or the circumstances
surrounding its disclosure, reasonably should be considered as confidential.
Confidential Information includes, without limitation, (a) all information
relating to a Party's or its Affiliates' technology, customers, business plans,
promotional and marketing activities, finances and other business affairs and
(b) all third party information that a Party or its Affiliates is obligated to
keep confidential. Confidential Information may be contained in tangible
materials, such as drawings, data, specifications,
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reports and computer programs, or may be in the nature of unwritten knowledge.
Confidential Information does not include any information that (i) has become
publicly available without breach of this Agreement, (ii) can be shown by
documentation to have been known to the Receiving Party at the time of its
receipt from the Disclosing Party or its Affiliates without a breach of
confidentiality or other improper means, (iii) is received from a third party
who did not acquire or disclose such information by a wrongful or tortious act
or (iv) can be shown by documentation to have been independently developed by
the Receiving Party without use of or reference to any Confidential Information
of the Disclosing Party.
"DERIVATIVE WORK" means any adaptation, modification, enhancement,
improvement or derivative work.
"DISCLOSING PARTY" means a Party that discloses Confidential
Information to the other Party in connection with this Agreement.
"EXCLUSIVE PRODUCTS" means book, music and toy products (of any type,
and in any format or medium, including in the case of toy products, video games
and video game platforms).
"HOME PAGE" means, with respect to a Web Site, the Web page designated
by the operator of the Web Site as the initial and primary end user interface
for the Web Site
"JOINT WORK" means any content, data, URLs, domain names, technology,
software, code, user interfaces, "look and feel" or other items which are
invented, created, developed or first reduced to practice jointly by the Parties
after the Effective Date, are protected or protectable by any Intellectual
Property Rights and either: (a) include or incorporate both LLC Existing
Intellectual Property, LLC Future Intellectual Property and/or LLC Derivative
Works, on the one hand, and/or Company Existing Intellectual Property, Company
Future Intellectual Property and/or Company Derivative Works, on the other hand;
or (b) include or incorporate no LLC Existing Intellectual Property or LLC
Derivative Works, on the one hand, or Company Existing Intellectual Property or
Company Derivative Works, on the other hand; provided, however, that
notwithstanding any other provision of this Agreement, to the extent that any
such items incorporate in whole or in part any technology, software, code, user
interfaces, "look and feel" or other item which is used in or associated with
any LLC Site Functionality, such items shall be deemed LLC Derivative Works in
their entirety and not Joint Works or Company Intellectual Property.
"LLC DERIVATIVE WORK" means any Derivative Work (whether created by
LLC, Company, or the Parties jointly) of any LLC Existing Intellectual Property
or LLC Future Intellectual Property.
"LLC EXISTING INTELLECTUAL PROPERTY" means, collectively, all of the
following existing as of the Effective Date: (a) the Trademarks of LLC and its
Affiliates; and (b) the LLC Site, including, without limitation, any and all
content, data, URLs, domain names, technology, software, code, user interfaces,
"look and feel", LLC Site Functionality,
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Trademarks and other items posted thereon or used in connection or
associated with any of the foregoing.
"LLC FUTURE INTELLECTUAL PROPERTY" means, collectively, all of
the following which are invented, created, developed or first reduced to
practice by LLC or its Affiliates after the Effective Date without the
participation of Company or its Affiliates and without use of or
reference to any Company Confidential Information, Company Existing
Intellectual Property and/or Company Future Intellectual Property: (a)
any Trademarks; and (b) any content, data, URLs, domain names,
technology, software, code, user interfaces, "look and feel," LLC Site
Functionality and other items (but excluding any Company Derivative
Works).
"LLC INTELLECTUAL PROPERTY" means, collectively, any LLC
Existing Intellectual Property, LLC Future Intellectual Property and LLC
Derivative Works, but excluding any Joint Works.
"LLC PRODUCTS" means any products available through the LLC
Site which LLC elects to make available for delivery via the Company
Delivery Option.
"LLC SITE" means that Web Site, the primary home page of which
is identified by the URL xxx.xxxxxx.xxx (and any successor or
replacement Web Site).
"LLC SITE FUNCTIONALITY" means, collectively: (a) tab, search
and browse functionality available to users for navigating through the
LLC Site (including, without limitation, the layout and design thereof);
(b) payment and transaction functionality available to users of the LLC
Site for purchasing products (including, without limitation, "shopping
cart" and "Payment with 1-Click" functionality), (c) any other
functionality available on the LLC Site which LLC may make available to
Company from time to time, and (d) any future equivalents, improvements
and enhancements of any of the foregoing.
* "INCENTIVE OFFER" means either (a) [*] or (b) a
substantially equivalent benefit upon purchase of a product from or
through the LLC Site if delivery is taken via the Company Delivery
Option.
"INTELLECTUAL PROPERTY RIGHT" means any patent (including
all reissues, divisions, continuations and extensions), copyright,
trademark, service marks, trade dress, trade name or trade secret right,
as well as all applications for any and all of the foregoing, and any
other intellectual property or proprietary right together with the
goodwill in connection with all of the foregoing.
"LAW" means any law, ordinance, rule, regulation, order,
license, permit and other requirement, now or hereafter in effect, of
any governmental authority of competent jurisdiction.
---------
* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
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"RECEIVING PARTY" means a Party that receives Confidential Information
from the other Party in connection with this Agreement.
"REFERRAL INFORMATION" means any information disclosing that a
specific end-user utilized the Company Delivery Option (however obtained),
disclosing any products purchased by any user of the LLC Site, or other
personally-identifying information regarding users of the LLC Site.
"SHIPMENT TERRITORY" means any and all areas serviced by the Company
Service.
"SITE" means either the LLC Site, on the one hand, or the Company
Site, on the other hand, as required by the context.
"TERM" means the term of this Agreement as defined in Section 11.
"TRADEMARK" means any trademark, service xxxx, trade name, trade
dress, proprietary logo or insignia or other product, source or business
identifier.
"WEB SITE" means any point of presence maintained on the Internet or
on any other public data network. With respect to any Web Site maintained on the
World Wide Web or any successor public data network, such Web Site includes all
HTML pages (or similar unit of information presented in any relevant data
protocol) that are identified by the same second-level domain (such as
xxxx://xxx.xxxxxx.xxx) or by the same equivalent level identifier in any
relevant address scheme.
"YEAR" means any period of twelve (12) consecutive months commencing
on the Commencement Date.
SECTION 2. LLC PURCHASE OF PRODUCTS
2.1 IN GENERAL. Following the Commencement Date and until the end of
the Term, LLC agrees to buy and Company agrees to sell Exclusive Products with
respect to which the Company Delivery Option has been requested in such
quantities as may be ordered by LLC from time to time. Company will keep
adequate inventories of Exclusive Products on hand in such quantities as will
allow Company to fulfill and ship orders in accordance with the mutually agreed
upon customer service requirements specified in Exhibit A.
2.2 PACKAGING, LABELING AND SHIPPING. Company shall provide for the
invoicing, labeling and packaging of Exclusive Products as mutually agreed upon
by the Parties in writing and the delivery of Exclusive Products to LLC
customers through the Company Delivery Option at the applicable locations within
the Shipment Territory. The details concerning invoicing, labeling and packaging
shall be set forth in Exhibit A hereto. LLC shall have the right, at its own
cost and expense, to require the use of LLC branded invoicing, labeling and
packaging, subject to approval by the Company in its reasonable
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discretion. Title to the Exclusive Products shipped by Company shall
pass to LLC and such Products shall be shipped by Company, F.O.B., LLC's
specified destination. Immediately upon LLC's taking title to any
Exclusive Product shipped by Company, LLC shall transfer title to the
customer who ordered such Exclusive Product from LLC, contingent upon
such customer's payment of the applicable fees therefor and satisfaction
of such other conditions of sale as LLC may impose upon its customers.
SECTION 3. LLC SITE
* 3.1 LLC SITE. In those areas of the Shipment Territory where
the Company Service is available, subject to the Parties' mutual
agreement of Exhibits A, B and C, and to the other terms of this
Agreement, (a) LLC shall present the Company Delivery Option on the LLC
Site as an available method of delivery for Exclusive Products purchased
through the LLC Site, and (b) LLC shall feature in a reasonably
prominent manner on the LLC Site, one or more buttons or text links
("Placements") identifying the existence of a one-hour delivery option
(which may or may not contain Company branding as provided by Company
which, if included, shall be subject to the final approval of LLC, such
approval not to be unreasonably withheld or delayed) and containing a
hypertext link to an area of the LLC Site which shall, except as
provided in Section 10, [*] such approval not to be unreasonably
withheld or delayed. Subject to the above, LLC will determine the
content, appearance, functionality and all other aspects of the LLC Site
in its sole discretion.
* 3.2 IMPLEMENTATION OBLIGATIONS. The parties will implement and
integrate the Company Delivery Option into the LLC Site as provided in
Section 5. Company will use commercially reasonable efforts to ensure
that (a) the Company Delivery Option is substantially equivalent (or
superior) in terms of ease of use, delivery times, delivery areas and
schedules to the Company Service as made available by Company through
any means other than the LLC Site, (b) for so long as the Company
Delivery Option is the exclusive option under Section 3.1 for LLC
customers to purchase Exclusive Products with a one-hour delivery
option,[*] and (c) promotions provided by Company and related to
products offered through the Company Delivery Option (including, without
limitation, discounts, free products with a purchase and "points" or
other customer loyalty programs), are equal to any such promotions
offered by Company in connection with the
---------
* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
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provision of the Company Service to the customers of any third party commercial
partner in a manner substantially equivalent to the Company Service offered to
LLC customers hereunder, it being understood that no such promotions shall be
specifically directed at LLC customers without LLC's prior written consent.
Company shall not, unless otherwise directed by LLC, include any advertisements
or promotional or marketing materials for Company or its Affiliates with any
Exclusive Products delivered to customers who select the Company Delivery
Option.
3.3 NO FRAMING. Neither Party will use or authorize or assist any
third party to use in connection with any links on its Site any framing
techniques, interstitial advertisements, pop-up windows, new consoles or other
items or techniques which would alter the appearance or presentation of the
other party's Site from that seen by users hand-entering the applicable URL into
their browser. Without limiting the generality of the foregoing, each Party
specifically acknowledges that it will not cause or permit any new browser
window to open upon any user's clicking on any link on its Site to the other
Party's Site.
3.4 CUSTOMER SERVICE. Each Party, as applicable, will at all times
comply with the customer service requirements (including, without limitation,
user privacy policies, delivery standards, return policies and customer
satisfaction service levels) to be mutually agreed upon by the Parties and, once
agreed, attached hereto as Exhibit A. The Parties will use commercially
reasonable efforts to agree upon such customer service requirements within sixty
(60) days after the Effective Date. Without limiting the generality of the
foregoing, Company will at all times use commercially reasonable efforts to
conduct its dealings with users of the LLC Site in a professional and courteous
manner which reflects favorably upon LLC and its Affiliates and the LLC Site,
and will in any event ensure that the customer service provided by Company to
users of the Company Delivery Option (including, without limitation, in regard
to product fulfillment and responsiveness to customer inquiries relating to the
delivery of the Exclusive Products) is of as high a standard as is commercially
reasonably possible for Company, and in any event, that the same is at least of
as high a standard as that provided by Company with respect to the services and
products made available by Company through any other means, compared on a
category-to-category basis (e.g., customer service with respect to books shall
be compared to customer service with respect to books, but not other products).
3.5 REFERRAL INFORMATION. Customers who purchase products through the
LLC Site shall be deemed to be customers of LLC for all purposes. LLC shall not
be required to disclose any Referral Information to Company except to the extent
necessary to permit Company to perform its obligations under this Agreement.
Company will not disclose any Referral Information to any third party, or permit
any third party to use any Referral Information to target communications
specifically to users of the LLC Site, except as necessary to perform its
obligations under this Agreement or as permitted by LLC in writing (provided,
however, that nothing in the foregoing shall prohibit Company from contacting
its own customers generally, so long as such contacts are not specifically and
intentionally
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directed at users of the LLC Site, or prohibit Company from using or
disclosing non-personal statistical or demographic information regarding
such users in the aggregate for any purpose without LLC's consent).
SECTION 4. PROMOTIONAL ACTIVITIES
4.1 PRESS RELEASES. Both Parties will issue mutually agreeable
press releases describing the nature of their relationship promptly
following the Effective Date and at such other times as the Parties may
mutually agree. Neither Party will issue any other press releases, make
any other disclosures regarding this Agreement or its terms or the
relationship between the parties, or use the other Party's Trademarks
(except as permitted by Section 7), without the other Party's prior
written consent, except that, each Party may, without the other Party's
prior consent: (y) distribute or issue public relations materials or
press releases that contain a description of the relationship of the
Parties, provided that such description has been approved in advance in
writing by such other Party (which approval shall not be unreasonably
withheld or delayed); and (z) speak in public regarding disclosures made
pursuant to the first sentence of this Section 4.1.
* 4.2 XXXXXX.XXX CUSTOMER BASE. From the Commencement Date
until the end of the Term, LLC will exert commercially reasonable
efforts to introduce, as specifically provided herein, the Company Site
to LLC's and its Affiliates' customer base within the areas of the
Shipment Territory within the United States. LLC and/or its Affiliates
will advertise the Company Service to selected members of such customer
base via electronic mail and/or product shipments, the specific nature,
timing, manner, scope, duration and cost of which shall be as mutually
agreed upon by the Parties in writing from time to time; provided, that
each individual communication shall in any event include an Incentive
Offer having a value to the potential customer of at least [*] Assuming
mutual agreement of the Parties as set forth above, LLC agrees that it
will send (a) the following minimum number of e-mail advertisements:
Year 1 [*]; Year 2 [*]; and Year 3 [*], and (b) the following minimum
number of product shipment advertisements: Year 2 [*]and Year 3 [*].
Assuming mutual agreement of the Parties as set forth above, Company
will pay all reasonable out-of-pocket costs actually incurred by LLC and
its Affiliates in connection with the advertising to be provided
pursuant to this Section 4.2, including without limitation the costs of
design, production, printing, mailing, and any Incentive Offers
("Advertising Expenses"). LLC will invoice Company on a monthly basis
for the Advertising Expenses actually incurred by LLC and its Affiliates
and include supporting documentation therefor substantiating the amounts
due, and Company will pay LLC the invoiced sums within thirty (30) days
after receipt of the applicable invoice. Any payment not received within
this thirty (30) day period will accrue interest at a rate of one and
one-half percent (1 1/2%) per month from the expiration of such thirty
(30) day period, or the highest rate allowed by applicable law,
whichever is lower.
4.3 ADDITIONAL PROMOTIONAL ACTIVITIES. In addition to LLC's
promotional obligations set forth in Section 4.2, as the Parties may
mutually agree from time to time
---------
* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
-8-
following the Commencement Date until the end of the Term, LLC may
engage in other promotional activities related to the Company Service
and/or Company Site (which may include, for example, providing
promotional placements relating to the Company Service and/or Company
Site on the home page of the LLC Site or in "thank you" pages displayed
to users of the LLC Site who elect to have Products delivered through
the Company Delivery Option and delivering physical mailings to segments
of LLC's customer base).
* 4.4 CONTENT SOURCING. As mutually agreed upon by the Parties
from time time to time following the Commencement Date and until the end
of the Term, LLC may provide [*] for use on the Company Site pursuant to
the license granted in Section 7.2 below (collectively referred to as
the "LLC Licensed Content").
* 4.5 [*]. As mutually agreed upon by the Parties from time to
time following the Commencement Date and until the end of the Term, LLC
will use commercially reasonable efforts [*]
SECTION 5. TECHNICAL IMPLEMENTATION
5.1 COMPANY DELIVERY OPTION; COMPANY SITE.
5.1.1 COMPANY DELIVERY OPTION. The Parties will use
all commercially reasonable efforts to perform, in a timely and
professional manner, all technical work necessary to integrate the
Company Service into the LLC Site pursuant to specifications and
schedules (the "Development Plan") that shall be developed by LLC in
consultation with Company and mutually agreed upon by the Parties, which
specifications and schedules, once agreed, shall be attached hereto as
Exhibit B. The Parties will use commercially reasonable efforts to agree
upon the Development Plan within sixty (60) days after the Effective
Date. LLC will provide Company with reasonable consultation regarding
appropriate information technology infrastructure and supply chain
management related thereto.
5.1.2 COMPANY SITE. As mutually agreed upon by the
parties from time to time following the Commencement Date and until the
end of the Term, LLC may provide to Company certain consulting services,
know-how and expertise related to technology development and deployment
on the Company Site, merchandising and marketing of Exclusive Products
and general logistics and operational techniques and strategies.
5.2 ACCOUNT MANAGERS. Each Party will assign an account
manager (which manager shall be subject to change from time to time by
the assigning Party upon notice to
---------
* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
-9-
the other Party) to oversee the performance of such Party's obligations
under this Agreement and to facilitate coordination of the Parties'
performance of their respective obligations. The account managers will
meet at least once every three (3) months after the Effective Date and
until the end of the Term to review the implementation of this Agreement
and to explore methods for improving performance.
5.3 REGULATORY COMPLIANCE.
5.3.1 Each Party will comply, and will ensure that
their respective information, products and services and all other
activities undertaken through or in connection with this Agreement
(including, without limitation, any implementation of the Company
Delivery Option as contemplated by this Agreement) comply with all
applicable Laws. Each Party will execute and furnish to the other Party
on reasonable request all certifications, guarantees and other documents
regarding compliance with such Laws.
5.3.2 Company will provide reasonable assistance to
LLC and LLC's Affiliates in all regulatory compliance activities
required in connection with the advertising and offering of the Company
Delivery Option, including, but not necessarily limited to, assisting
LLC in identifying, obtaining and maintaining in force any and all
licenses and permits necessary for LLC and its Affiliates in connection
with any of the foregoing. In connection with the foregoing regulatory
compliance activities, Company will reimburse LLC for any reasonable
costs (including legal costs) incurred by LLC or its Affiliates in
connection with identifying and obtaining any and all such licenses and
permits provided the Company has already identified and obtained such
licenses and permits. For the avoidance of doubt, LLC acknowledges and
agrees that Company shall have no obligation to assist LLC in any
regulatory compliance activities related to, or reimburse LLC for any
costs incurred by LLC or its Affiliates in connection with identifying
or obtaining any licenses or permits required in connection with, any
advertising, operation, maintenance or sale of any products sold or
services made available by LLC or its Affiliates independently through
the LLC Site without the participation of Company.
* SECTION 6. [*] PAYMENTS
6.1 PAYMENTS. Subject to LLC's obligation under Section 4.5,
following the Commencement Date and until the end of the Term, Company
shall purchase in advance the Exclusive Products to be sold by LLC and
delivered by Company through the Company Delivery Option. Promptly upon
arranging for the purchase of any Exclusive Products, Company shall
notify LLC of the Exclusive Product Cost (as hereinafter defined) for
such products. Company shall own and be responsible for the risk of loss
associated with all inventory of such Exclusive Products until title is
passed to LLC pursuant to Section 2.2.
6.1.1 LLC shall purchase Exclusive Products from
Company for resale to
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* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
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LLC's customers at the product cost ("Exclusive Product Cost")
paid by Company for the Exclusive Products to be delivered by
Company through the Company Delivery Option. In the event the
Exclusive Product Cost for any Exclusive Product sold by Company
to LLC hereunder exceeds the cost LLC would have paid or
otherwise been able to pay if LLC was purchasing such Exclusive
Product directly from LLC's vendors and distributors
("LLC Cost"), LLC shall have the right to exclude or delete such
Exclusive Products from the group of Exclusive Products for which
the Company Delivery Option is available, in which case Company
shall be under no obligation to deliver such Exclusive Products
via the Company Delivery Option. In the event LLC does not do the
foregoing, LLC shall pay Company for the LLC Cost plus fifty
percent (50%) of the difference in price between the Exclusive
Product Cost and the LLC Cost with respect to such Exclusive
Product (the "Differential Cost") In the event that the
application of this payment method would result in LLC paying any
Differential Cost in excess of the lesser of $1.50 or 10% of the
Exclusive Product Cost on a per item basis (the "50% Payment
Limit"), LLC shall pay Company an amount equal to the LLC Cost
plus the Differential Cost minus the 50% Payment Limit. The
Parties may mutually agree in writing to any alteration of the
above arrangements with respect to any Exclusive Products at any
time.
* 6.1.2 [*]
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* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
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6.1.3 All payments due from LLC to Company under this
Section 6.1 shall be payable by LLC monthly in arrears on or before
the twentieth (20) day of the calendar month following the month for
which payment is due. Any such payment shall be accompanied by a
report in a mutually agreed upon format which shall provide details
of the calculation of the monthly payment. Such report shall provide
information detailing the number and type of Exclusive Products
purchased by LLC customers utilizing the Company Delivery Option, the
date of purchase and the LLC Cost for such Exclusive Products, and
any other information relating to each Order which is reasonably
requested by Company or otherwise required by Company to perform its
obligations hereunder. Any payment not received within this twenty
(20) day period will accrue interest at a rate of one and one-half
percent (1 1/2%) per month from the expiration of such twenty (20)
day period, or the highest rate allowed by applicable law, whichever
is lower. All payments due under this Agreement shall be calculated
in accordance with US generally accepted accounting principles. The
customer service requirements to be attached hereto as Exhibit A
shall include details regarding the handling of returns, defective
products and wrong shipments, including the adjustments or offsets,
if any, to be made to the payments described above. The Parties shall
use commercially reasonable efforts to agree upon more complete terms
related to the payment, accounting and tax aspects of the
transactions contemplated by this Agreement within sixty (60) days of
the Effective Date, which terms shall be incorporated into Exhibit C
and attached hereto.
6.2 GENERAL. Except as specifically set forth in this Agreement, each
Party remains responsible for establishing its own prices and charges to end
users, customers, subscribers or otherwise in connection with its own offerings,
products and/or services available in the commercial marketplace. Furthermore,
except as otherwise provided herein or subsequently mutually agreed upon in
writing, each Party bears its own expenses and costs associated with performing
its obligations under this Agreement.
6.3 RIGHT TO AUDIT. Each Party shall maintain complete and accurate
books and records to substantiate and document the amounts due to the other
Party hereunder. Each Party ("Auditing Party") is entitled, once every twelve
(12) months during the Term on reasonable notice to the other Party ("Audited
Party"), to audit or have its external auditors audit the Audited Party's
records, which relate to the payments due to the Auditing Party hereunder. Any
such audit will be conducted during the Audited Party's normal business hours
and at the Audited Party's location where the relevant records are kept in the
normal
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course of business and shall be conducted to minimize any disruption to the
Audited Party's business activities. Any information obtained during the course
of any such Audit shall be treated as Confidential Information. In the event
that any such audit reveals that the Audited Party has underpaid any amounts due
to the Auditing Party under this Agreement, the Audited Party will immediately
pay the difference (required payment minus actual payment) to the Auditing
Party. In the event that any such audit reveals that the Audited Party has
underpaid any amounts due to the Auditing Party under this Agreement by more
than five (5%) percent, (a) the Audited Party will immediately pay the
difference (required payment minus actual payment) to the Auditing Party
together with the reasonable cost of such audit, and (b) the twelve (12) month
stand-off period referenced above shall not apply with respect to the next
audit.
SECTION 7. PROPRIETARY RIGHTS
7.1 OWNERSHIP.
7.1.1 As between the Parties, LLC reserves all right, title
and interest in and to the LLC Intellectual Property, along with all
Intellectual Property Rights associated therewith and no title to or ownership
of any of the foregoing is transferred or, except as expressly set forth in
Section 7.2, licensed to Company or any other person or entity pursuant to this
Agreement.
7.1.2 As between the Parties, Company reserves all right,
title and interest in and to the Company Intellectual Property, along with all
Intellectual Property Rights associated therewith and no title to or ownership
of any of the foregoing is transferred or, except as expressly set forth in
Section 7.3, licensed to LLC or any other person or entity pursuant to this
Agreement.
7.1.3 To the maximum extent permitted by applicable Laws,
any LLC Derivative Works or Company Derivative Works, to the extent created by
or for the other Party, shall be deemed "works made for hire", and all right,
title and interest therein shall vest in LLC (in the case of LLC Derivative
Works) or Company (in the case of Company Derivative Works) immediately upon
creation thereof. To the extent that any such LLC Derivative Works or Company
Derivative Works are not "works made for hire", Company hereby assigns and
agrees to assign to LLC (or such of its Affiliates as it may designate) all
right, title and interest to all LLC Derivative Works and all associated
Intellectual Property Rights, and LLC hereby assigns and agrees to assign to
Company (or such of its Affiliates as it may designate) all right, title and
interest in and to all Company Derivative Works and all associated Intellectual
Property Rights. Each Party shall take, at the other Party's expense, any
actions (including, without limitation, execution and delivery of affidavits and
other documents) reasonably requested by such other Party to effect, perfect or
confirm its or its designee's ownership rights as set forth in this Section
7.1.3.
7.1.4 To the extent that any Joint Works are created in the
course of performance of this Agreement, each party shall own a joint, equal and
undivided ownership
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interest in and to such Joint Works and the associated Intellectual Property
Rights, with no duty on the part of either Party to account to the other with
respect to its use and exploitation of the same. Each Party shall own all right,
title and interest in and to any Derivative Works of any Joint Works created by
or for such Party and all Intellectual Property Rights associated therewith (to
the extent not also associated with the Joint Works). Without limiting the
generality of the foregoing, either Party may, without any duty to account to
the other (including, without limitation, any duty to pay, share or account for
any royalties):
(a) make, manufacture, assemble, produce, market, sell,
distribute, transfer, use, license and otherwise commercially and
non-commercially exploit and deal with the Joint Works; provided, that
neither party shall seek or obtain any registration of any
Intellectual Property Rights associated with the Joint Works without
the other Party's prior written consent;
(b) make, manufacture, assemble, produce, market, sell,
distribute, transfer, use, license, seek and obtain registrations of
Intellectual Property Rights (subject to paragraph (a) above) and
otherwise commercially and non-commercially exploit and deal with
Derivative Works of any Joint Works created by or for such Party,
whether or not competitive with any items created by or for the other
party; and
(c) authorize any third party to take any action described
in (a) or (b) above.
7.2 LLC LICENSE. LLC hereby grants to Company, during the Term, a
royalty-free, non-exclusive, non-transferable (except in accordance with Section
12.7) license, which Company may sublicense only to its Affiliates, to use the
LLC Intellectual Property supplied by LLC to Company as is reasonably necessary
to perform its obligations under this Agreement; provided, however, that Company
shall not use LLC's Trademarks, including in any advertising, without LLC's
prior written consent, unless such use conforms to a written Trademark use
policy previously furnished by LLC to Company and not subsequently modified or
revoked. All goodwill arising out of any use of any of LLC's or its Affiliates'
Trademarks by, through or under Company will inure solely to the benefit of LLC
and its Affiliates.
7.3 COMPANY LICENSE. Company hereby grants to LLC, during the Term, a
royalty free, non-exclusive, non-transferable (except in accordance with Section
12.7) license, which LLC may sublicense only to its Affiliates, to use the
Company Intellectual Property supplied by Company to LLC as is reasonably
necessary to perform its obligations under this Agreement; provided, however,
that LLC shall not use Company's Trademarks, including in any advertising,
without the Company's prior written consent, unless such use conforms to a
written Trademark use policy previously furnished by Company to LLC and not
subsequently modified or revoked. All goodwill arising out of any use of any of
Company's Trademarks by, through or under LLC will inure solely to the benefit
of Company.
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7.4 NON-DISPARAGEMENT. Neither Company nor LLC will use the other
Party's Trademarks in a manner that disparages the other Party or its products
or services, and/or portrays the other Party or its products or services in a
false, competitively adverse or poor light. Each of Company and LLC will comply
with the other Party's requests as to the use of the other Party's Trademarks
and will avoid knowingly taking any action that diminishes the value of such
Trademarks.
SECTION 8. REPRESENTATIONS; INDEMNITY
8.1 REPRESENTATIONS. Each Party represents and warrants to the other
that: (a) it has the full corporate right, power and authority to enter into
this Agreement and perform its obligations hereunder; (b) its performance of
this Agreement, and the other party's exercise of such other party's rights
under this Agreement, will not conflict with or result in a breach or violation
of any of the terms or provisions or constitute a default under any agreement by
which it is bound; (c) when executed and delivered, this Agreement will
constitute its legal, valid and binding obligation enforceable against it in
accordance with its terms; and (d) it will comply with all applicable Laws in
its performance of its respective obligations this Agreement.
8.2 INDEMNITY. Each Party (as applicable, the "Indemnifying Party")
will indemnify and hold harmless the other Party (the "Indemnified Party") and
its Affiliates (and their respective employees, directors and representatives)
from and against any and all claims, costs, losses, damages, judgments and
expenses (including reasonable attorneys' fees) arising out of any Claim, to the
extent it is based on (a) the operation or content of the Indemnifying Party's
Site (other than any items or materials supplied by the Indemnified Party or
services offered or performed by the Indemnified Party), (b) the offer,
marketing, sale or provision of any products or services by the Indemnifying
Party, (c) any actual or alleged breach of the Indemnifying Party's
representations or warranties set forth in Section 8.1 above and its respective
obligations under Section 5.3 above, or (d) any actual or alleged infringement
of any Intellectual Property Rights by any content, items or materials provided
by the Indemnifying Party to the Indemnified Party for its use as permitted
under this Agreement. Subject to Section 8.3, the Indemnifying Party will pay
any award against the Indemnified Party and its Affiliates (and their respective
employees, directors or representatives) and any costs and attorneys' fees
reasonably incurred by them resulting from any such Claim.
8.3 PROCEDURE. In connection with any Claim described in this Section
8, the Indemnified Party will (a) give the Indemnifying Party prompt written
notice of the Claim, (b) cooperate with the Indemnifying Party (at the
Indemnifying Party's expense) in connection with the defense and settlement of
the Claim, and (c) permit the Indemnifying Party to control the defense and
settlement of the Claim, provided that the Indemnifying Party may not settle the
Claim without the Indemnified Party's prior written consent (which will not be
unreasonably withheld). Further, the Indemnified Party (at its cost) may
participate in the defense and settlement of the Claim with counsel of its own
choosing.
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Unless the Indemnifying Party notifies the Indemnified Party in writing within
five (5) days of its receipt of any Claim that it irrevocably elects not to
assume the defense of such Claim, the Indemnifying Party shall be deemed to have
irrevocably elected to assume the defense of such Claim. If the Indemnifying
Party elects not to assume the defense of any Claim as provided in the preceding
sentence, the Indemnifying Party shall be deemed to have irrevocably waived any
right to participate in or control the defense or settlement of such Claim and
the Indemnified Party shall be entitled to sole control of the defense and
settlement of such Claim (without limitation of the Indemnifying Party's
indemnity obligations under this Section 8).
SECTION 9. DISCLAIMERS, LIMITATIONS AND RESERVATIONS
9.1 DISCLAIMER OF WARRANTIES. EXCEPT AS PROVIDED IN SECTION 8.1 ABOVE,
NEITHER PARTY MAKES, AND EACH PARTY HEREBY WAIVES AND DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES REGARDING THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING (WITHOUT LIMITATION) ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OR IMPLIED
WARRANTIES ARISING OUT OF COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF
TRADE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT OF SALES
REVENUES THAT MAY OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT
THAT THEY MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.
9.2 NO CONSEQUENTIAL DAMAGES. EXCEPT TO THE EXTENT AWARDED TO A THIRD
PARTY IN A JUDGMENT AGAINST WHICH A PARTY IS ENTITLED TO INDEMNIFICATION
PURSUANT TO SECTION 8.2, OR TO THE EXTENT ARISING OUT OF ANY BREACH OF SECTION
12.3, NEITHER PARTY WILL BE LIABLE (WHETHER IN CONTRACT, WARRANTY, TORT
(INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE), PRODUCT LIABILITY OR OTHER THEORY),
TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY FOR COST OF COVER OR FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT
LIMITATION DAMAGES FOR LOSS OF PROFIT, REVENUE, BUSINESS OR DATA) ARISING OUT OF
THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISEDOF THE POSSIBILITY OF SUCH
COSTS OR DAMAGES.
9.3 LIMITATION OF DAMAGES. EXCEPT FOR LIABILITIES UNDER SECTION 8.2,
AND DAMAGES RESULTING FROM EITHER PARTY'S BREACH OF ITS OBLIGATIONS UNDERSECTION
12.3, INSTANCES OF WILLFUL MISCONDUCT AND GROSS NEGLIGENCE OF A PARTY AND/OR
PERSONAL INJURY OR TANGIBLE PROPERTY DAMAGE CAUSED BY A PARTY, NEITHER PARTY'S
AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS
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AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), WARRANTY OR OTHERWISE, SHALL EXCEED THE AGGREGATE
AMOUNTS ACTUALLY PAID PURSUANT TO THE PAYMENT PROVISIONS SET FORTH IN SECTION
6.1 AND EXHIBIT C DURING THE TERM OF THE AGREEMENT.
9.4 RESPONSIBILITY FOR WEB SITES. Subject to the express terms of this
Agreement, each Party will remain solely responsible for, and retains sole
control over, the programming, content and conduct of transactions on its Site.
In the event that either Party receives from a third party a BONA FIDE claim of
infringement concerning any advertising materials or other content supplied by
the other Party, such Party may upon notice to the other Party immediately
remove such materials or content from its Web Site at its sole discretion,
pending receipt of non-infringing replacement materials or content or
satisfactory resolution of such claim, and any such removal shall not constitute
a breach of this Agreement, provided such removal of the foregoing materials is
completed in good faith and in accordance with the terms and conditions herein.
SECTION 10. EXCLUSIVITY AND NON-SOLICITATION.
10.1 COMPANY SERVICE.
10.1.1 Subject to the terms and conditions of Section 10.1.2
and 10.2, Company will not: (a) offer or provide the Company Service with
respect to any Exclusive Products on behalf of any person or entity other than
LLC or its Affiliates; provided, however, nothing contained in this Agreement
shall be construed as prohibiting Company itself in any way from providing,
promoting or otherwise making the Company Service or any other Company or third
party information, products or services available to its customers on or through
the Company Site or, except as provided in Section 9.1 (b), providing, promoting
or otherwise making the Company Service available with respect to any
non-Exclusive Products on behalf of any third party; (b) advertise or promote in
any manner (including, without limitation, on or through the Company Site) any
person or entity which derives more than 10% of its gross revenues from the sale
of any one category of Exclusive Products (i.e., books, music or toys) or 15% of
its gross revenues from the sale of all categories of Exclusive Products in the
aggregate ("LLC Competitor"), provided, however, that Company shall be entitled
to advertise or promote any such LLC Competitor so long as it is exclusively in
connection with the advertising or promotion of the sale by such LLC Competitor
of a non-Exclusive Product, or the availability of the Company Service with
respect to such non-Exclusive Products offered on behalf of such LLC Competitor;
and (c) advertise or promote in any manner (including, without limitation, on or
through the Company Site) the availability or sale of any Exclusive Product by
any person or entity other than the Company or LLC or its Affiliates. Company
will use commercially reasonable efforts to train Company delivery personnel to
avoid any direct solicitation of any LLC customer to become a Company customer,
whether by way of product or service advertisements or solicitations delivered
verbally or in writing at the time of interface
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between such Company delivery personnel and the LLC customers, or
otherwise. Company will not advertise or promote the Company Site or the
Company Service specifically in preference to the LLC Site or the
Company Delivery Option (e.g., without limitation, "come to Xxxxx.xxx
for free delivery rather than Xxxxxx.xxx which charges a delivery fee").
Company will discuss in good faith with LLC from time to time the
possibility of exclusively sourcing products other than Exclusive
Products from LLC or its suppliers for delivery via the Company Service.
Company agrees that it will not enter into any agreement pursuant to
which Company exclusively offers or delivers products provided by any
third party if such products are then offered by LLC or its Affiliates
without first offering to negotiate with LLC (or such of its Affiliates
as LLC may designate) an agreement granting such rights to LLC (or such
Affiliate) (any such agreement, an "Exclusive Sourcing Agreement"). If
LLC rejects such offer, or does not respond to Company's offer to
negotiate a Exclusive Sourcing Agreement within five (5) business days,
Company will be free to enter into the applicable transaction with the
third party without restriction. If LLC indicates that it wishes to
negotiate an Exclusive Sourcing Agreement with Company within five (5)
business days of its receipt of Company's offer, the Parties will
attempt in good faith to negotiate a Exclusive Sourcing Agreement.
Either Party may terminate such negotiations at any time, and following
any such termination, Company shall be free to negotiate and enter into
the applicable transaction with the applicable third party without
restriction.
10.1.2 EXCEPTIONS TO COMPANY'S EXCLUSIVITY
OBLIGATIONS. Notwithstanding anything to the contrary set forth in
Section 10.1, Company shall not be precluded from providing any
Exclusive Product through the Company Service for any third party
provided that the Company's total annual revenue for the provision of
such Exclusive Product through the Company Service for such third
parties does not exceed five percent (5%) of the Company's total annual
revenue for the provision of such Exclusive Product through the Company
Service for all third parties, including LLC.
* 10.2 LLC SITE. In those areas of the Shipment Territory where
the Company Delivery Option is presented as the exclusive delivery
option in accordance with the terms of Section 3.1, except as provided
below, [*]Notwithstanding the foregoing, in the event LLC desires to
advertise, promote or make available on the LLC Site or otherwise the
one-hour delivery option or service for Exclusive Products [*] in any
one or more areas of the Shipment Territory where the Company Delivery
---------
* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
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* Option is presented as an available delivery option in accordance with
the terms of Section 3.1, LLC shall have the right to do so provided
that it gives at least ninety (90) days written notice to Company, which
notice shall specify [*]. Upon the expiration of such notice period, (a)
the Company's exclusivity obligations set forth in Sections 10.1(a), (b)
and (c) with respect to the particular areas of the Shipment Territory
identified in the above-described notice shall cease, and Section 3.1,
(b) LLC shall continue to feature the Placements on the LLC Site as set
forth in but LLC's obligation \ under Section 3.1 to present the Company
Delivery Option as the exclusive one-hour delivery option for Exclusive
Products shall be converted to a reduced obligation to [*]; provided,
however, that the Company branding associated with the Company Delivery
Option shall not be removed in its entirety and shall continue to be as
provided by Company, subject to the final approval of LLC, such approval
not to be unreasonably withheld or delayed. In the event Company fails
to materially comply with the service levels and customer service
requirements set forth in Exhibit A in any area or areas of the Shipment
Territory, LLC shall be entitled to give written notice of this fact to
Company (which notice shall specify the problem and cure with reasonable
particularity), and Company shall have sixty (60) days to remedy the
same from the date of receipt of such notice. In the event Company is
unable to cure the problem in any area or areas of the Shipment
Territory by substantially conforming to the applicable service levels
and customer service requirements within such time period, LLC shall be
entitled to use [*] for one-hour deliveries of Exclusive Products in
such areas of the Shipment Territory without causing termination of the
Company's exclusivity obligations set forth in Sections 10.1(a), (b) and
(c) in such areas. If Company later demonstrates to LLC's reasonable
satisfaction that it is able to substantially conform to the applicable
service levels and customer service requirements set forth in Exhibit A
in such area or areas of the Shipment Territory, LLC shall either (x)
cease using Company Competitors in such area or areas of the Shipment
Territory within ninety (90) days, or (y) be deemed to agree to the
termination of Company's exclusivity obligations set forth in Sections
10.1 (a),(b) and (c) with respect to such area or areas of the Shipment
Territory.
10.3 OTHER OBLIGATIONS NON-EXCLUSIVE. Except as expressly
provided in Section 10.1 and 10.2 above, the rights and obligations of
the Parties under this Agreement shall be non-exclusive, and either
party shall be free to enter into any transactions and agreements with
third parties (whether or not similar to or competitive with the
transactions and agreements specified in this Agreement or the business
of the other Party), so long as the same do not breach any express
provision of this Agreement.
---------
* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
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SECTION 11. TERM AND TERMINATION
11.1 TERM. The term of this Agreement will start on the
Effective Date, and unless earlier terminated as provided elsewhere in
this Agreement, will end three (3) years following the Commencement Date.
11.2 TERMINATION FOR BREACH. Without limiting any other rights
or remedies (including, without limitation, any right to seek damages
and other monetary relief and LLC's rights under Section 11.3 or
Company's rights under Section 11.4) that either Party may have in law
or otherwise, either Party may terminate this Agreement if the other
Party materially breaches its obligations hereunder, provided that (a)
the non-breaching Party sends written notice to the breaching Party
describing the breach, and (b) the breaching Party does not cure the
breach within thirty (30) days following its receipt of such notice.
11.3 LLC TERMINATION. In the event that: (a) Company at any
time engages in any criminal conduct, fraud, dishonesty or other
behavior that LLC reasonably and in good faith determines is materially
harming or is likely to materially harm the goodwill or reputation of
LLC or its Affiliates or the LLC Site; (b) LLC reasonably and in good
faith determines that Company has consistently failed to abide by LLC's
reasonable requests with respect to the establishment of technical and
customer service requirements or its obligations to integrate the
Company Service into the LLC Site as required hereunder; or (c) Company
consistently fails to pay BONA FIDE debts as they legally come due,
institutes or has instituted against it any bankruptcy, reorganization,
debt arrangement, assignment for the benefit of creditors, or other
proceeding under any bankruptcy or insolvency Law or dissolution,
receivership, or liquidation proceeding (and, if such proceeding is
instituted against it, such proceeding is not dismissed within one
hundred twenty (120) days), the same shall be deemed a material breach
of this Agreement which is not susceptible to cure, and LLC shall be
entitled to terminate this Agreement upon written notice to Company. In
addition, in the event that any Change of Control involving an LLC
Competitor occurs with respect to Company, LLC shall be entitled to
terminate this Agreement upon written notice to Company, LLC
acknowledging, however, that the occurrence of a Change of Control shall
not be deemed to be a breach of this Agreement in and of itself, and
(bb) without terminating the Agreement in whole, LLC may terminate this
Agreement with respect to any one or more areas of the Shipment
Territory if the Company materially breaches its obligations hereunder
with respect to any such area or areas and LLC follows the same
procedures related to such breach or breaches that would be required to
terminate the Agreement in its entirety.
* 11.4 COMPANY TERMINATION. In the event that [*]
---------
* Confidential Treatment Requested and the Redacted Material has been
separately filed with the Commission.
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[*] (c) LLC consistently fails to pay its BONA FIDE debts as they legally come
due, institutes or has instituted against it any bankruptcy, reorganization,
debt arrangement, assignment for the benefit of creditors, or other proceeding
under any bankruptcy or insolvency Law or dissolution, receivership, or
liquidation proceeding (and, if such proceeding is instituted against it, such
proceeding is not dismissed within one hundred twenty (120) days), the same
shall be deemed a material breach of this Agreement which is not susceptible
to cure, and Company shall be entitled to terminate this Agreement upon
written notice to LLC. In addition, in the event that any Change of Control
involving a Company Competitor occurs with respect to LLC, Company shall be
entitled to terminate this Agreement upon written notice to LLC, Company
acknowledging, however, that the occurrence of a Change of Control shall not
be deemed to be a breach of this Agreement in and of itself.
11.5 EFFECT OF TERMINATION.
11.5.1 GENERAL. Upon termination of this Agreement, each
Party in receipt, possession or control of the other Party's intellectual or
proprietary property, information and materials (including any Confidential
Information) pursuant to this Agreement must return to the other Party (or at
the other Party's written request, destroy and certify in writing such
destruction) such property, information and materials and all copies thereof,
regardless of the form, format or media. Sections 7 through 9, 11 and 12 and any
other provision of this Agreement which must survive the termination or
expiration of this Agreement in order to give effect to its meaning, will
survive the termination or expiration of this Agreement.
11.5.2 USER TRANSITION. Upon any expiration of the Term, or
a termination of the Term as a result of Company's material breach of the
Agreement, the Parties will cooperate in good faith to promote a smooth customer
transition, and in any event, Company will, at LLC's option, continue to offer
the Company Delivery Option in accordance with the terms of this Agreement for a
period of up to four (4) months following such termination, provided, however,
that Company's exclusivity obligations contained in Section 10 of the Agreement
shall not apply during this transition period.
SECTION 12. MISCELLANEOUS
12.1 TAXES. The Parties acknowledge and agree that notwithstanding any
other provision of this Agreement, LLC shall have no obligation to offer or
promote (or to continue to offer or promote) the Company Delivery Option in any
jurisdiction in the Shipment Territory if LLC determines, in its reasonable and
good faith discretion, that such offer or promotion may create any jurisdiction
or authority for any governmental authority to impose material additional
obligations to collect sales tax, use tax or similar tax in connection with any
sales of Exclusive Products by LLC or its Affiliates. Each Party specifically
acknowledges and agrees that this Agreement and the transactions contemplated
hereby are not intended to create any jurisdiction or authority for any
governmental authority to impose any obligation to collect any sales tax, use
tax or similar tax in connection with any sales of
---------
* Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission.
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products by LLC or its Affiliates. Accordingly, Company agrees to take such
action as LLC may reasonably request in compliance with all Laws, at LLC's sole
cost and expense, (including, without limitation, execution of affidavits and
other documents) to avoid or limit the imposition, by reason of this Agreement
or the transactions contemplated hereby, of any such obligation on LLC or its
Affiliates, or the establishment of a nexus for tax purposes sufficient to grant
any jurisdiction the authority to levy any sales tax, use tax or similar tax on
sales of products by LLC or its Affiliates in connection with this Agreement.
12.2 INSURANCE. Company, at its sole cost and expense, shall procure
and maintain in effect during the term of this Agreement and for a period of
twelve (12) months thereafter, the following insurance policies: (a) commercial
general, umbrella and/or excess liability insurance with limits of at least
$25,000,000 per occurrence (which insurance shall include, but not be limited
to, products, products/completed operations, bodily injury, personal injury,
broad form property damage and broad form contractual and advertising injury)
and (b) such other policy or policies of insurance as is or are commercially
reasonable for the transactions and business contemplated by this Agreement. As
soon as is reasonably practicable following the Effective Date, and from time to
time upon the reasonable request of LLC, Company shall furnish to LLC a
certificate of insurance and any other relevant documentation as evidence of
said insurance policy or policies. Company agrees to consult with LLC from time
to time regarding the adequacy of Company's insurance coverage. LLC and
Xxxxxx.xxx, Inc. shall at all times be named as an "additional insureds" under
such policy or policies, or any renewals or replacements thereof, and such
policies shall contain a waiver of subrogation against LLC and Xxxxxx.xxx, Inc.
12.3 INDEPENDENT CONTRACTORS. The Parties are entering this Agreement
as independent contractors, and this Agreement will not be construed to create a
partnership, joint venture or employment relationship between them. Neither
Party will represent itself to be an employee or agent of the other or enter
into any agreement or legally binding commitment or statement on the other's
behalf of or in the other's name.
12.4 NONDISCLOSURE. Each Party will protect the Confidential
Information of the other Party from misappropriation and unauthorized use or
disclosure, and at a minimum, will take precautions at least as great as those
taken to protect its own confidential information of a similar nature, but in no
event with less than reasonable care. Without limiting the foregoing, the
Receiving Party will: (a) use such Confidential Information solely for the
purposes for which it has been disclosed; and (b) disclose such Confidential
Information only to those of its and its Affiliates' employees, agents, and
consultants who have a need to know the same for the purpose of performing this
Agreement and who are informed of and agree to a duty of nondisclosure. The
Receiving Party may also disclose Confidential Information of the Disclosing
Party to the extent necessary to comply with applicable Law or legal process or
pursuant to a registration report or exhibits thereto filed or to be filed with
the Securities and Exchange Commission, listing agency or any stock
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securities commission, or any other associated filings, provided that the
Receiving Party uses gives the Disclosing Party not less than ten (10) days'
prior written notice thereof and complies with all reasonable requests of the
Disclosing Party to minimize the extent or scope of any such disclosure. Upon
request of the other Party, or in any event upon any termination or expiration
of the Term, each Party shall return to the other or destroy (and certify in
writing such destruction) all materials, in any medium, which contain, embody,
reflect or reference all or any part of any Confidential Information of the
other Party.
12.5 COSTS. Except as expressly provided herein, each Party will be
responsible for all costs and expenses incurred by it in connection with the
negotiation, execution, delivery and performance of this Agreement.
12.6 NOTICES. Any notice or other communication under this Agreement
given by either Party to the other Party will be in writing and, to be
effective, must be sent to the intended recipient by prepaid registered letter,
receipted commercial courier, or electronically receipted facsimile transmission
(acknowledged in like manner by the intended recipient) at its address specified
below its signature at the end of this Agreement, and in the case of LLC, with a
copy to Xxxxxx.xxx, Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000,
XXX, Facsimile: (000) 000-0000 Attn: General Counsel and in the case of Company,
with a copy to Xxxxxxxxx Xxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Facsimile
(212-801- 6400), Attn: Xxxxxx Xxxxxxx, Esq.; provided, that no notice of
termination of this Agreement shall be deemed properly given unless sent by
prepaid registered mail to such address(es) and to the attention of such
officer(s). Either Party may from time to time change such address or individual
by giving the other Party notice of such change in accordance with this Section
12.6.
12.7 ASSIGNMENT. Except as set forth below, neither Party may assign,
transfer or subcontract this Agreement and/or any rights and/or obligations
hereunder, without the written consent of the other and any attempt to do so
shall be void. Notwithstanding the foregoing, either party may assign this
Agreement to an Affiliate or in connection with a merger, sale, transfer,
conveyance, acquisition or other corporate reorganization or change in control
or ownership relating to all or any material portion of its stock, assets,
operations or business, other than a Change of Control involving an LLC
Competitor or a Company Competitor, provided that the assignee agrees in writing
to be bound by all of the terms and conditions of this Agreement. Subject to the
foregoing, this Agreement will be binding on and enforceable by the Parties and
their respective successors and permitted assigns.
12.8 NONWAIVER. To be effective, any waiver by a Party of any of its
rights or the other Party's obligations under this Agreement must be made in a
writing signed by the Party to be charged with the waiver. No failure or
forbearance by either Party to insist upon or enforce performance by the other
Party of any of the provisions of this Agreement or to exercise any rights or
remedies under this Agreement or otherwise at law or in equity shall be
construed as a waiver or relinquishment to any extent of such Party's right to
assert or rely
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upon any such provision, right, or remedy in that or any other instance; rather
the same shall be and remain in full force and effect.
12.9 COUNTERPARTS; TRANSMITTED COPIES. This Agreement may be executed
in any number of counterparts, each of which will be deemed an original, but all
of which taken together will constitute one and the same instrument. To expedite
the process of entering into this Agreement, the parties acknowledge that
Transmitted Copies of the Agreement shall be equivalent to original documents
until such time (if any) as original documents are completely executed and
delivered. "Transmitted Copies" shall mean copies which are reproduced or
transmitted via facsimile, or another process of complete and accurate
reproduction and transmission.
12.10 HEADINGS. The headings of sections and subsections of this
Agreement are for convenience of reference only and are not intended to
restrict, affect or otherwise influence the interpretation or construction of
any provision of this Agreement.
12.11 CHOICE OF LAW. This Agreement will be interpreted, construed and
enforced in accordance with the Laws of the State of Washington, without
reference to its choice of Laws rules.
12.12 VENUE. Company hereby irrevocably consents to non-exclusive
personal jurisdiction and venue in the state and federal courts located in King
County, Washington with respect to any claim, action or proceeding arising out
of or related to this Agreement and agrees not to commence or prosecute any such
claim, action or proceeding other than in the aforementioned courts.
12.13 ENTIRE AGREEMENT. The Exhibits, materials, information and
documents attached, referred to or specified in this Agreement are incorporated
by reference and constitute a part of this Agreement as if fully set forth
herein. This Agreement (a) represents the entire agreement between the Parties
with respect to the subject matter hereof and supersedes any previous or
contemporaneous oral or written agreements regarding such subject matter and (b)
may be amended or modified only by a written instrument signed by a duly
authorized agent of each Party. No breach of this Agreement by either Party
shall affect the rights or obligations of either Party under any other Agreement
between the Parties; rather, the same will remain in full force and effect.
-24-
LLC COMPANY:
XXXXXX.XXX LLC XXXXX.XXX, INC.
By: F/ By: /s/ Xxxx Xxxxx
----------------------------- -----------------------------
Title: Vice President Title: Vice President
-------------------------- --------------------------
Date: March 13, 2000 Date: March 13, 2000
--------------------------- ---------------------------
Notice Address: Notice Address:
Xxxxxx.xxx LLC XXXXX.XXX, INC.
0000 00xx Xxxxxx Xxxxx, Xxxxx 0000 00 XXXXX XXXXXX
Xxxxxxx, XX 00000-0000 XXX XXXX, XX 00000
Facsimile: 206-266-7010 FACSIMILE: 000-000-0000
Attn: General Counsel, Xxxxxx.xxx, Inc. ATTN: XXXX XXXXX, VP BUSINESS
DEVELOPMENT
-25-
EXHIBIT A
CUSTOMER SERVICE REQUIREMENTS
EXHIBIT B
DEVELOPMENT PLAN
EXHIBIT C
PAYMENT TERMS AND CONDITIONS
