CONFIDENTIAL
SHOPPING CHANNEL PROMOTIONAL AGREEMENT
This Agreement, dated as of March 10, 1999 (the "Effective Date"), is
made and entered into by and between America Online, Inc. ("AOL"), a Delaware
corporation, with its principal offices at 22000 AOL Way, Dulles, Virginia 20166
and DG Jewellery -XiteJewelry.com ("MERCHANT") an Ontariocorporation, with its
principal offices at 1001 Petrolia Rd. Toronto, Ontario M3J2x7(each a "Party"
and collectively the "Parties").
INTRODUCTION
AOL owns, operates and distributes the AOL Canada(R) brand commercial
online service (the "AOL Service"), the Canadian version of its primary website
marketed under the AOL.CA(R) brand ("AOL.CA") and CompuServe for Canadians(R).
MERCHANT wishes to secure a promotional placement (the "Promotion") within the
shopping channel of the AOL Service, AOL.CA and CompuServe for Canadians (as
specified in Exhibit A) (each channel, a "Shopping Channel") which, when
activated, will provide access to MERCHANT's site on the World Wide Web or its
area on the AOL (as the case may be) (the "Merchant Site") where MERCHANT offers
content, products and/or services for sale.
TERMS
1. MERCHANT PROGRAMMING. MERCHANT will make available through the Merchant
Site the certain products, content and/or services specified in Exhibit A
(the "Products") in accordance with the Standard Shopping Channel Terms and
Conditions set forth on Exhibit B.
2. PROMOTIONAL OBLIGATIONS.
2.1 AOL Promotion of MERCHANT. Commencing on a date to be mutually
agreed promptly following execution hereof, AOL will provide
the Promotion(s) set forth in Exhibit A. Except to the extent
expressly described in Exhibit A, the specific form,
placement, positioning, duration and nature of the
Promotion(s) will be as determined by AOL in its reasonable
discretion (consistent with the editorial composition of the
applicable screens) and the nature of the Promotion being
purchased by MERCHANT, as reflected in Exhibit A and in any
placement fee specified in Section 3 below). The specific
content to be contained within the Promotions (including,
without limitation, within any advertising banners or
contextual promotions) will be determined by MERCHANT, subject
to AOL's technical limitations, the terms of this Agreement
and AOL's then-applicable policies relating to advertising and
promotions. Each Promotion will link only to the Merchant Site
and will promote only Products in the category directly
relating to the Shopping Channel department for which the
Promotion is being purchased by MERCHANT. MERCHANT
acknowledges that the sole obligation of AOL is to display the
Promotion(s) in the Shopping Channel(s) in accordance with the
terms and conditions hereto.
1
2.2 MERCHANT Cross-Promotion. Within each Merchant Site, MERCHANT
shall include a prominent promotional banner ("AOL Promo")
appearing "above the fold" on the first screen of the Merchant
Site, to promote such AOL products or services as AOL may
reasonably designate (for example, the AOL Canada(R) brand
service, the AOL.CA(R) site and the CompuServe for Canadians
brand service); AOL will provide the creative content to be
used in the AOL Promo (including designation of links from
such content to other content pages). MERCHANT shall post (or
update, as the case may be) the creative content supplied by
AOL (within the spaces for the AOL Promo) within a
commercially reasonable period of time from its receipt of
such content from AOL. Without limiting any other reporting
obligations of the Parties contained herein, MERCHANT shall
provide AOL with monthly written reports specifying the number
of Impressions to the pages containing the AOL Promo during
the prior month. In MERCHANT's television, radio, print and
"out of home" (e.g., buses and billboards) advertisements and
in any publications, programs, features or other forms of
media over which MERCHANT exercises at least partial editorial
control, MERCHANT will include specific references or mentions
(verbally where possible) of the availability of the
Merchant's Site through the America Online(R) brand service,
which are at least as prominent as any references that
MERCHANT makes to any other MERCHANT online or Internet site
(by way of site name, related company name, URL or otherwise).
Without limiting the generality of the foregoing, MERCHANT's
listing of the "URL" for any Merchant online site will be
accompanied by an equally prominent listing of the "keyword"
term on AOL for Merchant's Site.
3. PAYMENTS; REPORTS.
3.1 Placement Fees. MERCHANT will pay AOL $25,000.00 net cdn for
displaying the Promotion on the AOL Service, AOL.CA and
CompuServe for Canadians. The total amount of $25,000.00 will
be payable in, with the first such payment to be made upon the
Effective Date and subsequent quarterly payments to be made on
the first day of each subsequent quarter. MERCHANT agrees
that, except as specified herein, once the Promotion is
installed, there will be no refunds or proration of rates if
MERCHANT elects to discontinue display of the Promotion prior
to expiration of the Term. Should AOL fail to display the
Promotion in accordance with the terms of this Agreement due
to MERCHANT's failure to comply with any requirement of this
Agreement, MERCHANT will remain liable for the full amount
indicated above.
3.2 Reports. AOL will provide MERCHANT with monthly usage
information related to the Promotion in substance and form
determined by AOL. MERCHANT may not distribute or disclose
usage information to any third party without AOL's prior
written consent. AOL makes no guarantees regarding the
accuracy, reliability or completeness of any usage information
provided to MERCHANT. MERCHANT will provide AOL with monthly
reports, in a form reasonably satisfactory to AOL, which
detail the number of daily items, orders and gross sales
through the Merchant Site on the AOL Service, AOL. (as
applicable).
2
4. TERM. Unless otherwise rightfully terminated pursuant to the terms
hereto, the term of this Agreement will be for a period of twelve (12)
months commencing on the Effective Date (the "Term").
5. GENERAL TERMS. The general legal terms and conditions set forth on
Exhibit C attached hereto are hereby made a part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the Effective Date.
AMERICA ONLINE, INC. DG JEWELLERY - XiteJewelry.com
By: __/S/ Bruno Lepps By: _____/S/ Jack Berkovits_____
Print Name: ___Bruno Lepps___________ Print Name: ___Jack Berkovits___
Title: __Director Business Development_____ Title: __President______
Date: _____March 17, 1999___________ Date: _____March 17, 1999_
Tax ID/EIN#: _______________________
3
EXHIBIT A
Description of Products:
The only categories of Products to be sold through the Merchant Site are as
listed below.
Product List: [MERCHANT to provide detailed, specific list; AOL sales person to
submit list for review by AOL Business Affairs]
Products. MERCHANT will make available through the Merchant Site the
comprehensive offering of Products and other related Content specifically
described above.
Impressions:
The screens on which the promotions appear on each of the AOL Service, AOL.CA
and CompuServe for Canadians will receive a minimum of 250,000 Impressions in
the aggregate, subject to the remainder of this paragraph. In the event there is
(or will be in AOL's reasonable judgment) a shortfall in Impressions as of the
end of the Initial Term (a " Shortfall"), AOL will provide MERCHANT, as its sole
remedy, with advertising placements through reasonably comparable advertising on
AOL properties (determined by AOL) which has a total value, based on AOL's
then-current advertising rate card, equal to the value of the Shortfall
(determined by multiplying the percentage of Impressions that were not delivered
by the total, guaranteed payment provided for in Section 3 of the Agreement).
For purposes of this Agreement, "Impression" shall mean user exposure to the
department level screen containing the applicable promotion or advertisement, as
such exposure may be reasonably determined and measure by AOL in accordance with
its standard methodologies and protocols. Notwithstanding the foregoing, no
representation is made with respect to impressions in conjunction with the More
Stores Plus Package described below.
Description of Specific Promotion(s):
Please check the box next to the Promotion(s) that MERCHANT is purchasing.
4
X ANCHOR PROMOTION
MERCHANT will become an "Anchor" in the Beauty & Accessories department(s) of
the Shopping Channel on the AOL Service, AOL.CA and CompuServe for Canadians. As
an Anchor in a department, MERCHANT will be entitled to the following:
Principal Exposure on the AOL Service, AOL.CA and CompuServe for Canadians:
o One continuous (24/7) 130 x 90 button with corporate brand or logo on the
department front screen of the AOL Service.
o One continuous (24/7) 120 x 70 button with corporate brand or logo on the
department front screen of AOL.CA.
o One continuous (24/7) 120 x 60 button with corporate brand or logo on the
department front screen of the CompuServe Service.
Additional Promotion on the AOL Service and CompuServe for Canadians Shopping
Channel:
o One continuous (24/7) two-line text field with featured product to promote
store product offerings on the corresponding department screen.
o Product listing availability through the AOL Service Shopping channel
search screen. Web MERCHANT search links to storefront.
o Up to three (3) AOL Keywords(TM)for use from the AOL Service, for
registered MERCHANT trade name or trademark (subject to the other
provisions contained herein).
o Twenty percent (20%) discount from the then-current rate card on purchases
of additional advertising banners or buttons on the AOL Service, AOL.CA
and CompuServe for Canadians, subject to availability for the period
requested (with such purchases to be made in accordance with the
then-applicable Standard Advertising Insertion Order for the property in
question).
o Eligibility to participate in the following AOL Shopping promotional
programs (the "Program Areas"):
o Seasonal Catalogs or Special Events areas (e.g., Christmas Shop)
o Order from Print Catalogs
o Gift Reminder
o Newsletters
o AOL's Checkout
All additional Promotions on AOL.CA not specified herein will be determined at
AOL's reasonable and sole discretion; provided that the additional, standard
Promotions to be provided to the MERCHANT within the Shopping areas on AOL.CA
will be comparable in nature to the additional, standard Promotions provided to
other similarly situated MERCHANTs in the same category (i.e. Anchor, Tenant or
More Stores).
5
EXHIBIT B
Standard Shopping Channel Terms & Conditions
1. Merchant Site. MERCHANT will work diligently to develop and implement the
Merchant Site, consisting of the specific Product(s) set forth in Exhibit A to
the Shopping Channel Promotional Agreement which has been executed by AOL and
MERCHANT (the "Promotional Agreement," and, collectively with these Standard
Shopping Channel Terms and Conditions, the "Agreement") and any additional
Products agreed upon in writing by the Parties subsequent to the Effective Date.
Except as mutually agreed upon in writing by the Parties, the Merchant Site will
contain only categories of Products, Services and Content that are directly
related to the MERCHANT Products listed in Exhibit A. All sales of Products
through the Merchant Site will be conducted through a direct sales format,
absent the mutual consent of the Parties. MERCHANT will ensure that the Merchant
Site does not in any respect promote, advertise, market or distribute the
products, services or content of any other Interactive Service.
2. Management of Merchant Site. MERCHANT will manage, review, delete, edit,
create, update and otherwise manage all Products available on or through the
Merchant Site, in a timely and professional manner and in accordance with the
terms of this Agreement and AOL's applicable Terms of Service and Privacy Policy
(as set forth on the AOL Service). To the extent that Merchant Site makes online
payment options available, MERCHANT will ensure that AOL Checkout (as defined in
Section 3 of Exhibit B) is of equal placement and promotion prominence to other
available payment options. MERCHANT will ensure that the Merchant Site is
current, accurate and well-organized at all times. MERCHANT warrants that the
Merchant Site and any material contained therein: (i) will conform to AOL's
applicable Terms of Service and Privacy Policy; (ii) will not infringe on or
violate any copyright, trademark, U.S. or Canadian patent or any other third
party right, including without limitation, any music performance or other
music-related rights; and (iii) will not contain any Product which violates any
applicable law or regulation, including those relating to contests, sweepstakes
or similar promotions. AOL will have no obligations with respect to the Products
available on or through the Merchant Site, including, but not limited to, any
duty to review or monitor any such Products; provided, however, that AOL
reserves the right to review and approve any additional Products and any
third-party content, products or services that MERCHANT makes or desires to make
available through the Merchant Site. Upon AOL's request, MERCHANT agrees to
include within the Merchant Site a product disclaimer (the specific form and
substance to be mutually agreed upon by the Parties) indicating that
transactions are solely between MERCHANT and the AOL Users who purchase products
from MERCHANT. MERCHANT will ensure that neither MERCHANT nor any content,
product or service contained within the Merchant Site, linked to the Promotion
or otherwise relating the Agreement shall (i) disparage AOL; (ii) promote a
competitor of AOL; or (iii) state or imply that AOL endorses MERCHANT's
Products.
6
3. Optimization of Merchant Site. MERCHANT will take all reasonable steps
necessary to conform its promotion and sale of Products through the Merchant
Site to the then-existing commerce technologies made available to MERCHANT by
AOL, including without limitation AOL's "checkout" tool which allows AOL Users
to enter payment and shipping information which is then passed from AOL's
centralized server unit to MERCHANT for order fulfillment ("AOL Checkout").
MERCHANT agrees to fully integrate the AOL Checkout technology and functionality
within Merchant Site, and make AOL Checkout available to AOL Users, no later
than March 31, 1999. For AOL Checkout transactions, MERCHANT agrees to pass all
information necessary to fulfill the transaction, including but not limited to;
product, price, any applicable taxes, shipping fees, shipping address, and any
other transactional information as determined by AOL at its' sole and reasonable
discretion. Collection, storage and disclosure of information which MERCHANT
provides to AOL, will be subject to AOL's privacy policy and all confidentiality
requirements hereunder. AOL reserves the right to review and test the Merchant
Site from time to time to determine whether the site is compatible with AOL's
then-available client and host software and their corresponding networks. AOL
will be entitled to require reasonable changes to the content, features and/or
functionality within any screen or form created using (a) AOL's proprietary form
technology (a "Rainman Area") or (b) HTML-based World Wide Web forms (or any
other forms created using a technology other than AOL's proprietary form
technology) ("Web Forms") to the extent such Rainman Area or Web Forms will, in
AOL's good faith judgment, adversely affect operations of the AOL Service,
AOL.CA and CompuServe for Canadians. MERCHANT agrees to optimize operations of
the Merchant Site consistent with Exhibit D attached hereto.
4. Removal of Content. AOL will have the right to remove, or direct MERCHANT to
remove, any Content in the Merchant Site (including, without limitation, any
features, functionality or technology) which, as reasonably determined by AOL
(i) violates AOL's then-standard Terms of Service or Privacy Policy (as set
forth on the AOL Service), any other standard, written AOL policy or the terms
of this Agreement, (ii) is inconsistent in any manner with the terms of the
Agreement or with the Product description set forth in Exhibit A or (iii) is
otherwise in conflict with AOL's programming objectives or its existing
contractual commitments to third parties. In addition, in the event that AOL
reasonably believes that software, technology or other technical components of
the Merchant Site will materially affect AOL operations, MERCHANT will work in
good faith with AOL to limit access to such components from the AOL Service,
AOL.CA and CompuServe for Canadians. MERCHANT will take all commercially
reasonable steps using MERCHANT's then-available technology to block access by
AOL Users to Content which AOL desires to remove or have removed pursuant to any
of the foregoing. In the event that MERCHANT cannot, through such efforts, block
access to the Content in question, then MERCHANT will provide AOL prompt written
notice of such fact no later than five (5) days after AOL notifies MERCHANT of
AOL's objection to such Content. AOL may then, at its option, either (i)
restrict access by AOL Users to the Content in question using technology
available to AOL or (ii) terminate all links, promotions and advertisements for
the Merchant Site until such time as the Content in question is no longer
displayed. MERCHANT will cooperate with AOL's reasonable requests to the extent
AOL elects to implement any of the foregoing access restrictions.
7
5. Promotional Placement. MERCHANT acknowledges that the sole obligation of AOL
is to display the Promotion in the Shopping Channel in accordance with the terms
and conditions of the Agreement. The specific positioning of the Promotion on
any screen in the Shopping Channel shall be as determined by AOL, consistent
with the editorial composition of such screen and the nature of the Promotion
being purchased by MERCHANT. AOL reserves the right to reject, cancel or remove
at any time the Promotion for any reason with fifteen (15) days prior notice to
MERCHANT, and AOL will refund to MERCHANT a pro-rata portion of the fee
allocable to the display of the Promotion based on the number of days that the
Promotion was displayed. AOL will not be liable in any way for any rejection,
cancellation or removal of the Promotion. AOL reserves the right to redesign or
modify the organization, navigation, structure, "look and feel" and other
elements of the AOL Service, AOL.CA and CompuServe for Canadians at its sole
discretion at any time without prior notice. In the event such modifications
materially affect the placement of the Promotion, AOL will notify MERCHANT and
will work with MERCHANT to display the Promotion in a comparable location and
manner. If AOL and MERCHANT cannot reach agreement on a substitute placement,
MERCHANT will have the right to cancel the Promotion, upon sixty (60) days
advance written notice to AOL. In such case, MERCHANT will only be responsible
for the pro-rata portion of payments attributable to the period from the
Effective Date through the end of the sixty (60) day notice period. MERCHANT may
not resell, trade, exchange, barter or broker to any third party any promotional
or advertising space which is the subject of this Agreement. MERCHANT will not
be entitled to any refund or proration for delays caused by MERCHANT's failure
to deliver to AOL any materials relating to the Promotion.
6. Product Offering. MERCHANT will ensure that the Merchant Site generally
includes all of the Products and other Content (including, without limitation,
any features, offers, contests, functionality or technology) that are then made
available by or on behalf of MERCHANT through any Additional MERCHANT site.
7. Pricing and Terms. MERCHANT will ensure that: (i) the prices for Products in
the MERCHANT Site generally do not exceed the prices for the Products offered by
or on behalf of MERCHANT through any Additional MERCHANT Channel; and (ii) the
terms and conditions related to Products in the MERCHANT Site are generally no
less favorable in any respect to the terms and conditions for the Products
offered by or on behalf of MERCHANT through any Additional MERCHANT Channel. For
purpose of this Agreement, MERCHANT Channel means any other distribution channel
(e.g., an Interactive Service other than AOL) through which MERCHANT makes
available an offering comparable in nature to the MERCHANT Site.
8. Special Offers. MERCHANT will promote a reasonable number of special offers
through the Merchant Site (e.g., offers enabling AOL Users to purchase specified
Product(s) at a substantial discount from prices offered by MERCHANT through
other sales channels, free gifts to AOL Users upon the purchase of Product(s),
the availability of Product(s) prior to their availability through other sales
channels, and AOL-branded reward or frequent purchaser points to AOL Users for
the purchase of Product(s)) (the "Special Offers"). MERCHANT will provide AOL
with reasonable prior notice of Special Offers so that AOL can market the
availability of such Special Offers in the manner AOL deems appropriate in its
editorial discretion.
8
9. Customer Service. It is the sole responsibility of MERCHANT to provide
customer service to persons or entities purchasing Products through the AOL
Service, AOL.CA and CompuServe for Canadians ("Customers"). MERCHANT will bear
full responsibility for all customer service, including without limitation,
order processing, billing, fulfillment, shipment, collection and other customer
service associated with any Products offered, sold or licensed through each
Merchant Site, and AOL will have no obligations whatsoever with respect thereto.
MERCHANT will receive all emails from Customers via a computer available to
MERCHANT's customer service staff and generally respond to such emails within
one business day of receipt. MERCHANT will receive all orders electronically and
generally process all orders within one business day of receipt, provided
Products ordered are not advance order items. MERCHANT will ensure that all
orders of Products are received, processed, fulfilled and delivered on a timely
and professional basis. MERCHANT will offer AOL Users who purchase Products
through such the Merchant Site a money-back satisfaction guarantee. MERCHANT
will bear all responsibility for compliance with federal, state and local laws
in the event that Products are out of stock or are no longer available at the
time an order is received. MERCHANT will also comply with the requirements of
any federal, state or local consumer protection or disclosure law. Payment for
Products will be collected by MERCHANT directly from customers. MERCHANT's order
fulfillment operation will be subject to AOL's reasonable review.
10. Launch Dates. In the event that any terms contained herein relate to or
depend on the commercial launch date of the online area or other property
contemplated by this Agreement (the "Launch Date"), then it is the intention of
the Parties to record such Launch Date in a written instrument signed by both
Parties promptly following such Launch Date; provided that, in the absence of
such a written instrument, the Launch Date will be as reasonably determined by
AOL based on the information available to AOL.
9
11. Merchant Certification Program. MERCHANT will participate in any generally
applicable "Certified Merchant" program operated by AOL or its authorized agents
or contractors. Such program may require merchant participants on an ongoing
basis to meet certain reasonable standards relating to provision of electronic
commerce through the AOL Service, AOL.CA and CompuServe for Canadians and may
also require the payment of certain reasonable certification fees to AOL or its
authorized agents or contractors operating the program. The program also
requires MERCHANT to offer Users who purchase Products through such Merchant
Site payment by the AOL Checkout (as defined in Section 3). MERCHANT agrees to
(i) participate in the BizRate(R) Program, a service offered by Binary Compass
Enterprises, Inc. (BCE), which provides opt-in satisfaction surveys to Users who
purchase Products through such Merchant Site, or such other provider of such
services as AOL may designate or approve from time to time, and (ii) provide a
link to BizRate's then-current standard survey forms, or such other survey forms
offered by any other party that AOL may reasonably designate or approve from
time to time. MERCHANT's participation shall be based upon a separate written
agreement which MERCHANT will enter into with BCE, or other such party
reasonably designated or approved by AOL. MERCHANT hereby authorizes BCE to
provide to AOL any and all reports provided to MERCHANT by BCE, or other third
party providing such services, and agrees to provide written notice of such
authorization to BCE, or such other third party.
10
EXHIBIT C
Standard Legal Terms & Conditions
1. Production and Technical Services. Unless expressly provided for elsewhere in
the Shopping Channel Promotional Agreement which has been executed by AOL and
MERCHANT (the "Promotional Agreement," and, collectively with these Standard
Legal Terms and Conditions, the "Agreement") Agreement, (i) AOL will have no
obligation to provide any creative, design, technical or production services to
MERCHANT and (ii) the nature and extent of any such services which AOL may
provide to MERCHANT will be as determined by AOL in its sole discretion. The
terms regarding any creative, design, technical or productions services provided
by AOL to MERCHANT will be as mutually agreed upon by the parties in a separate
written work order.
2. AOL Accounts. To the extent MERCHANT has been granted any AOL accounts,
MERCHANT will be responsible for the actions taken under or through its
accounts, which actions are subject to AOL's applicable Terms of Service and for
any surcharges, including, without limitation, all premium charges, transaction
charges, and any applicable communication surcharges incurred by any account
issued to MERCHANT. Upon the termination of this Agreement, all such accounts,
related screen names and any associated usage credits or similar rights, will
automatically terminate. AOL will have no liability for loss of any data or
content related to the proper termination of any such account.
3. Taxes. MERCHANT will collect and pay and indemnify and hold AOL harmless
from, any sales, use, excise, import or export value added or similar tax or
duty not based on AOL's net income, including any penalties and interest, as
well as any costs associated with the collection or withholding thereof,
including attorneys' fees.
4. Promotional Materials/Press Releases. Each Party will submit to the other
Party, for its prior written approval, which will not be unreasonably withheld
or delayed, any marketing, advertising, and all other promotional materials
related to the Merchant Site and/or referencing the other Party and/or its trade
names, trademarks, and service marks; provided, however, that (a) either Party's
use of screen shots of the Merchant Site for promotional purposes and (b) either
Party's reference to the fact of the Parties' contractual relationship relating
to the Shopping Channel will not require the approval of the other Party so long
as, in the case of (a), the AOL Service, AOL.CA and CompuServe for Canadians (as
applicable) is clearly identified as the source of such screen shots. MERCHANT
will not (i) issue any press releases, promotions or public statements
concerning the existence or terms of the Agreement or (ii) use, display or
modify AOL's trademarks, tradenames or servicemarks in any manner, absent AOL's
express prior written approval. Notwithstanding the foregoing, (a) either Party
may issue press releases and other disclosures as required by law or as
reasonably advised by legal counsel without the consent of the other Party and
in such event, prompt notice thereof will be provided to the other Party and (b)
following the initial public announcement of the business relationship between
the Parties in accordance with the approval and other requirements contained
herein, either Party's subsequent factual reference to the existence of a
business relationship between the Parties will not require the approval of the
other Party.
11
5. Representations and Warranties. Each Party represents and warrants to the
other Party that: (i) such Party has the full corporate right, power and
authority to enter into the Agreement and to perform the acts required of it
hereunder; (ii) the execution of the Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not and
will not violate any agreement to which such Party is a Party or by which it is
otherwise bound; (iii) when executed and delivered by such Party, the Agreement
will constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms; and (iv) such Party
acknowledges that the other Party makes no representations, warranties or
agreements related to the subject matter hereof that are not expressly provided
for in the Agreement.
6. License. MERCHANT hereby grants AOL a non-exclusive worldwide license to
market, license, distribute, reproduce, display, perform, transmit and promote
the Merchant Site and all content, products and services offered therein or
otherwise provided by MERCHANT in connection herewith (e.g., offline or online
promotional content, Promotions, etc.) through the AOL Service, AOL.CA and
CompuServe for Canadians and through any other product or service owned,
operated, distributed or authorized to be distributed by or through AOL or its
affiliates worldwide through which such Party elects to offer the Merchant Site
(which may include, without limitation, Internet sites promoting AOL products
and services and any "offline" information browsing products of AOL or its
affiliates). Users of the AOL Service, AOL.CA and CompuServe for Canadians (as
applicable) ("AOL Users") will have the right to access and use the Merchant
Site. Subject to such license, MERCHANT retains all right, title to and interest
in the Merchant Site. During the Term, AOL will have the right to use MERCHANT's
trademarks, trade names and service marks in connection with performance of this
Agreement, subject to any written guidelines provided in writing to AOL.
7. Confidentiality. Each Party acknowledges that Confidential Information may be
disclosed to the other Party during the course of this Agreement. Each Party
agrees that it will take reasonable steps, at least substantially equivalent to
the steps it takes to protect its own proprietary information, during the term
of this Agreement, and for a period of three years following expiration or
termination of this Agreement, to prevent the duplication or disclosure of
Confidential Information of the other Party, other than by or to its employees
or agents who must have access to such Confidential Information to perform such
Party's obligations hereunder, who will each agree to comply with this
provision. "Confidential Information" means any information relating to or
disclosed in the course of the Agreement, which is or should be reasonably
understood to be confidential or proprietary to the disclosing Party, including,
but not limited to, the material terms of this Agreement, information about AOL
Users, technical processes and formulas, source codes, product designs, sales,
cost and other unpublished financial information, product and business plans,
projections, and marketing data. "Confidential Information" will not include
information (a) already lawfully known to or independently developed by the
receiving Party, (b) disclosed in published materials, (c) generally known to
the public, (d) lawfully obtained from any third party, or (e) required or
reasonably advised to be disclosed by law.
12
8. Limitation of Liability; Disclaimer; Indemnification.
a) Liability. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES
(EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES),
ARISING FROM BREACH OF THE AGREEMENT, THE SALE OF PRODUCTS, THE USE OR INABILITY
TO USE THE AOL NETWORK, THE AOL SERVICE, AOL.CA and CompuServe for Canadians, OR
THE MERCHANT SITE, OR ARISING FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH
AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS
(COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL REMAIN
LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A
THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT TO PARAGRAPH (C) BELOW.
EXCEPT AS PROVIDED TO PARAGRAPH (C) BELOW, (I) LIABILITY ARISING UNDER THIS
AGREEMENT WILL BE LIMITED TO DIRECT, OBJECTIVELY MEASURABLE DAMAGES, AND (II),
AOL WILL NOT BE LIABLE TO MERCHANT UNDER THE AGREEMENT FOR MORE THAN THE AMOUNTS
THEN PAID TO AOL BY MERCHANT HEREUNDER.
b) No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT,
NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING AOL.CA, THE AOL
SERVICE OR NETWORK, OR THE MERCHANT SITE, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES
ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, AOL SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING
(I) THE PROFITABILITY OF THE MERCHANT SITE, (II) THE NUMBER OF PERSONS WHO WILL
ACCESS OR "CLICK-THROUGH" THE PROMOTION, (III) ANY BENEFIT MERCHANT MIGHT OBTAIN
FROM INCLUDING THE PROMOTION WITHIN THE AOL SERVICE, AOL.CA and CompuServe for
Canadians OR (IV) THE FUNCTIONALITY, PERFORMANCE OR OPERATION OF AOL WITH
RESPECT TO THE PROMOTION.
c) Indemnity. Either Party will defend, indemnify, save and hold harmless the
other Party and the officers, directors, agents, affiliates, distributors,
franchisees and employees of the other Party from any and all third party
claims, demands, liabilities, costs or expenses, including reasonable attorneys'
fees ("Liabilities"), resulting from the indemnifying Party's material breach of
any duty, representation, or warranty of the Agreement, except where Liabilities
result from the gross negligence or knowing and willful misconduct of the other
Party.
d) Claims. If a Party entitled to indemnification hereunder (the "Indemnified
Party") becomes aware of any matter it believes is indemnifiable hereunder
involving any claim, action, suit, investigation, arbitration or other
proceeding against the Indemnified Party by any third party (each an "Action"),
the Indemnified Party will give the other Party (the "Indemnifying Party")
prompt written notice of such Action. Such notice will (i) provide the basis on
which indemnification is being asserted and (ii) be accompanied by copies of all
relevant pleadings, demands, and other papers related to the Action and in the
possession of the Indemnified Party. The Indemnifying Party will have a period
of ten (10) days after delivery of such notice to respond. If the Indemnifying
Party elects to defend the Action or does not respond within the requisite ten
(10) day period, the Indemnifying Party will be obligated to defend the Action,
at its own expense, and by counsel reasonably satisfactory to the Indemnified
Party. The Indemnified Party will cooperate, at the expense of the Indemnifying
Party, with the Indemnifying Party and its counsel in the defense and the
Indemnified Party will have the right to participate fully, at its own expense,
in the defense of such Action. If the Indemnifying Party responds within the
required ten (10) day period and elects not to defend such Action, the
Indemnified Party will be free, without prejudice to any of the Indemnified
Party's rights hereunder, to compromise or defend (and control the defense of)
such Action. In such case, the Indemnifying Party will cooperate, at its own
expense, with the Indemnified Party and its counsel in the defense against such
Action and the Indemnifying Party will have the right to participate fully, at
its own expense, in the defense of such Action. Any compromise or settlement of
an Action will require the prior written consent of both Parties hereunder, such
consent not to be unreasonably withheld or delayed.
e) Acknowledgement. AOL and MERCHANT each acknowledges that the provisions of
this Agreement were negotiated to reflect an informed, voluntary allocation
between them of all risks (both known and unknown) associated with the
transactions contemplated hereunder. The limitations and disclaimers related to
warranties and liability contained in the Agreement are intended to limit the
circumstances and extent of liability. The provisions in paragraphs (a) through
(d) above and this paragraph (e) will be enforceable independent of and
severable from any other enforceable or unenforceable provision of this
Agreement.
13
9. Solicitation of Subscribers.
(a) MERCHANT will not send unsolicited, commercial e-mail through or into AOL's
products or services, absent a Prior Business Relationship. For purposes of this
Agreement, a "Prior Business Relationship" will mean that the AOL User to whom
commercial e-mail is being sent has voluntarily either (i) engaged in a
transaction with MERCHANT or (ii) provided information to MERCHANT through a
contest, registration, or other communication, which included notice to the AOL
User that the information provided could result in commercial e-mail being sent
to that AOL User by MERCHANT or its agents. More generally, any commercial
e-mail to be sent through or into AOL's products or services shall be subject to
AOL's then-standard restrictions on distribution of bulk e-mail (e.g., related
to the time and manner in which such e-mail can be distributed through the AOL
service in question) and the limitations set forth in Exhibit B.
(b) MERCHANT shall ensure that its collection, use and disclosure of information
obtained from AOL Users under this Agreement ("User Information") complies with
(i) all applicable laws and regulations and (ii) AOL's standard privacy
policies, available on the AOL Service at the keyword term "Privacy".
(c) MERCHANT will not disclose User Information to any third party in a manner
that identifies AOL User as end users of an AOL product or service or use User
Information collected under this Agreement to market an Interactive Service
competitive with AOL; provided that the restrictions in this subsection (c)
shall not restrict MERCHANT's use of any information collected independently of
this Agreement. For the purpose of this Agreement, the term "Interactive Service
Provider" shall mean and refer to an entity offering one or more of the
following: (i) online or Internet connectivity services (e.g., an Internet
service provider); (ii) a broad selection of aggregated third party interactive
content (or navigation thereto) (e.g., an online service or search and directory
service); (iii) communications software capable of serving as the principal
means through which a user creates, sends and receives electronic mail or real
time online messages.
10. AOL User Communications. To the extent MERCHANT sends any form of
communications to AOL Users, MERCHANT will promote the Merchant Site as the
location at which to purchase Products (as compared to any more general or other
site or location). In addition, in any communication to AOL Users or on the
Merchant Site, MERCHANT will not encourage AOL Users to take any action
inconsistent with the scope and purpose of this Agreement, including without
limitation, the following actions: (a) using interactive sites other than the
Merchant Site; (b) bookmarking of other interactive sites; (c) changing the
default home page on the AOL browser; or (d) using any interactive service other
than the AOL.
11. Navigation Tools. The Keyword(TM) online search terms made available on the
AOL Service for use by AOL Members, combining AOL's Keyword(TM) online search
modifier with a term or phrase specifically related to MERCHANT (and determined
in accordance with the terms of this Agreement). Any Keyword Search Terms to be
directed to Merchant's Site shall be (i) subject to availability and (ii)
limited to the combination of the Keyword(TM) search modifier combined with a
registered trademark of MERCHANT. AOL reserves the right at any time to revoke
MERCHANT's use of any Keywords that are not registered trademarks of MERCHANT.
MERCHANT acknowledges that its utilization of a Keyword Search Term will not
create in it, nor will it represent it has, any right, title or interest in or
to such Keyword Search Term, other than the right, title and interest MERCHANT
holds in MERCHANT's registered trademark independent of the Keyword Search Term.
Without limiting the generality of the foregoing, MERCHANT will not: (a) attempt
to register or otherwise obtain trademark or copyright protection in the Keyword
Search Term; or (b) use the Keyword Search Term, except for the purposes
expressly required or permitted under this Agreement. To the extent AOL allows
AOL Users to "bookmark" the URL or other locator for the Merchant Site, such
bookmarks will be subject to AOL's control at all times. Upon the termination of
this Agreement, MERCHANT's rights to any Keywords and bookmarking will
terminate. For purposes of this Agreement, "Keyword Search Terms" shall mean the
Keyword(TM) online search terms made available on the AOL Service for use by AOL
Members, combining AOL's Keyword(TM) online search modifier with a term or
phrase specifically related to MERCHANT (and determined in accordance with the
terms of this Agreement).
14
12. Miscellaneous. Neither Party will be liable for, or be considered in breach
of or default under the Agreement on account of, any delay or failure to perform
as required by the Agreement (except with respect to payment obligations) as a
result of any causes or conditions which are beyond such Party's reasonable
control and which such Party is unable to overcome by the exercise of reasonable
diligence. MERCHANT's rights, duties, and obligations under the Agreement are
not transferable. The Parties to the Agreement are independent contractors.
Neither Party is an agent, representative or partner of the other Party. Neither
Party will have any right, power or authority to enter into any agreement for or
on behalf of, or incur any obligation or liability of, or to otherwise bind, the
other Party. The failure of either Party to insist upon or enforce strict
performance by the other Party of any provision of the Agreement or to exercise
any right under the Agreement will not be construed as a waiver or
relinquishment to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather, the same will be
and remain in full force and effect. Sections 3, 4, 7, 8, 9, 10, 11 and 12 of
these Standard Legal Terms and Conditions, will survive the completion,
expiration, termination or cancellation of the Promotional Agreement. Either
Party may terminate the Agreement at any time with written notice to the other
Party in the event of a material breach of the Agreement by the other Party,
which remains uncured after thirty days written notice thereof. Any notice,
approval, request, authorization, direction or other communication under this
Agreement will be given in writing and will be deemed to have been delivered and
given for all purposes (i) on the delivery date if delivered by electronic mail
on AOL's network or systems (to screenname "AOLNotice@AOL.CA" in the case of
AOL) or by confirmed facsimile; (ii) on the delivery date if delivered
personally to the Party to whom the same is directed; (iii) one business day
after deposit with a commercial overnight carrier, with written verification of
receipt; or (iv) five business days after the mailing date, whether or not
actually received, if sent by U.S. mail, return receipt requested, postage and
charges prepaid, or any other means of rapid mail delivery for which a receipt
is available. In the case of AOL, such notice will be provided to both the
Senior Vice President for Business Affairs (fax no. 703-265-1206) and the Deputy
General Counsel (fax no. 703-265-1105), each at the address of AOL set forth in
the first paragraph of this Agreement. In the case of MERCHANT, except as
otherwise specified herein, the notice address will be the address for MERCHANT
set forth in the first paragraph of this Agreement, with the other relevant
notice information, including the recipient for notice and, as applicable, such
recipient's fax number or AOL email address, to be as reasonably identified by
AOL. The Agreement sets forth the entire agreement between MERCHANT and AOL, and
supersedes any and all prior agreements of AOL or MERCHANT with respect to the
transactions set forth herein, but makes exception for the continuance of the
terms established in the Addendum to License Star Software which shall remain in
full force and effect for the duration of this Agreement. No change, amendment
or modification of any provision of the Agreement will be valid unless set forth
in a written instrument signed by the Party subject to enforcement of such
amendment. MERCHANT will promptly inform AOL of any information related to the
Merchant Site which could reasonably lead to a claim, demand, or liability of or
against AOL and/or its affiliates by any third party. MERCHANT will not assign
this Agreement or any right, interest or benefit under this Agreement without
the prior written consent of AOL. Assumption of the Agreement by any successor
to MERCHANT (including, without limitation, by way of merger, consolidation or
sale of all or substantially all of MERCHANT's stock or assets) will be subject
to AOL's prior written approval. Subject to the foregoing, this Agreement will
be fully binding upon, inure to the benefit of and be enforceable by the Parties
hereto and their respective successors and assigns. Except where otherwise
specified herein, the rights and remedies granted to a Party under the Agreement
are cumulative and in addition to, and not in lieu of, any other rights or
remedies which the Party may possess at law or in equity. In the event that any
provision of the Agreement is held invalid by a court with jurisdiction over the
Parties to the Agreement, (i) such provision will be deemed to be restated to
reflect as nearly as possible the original intentions of the Parties in
accordance with applicable law and (ii) the remaining terms, provisions,
covenants and restrictions of this Agreement will remain in full force and
effect. The Agreement may be executed in counterparts, each of which will be
deemed an original and all of which together will constitute one and the same
document. The Agreement will be interpreted, construed and enforced in all
respects in accordance with the laws of the Commonwealth of Virginia, except for
its conflicts of laws principles. MERCHANT hereby irrevocably consents to the
exclusive jurisdiction of the courts of the Commonwealth of Virginia and the
federal courts therein in connection with any action arising under this
Agreement.
15
EXHIBIT D
Operations
1. Capacity. MERCHANT will be responsible for all communications, hosting and
connectivity costs and expenses associated with the Merchant Site. MERCHANT
will provide all hardware, software, telecommunications lines and other
infrastructure necessary to meet traffic demands on the Merchant Site from
the AOL Service, AOL.CA and CompuServe for Canadians, except for the
proprietary client software necessary to access AOL. In the event that
MERCHANT fails to provide the requisite infrastructure, AOL will have the
right to regulate the promotions it provides to MERCHANT hereunder to the
extent necessary to minimize user delays until such time as MERCHANT
corrects its infrastructure deficiencies. In the event that MERCHANT elects
to create a custom version of the Merchant Site in order to comply with the
terms of this Agreement, MERCHANT will bear responsibility for the
implementation, management and cost of such mirrored site.
2. Optimization; Speed. MERCHANT will use commercially reasonable efforts to
ensure that: (a) the functionality and features within the Merchant Site
are optimized for the client software then in use by AOL Users; and (b) the
Merchant Site is designed and populated in a manner that minimizes delays
when AOL Users attempt to access such site. At a minimum, MERCHANT will
ensure that the Merchant Site's data transfers initiate within fewer than
fifteen (15) seconds on average.
3. Service Level Response. MERCHANT agrees to use commercially reasonable
efforts to address material technical problems (over which MERCHANT
exercises control) affecting use by AOL Users of the Merchant Site (a
"MERCHANT Technical Problem") promptly following notice thereof. In the
event that AOL has received substantial AOL Member complaints regarding a
MERCHANT Technical Problem based on MERCHANT's failure to satisfy a site
operating standard specified in this Agreement (and MERCHANT is unable to
promptly resolve such MERCHANT Technical Problem following notice thereof),
AOL will have the right to regulate the promotions it provides to MERCHANT
hereunder until such time as MERCHANT corrects the MERCHANT Technical
Problem at issue).
4. Monitoring. MERCHANT will ensure that the performance and availability of
the Merchant Site is monitored on a continuous basis. MERCHANT will provide
escalation procedures (e.g., contact names and notification mechanisms) for
use in connection with technical problems, as described more fully above.
5. Security. MERCHANT will utilize Internet standard encryption technologies
(e.g., Secure Socket Layer - SSL) to provide a secure environment for
conducting transactions and/or transferring private member information
(e.g. credit card numbers, banking/financial information, and member
address information). MERCHANT will facilitate periodic reviews of the
MERCHANT Site by AOL in order to evaluate the security risks of such site.
MERCHANT will fix any security risks or breaches of security as may be
identified by AOL's Operations Security.
16
6. Technical Performance.
i. MERCHANT will design the Merchant Site to support the Windows version
of the Microsoft Internet Explorer 3.0 and 4.0 browser, the Macintosh
version of the Microsoft Internet Explorer 3.0, and make commercially
reasonable efforts to support all other AOL browsers listed at:
"http://webmaster.info.AOL.CA/BrowTable.html."
ii. To the extent MERCHANT creates customized pages on the Merchant Site
for AOL Members, MERCHANT will configure the server from which it
serves the site to examine the HTTP User-Agent field in order to
identify the "AOL Member-Agents" listed at: "http://webmaster.
info.AOL.CA/Brow2Text.html."
iii. MERCHANT will periodically review the technical information made
available by AOL at http://webmaster.info.AOL.CA/CacheText.html.
iv. MERCHANT will design its site to support HTTP 1.0 or later protocol as
defined in RFC 1945 (available at
"http://ds.internic.net/rfc/rfc1945.text") and to adhere to AOL's
parameters for refreshing cached information listed at
http://webmaster.info.AOL.CA/CacheText.html.
v. Prior to releasing material, new functionality or features through the
MERCHANT Site ("New Functionality"), MERCHANT will use commercially
reasonable efforts to either (i) test the New Functionality to confirm
its compatibility with AOL Service client software or (ii) provide AOL
with written notice of the New Functionality so that AOL can perform
tests of the New Functionality to confirm its compatibility with the
AOL Service client software.
7. AOL Internet Products Partner Support. AOL will provide MERCHANT with access
to the standard online resources, standards and guidelines documentation,
technical phone support, monitoring and after-hours assistance that AOL makes
generally available to similarly situated web-based partners. AOL support
will not, in any case, be involved with content creation on behalf of
MERCHANT or support for any technologies, databases, software or other
applications which are not supported by AOL or are related to any MERCHANT
area other than the Merchant Site. Support to be provided by AOL is
contingent on MERCHANT providing to AOL demo account information (where
applicable), a detailed description of the Merchant Site's software, hardware
and network architecture and access to the Merchant site for purposes of such
performance and load testing as AOL elects to conduct. As described elsewhere
in this Agreement, MERCHANT is fully responsible for all aspects of hosting
and administration of the Merchant Site and must ensure that the site
satisfies the specified access and performance requirements as outlined in
this Exhibit.
17
CONSENT TO BINARY COMPASS ENTERPRISES, INC.
------------------------------------------
DG Jewellery - XiteJewelry.com ("Merchant") hereby authorizes Binary
Compass Enterprises, Inc. (BCE) to provide to America Online, Inc.
(AOL) any and all reports provided to Merchant by BCE as part of
Merchant's participation in AOL's Merchant Certification Program.
DG Jewellery - XiteJewelry.com
By: _/S/_Jack Berkovits____________
Print Name: ____Jack Berkovits___
Title: ____President__
Date: __March 17, 1999_
Tax ID/EIN#: _______________________
18