EXHIBIT 10.17
MARKETING AND INTEGRATION AGREEMENT BETWEEN
ROWECOM INC. AND ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
MARKETING AND INTEGRATION AGREEMENT
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This MARKETING AND INTEGRATION AGREEMENT dated as of August 20, 1998,
between RoweCom Inc., a Delaware corporation ("RCI"), and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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inc., a Delaware corporation ("BN").
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W I T N E S S E T H:
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WHEREAS, RCI provides business-to-business electronic commerce services to
businesses and not-for-profit institutions interested in purchasing
Subscriptions, books and other knowledge products and services of a professional
nature (the "RCI Products") and, in connection therewith, RCI collaborates with
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such entities to enhance existing intranet networks (each, a "RCI Intranet") to
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enable such entities to purchase Subscriptions, books and other knowledge
products and services via their intranets (the "RCI Service"); and
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WHEREAS, each RCI Intranet contains a home page created by RCI (the "RCI
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Service Home Page"); and
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WHEREAS, RCI operates a web site on the World Wide Web having the URL,
▇▇▇.▇▇▇▇.▇▇▇," which describes RCI's business and the products and services it
offers to the public (the "RCI Site"); and
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WHEREAS, BN, among other things, has implemented a Business Solutions
Program (the "Business Solutions Program") pursuant to which BN has created a
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unique web site (the "Business Solutions Site") (the RCI Site and the Business
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Solutions Site, each individually a "Site") which is accessible solely by the
intranets of Business Solutions Program participants (the "BN Intranets" and,
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together with the RCI Intranets, the "Intranets") and such Business Solutions
Site, among other things, sells and provides information regarding books,
software and Subscriptions (the "BN Products") to users of BN Intranets; and
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WHEREAS, the parties hereto desire to join their efforts with respect to
the offering of products in the Intranets via the Business Solutions Site and
the RCI Service and, at RCI's option, via the RCI Site, by, among other things,
creating links between the Business Solutions Site and the RCI Service,
exchanging product databases, and, if the parties hereto so agree, ultimately,
launching a single fully integrated service for all of the business-to-business
services of both parties, including any related web sites (the "Integrated
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Service"), all on the terms and conditions set forth herein.
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NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS For purposes of this Agreement, the following terms have the
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respective meanings set forth below:
AGGREGATE REVENUE shall mean the total payment made by one party to the
other with respect to the revenue sharing terms and conditions of this
Agreement.
BN AFFILIATES PROGRAM shall mean the BN program whereby links are
established from the web sites of certain third parties to the BN Site in
connection with the sale of books and other BN Products.
BNSITE shall mean the web site on the World Wide Web operated by BN and
having the URL, "▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇."
BUSINESS SUBSCRIPTION shall mean a Subscription which is a business to
business or professional Subscription, or personal subscription purchased
at a business location, whether or not such Subscription is currently
offered by RCI.
CONSUMER SUBSCRIPTION shall mean a Subscription which is not a business to
business or professional Subscription.
CURRENT CUSTOMERS shall mean customers of BN and RCI who are customers of
BN or RCI, as the case may be, as of the date hereof.
DEVELOPMENT PLAN means the plan to be jointly prepared by RCI and BN
regarding the provision of the Integrated Service as described in Section
3(b)(v) hereof.
E-NEWS shall mean Electronic Newsstand, Inc., a Delaware company.
FEE SCHEDULE means the payments payable to each party as set forth on the
chart attached hereto as Schedule 1.
LEVELS refers to the initial services provided by BN and RCI that are
described in Section 2 of this Agreement.
NET SALES PRICE shall mean the price of a book sold to a customer
by BN less any amounts added for ***1.
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NEW CUSTOMERS shall mean any customers of BN or RCI who become customers of
BN or RCI, as the case may be, after the date hereof
PHASES shall mean the three stages of development, promotion, cross-
branding, and integration of Sites as more fully described in Section 4
hereof
SUBSCRIPTION means any magazines, serials, or other publications, embodied
in paper or digital media.
TRADEMARK means names, trademarks, service marks, trade names, labels,
logos, designs or other designations.
Each of the following terms have the meanings ascribed to it in the section
set forth opposite such term:
BN Preamble
BN Business Solutions Site Preamble
BN Database Section 4(b)(i)(1)
BN Intranets Preamble
BN Products Preamble
BN Trademarks Section 3(a)(i)
Business Solutions Program Preamble
Change of Control Section 8(c)
E-News Subscriptions Section 3(b)(iii)(1)
Integrated Service Preamble
Intranets Preamble
Level One Service Section 2(b)
Level Two Service Section 2(c)
RCI Preamble
RCIDatabase Section 4(b)(i)(2)
RCI Intranet Preamble
RCI Products Preamble
RCI Service Preamble
RCI Service Home Page Preamble
RCI Site Preamble
RCI Trademarks Section 3(a)(ii)
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1 Confidential treatment has been requested for this portion of this
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exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
Site Preamble
2. DESCRIPTION OF SERVICES
a. GENERAL DESCRIPTION The services that are covered by this Agreement
include services which are currently provided by one of the parties
and services which may be jointly developed by the parties as a result
of this and subsequent agreements between them. Current services
include Level One and Level Two. Future services may include if the
parties so agree, the Integrated Service.
b. LEVEL ONE SERVICE. Level One service is currently provided by BN for
its business to business clients. This service is marketed as the BN
Business Solutions Program. It includes the ability to order and pay
for books, magazine subscriptions and software through the BN Business
Solutions Site (and may include any other consumer oriented products
or services which may become available to users of the BN Site at any
time after the date hereof, including, without limitation, article and
document search and delivery services, customized recommendations and
related value added services). Through this service BN shall continue
its practice of utilizing (i) a number of payment options for its
participants which shall include credit cards, debit cards, purchasing
cards, purchase orders and letters of credit for foreign purchasers,
and (ii) tracking and reporting systems which provide users the
ability to understand and manage their purchases. Level One service
will be enhanced under this Agreement to include a comprehensive
catalog of subscription titles provided by RCI. The Level One service
will be offered by both BN and RCI, but shall be implemented solely by
BN. BN shall not create any solely business-to-business enhancements
on the Level One service without the prior written consent of RCI.
c. LEVEL TWO SERVICE. Level Two service is currently provided by RCI for
its business to business clients. This service is marketed as the
RCI's kStore service. It includes comprehensive catalogs of
Subscriptions, books, and other knowledge products, and enables users
to order and pay for these items using RCI's kStore web site. Level
Two service will be enhanced under this Agreement to include catalogs
of books and software titles provided by BN. Participants of this
service shall receive all of the benefits of Level One
service participants and will have the option of receiving the
additional benefits of Level Two services offered by RCI which shall
include enhanced management and payment controls with respect to such
clients' intranet users. The Level Two service will be offered by both
BN and RCI, but shall be implemented solely by RCI.
d. INTEGRATED SERVICE. The Integrated Service may be implemented by
mutual agreement of the parties hereto. If implemented, the Integrated
Service will integrate the Level One and Level Two services into a
family of services offered in a joint integrated site supported by
both parties. The anticipated structure and characteristics of the
Integrated Service are described in Section 4(c) hereof.
e. COMPETITION BETWEEN SERVICES. Level One and Level Two services are
designed to be complementary in nature, responding to different client
preferences and requirements. Both services will be offered by both
parties to this Agreement with revenue from both services shared as
provided in Schedule 1 attached hereto. It is anticipated that,
ultimately, subject to subsequent agreement between the parties, these
two services will be fully integrated into the Integrated Service
which will be jointly developed and offered by both parties. Until
such time BN will refrain from enhancing the Level One service to
include any control mechanism whereby a corporate participant can
state authorization levels or any permission requirement matrix.
3. LICENSE & MARKETING ARRANGEMENTS
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a. License
i Subject to the terms and conditions of this Agreement, including,
but not limited to, the provisions of Section 9 hereof, BN hereby
grants to RCI a non-exclusive, non-transferable, royalty-free
right and license (excluding the right to sublicense) (i) to use,
copy, distribute, display and allow third parties to access the
BN Database and the BN books search engine and Business Solutions
software solely to market and promote books and the BN Products
to business-to-business clients as described more fully in this
Agreement, and (ii) to reproduce and display all Trademarks
relating to BN (the "BN Trademarks")
solely for the purposes described herein; provided, however, that
in performing hereunder RCI shall not make any specific use of
any BN Trademark without first submitting a sample of the same to
BN and obtaining BN's prior consent, which consent shall not be
unreasonably withheld or delayed. Such license shall terminate
upon the effective date of the expiration or termination of this
Agreement.
(ii) Subject to the terms and conditions of this Agreement, including,
but not limited to, the provisions of Section 9 hereof, RCI
hereby grants to BN a non-exclusive, non-transferable, royalty-
free right and license (excluding the right to sublicense) (i) to
use, copy, distribute, display, allow third parties to access the
RCI Database and the RCI Subscription search engine and related
transaction software solely to market and promote RCI Products,
RCI services, and Subscriptions to business-to-business clients
as described more fully in this Agreement, and (ii) to reproduce
and display all Trademarks relating to RCI (the "RCI Trademarks")
solely for the purposes described herein; provided, however, that
in performing hereunder BN shall not make any specific use of any
RCI Trademark without first submitting a sample of the same to
RCI and obtaining RCI's prior consent, which consent shall not be
unreasonably withheld or delayed. Such license shall terminate
upon the effective date of the expiration or termination of this
Agreement.
b. MARKETING ARRANGEMENTS
i. Marketing Arrangements. The parties hereby agree to implement the
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marketing, promotion, and sales efforts described below in accordance
with the Development Plan described in Section 3(b)(v) hereof.
ii Exclusivity of BN. During the Term, RCI agrees that it will not in any
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area of the Integrated Service, the RCI Service, the RCI Site, or the
RCI Service Home Page (or any similar customized home pages of RCI
Intranets) or the RCI Products promote or link to the web site of any
third party booksellers, nor will it permit any other person or entity
to sell books online in any area of the Integrated Service, the
RCI Service, the RCI Site, or the RCI Service Home Page, provided that
the parties understand and agree that the customer owning such
intranet cannot be restricted in any way from having relationships
with or links to the web sites of third party booksellers. RCI shall
notify BN if it intends to enter into any market where it would offer
non-English language books, and if BN either offers such non English
language books or agrees to carry such non-English language books then
the parties shall work together in good faith to enter into an
agreement covering such non-English language books. If BN does not
then offer such non-English language books and does not agree to carry
such non-English language books, RCI may enter into an agreement with
a third party vendor to provide such non-English language books.
iii Exclusivity of RCI Except as set forth in clause (2) below, during
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the Term, BN agrees that it will not in any area of the Integrated
Service, the BN Site, the BN Business Solutions Site (or any BN
customized home pages of BN Intranets), or the BN Products promote or
link to the web site of any third party Subscription providers, nor
will it permit any other person or entity to sell Subscriptions online
in any area of the BN Site, the BN Business Solutions Site (or any BN
customized home pages of BN Intranets), or the BN Products, provided
that the parties understand and agree that (A) the customer owning
such intranet cannot be restricted in any way from having
relationships with or links to the web sites of third party
Subscription providers; and (B) BN currently has an agreement to buy
and to offer to its Current Customers certain Consumer Subscriptions
(the "E-News Subscriptions") through the BN Site, which Subscriptions
shall not be subject to the terms of this Agreement for the duration
of BN's agreement with E-News. All Subscriptions other than the E-
News Subscriptions shall be subject to the exclusive marketing
arrangement set forth in this Section 3(b)(iii)(1). BN shall notify
RCI if it intends to enter into any market where it would offer non-
English language Subscriptions, and if RCI either offers such non-
English language Subscriptions or agrees to carry such non-English
language Subscriptions then the parties shall work together in good
faith to enter into an agreement covering such non-English language
Subscriptions. If RCI does not then offer such non-English language
Subscriptions and does not agree to carry such non-English language
Subscriptions, BN may enter into an agreement with a third party
vendor to provide such non-English language Subscriptions.
iv. Future Sales Activities of the Parties. To the extent that BN enetrs
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into any new third party relationships with respect to the sale or
promotion of its services in geographic locations not yet undertaken
by BN, BN agrees that during the Term BN will, in good faith, use its
best efforts to include the RCI Products as part of such undertaking.
In addition, to the extent that RCI enters into any new third party
relationships with respect to the sale or promotion of RCI Services in
geographic locations not yet undertaken by RCI, RCI agrees that during
the Term RCI will, in good faith, use its best efforts to include the
BN Products as part of such undertaking.
v. Development Plan - No later than November 1, 1998, RCI and BN, shall
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agree upon a Development Plan that will include a technology and sales
strategy and budget for the balance of 1998 and the full calendar year
1999. The Development Plan will include a specific process and
timetable within the calendar year 1999 for the parties to decide
whether or not to develop jointly the Integrated Service. The parties
shall determine whether to proceed with Phase Three within
approximately twelve months following the date hereof or at such other
time as the parties shall otherwise agree.
c. During the 60 day period following the date of this Agreement the parties
agree to work together in good faith to enter into another agreement with
respect to the consumer market which agreement will cover the parties
relationship with respect to the BN Site and the RCI Site. Until such
agreement is reached, neither party shall be precluded from working with
third party vendors of books and/or Subscriptions on the BN Site or the RCI
Site, as the case may be.
4. PHASES OF DEVELOPMENT, MARKETING & INTEGRATION
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A. PHASE ONE - LINKING AND PROMOTIONS
i Internet Links to Other Party's Home Page
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(1) knowledgeStore and knowledgeLibrary Link to
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the Business Solutions Program. As promptly as practicable
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after the date hereof, RCI will place a hyperlink from the
knowledgeStore and knowledgeLibrary sections of the RCI Site
to the home page of the BN Business Solutions Site. Such
link shall contain a reference to the Business Solutions
Program and shall otherwise contain text and be in a format
agreed upon by the parties hereto.
(2) RCI Banner Advertisement on the Business Solutions Home
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Page. As promptly as practicable after the date hereof, BN
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will place a banner advertisement (which shall include a
hyperlink) on the home page of the BN Business Solutions
Site that shall link to the knowledgeStore area of the RCI
Site. Such link shall contain a reference to RCI services
and shall otherwise contain text and be in a format mutually
agreed upon by the parties hereto.
ii. Joint Sales Efforts.
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(1) As promptly as practicable after the date hereof, each of BN
and RCI will begin coordinating their marketing and selling
efforts (as described below) with respect to the services of
both parties. The officers of each party (whose primary
responsibilities involve marketing and sales) will be
responsible for active coordination by both parties in order
to maximize the combined revenue of both parties. The
parties' respective responsibilities will be as follows:
(A) Enterprise Sales. RCI and BN shall be responsible for
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managing the process of soliciting business from
prospective and existing clients who may be interested
in implementing on their respective Intranets the Level
One or Level Two services (such services are described
in Section 2 hereof).
(B) Third Party Sales. BN and RCI shall approach
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publishers, authors, web site owners and operators and
other third
parties with whom RCI and BN have existing business
relationships to generate customer leads in order to
gain participation in both of their services.
(C) Sales Support. Every Level One and Level Two Account
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will be assigned an account team made up of BN and RCI
personnel. BN will be responsible for merchandising
support for book sales, and RCI will be responsible for
merchandising support for Subscription sales. The BN
representative will head the account team for Level One
accounts and the RCI representative will head the
account team for Level Two accounts.
(D) Sales Channels. In the event that any third party
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sales channel (e.g., Intellysis) facilitates the
participation of any Level One or Level Two service
corporate client, then the parties agree to renegotiate
(and equitably adjust) the terms of consideration set
forth in Schedule I hereto to take into consideration
any commission payment which may be due to such third
party sales channel.
b. PHASE TWO - EXCHANGE OF DATABASES. As promptly as practicable after
the parties shall have commenced Phase One, the parties will perform
the following obligations:
i Delivery of Respective Databases.
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(1) BN will deliver to RCI, in a format to be mutually agreed
upon by the parties, BN's then existing database of books.
At such time, BN will use its commercially reasonable best
efforts to increase its book inventory to include additional
products which pertain to the areas of Health Services,
Financial Services, Professional Services, Academia and High
Technology, devoting particular attention to obtaining
scientific, technical and medical books. Thereafter, no
later than the first day of each week, BN shall
deliver to RCI any updates to such database. (The database
described in this clause (1) and all updates thereto are
hereinafter referred to as the "BN Database".) BN agrees to
consider all customer requests for books not included in the
BN Database and to obtain such books to the extent
practicable; provided, that inclusion of such book does not
violate any BN internal policy. Notwithstanding Section
3(b)(ii) hereof, if BN is unable to supply a requested book
in a timely manner, RCI may, at its option and upon prompt
advance notice to BN, obtain the book from a third party.
(2) RCI will deliver to BN, in a format to be agreed upon by the
parties, RCI's then existing database of Subscriptions.
Thereafter, no later than the first day of each week, RCI
shall deliver to BN any updates to such database. (The
database described in this clause (2) and all updates
thereto are hereinafter referred to as the "RCI Database.")
RCI agrees to consider all customer requests for
Subscriptions not included in the RCI Database and to obtain
such Subscriptions to the extent practicable; provided, that
inclusion of such Subscriptions does not violate any RCI
internal policy. RCI further agrees to actively assist BN in
identifying new book titles in connection with BN's
obligations described in clause (1) above. Notwithstanding
Section 3(b)(iii) hereof, if RCI is unable to supply a
requested Subscription in a timely manner, BN may, at its
option and upon prompt advance notice to RCI, obtain the
Subscription from a third party.
ii. BN Business Solutions Site Link to the Magazine Area. BN will
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continue its current practice of placing a link on the home page
of the BN Business Solutions Site accessing the area of the BN
Business Solutions Site where Subscriptions can be purchased.
iii. RCI Link to the Book Area. RCI shall place a link on the RCI
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Service Home Page accessing the area of the RCI Service where
books can be purchased.
iv. Joint Sales Efforts. The parties shall continue to perform their
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selling obligations as described in Section 4(a)(ii) hereof.
v. Orders and Product Fulfillment. All products purchased through
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the BN Business Solutions Site other than Subscriptions shall be
processed and fulfilled by BN. All products purchased through the
RCI Service other than books shall be processed and fulfilled by
RCL Book orders purchased through the RCI Service shall be
transmitted to BN by RCI and shall include all payment and
customer information related thereto. BN shall then process such
orders and ship the products to the customer. Subscription orders
purchased through the BN Business Solutions Site shall be
transmitted to RCI by BN and shall include all payment and
customer information related thereto. RCI shall then process such
orders and cause the products to be shipped to the customer.
c. PHASE THREE - IMPLEMENTATION OF THE INTEGRATED SERVICE. In accordance
with the timetable set forth in the Development Plan, the parties
shall determine whether to proceed with Phase Three. If they so agree
explicitly and in writing (pursuant to an amendment to this Agreement
or otherwise), then, as promptly as practicable thereafter, the
parties will merge their heretofore parallel sites into a single
Integrated Service provided through a single web site all on the terms
and conditions as the parties shall mutually agree.
5. FEES AND PAYMENTS
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a. FEE STRUCTURE. No later than fifteen (15) days after the end of each
calendar month, each party shall remit to the other party an amount
equal to such party's payment as specified in the Fee Schedule
attached hereto as Schedule I.
b. DISCOUNTS. From time to time, the parties acknowledge that BN may
offer a ***2 discount to Business Solutions Program customers in
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accordance with the terms and conditions of
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2 Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted
portion, has been filed with the Securities and Exchange Commission
separately.
the Business Solutions Program. In the event that BN does not offer
such standard discount to Business Solutions Program customers, then
with respect to book purchases, ***3 as specified in the Fee Schedule.
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c. RCI STANDARD FEE. In the event that RCI increases or decreases the
***4 per Subscription fee that RCI currently charges its Subscription
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customers, then the fees due to BN for Subscription purchases as
specified in the Fee Schedule shall be increased or decreased in
proportion to the increase or decrease in the Subscription customers
fee.
d. SALES OF ADDITIONAL PRODUCTS. In the event that (i) BN offers for
sale products other than the BN Products, or (ii) RCI offers for sale
products other than the RCI Products, then the parties shall at such
time determine amounts, if any, to be shared between them with respect
to revenues received in connection therewith. Nothing herein shall be
deemed to obligate either party to participate in any such future
revenue sharing.
e. RENEGOTIATION OF THE TERMS OF CONSIDERATION. The parties hereby agree
that on or about ***5 after the date hereof and, thereafter, on or
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about each ***6 of the date hereof, the parties will review the fee
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structure set forth in this Section 5 and the Fee Schedule and will,
in good faith, renegotiate the terms of consideration hereunder to the
extent necessary, if at all, to create a more equitable financial
relationship between the parties. In connection therewith, the
parties will execute an amendment to this Agreement substantially in
the form attached hereto as Schedule 2. Except as expressly modified
therein, the terms of consideration herein shall remain in full
force and effect.
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3 Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
4 Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
5 Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
6 Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
in the form attached hereto as Schedule 2. Except as expressly
modified therein, the terms of consideration herein shall remain in
full force and effect.
f. PURCHASES MADE VIA THE RCI SITE. In the event that after the date
hereof RCI enhances the RCI Site so that customers can purchase books
and/or Subscriptions directly from the RCI Site, then RCI may become a
member of BN's Affiliates Program pursuant to which ***7 on the BN
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Site pursuant to a link from the RCI Site to the BN Site.
6. REPRESENTATIONS AND WARRANTIES
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A. AUTHORIZATION, ETC. Each party hereby represents and warrants to the
other that: (i) it has the requisite power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby; and (ii) this Agreement has been duly authorized,
executed and delivered by such party, constitutes the legal, valid and
binding obligation of such party and is enforceable against such party
in accordance with its terms, except to the extent such enforceability
may be limited by bankruptcy, reorganization, insolvency or similar
laws of general applicability governing the enforcement of the rights
of creditors or by the general principles of equity (regardless of
whether considered in a proceeding at law or in equity).
B. PROPRIETARY INFORMATION. Each party hereby represents and warrants to
the other party that: (a) the provision by such party of proprietary
information hereunder does not violate any proprietary or intellectual
property right of any third party; (b) each party shall promptly
inform the other party in the event that such party becomes aware that
any third party has filed or threatened to file any suit based on any
alleged violation of any such proprietary or intellectual property
rights of such party; and (c) each party holds title or license rights
sufficient to permit it to grant the licenses granted under Section 3
hereof.
C. THIRD PARTY RIGHTS. Each party represents and warrants to
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7 Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
the other party that: (a) it is not bound by any agreement or
obligation (and will not enter into any agreement or obligation) that
could materially interfere with the performance of its obligations
under this Agreement; and (b) no approval, authorization or consent of
any governmental or regulatory authority is required to be obtained or
made by it in order for it to enter into and perform its obligations
under this Agreement.
7. POLICIES AND CUSTOMER INFORMATION
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a. All customers will be deemed to be customers of the party that accepts
and processes the product order. Accordingly, all of such party's
rules, policies and operating procedures concerning customer orders,
customer service and book sales will apply to those customers. Each
party may change its policies and operating procedures at any time;
provided that, to the extent practicable, it promptly notifies the
other party of such changes. The parties hereto hereby agree that
title to any customer information, including but not limited to the
name, address, and e-mail address of the customer, shall be owned
solely by the party accepting and processing the applicable customer
order; it being understood that overlaps may exist with respect to
customer information to the extent that customers purchase products
from BN and/or RCI through more than one method (i.e., via the
Internet and Intranets) or purchase products from one party which are
then processed by the other party.
b. CURRENT CUSTOMER LISTS. Upon execution of this Agreement, each party
is delivering to the other party A list setting forth such party's
intranet Current Customers as of the date hereof. The list of Current
BN Customers is attached hereto as Schedule 3 and the list of Current
RCI Customers is attached hereto as Schedule 4. This information shall
be considered confidential and shall be subject to Section 10 hereof.
BN and RCI each agree not to market or sell to each other's current
customers.
c. BOOKS AND RECORDS. Each party will maintain true and correct books of
account containing a record of all information necessary to calculate
Net Sales for a period of one (1) year following the date of each
transaction subject to this Agreement. Subject to Section 10 hereof,
each party or each party's agent shall be entitled to review, at such
party's
cost, during the other party's regular business hours and upon not
less than three business days notice, such books and records for the
purpose of verifying the accuracy of such calculation and the amount
of payments due hereunder. Any such review will be made not more than
once each year during the term of this Agreement. If any such review
indicates that during the period reviewed the other party has
underpaid amounts to the reviewing party by more than ten percent
(10%) of the amounts actually paid during the period reviewed, then
such party shall reimburse the reviewing party for all costs and
expenses incurred by the reviewing party in performing the review.
8. TERM, TERMINATION
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a. The term of this Agreement shall commence on the date hereof and shall
continue for a period of five years, unless earlier terminated by
either party as hereinafter provided (the "Term"). Thereafter, this
Agreement shall be automatically renewable for successive one year
periods until either party notifies the other party of its intention
to terminate this Agreement at least ninety (90) days prior to the
expiration of the then current term.
b. Either party shall have the right to terminate this Agreement by
delivery of written notice of termination to the other party hereto in
the event such other party materially breaches any representation,
warranty, covenant or agreement made by it hereunder or otherwise
fails to perform any of its material obligations hereunder and such
breach or failure is not cured within fifteen (15) days after delivery
of such notice; provided, however, that each party shall be entitled
to terminate this Agreement effective upon delivery of notice in the
event of a breach by the other party of the provisions of Sections 10
or 11 hereof. Failure to reach agreement upon a Development Plan by
November 1, 1998, or failure to implement the Development Plan in good
faith and in a timely manner will be considered a material breach.
c. Either party may terminate this Agreement upon six months prior
written notice to the other party given at any time within six months
following the occurrence of a Change of Control of the other party;
provided, that the party subject to such Change of Control notifies
the other party of such event no later than the effective date
thereof. Change of Control
shall mean a merger or consolidation of the company with or into
another entity (other than a merger or reorganization involving only a
change in the state of the incorporation of the company, or the
acquisition by the company of other businesses where the company
survives as a going concern), the sale of all or substantially all of
a party's assets to any other person, or the issuance of shares of
capital stock of the company in a transaction or series of related
transactions in which the persons acquiring such shares acquire more
than 50% voting control of the company. Notwithstanding the foregoing,
an initial public offering shall not be deemed to be a Change of
Control.
d. Effective on the basis of the first quarter of 1999 and all subsequent
calendar year quarters, ***8
-
e. Except as otherwise provided in this Agreement, upon such effective
date of termination, each party's rights and obligations hereunder
shall terminate; provided, however, that the rights and obligations of
the parties hereto under Section 9 through 14 hereof shall survive
such expiration and termination.
9. TRADEMARKS
----------
Each party hereby covenants and agrees that the Trademarks of the other
party are and shall remain the sole and exclusive property of that party
and neither party shall hold itself out as having any ownership rights with
respect thereto or except as specifically granted hereunder, any other
rights therein. Any and all goodwill associated with any such rights shall
inure directly and exclusively to the benefit of the owner thereof. Each
party agrees to use the Trademarks of the other party in the manner
requested by the owner of such marks and shall include all legends, symbols
or other identifying matter as the owner of such Trademark may reasonably
request from time to time.
10. CONFIDENTIALITY
---------------
Except as otherwise provided in this Agreement or with the
-----------------------
8 Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
consent of the other party hereto, each of RCI and BN agrees that all
information including, without limitation, the terms of this Agreement,
business and financial information, customer and vendor lists and pricing
and sales information, concerning BN or RCI, respectively, or any of its
affiliates provided by or on behalf of any of them shall remain strictly
confidential and secret and shall not be utilized, directly or indirectly,
by such party for its own business purposes or for any other purpose except
and solely to the extent that any such information is generally known or
available to the public through a source or sources other than such party
hereto or its affiliates. Notwithstanding the foregoing, each party is
hereby authorized to deliver and file a copy of any such information (a) to
any person pursuant to a subpoena issued by any court or administrative
agency, (b) to its accountants, attorneys or other agents on a confidential
basis and (c) otherwise as required by applicable law, rule, regulation or
legal process including, without limitation, the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
11. PUBLICITY
---------
a. Notwithstanding the provisions of Section 10 hereof, promptly after
the execution of this Agreement, the parties shall jointly create and
approve a press release and communications strategy describing the
terms of the relationship between the parties that has been
established by this Agreement.
b. Subject to Section 10 hereof and clause (a) above, neither party shall
(i) create, publish, distribute or permit any written material which
makes reference to the other party hereto without first submitting
such material to the other party and receiving the prior written
consent of such party, which consent shall not be unreasonably
withheld or delayed, nor (ii) disclose to the public or any third
party the relationship between them or the transactions contemplated
by this Agreement without receiving the prior written consent of the
other party, which consent shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing, no consent shall be required
in the event that either party is engaged in an initial public
offering or other transaction which, in the reasonable opinion of such
party after consultation with their counsel, requires the provision
of such information to third parties; provided, that such party must
still give the other party prior notice of such disclosure.
12. INDEMNIFICATION
---------------
a. Each party (the "Indemnifying Party") hereby agrees to indemnify and
hold harmless the other party and its subsidiaries and affiliates, and
their respective directors, officers, employees, agents, shareholders,
partners, members and other owners, against any and all claims,
actions, demands, liabilities, losses, damages, judgments,
settlements, costs and expenses (including reasonable attorneys' fees)
(any or all of the foregoing hereinafter referred to as "Losses")
insofar as such Losses (or actions in respect thereof arise out of or
are based on any representation or warranty made by the Indemnifying
Party being untrue or any breach by the Indemnifying Party of any
covenant or agreement made by it herein
b. Except to the extent that either party provides or otherwise licenses
materials to the other party as required hereunder, each party will
indemnify and hold the other party harmless from all Losses relating
to the development, operation, maintenance and Content (as defined
below) of the Indemnifying Party's Site or Intranet program, as the
case may be.
c. For purposes herein, "Content" shall mean BN Content or RCI Content,
as the case may be, as defined below.
i. "BN Content" shall mean proprietary content of BN contained on
----------
the BN Business Solutions or BN Site and shall include only that
content created by BN, its employees or other persons
contractually bound to BN to create such content. In no event
shall the term BN Content be deemed to include any content
created or transmitted by users of the BN Business Solutions
Site, BN Site or BN Intranets.
ii. "RCI Content" shall mean proprietary content of RCI contained on
-----------
RCI Sites and RCI Service Home Pages and shall include only that
content created by RCI, its employees or other persons
contractually bound to RCI to create such content. In no event
shall the term RCI
Content be deemed to include any content created or transmitted
by users of the RCI Site or RCI Intranets.
13. LIMITATION OF LIABILITY
-----------------------
a. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES,
INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF REVENUE OR LOST
PROFITS, ARISING FROM ANY PROVISION OF THIS AGREEMENT, EVEN IF SUCH
PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
b. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES
ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE.
14. MISCELLANEOUS
-------------
a. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to the
conflict of law principles thereof.
b. This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes any and all
prior agreement, written and oral, with respect thereto. No change,
amendment or modification of any provision of this Agreement shall be
valid unless set forth in a written agreement signed in counterparts
or otherwise by both parties.
c. Any and all notices and other communications to either party hereunder
shall be in writing and deemed delivered (i) upon receipt if by hand,
overnight courier or telecopy (provided that in the event of a
telecopy, concurrently therewith a copy is mailed in accordance with
clause (ii) hereof) and (ii) three days after mailing by first class,
certified mail, postage prepaid, return receipt requested (1) if to
RCI to ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇; telecopier number: 617-497-
6800, and (2) if to BN to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention: Vice President, New Business Development, telecopier no.:
▇▇▇-▇▇▇-▇▇▇▇, or to such other address for a party as shall be
specified by like notice.
d. This Agreement does not constitute either party an agent, legal
representative, joint venturer, partner or employee of the other
for any purpose whatsoever and neither party is in any way authorized
to make any contract, agreement, warranty or representation or to
create any obligation, express or implied, on behalf of the other
party hereto.
e. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and together which shall constitute
one and the same instrument.
f. This Agreement and the provisions hereof shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and
their permitted assigns. Neither party may assign its rights or
obligations under this Agreement without the consent of the other
party (which consent shall not be unreasonably withheld or delayed),
except to the extent permitted under Section 8(c) hereof.
g. Each provision of this Agreement shall be considered severable and if,
for any reason, any provision hereof is determined to be invalid and
contrary to, or in conflict with, any existing or future law or
regulation of any court or agency having valid jurisdiction, such
shall not impair the operation or affect the remaining provisions of
this Agreement; and the latter shall continue to be given full force
and effect and bind the parties hereto and such invalid provisions
shall be deemed not to be a part of this Agreement.
h. Neither party shall be liable to fulfill its obligations hereunder, or
for delays in performance, due to causes beyond its reasonable
control, including, but not limited to, acts of God, acts or omissions
of civil or military authority, fires, strikes, floods, epidemics,
riots or acts of war.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ROWECOM,
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Executive Vice President
Chief Financial Officer
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President Marketing, Sales
Business Development
Schedule I
----------
Fee Schedule
------------
----------------------------------------------------------------------------------------------------
New Customers Accessing Current RCI Customer Current BN
the BN or RCI Service Orders Customer
Orders
---------------------------------------------------------------------------------------------------
BOOKS BN PROVIDES BOOK TO CUSTOMER BN provides book to Current BN provides book to
Customer Current Customer
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
BN pays ***/9/ of Net Sales BN pays ***/10/ of Net ***/11/
- -- --
Price to RCI Sales Price to RCI,
pursuant to Section 5B
---------------------------------------------------------------------------------------------------
CONSUMER RCI PROVIDES SUBSCRIPTION TO RCI PROVIDES RCI PROVIDES
SUBSCRIPTIONS CUSTOMER SUBSCRIPTION TO SUBSCRIPTION TO
CURRENT CUSTOMER CURRENT CUSTOMER
RCI pays ***/12/ of RCI Net
--
Sales Price per Subscription RCI retains ***/13/ of all RCI pays ***/14/ of
-- --
to BN* revenue from sales RCI Net Sales Price per
Subscription to BN*
---------------------------------------------------------------------------------------------------
BUSINESS RCI PROVIDES SUBSCRIPTION RCI PROVIDES SUBSCRIPTION RCI PROVIDES
SUBSCRIPTIONS TO CUSTOMER TO CURRENT SUBSCRIPTION TO
---------------------------------------------------------------------------------------------------
/9/ Confidential treatment has been requested for this portion of this
-
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
/10/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
/11/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
/12/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
/13/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
/14/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
----------------------------------------------------------------------------------------------------
CUSTOMER CURRENT CUSTOMER
RCI pays ***/15/ of RCI retains ***/16/ RCI pays ***/17/ per
-- -- --
per Subscription to BN of all revenue sales Subscription to BN
----------------------------------------------------------------------------------------------------
* In the event that RCI sources these titles directly from the publisher, and
their margins change significantly, RCI will adjust its payment to BN
proportionately
______________
/15/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
/16/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
/17/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
SCHEDULE 2
----------
FORM OF AMENDMENT
AMENDMENT NO. _____
This Amendment No. ______ is entered into between RoweCom Inc., a Delaware
corporation ("RCI"), and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ inc., a Delaware corporation ("BN")
---
pursuant to the terms of Section 5(d) of that certain Marketing and Integration
Agreement dated as of August ___, 1998 between RCI and BN (the "Marketing
---------
Agreement"). This Amendment No. ______ is intended to supplement the Marketing
---------
Agreement by specifying the percentage of the Net Sales Price or per
Subscription payment applicable to the sales of books or Subscriptions, as
applicable. Capitalized terms used in this Amendment No. ____ and not otherwise
defined herein are used with the meanings ascribed to them in the Marketing
Agreement.
In consideration of the mutual promises and covenants contained in the
Marketing Agreement, the parties hereby agree that the Marketing Agreement is
amended as follows:
1. The Fee Schedule attached to the Marketing Agreement as Schedule I is
hereby amended in its entirety as follows:
[TO BE SUPPLIED]
Except as expressly modified by this Amendment No. ____ all terms and
conditions of the Marketing Agreement shall remain in full force and effect.
This Amendment No. ____ is subject to all of the terms and conditions set forth
in the Marketing Agreement.
IN WITNESS WHEREOF the parties have caused this Amendment to be
executed by their authorized representatives as an instrument under seal as of
ROWECOM, INC. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
By:_________________________________ By:________________________________
Name:_______________________________ Name:______________________________
Title:______________________________ Title:_____________________________
SCHEDULE 3
----------
CURRENT BN CUSTOMERS
***/18/
--
_______________________
/18/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
SCHEDULE 4
----------
CURRENT RCI CUSTOMERS
***/19/
--
------------
/19/ Confidential treatment has been requested for this portion of this
--
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.