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EXHIBIT 10.5
SNAP/XOOM INTERACTIVE PROMOTION AGREEMENT
VALUEVISION INTERNATIONAL, INC.
This Interactive Promotion Agreement (the "Agreement") is made and
entered into as of September 13, 1999 (the "Effective Date") between Snap! LLC,
a Delaware limited liability company, with its principal place of business at
One Beach Street, San Francisco, California 94133 ("Snap"); Xoom.com, Inc., a
Delaware corporation with its principal place of business at 300 Montgomery
Street, Suite 300, San Francisco, California 94104 ("Xoom"); and ValueVision
International, Inc., a Minnesota corporation, with its principal place of
business at 6740 Shady Oak Road, Minneapolis, Minnesota 55344 (the "Company").
Pursuant to this Agreement and the Trademark License Agreement (as defined
below), the Company wishes to rebrand its Internet site with a Snap service mark
and Snap wishes to provide various services to the Company to assist the Company
in promoting its Internet site and the products and services offered through its
Internet site. Accordingly, the parties hereby agree as follows:
1. Background.
1.1. The Company operates a 24 hours a day/7 days a week television
program service consisting primarily of home shopping and
transactional television, which may include the presentation
of products and services for sale as well as product
information (the "Television Home Shopping Service") presently
known as "ValueVision Television" to multichannel video
programming distributors for distribution, exhibition and
transmission by Television;
1.2. Snap operates a search and aggregation "portal" site on the
Web.
1.3. Xoom operates a direct marketing site on the Web.
1.4. Snap has entered into an Agreement and Plan of Contribution
and Merger, dated as of May 9, 1999 with Xoom and others, and
the Second Amended and Restated Agreement and Plan of
Contribution, Investment and Merger dated as of July 8, 1999
with National Broadcasting Company, Inc. ("NBC") and others
(collectively, as such agreements may be amended, the "Merger
Agreements") pursuant to which the existing businesses of
Xoom, Snap and other assets of NBC will be combined to form
NBC Internet, Inc. ("NBCi"). The closing of the transactions
contemplated by the Merger Agreements is expected to occur
prior to December 31, 1999 (the "NBCi Closing"). Following the
NBCi Closing, Snap and Xoom may assign their rights and
obligations hereunder to NBCi. If the NBCi Closing does not
occur, Snap and Xoom shall remain as separate parties under
this Agreement, unless this Agreement is terminated by one of
the parties as provided herein.
2. Definitions.
2.1. "Above the Fold" means that a particular item on a Web page is
viewable on a computer screen at an 800 x 600 pixels
resolution when the User first accesses such Web page, without
scrolling down to view more of the Web page.
2.2. "Anchor Tenant" (and cognitives thereof) means a preferred Web
content provider whose position is greater in size and
prominence than that of any non-affiliated third party within
the relevant Snap Sites' page or area of a page.
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2.3. "Commerce Opportunity" means any text, content, links or
promotions providing a direct or indirect opportunity for
Users on the Snap Sites or the SnapTV Site to engage in a
commerce, purchase, trade, exchange, or sale transaction,
whether paid or unpaid, or any registration or membership
opportunity for Users to provide User Profile Data, including,
without limitation, content purchase opportunities,
registration or membership sign-up opportunities, for-fee or
subscription-based content or services, other purchase or sale
opportunities for products or services offered by the Company
directly or indirectly, links to any such opportunities
presented to Users on the Snap Sites or the SnapTV Site, or
other content areas of the Snap Sites or SnapTV Site.
2.4. "Company Content" means the Company's and its licensors' text
links, logos, graphic links, audio and video clips of the
Television Home Shopping Service, and other materials, tools,
content, or text that are delivered by the Company to Snap
hereunder.
2.5. "Company Database" means User Profile Data and any other
information relating to Users of the ValueVision Site or the
SnapTV Site or other customers of the Company or purchasers of
Company Products who have had information about them collected
or otherwise obtained by the Company, or for the Company's use
or benefit, including information obtained through telephone
operators and the Company's catalogue business, and all
updates or additional information that may be added to such
database during the Term. Notwithstanding the foregoing, the
Company Database shall not include any information which, if
provided by the Company to Snap or Xoom, (a) would violate any
law, rule or regulation, or (b) would be contrary to the
express, unprompted preference of the person to whom the data
pertains (if such preferences are followed by the Company with
respect to all other third parties having access to such
data), provided however, that if the Company Database contains
data subject to this subsection (b), the Company shall notify
Snap and Xoom of such preferences and Snap and Xoom agree to
comply with such preferences.
2.6. "Company Marks" means the Company's and its licensors'
trademarks, trade names, service marks and logos that may be
delivered by the Company to Snap hereunder.
2.7. "Company Products" means all products and services offered
through the SnapTV Site or sold by or through the Company's
Television Home Shopping Service, whether by the Company or a
third-party.
2.8. "Conflicting Contract" means (i) any contract to which Snap is
a party that would result in a breach of such contract by the
Company's actions in Section 3.11 or (ii) any contract to
which Snap is a party that would result in a breach of such
contract by the Company's action in Section 3.11 if the
Company were deemed to be the party to the contract instead of
Snap.
2.9. "Content Portal(s)" means, as applicable, the specific
aggregations of linked content within the Jewelry Shop, or on
the "front page" of the Shopping Channel, which are organized
around the Company Content, and, on the Jewelry Shop, relate
to jewelry products and services, and on the "As Seen on
SnapTV" Content Portal, relate to Company Products.
2.10. "Enhanced Sites" has the meaning set forth in Section 6.2
below.
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2.11. "FTE Subscriber" means a household that receives the Company's
Television Home Shopping Service from a multichannel video
programming distributor which operates one or more
distribution systems, including, without limitation, cable
television systems, MATV and SMATV systems, MMDS, TVRO and
other wireline, wireless and direct broadcast satellite
delivery methods, in all cases, whether analog or digital
(each, a "Distribution System"), on a full-time basis. In the
case of multiple dwelling units which receive the Company's
Television Home Shopping Service pursuant to bulk rate
arrangements, the number of FTE Subscribers shall be equal to
100% of all residential dwelling units in the multiple
dwelling unit complex that receive the Company's Television
Home Shopping Service on a full-time basis. The term "FTE
Subscriber" shall not include commercial subscribers (i.e.,
subscribers receiving the Company's Television Home Shopping
Service in the course of their business, including, without
limitation, commercial establishments, hospitals, nursing
homes, hotels, motels, universities, offices, bars and
restaurants). For Distribution Systems carrying the Company's
Television Home Shopping Service other than on a full-time
basis, the number of FTE Subscribers shall be computed by
adding, for each hour during each day on which the Company's
Television Home Shopping Service is carried in the
Distribution System, the product of (a) the sum of the
applicable FTE Factors set forth on Exhibit A attached hereto
for each such hour on each such day, multiplied by (b) the
number of subscribers in the Distribution System.
2.12. "Fulfillment Services" has the meaning set forth in Section
4.2 below.
2.13. "International Editions" has the meaning set forth in Section
6.3 below.
2.14. "Internet Advertising" has the meaning set forth in Section
3.9 below.
2.15. "Jewelry Shop" means the Web page within the Shopping Channel,
which in Snap's sole discretion may also be a sub-shop, that
will feature a variety of jewelry-related goods and related
services to be purchased by Users.
2.16. "Launch Date" has the meaning set forth in the Trademark
License Agreement.
2.17. "Look and Feel" means the look and feel, User interface and
flow of User experience of an Internet site.
2.18. "NBCi Competitor" has the meaning set forth in the Trademark
License Agreement.
2.19. "Portal-like Features" means those features in a "Portal
Service" (as defined in the Trademark License Agreement).
2.20. "Product Comparison Engine" means a product comparison engine
featuring a searchable interface through which the User may
select a category (e.g., videos), enters one or more words
into a search box to search for a particular product (e.g.,
Disney), and may select a product from a listing on the
product selection page (e.g., Lion King video).
2.21. "Promotions" means (i) banners, buttons, windows, portals,
text links, and other promotions that are offered now or in
the future on Web sites; and/or (ii) text links within email
newsletters distributed by Snap and/or Xoom (including,
without limitation, Snap Wires and Xoom Wires) and other
promotions that are offered by Snap and/or Xoom now or in the
future and link directly to the SnapTV Site.
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2.22. "Shopping Channel" means the Shopping Channel on the Snap
Sites (other than the Xoom Site).
2.23. "Snap Marks" means the Exclusive Marks and Non-Exclusive Marks
as defined in the Trademark License Agreement.
2.24. "Snap Member" means a User who has registered to become a
member of one of Snap's registration based services, including
without limitation, the Snap Sites and the free email service
available at www.email.com.
2.25. "Snap Product Manager" means a Snap employee or independent
contractor holding editorial authority and responsibility for
a portal, site, collection, area, center or page on the Snap
Sites.
2.26. "Snap Sites" means: (i) subject to the "Distributor" (as
defined in Section 6.1 below) exclusion in Section 6.1, any
and all search and aggregation "portal," direct marketing, and
commerce sites, whether operated by Snap or a third party
under the "Snap" brand, including, without limitation, the
sites located at http://www.snap.com, http://www.xoom.com,
http://www.nbc.com, http://www.videoseeker.com, and
http://www.nbcin.com, together with any mirror sites, any
co-branded editions of such site that have been or may be
developed for Distributors, and successors to the foregoing
(but not the SnapTV Site); and (ii) if Snap so elects within
its sole discretion, the Enhanced Site and/or the
International Editions, subject to Sections 6.2 and 6.3.
2.27. "SnapTV Domain Name" means the URL http://www.snaptv.com.
2.28. "SnapTV Site" means the Internet site operated by the Company
at http://www.snaptv.com, and successors to the foregoing,
that is created pursuant to Section 3 below.
2.29. "Snap Wire" means Snap's weekly email newsletter sent by Snap
to Snap Members.
2.30. "Television" has the meaning set forth in the Trademark
License Agreement.
2.31. "Term" means the term of this Agreement as defined in Section
10.1 below.
2.32. "Trademark License Agreement" means the Trademark License
Agreement dated as of the date hereof between Snap and the
Company, as may be amended from time to time.
2.33. "User" means any end-user of the Web.
2.34. "User Profile Data" means data regarding a User provided by
the User on the Snap Sites or the SnapTV Site or otherwise to
Snap or the Company, including without limitation the User's
name, e-mail address, telephone number, shipping address,
credit card information (to the extent permissible by law),
and other information about the User.
2.35. "ValueVision Site" means the Internet site operated by the
Company at http://www.vvtv.com.
2.36. "Web" means the World Wide Web part of the Internet.
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2.37. "Xoom Marks" means any trademarks, trade names, service marks
and logos delivered by Xoom to the Company hereunder.
2.38. "Xoom Member" means a User who has registered to become a
member of one of Xoom registration based services, including
without limitation, the Xoom Site.
2.39. "Xoom Site" means the direct marketing Web site operated by
Xoom located at http://www.xoom.com and any successor sites
thereto.
2.40. "Xoom Wire" means Xoom's periodic email newsletter sent by
Xoom to Xoom Members
3. SnapTV Site.
3.1. Ownership of SnapTV Site. Subject to the terms of this
Agreement and the Trademark License Agreement, the Company
will own the SnapTV Site and will be responsible for the
development, operation and maintenance of the SnapTV Site,
including the Look and Feel and technical requirements for the
SnapTV Site. Snap acknowledges that the Company may change the
design and functionality of the SnapTV Site from time to time,
as determined by the Company, subject to the requirements
herein and in the Trademark License Agreement. Notwithstanding
the foregoing and pursuant to the terms and conditions of the
Trademark License Agreement, the Company will ensure the
SnapTV Site maintains the SnapTV branding and other features
reasonably agreed upon by the parties and the Company agrees
to consult with Snap in connection with the development,
operation and maintenance of the SnapTV Site, including all
changes in the design and functionality thereof, and, to the
extent commercially reasonable, minimize the additional costs
to Snap resulting from any such changes.
3.2. SnapTV Site Described. The Company will transfer the content
and functionality of the ValueVision Site (including, in the
Company's discretion, corporate and investor communications
which may also remain on the ValueVision Site) to the SnapTV
Site in accordance with this Section 3 and the terms of the
Trademark License Agreement, and Snap will provide reasonable
assistance in connection therewith. The Company will develop
and operate the SnapTV Site as a live, Web site that will
include "SnapTV" branding and Company Content related to the
Company's Television Home Shopping Service. The SnapTV Site
will be a separate and distinct Web site linked to from the
Snap Sites and will serve as the entrance point for all Users
who wish to purchase Company Products. The SnapTV Site will
provide, at a minimum, all of the features and functionality
(including, in the Company's discretion, corporate and
investor communications) provided by, and will perform in a
manner no less effective than the ValueVision Site immediately
prior to the Effective Date.
3.3. Placement of Snap Search Engine. The Company will place a
functional search tool box linked to the Snap search engine on
the front door of the SnapTV Site, but the exact location will
be at the reasonable discretion of the Company. Snap shall
design such search tool box (which shall not be less than 90
pixels wide by 60 pixels high) so that it provides Users with
the option to search either the SnapTV Site or the Internet,
with the SnapTV Site being the default. Snap shall provide
such search tool box to the Company subject to Snap's standard
terms and conditions and Snap may include a "Powered by Snap"
logo in the search tool box. The Company shall not place any
other search functionality on the front door of the SnapTV
Site.
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3.4. Community Features. If the Company elects to provide any
community features (i.e., free home pages, chat, greetings
cards, MightyMail, email, as well as any community features
provided by Snap or Xoom in the future on their respective Web
Sites) within the SnapTV Site, the Company will offer such
community features exclusively through links on the SnapTV
Site to the Xoom Site, or, following the NBCi Closing, to the
Snap Sites, with all resulting pages being on a Snap Site.
Such links shall be branded in a manner reasonably determined
by Snap and Xoom in conjunction with the Company.
3.5. Portal-Like Features. If the Company elects to provide any
Portal-like Features within the SnapTV Site, the Company will
use such Portal-like Features exclusively through links on the
SnapTV Site to the Snap Sites, with all resulting pages being
on a Snap Site. SnapTV shall have the right to incorporate
features provided by its Company Affiliates; provided that
such features shall be subject to the approval of Snap, which
approval shall not be unreasonably withheld.
3.6. Hosting. The Company will host the SnapTV Site on its servers
(or on servers within its control or servers of a third party
under contract with the Company) and will provide all computer
hardware, software and personnel necessary to operate and
maintain the SnapTV Site as a functional site accessible to
Users.
3.7. SnapTV Domain Name. The URL for the SnapTV Site will be the
SnapTV Domain Name. Snap will register and own the SnapTV
Domain Name and will exclusively license the SnapTV Domain
Name to the Company pursuant to the terms and conditions of
the Trademark License Agreement. The Company agrees that Snap
will be entitled to count all page views, unique users, reach,
frequency, etc. of the SnapTV Site towards Snap's traffic as
measured by Media Metrix and other Internet traffic-auditing
firms.
3.8. Launch Date. The Company will use its best efforts to achieve
a Launch Date for the SnapTV Site as soon as practicable
following the Effective Date; provided, however, that if the
Launch Date occurs after June 1, 2000, or does not occur due
to the fault of the Company, then such failure will be deemed
a material breach of this Agreement by Company. Snap shall
provide the Company with reasonable assistance to launch the
SnapTV Site to the extent that such assistance can be provided
at no additional out of pocket cost to Snap. The Company shall
give Snap at least thirty (30) days prior written notice of
any projected Launch Date.
3.9. Advertisements. Subject to Section 3.10, Snap shall own and
have the exclusive right to use or sell all of the advertising
(including all Promotions and sponsorships, integrated third
party links and email advertisements to the SnapTV email
database) ("Internet Advertising") on the SnapTV Site;
provided, however, that Snap shall pay to the Company fifty
percent (50%) of all gross revenue (net of agency fees Snap
pays for such Internet Advertising) from such Internet
Advertising. The Company shall incorporate all Internet
Advertising into the SnapTV Site on a timely basis. To the
extent Internet Advertising is available on the SnapTV Site,
Snap shall use reasonable commercial efforts to sell Company
inventory in every Internet Advertising transaction on the
Xoom Site and http://www.snap.com, and if such Internet
Advertising is sold, will provide the Company with a pro rata
share of such transaction based on the SnapTV Site's available
Internet Advertising inventory; provided further that the
Company and Snap agree on reasonable terms for content
standards and the pricing of a Snap/Company Internet
Advertising package and that, following such agreement, Snap
may enter into such transactions without any further approval
or consent from the Company for transactions
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consistent with such agreement. The parties hereto will
discuss, and if mutually agreed, reprice such Internet
Advertising packages annually or as otherwise agreed to ensure
that such package is always competitive with the Internet
Advertising market. The Company shall serve Internet
Advertising on the SnapTV Site using the same system as Snap
(which as of the Effective Date is Accipiter); provided,
however, that the Company shall not be required to change the
manner it serves Internet Advertising more than two times
every five years.
3.10. Company Right to Commit Internet Advertising Inventory.
Notwithstanding Section 3.9 hereof, the Company shall have the
right to commit up to 40% of the Internet Advertising for each
type and category of Internet Advertising (e.g. untargeted vs.
targeted, entertainment vs. shopping) to entities other than
NBCi Competitors, in which the Company has made investments in
excess of $1,000,000 ("Company Affiliates"). For the purposes
of the pro-rata distribution of revenue and advertising on a
given Internet Advertising transaction, the actual amount up
to the 40% hold back referenced above in this section will not
be included in the calculation of the revenue distribution.
3.11. Company Affiliate Promotions. The Company can place Promotions
of Company Affiliates on the SnapTV Site, which shall be
included within the 40% hold back referenced in Section 3.10,
provided that Snap does not have a Conflicting Contract.
Before doing so, the Company must inform Snap of its
intentions to make such an investment in a Company Affiliate
and make commercially reasonable efforts to allow Snap to
participate in the investment. If Snap reasonably objects to
the placement due to a conflict in a pending "network wide"
Anchor Tenancy (in the same category) that will include
exclusive or most prominent placement on the SnapTV Site as
well (a "Anchor Tenancy Contract"), and Snap passes on the
investment, or Snap is not invited to participate in the
investment, then the Company will have the right to place such
Company Affiliate's Promotion on the SnapTV Site exclusively
or on a most prominent basis for a period of 90 days. During
that 90-day period, Snap may make commercially reasonable
efforts to sell the Promotions pursuant to an Anchor Tenancy
Contract (which may include the Snap Sites and the SnapTV
Site, but may exclude NBC.com, NBC-Interactive Neighborhood
and Videoseeker.com) and in the same category. If Snap enters
into such an Anchor Tenancy Contract that includes SnapTV
Site, the Company will remove the Promotions for such Company
Affiliate. However, if Snap does not enter into such an Anchor
Tenancy Contract during that 90-day period, the Company shall
have the right to keep the Promotions for such Company
Affiliate on the SnapTV Site. If the Company is required to
remove the Promotions for such Company Affiliate from the
SnapTV Site, the Company shall have the right to continue
selling merchandise on the SnapTV Site from that Company
Affiliate. Once any such Anchor Tenancy Contract terminates,
Snap shall have the right to renew such Anchor Tenancy or sell
such Anchor Tenancy to any third party. In the absence of such
renewal or resale within 90 days after the expiration of such
Anchor Tenancy Contract, the Company may then include the
Promotions for such Company Affiliate on the SnapTV Site.
3.12. Company's Right to Sell Company Products. Snap acknowledges
that it has no authority to prohibit the Company from selling
Company Products on the SnapTV Site; provided that the Company
acknowledges that Snap may limit (e.g., through a
non-exclusive Anchor Tenancy Contract) the placement of
Internet Advertising on the SnapTV Site. To clarify, if Snap
brings an exclusive Anchor Tenancy to the online "network"
(which would include the SnapTV Site), Snap must create an
appropriate carve out which allows the Company and the SnapTV
Site to continue to sell Company Products, subject to any
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Anchor Tenancy (e.g., the Anchor Tenant's merchandise may be
more prominently featured than the Company Products) but not
subject to any exclusivity.
3.13. Quality Standards. The Company agrees that the SnapTV Site
will comply with the quality standards set forth in Section
3.3 of the Trademark License Agreement throughout the Term. If
the SnapTV Site fails to operate fully and functionally in any
material respect for at least 99% of the time during any 30
day period, even if otherwise in compliance with the
performance standards, Snap may immediately remove any or all
links to the SnapTV Site, at Snap's sole discretion, until
such time as the Company notifies Snap that the SnapTV Site
has resumed acceptable operation and the SnapTV Site has
actually resumed acceptable operation. These remedies are for
Snap's editorial purposes and in no way limit Snap's ability
to terminate this contract or pursue any other remedies
hereunder in the event the performance standards set forth
herein are not met.
4. Harvesting, Fulfillment Services and Account Management.
4.1. Harvesting. The Company shall, beginning on the Launch Date,
provide all Company Content as required herein in connection
with the Content Portals pursuant to Snap's then current,
standard technical specification policies for harvesting
required of third parties with content portals to be harvested
with similar functionality, as updated from time to time in
Snap's sole discretion. Harvested Company Content will
maintain the applicable Snap Site's Look and Feel and will
include branding for the Company using Company Marks, in such
form and placement as a Snap Product Manager shall determine
in his or her sole discretion, subject to Section 12 of this
Agreement. The Company shall ensure that all Company Content
remains at all times current by continually providing Snap
with timely updates to the Company Content. Furthermore, under
no circumstances shall Company Content include any content of
an NBCi Competitor or reference an NBCi Competitor.
4.2. Fulfillment Services. The Company will be responsible for
developing all systems and entering into any arrangements and
relationships required to accept the purchasing information
collected from Users of the SnapTV Site for Company Products
and finalize and fufill the relevant sales. The Company will
accept and process the purchasing information collected on
SnapTV Site, and will provide all fulfillment services in a
timely and professional manner, including but not limited to,
email confirmation of orders, email confirmation of shipping,
online customer order checking, prompt customer service via
email, establishing and maintaining a single point for data
delivery by Snap, order fulfillment, credit management and
inventory maintenance. At a minimum, Company will establish an
order transmittal and fulfillment process that meets
reasonable online industry standards for fulfillment services.
In addition, the Company shall be responsible for any customer
communication (via email, phone, fax, etc.) related to
customer service, fulfillment, complaints, returns, etc.
related to purchases made on the SnapTV Site. All services
described in this section shall be deemed to be "Fulfillment
Services."
4.3. Account Management.
4.3.1. Account and Contact Managers. For the purposes of
this Agreement, Rita Han shall be Snap's account
manager for the Company and Cary Deacon shall be the
Company's contact manager for Snap (collectively, the
"Managers"). Subject to Section 18.12, the Managers
shall be the primary points of contact for inquiries
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and requests, and each Manager shall provide the
other with such information and assistance as may be
reasonably requested by the other from time to time.
Either party to this Agreement may change its
designated Manager by giving the other party written
notice of such change.
4.3.2. Steering Committee. Each party shall appoint three
members of a committee (the "Steering Committee") to
review strategic plans, projected fees payable under
this Agreement and the Trademark License Agreement,
marketing, brand positioning and other relevant
issues of the SnapTV Site on a quarterly basis;
provided, however, after the NBCi Closing Snap and
Xoom shall together appoint three members. The
Steering Committee shall make such decisions and take
such actions as may be necessary or desirable to
carry out the purpose of this Agreement and the
Trademark License Agreement, and all such decisions
and actions shall be made by a unanimous consensus of
the Steering Committee, which shall include at least
one member appointed by each party. The Steering
Committee shall meet at least once per quarter at a
mutually agreed time and place. Steering Committee
meetings may take place in person and/or via
telephone, videoconference, or other two-way
communications device. Notice of the time and place
of each meeting of the Steering Committee shall be
given to each member of the Steering Committee not
less than seven (7) days before the time when the
meeting is to be held by personal delivery, facsimile
transmission, or email to such member's business
address. A member of the Steering Committee may, in
any manner, waive notice of a meeting. The attendance
of a member of the Steering Committee at a meeting of
the Steering Committee shall constitute a waiver of
notice of the meeting, unless such member is
attending for the sole purpose of disputing notice.
5. Anchor Tenancy.
5.1. Creation of Jewelry Shop. Snap will create the Jewelery Shop
on a schedule determined by Snap in its sole discretion, but
in no event later than the Launch Date.
5.2. Anchor Tenant of Jewlery Shop. After the Launch Date and
during the Term, Snap will feature the Company as the Anchor
Tenant within the Jewelry Shop. Subject to this Section 5,
Snap may, in the exercise of its reasonable discretion, make
changes to the design and functionality of the Jewelry Shop.
In the Jewelry Shop, the Company will have the right to
program one Content Portal that begins Above the Fold that
measures approximately 150 x 400 pixels with relevant content
and links to the Jewelry Shop. The Company will provide the
appropriate Company Content, subject to the reasonable
discretion of a Snap Product Manager, for the Content Portal,
which shall be harvested as set forth in Section 4.1. The Snap
Product Manager may provide the Company with reasonable
assistance to enable the Company to effectively design the
Content Portal. Subject to this Section 5.2, the Snap Product
Manager will determine the size and location of the Content
Portal. Snap may, in the exercise of its reasonable
discretion, make changes to the design and functionality of
the Jewelry Shop.
5.3. "As Seen on SnapTV" Advertising. After the Launch Date and
during the Term, an "As Seen on SnapTV" Content Portal, a mock
up of which is attached hereto as Exhibit B, will be
prominently displayed on the "front page" of the Shopping
Channel, which is one click or link away from the "front door"
of the applicable Snap Site. This Content Portal will be
displayed with not less than 50% of the unit appearing Above
the Fold. The size
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of the Content Portal will be not less than 120 pixels wide by
60 pixels high on an 800 x 600 pixel screen. Snap will deliver
a mock up of the location and size of this Content Portal for
approval by the Company, whose approval shall not be
unreasonably withheld. Snap agrees that at a minimum, the
words "As Seen on SnapTV" will appear fully Above the Fold.
The Company will provide the appropriate Company Content,
subject to the reasonable discretion of a Snap Product
Manager, for the Content Portal, which shall be harvested as
set forth in Section 4.1. The Snap Product Manager may provide
the Company with reasonable assistance to enable the Company
to effectively design the Content Portal. Subject to this
Section 5.3, the Snap Product Manager will determine the size
and location of the Content Portal. Snap may, in the exercise
of its reasonable discretion, make changes to the design and
functionality of the "As Seen on SnapTV" Content Portal in
connection with changes being made to all or substantially all
content portals throughout http:///www.snap.com and the
Shopping Channel.
5.4. Hosting. Snap will host the Jewelry Shop and the Content
Portals on its servers (or on servers within its control or
servers of a third party under contract with the Company) and
will provide all computer hardware, software and personnel
necessary to operate and maintain the Jewelry Shop and the
Content Portals as functional pages accessible to Users.
5.5. Internet Advertising. Snap shall own and have the right to use
or sell all of the Internet Advertising inventory on the
Jewelry Shop and may keep all revenue derived therefrom. The
Company acknowledges that Internet Advertising, Promotions and
third party content for and/or links to other sites similar to
or in competition with the Company may exist in the Jewlery
Shop. Notwithstanding anything in this Agreement to the
contrary, any third party content or links may exist on any
area of the Jewelry Shop. Moreover, other than as expressly
set forth herein, Snap shall have the right to display any
third party links, media, banner advertisements, other
Promotions, and/or paid or unpaid editorial content anywhere
on the Snap Sites and to market and promote jewelry and
related promotions on television using Snap as the Internet
fulfillment provider.
5.6. Comparison Engine. Snap shall have the right to create a
Product Comparison Engine on the Snap Sites that provides the
User with a page that compares prices of several vendors for a
particular product. The User has the option of clicking
through on the product link, which may deliver the User to the
selected vendor's Web page, where the User can purchase the
product. The Snap Product Comparison Engine, if created, will
be implemented in accordance with a schedule determined by
Snap in its sole discretion. Following its launch, the Snap
Product Comparison Engine shall be featured on and throughout
the Shopping Channel. To the extent technically feasible, the
Snap Product Comparison Engine shall consider ("crawl") the
Company's Products in its comparison of prices for a
particular product, provided that Company's Products include
such product, and shall also consider products from
competitors of the Company.
5.7. Wallet-Enabling SnapTV Site. On a schedule mutually agreed by
all the parties hereto, Xoom will use its Liquid Market
technology to "Wallet-enable" the SnapTV Site to enable Users
on the Shopping Channel to purchase Company Products.
"Wallet-enable" shall mean: (i) the User enters a credit card
and related personnel data once on the Shopping Channel; (ii)
this financial information is stored within the Shopping
Channel and associated with a unique User number; and (iii)
the User does not have to reenter such information each time
the User purchases a Company Product on the Shopping
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Channel. The Company will provide reasonable assistance to
Xoom to "Wallet-enable" the SnapTV Site.
6. Co-Branded, Enhanced, and International Editions.
6.1. Co-Branded Editions. Company acknowledges that Snap produces
co-branded editions of the Snap Sites for various resellers,
distributors, other licensees and/or joint venture partners
(collectively the "Distributors"). In some cases, such
Distributors are entitled to replace Snap's default content
with other content within their own co-branded editions of any
Snap Site. Notwithstanding any other provisions of this
Agreement, if any such Distributor has exercised its right to
replace Company Content with other content, then Snap will not
be required to display the Promotions or Company Content
within such Distributor's co-branded edition of the Snap
Sites.
6.2. High-Speed Editions. Snap has created an enhanced, high-speed
version of the Snap Site focused on rich media content
(together with any successor service(s) or site(s) thereof and
any co-branded editions of such service that have been or may
be developed for Snap's third party distribution partners and
licensees, the "Enhanced Site") and may desire to include
appropriate rich media content from the Company within the
Enhanced Site. At Snap's sole discretion, all terms and
conditions contained in the Agreement related to the "Snap
Sites" may also apply to the Enhanced Site. The Company hereby
acknowledges that Snap, in its sole discretion, may use
appropriate Company Content within the Enhanced Site, and all
licenses set forth in the Agreement are hereby expanded to
include the Enhanced Site. Further, Snap shall have the
exclusive right, at its sole discretion, to take video and/or
audio clips (e.g., product demonstrations) from the Company's
Television Home Shopping Service and include them on the
Shopping Channel within the Enhanced Site; it being understood
that the Company shall have the right to transmit, exhibit,
display and stream the Company's Television Home Shopping
Service on a full-time (24 hour/7 day) basis and/or audio
and/or video clips of such service on any Computer Service (as
such term is defined in the Trademark License Agreement). The
Company acknowledges that the look and feel of the Enhanced
Site will be designed for a high-bandwidth audience and
therefore may substantially differ from the look and feel of
the primary Snap Site.
6.3. International Editions. Snap is currently considering creating
one or more international editions of the Snap Site to reflect
appropriate localized and local partner content
("International Editions") and may desire to include localized
media content from Company within an International Site. At
Snap's sole discretion, Snap may include Company Content in
any International Edition, subject to the Company's reasonable
approval. The Company shall use its reasonable commercial
efforts to provide Fulfillment Services for such International
Editions. All terms and conditions contained in the Agreement
related to the "Snap Site" shall also apply to such
International Editions. Snap, in its sole discretion, may use
appropriate Company Content within such International
Editions, and all licenses set forth in the Agreement are
hereby expanded to include such International Editions.
Further, the Company hereby grants Snap a license to create
derivative works (including translations) of the Company
Content solely for the purpose of adapting such International
Editions to the relevant target audience. The Company
acknowledges that the look and feel of the International
Editions will be localized for the relevant target audience
(e.g., in terms of language, culture, and ethnicity) and
therefore may substantially differ from the look and feel of
the primary Snap Site.
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7. On-Air Promotion.
7.1 Provided by Snap. Snap will promote the Snap TV brand,
including the SnapTV Domain Name using $4 million per year of
NBC Television Network advertising commencing upon receipt of
written notification by Snap from Company that the Company's
Television Home Shopping Service has obtained an overall reach
of at least 30 million FTE Subscribers and then only to the
extent of $1 million for each three-month period remaining
from receipt of such notification until the fourth anniversary
of the Effective Date. Snap shall use such time to promote
principally the SnapTV brand, including the SnapTV Domain
Name. The Company acknowledges that Snap's on-air promotions
may also contain promotion of the Snap Sites and the Shopping
Channel; provided, however, that the SnapTV brand presence
will be more prominent than Snap's brand presence. Snap shall
prepare the relevant creative material for such advertising
and shall place such advertising on NBC Television Network,
subject to the Company's approval over the advertising and the
placement thereof (such approval not to be unreasonably
withheld or delayed).
7.2 Provided by the Company. Commencing upon delivery of the
written notification from Company to Snap that the Company's
Television Home Shopping Service has obtained an overall reach
of at least 30 million FTE Subscribers, the Company will use
$4 million per year of any "run-of-network" cable television
advertising (other than advertising appearing on the Company's
Television Home Shopping Service) to promote Snap or Snap's
products or services and then only to the extent of $1 million
for each three-month period remaining from the receipt of such
notification until the fourth anniversary of the Effective
Date. The Company shall use such time to promote principally
the Snap brand, including the SnapTV Domain Name. Snap
acknowledges that the Company's contractual obligations
require that this cross-channel promotion must contain SnapTV
promotion as well; provided, however the SnapTV brand presence
will be less prominent than Snap's brand presence. Snap shall
prepare the relevant creative material for such advertising,
subject to the Company's approval (such approval not to be
unreasonably withheld or delayed), and the Company shall place
such advertising on cable television networks (other than the
Company's Television Home Shopping Service) in accordance with
the Company's affiliation agreements with such networks and
subject to Snap's approval, which approval shall not be
unreasonably withheld or delayed.
7.3 Company Promotion of SnapTV URL. With respect to third party
merchandise sold on the Company's Television Home Shopping
Service, the Company shall use commercially reasonable efforts
to always promote a URL that incorporates the SnapTV Domain
Name for any on-air promotion that leads a User to the SnapTV
Site. This obligation is dependent on Snap's ability to
promptly deliver a reasonably easy to remember and
commercially appropriate SnapTV URL for each on-air merchant
(e.g., SnapTV.com/victoria for Victoria's Secret). Following
such commercially reasonable efforts, if the Company cannot
convince its on-air merchant to use a URL that incorporates
the SnapTV Domain Name, then the Company can use 15% of the
Company's airtime promoting non-SnapTV URLs with no amounts
paid to Snap. Any airtime used, which includes a URL of any
kind, over the above 15% which does not refer to a URL that
incorporates the SnapTV Domain Name, whether or not the
Company has made an equity investment, the Company shall pay
Snap a 20% commission based on the rate card, should one
exist, or calculated based on the average revenue for all
airtime that the Company receives or derives for all airtime
that does not incorporates the SnapTV Domain Name.
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7.4 Valuation of Advertising. The advertising provided to the
Company or Snap pursuant to Section 7.1 or 7.2 hereof shall be
valued at the rate actually charged to the Company by cable
operators or to Snap by NBC Television Network; it being
understood that the Company and Snap shall each use their
commercially reasonable efforts to obtain the lowest rate for
such advertising.
8. User Profile Data, Commerce Opportunities, and Direct Marketing.
8.1. Data Ownership. Snap will be the sole owner of any information
that Snap collects from Users through the Snap Sites,
including, without limitation, any data derived from User
Profile Data and Users of the SnapTV Site that become a Snap
Member or a Xoom Member. Snap, Xoom and the Company will
co-own the User Profile Data for purchases made over the Web
resulting from the direct email marketing described in Section
8.4, which co-ownership will survive the Term and/or
termination of this Agreement. Snap and Xoom shall co-own all
data collected through the use of the Liquid Market technology
described in Sections 5.6 and 5.7. Snap and the Company will
use their good faith efforts to develop a common registration
and password for new Users to simultaneously become Snap
Members and SnapTV Members; if such common registration is
developed, Snap and the Company will co-own such User Data
Profile, which co-ownership will survive the Term and/or
termination of this Agreement.
8.2. Use of Information and Confidentiality. Snap and Xoom shall
each have access to the Company Database at all times during
the Term of this Agreement. Each party will have the right to
use any information provided by the other party pursuant to
Section 11 subject to the confidentiality restrictions set
forth in Section 18.4. Unless otherwise clearly disclosed to
Users on the respective site, all data collected from Users
through the SnapTV Site will be kept confidential and not
disclosed to third parties in accordance with the published
privacy policy of Snap and Xoom and, following the NBCi
Closing, NBCi.
8.3. Commerce Opportunity. If any Company Content accessed through
links appearing on the Snap Sites contains any Commerce
Opportunity that requires the User to register or submit any
User Profile Data, then Snap has the right in its sole
discretion to cause any of the following: (i) the Web page
that requests the User Profile Data, (ii) any other page
relating to the Commerce Opportunity, or (iii) a separate Snap
Member registration page, to present the User with an
opportunity to register to become a Snap Member.
8.4. Direct Marketing. During the Term, Xoom and Snap and,
following the NBCi Closing, NBCi, shall have the exclusive
right to use (or allow an affiliate entity to use, in which
case all references to "Xoom" in this Section 8 shall refer to
such affiliate entity) the information contained in the
Company Database for email direct marketing purposes as set
forth in this Section, and all ancillary activities related
thereto. Snap and Xoom shall have the co-exclusive right to
execute, or cause to be executed, the same number of
promotional email offers per month that Snap and Xoom execute
or cause to be executed to their respective members,
promotional email offers, to all or some of the Users in the
Company Database other than those who have opted not to
receive such email offers. Such email offers shall be drafted
by Xoom, approved by Company (and such approval shall not be
unreasonably withheld) and will appear to come from "SnapTV
and Xoom" (and after the NBCi Merger, as NBCi determines in
its sole discretion). Such email messages may have links to
the Snap Sites or the SnapTV Site, as Xoom shall decide in
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its sole discretion. Products offered in such emails may
include Xoom's products or services or third party products
and/or services that Xoom has the right to offer, and Xoom
shall select all of such products to be offered in its sole
discretion; provided that the Company will have the right to
approve such products, and shall not unreasonably withhold or
delay such approval (it being understood that the Company may
reject products that directly compete with Company Products).
Xoom may choose to distribute emails to some or all Users in
the Company Database, and may choose to send the emails itself
or to direct that the Company or another party (i.e.
agent/outsourcer) send the emails. Xoom shall also have the
option to create and host "sell" pages for any marketing
campaign, and Xoom shall arrange for purchase orders to be
processed and fulfilled (other than for Company Products which
shall be processed and fulfilled by the Company), and for
customer service and inventory matters to be coordinated in
relation to the products offered in emails distributed
pursuant to this Section, as Xoom shall determine in its sole
discretion. Xoom shall send a copy of the email offer to the
Company at least forty-eight hours prior to the time at which
the email messages are to be sent. The Company may reject, but
not unreasonably, promotional email offers proposed by Xoom
that include products or services that compete with Company
Products then offered by the Company on the Company Sites.
Xoom shall, in all such direct marketing activities permitted
in this section, comply with all laws, rules, regulations and
orders applicable to such activities.
8.5. Company Database Management. Within two weeks of the Effective
Date, the Company will electronically send Xoom and Snap all
User Profile Data then contained in the Company Database to
one or more FTP addresses designated by Xoom and Snap. In
addition, the Company shall: (a) initially process User names
to create a clean ASCII text file, (b) filter known bad domain
names and false email addresses, (c) process requests for
unsubscription and remove from the Company Database such
entries for subsequent direct market activities, and (d)
update Snap's and Xoom's copies of the Company Database by
sending to the designated FTP addresses information on new
member additions and unsubscribe requests at least one time
each month during the Term. The Company has the right to
request from Snap and Xoom a copy of their current Company
Database text files and receive such data at least one time
per month during the Term.
8.6. Company Offers. Snap shall, if the Company requests, make a
reasonable number of promotional email offers per month
containing a Company Product offer to Users described in the
Company Database, provided that such email messages will be
sent by Snap, Xoom or a third party outsourcer in consultation
with the Company. Snap may reject promotional email offers
proposed by the Company that include products or services
which compete with products or services then offered to Users
of the Snap Sites (other than Company Products offered through
the SnapTV Site or harvested Company Content), or if such
offer otherwise conflicts with a Snap contractual agreement or
Snap's privacy or merchandising philosophy.
8.7. Exclusivity. The Company shall not enter into any agreement
with any NBCi Competitor to make, or otherwise permit any NBCi
Competitor to make on its behalf, any promotional e-mail
offers regarding the Company or the Company Products.
9. Payments and Credits.
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9.1. Commission from Program Sales. The Company will pay Snap or
Xoom, as appropriate, 20% of the gross revenue actually
received by the Company, less third party sales commissions,
without any other adjustment of any kind, of all Advertising
(as defined in the Trademark License Agreement) or program
sales on the Company's Television Home Shopping Service for
each sale in which the purchaser of such Advertising or
program was referred to the Company by Snap or Xoom or Snap or
Xoom materially assisted with respect to such sale.
9.2. Commissions from Email Marketing. The Company will receive 50%
of the gross revenue actually received by Snap or Xoom, as
applicable, generated from the email marketing described in
Sections 8.4, less third party sales commissions, cost of
goods, shipping and handling, gift wrapping, credit card
processing fees, returns, fraud, and chargebacks. Xoom will
receive 50% of the gross revenue actually received by the
Company generated from the email marketing described in
Sections 8.4 relating to Company Products and Section 8.6,
less third party sales commissions, cost of goods, shipping
and handling, gift wrapping, credit card processing fees,
returns, fraud, and chargebacks.
9.3. Internet Advertising Revenue. Snap will pay the Company the
amounts referenced in Section 3.9 derived from Internet
Advertising as being due the Company, and the Company will pay
Snap the commissions referenced in Section 7.3 as being due
Snap.
9.4. Payment. Payments under this Agreement will be made by check
or wire transfer of immediately available funds. All amounts
due from one party to another party hereunder shall be due and
payable quarterly by the 45th day of the month following the
quarter in which such amount can be reasonably calculated.
9.5. Audit Rights. Each party agrees to keep accurate books of
account and records at its principal place of business
covering all transactions relating to this Agreement. Each
party or any duly authorized representative shall have the
right, at all reasonable hours of the day, to audit each of
the other party's books of account and records and all other
documents and material in the possession or under the control
of such other party with respect to the subject matter and the
terms of this Agreement and to make copies and extracts
thereof. In the event that any such audit reveals an
underpayment by the audited party, the audited party shall
immediately remit payment to appropriate party in the amount
of such underpayment plus interest calculated at a rate of one
and one-half (11/2%) per month, or the maximum rate allowed by
law, compounded daily, calculated from the date such payments
were actually due until the date when such payment is in fact
actually made. Further, in the event that any such
underpayment is greater than five percent (5%) of the amount
due for the period being audited, the audited party shall
reimburse the party conducting the audit for the reasonable
costs and expenses of such audit. All books of account and
records of each party covering all transactions relating to
this Agreement shall be retained by such party for at least
three (3) years after the expiration or termination of this
Agreement, as the case may be, for possible inspection and/or
audit by the other parties.
10. Term; Termination.
10.1. Term. The term of this Agreement will begin on the Effective
Date and end on the tenth (10th) anniversary of the Effective
Date, unless otherwise terminated or extended as set forth in
this Agreement (the "Term").
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10.2. Termination of the Trademark License Agreement. Any party may
terminate this Agreement upon any termination of the Trademark
License Agreement, which termination will be effective as of
the effective date of the termination of the Trademark License
Agreement.
10.3. Termination for Cause. Either Snap or the Company may
terminate this Agreement at any time by giving written notice
of termination to the other parties if any other party commits
a material breach of its obligations hereunder that is not
cured within 30 days after notice thereof from a non-breaching
party; provided, however, Snap may not terminate this
Agreement pursuant to this section due to a breach of Xoom and
Xoom may not terminate this Agreement pursuant to this section
due to a breach of Snap.
10.4. Termination Upon Insolvency. Any party may immediately
terminate this Agreement in the event that (a) another party
files any petition for bankruptcy or is adjudicated a bankrupt
or insolvent under the bankruptcy laws of any jurisdiction;
(b) a petition in bankruptcy is filed against another party
and such petition is not dismissed within 60 days; (c) another
party becomes insolvent or makes an assignment for the benefit
of its creditors or an arrangement for its creditors pursuant
to any bankruptcy law; (d) another party discontinues its
business; or (e) a receiver or trustee is appointed for
another party, which appointment is not contested by that
party within 60 days; provided, however, Snap may not
terminate this Agreement pursuant to this section based on
Xoom's triggering this section and Xoom may not terminate this
Agreement pursuant to this section based on Snap's triggering
this section.
10.5. Consequences of Termination. Upon the termination or
expiration of this Agreement, all licenses granted hereunder
shall immediately terminate and each party shall return or
destroy all Confidential Information of the other party in its
possession, including the Company Database and User Profile
Data which the party in possession does not own or have rights
to possess after the termination of this Agreement.
Termination of this Agreement by a party hereto shall result
in the complete termination of this Agreement with respect to
all parties.
11. Reports, Records, and Accounts.
11.1. Company Reports. Within 15 days after the end of each month
during the Term, the Company, to the extent the Company has
such information, and the Company agrees to use commercially
reasonable efforts to obtain such information, will provide to
Snap a complete and detailed report that includes, at a
minimum, for such month: (i) the total page views on the
SnapTV Site, (ii) the number of unique Users to the SnapTV
Site from the Jewelry Shop, (iii) the number of click thrus
and the conversion rate resulting from such click thrus, (iv)
the type, price, and number of goods sold by the Company
pursuant to Sections 8.4 and 8.6, the number of Snap Users who
bought such items, and number of click thrus pursuant to
Sections 8.4 and 8.6, and (v) the number of Users and User
Profile Data for Users who click through from the Snap Sites
to the SnapTV Site, (vi) the number of Users and User Profile
Data for Users who click through from the Snap Sites to the
SnapTV Site and order Company Products, and (vii) the
aggregate statistical and demographic characteristics of Users
in (ii), (iii), (iv), (v), and (vi). Snap will, to the extent
commercially feasible, tag each such User originating from the
Snap Site using a cookie or other similar technology to assist
the Company in obtaining the foregoing data. Furthermore, the
Company shall furnish whatever additional information Snap may
reasonably prescribe from time to time to enable Snap to
verify the calculation of the
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monies due pursuant to Section 8. The Company shall make
commercially reasonable efforts to collect buyer information,
including email addresses, from its customers ordering by
phone or any other means. The Company will also provide Snap
and Xoom with historical buyer data on the Company's
customers, which will allow Snap and Xoom to maximize the
economic benefit to all parties.
11.2. Records and Accounts. Each party agrees to keep, on a
continuing basis, full and accurate records and accounts,
including, without limitation all logs and reports, sufficient
to permit the other parties to verify the accuracy of all
reports submitted by the party as hereinabove required. Each
party shall have the right, at their sole expense, to examine
such books and records, whether in electronic format or
otherwise, to the extent that such examination is necessary
and pertinent to the foregoing verification, during reasonable
business hours, using its employees or principals, or through
outside, authorized representatives.
12. License for Company Marks and Content. The Company hereby grants to
Snap and Xoom a non-exclusive, non-transferable, royalty-free license,
effective throughout the Term, to use, display and publish the Company
Marks and Company Content as permitted hereunder. In the event the
Enhanced Sites and/or the International Editions are deemed included
within this Agreement pursuant to Section 6.2 or 6.3 above, the Company
hereby further grants to Snap and Xoom a non-exclusive,
non-transferable, royalty-free license, effective throughout the Term,
to modify and create derivative works of the Company Content solely as
permitted in Sections 6.2 or 6.3. In the event the International
Editions are deemed included within this Agreement pursuant to Section
6.3 above, the Company shall in good faith modify the Company Marks to
incorporate changes reasonably suggested by Snap for the relevant
target audience (e.g., complying with local laws or avoiding the use of
offensive terms in the local language). Any use of the Company Marks or
the Company Content by Snap or Xoom must comply with any reasonable
usage guidelines communicated by the Company to Snap and Xoom from time
to time and the Design Standards and Standards and Practices (as such
terms are defined in the Trademark License Agreement). Nothing
contained in this Agreement will give Snap or Xoom any right, title or
interest in or to the Company Content and any derivative works thereof,
the Company Marks or the goodwill associated therewith, except for the
limited usage rights expressly provided above. Snap and Xoom
acknowledge and agree that, as between the Company and Snap and Xoom,
the Company is the sole owner of all rights in and to the Company Marks
and the Company Content and any derivative works thereof.
13. Responsibility for the Sites and Products.
13.1. The Company acknowledges and agrees that, as between the
Company, on the one hand, and Snap and Xoom, on the other
hand, the Company will be solely responsible for any claims or
other losses associated with or resulting from the marketing
or operation of the SnapTV Site, or the offer or sale of any
Company Products by the Company, or through emails delivered
by Xoom for Company Products, including, but not limited to
customer claims, vendor claims, product liability, and damage
in transit. Snap and Xoom are not authorized to make, and
agree not to make, any representations or warranties
concerning the Company Products, except to the extent (if any)
contained within Promotions delivered to Snap or Xoom by the
Company.
13.2. Snap and Xoom acknowledge and agree that, as between the
Company, on the one hand, and Snap and Xoom, on the other
hand, Snap or Xoom will be solely responsible for any claims
or other losses associated with or resulting from emails sent
by Snap or Xoom
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(other than pursuant to Section 8.6) or from products (other
than Company Products) sold by Snap or Xoom pursuant to
Section 8.4, including, but not limited to customer claims,
vendor claims, product liability, and damage in transit. The
Company is not authorized to make, and agrees not to make, any
representations or warranties concerning such products.
14. Representations, Warranties and Covenants.
14.1. Compliance with Law. The Company shall comply with all
truth-in-advertising, consumer credit, consumer product safety
and other laws, rules, regulations and orders applicable to
the Company's Television Home Shopping Service or to the
advertising and sale of products or services. Snap and Xoom
shall have no responsibility or liability with respect to any
products or services or the use thereof. The Company
represents and warrants that all data in the Company Database
has been gathered in compliance with all applicable laws,
rules regulations and orders and that the Company will advise
Snap and Xoom, in a timely manner, of all limitations on the
use of such data requested by the person to whom the data
pertains.
14.2. Product Warranties. The Company warrants that Company Products
delivered to customers hereunder (a) will be free from defects
in workmanship and material, (b) shall be of merchantable
quality and in good working order, and (c) will comply with
all specifications and documentation relating thereto
(including but not limited to the relevant description and
specification included on the SnapTV Site).
14.3. Insurance Requirements. The Company shall at all times during
the Term maintain with a reputable insurance company or
companies (i) errors and omissions insurance in an amount not
less than $2 million combined single limit, naming Snap and
Xoom and their respective affiliates as additional insured
thereunder; and (ii) adequate general comprehensive public
liability insurance coverage against all types of public
liability (including product liability, bodily injury,
property damage and personal injury), in such amounts as are
customary in accordance with sound business practices. Such
policies shall not be subject to cancellation or material
modification upon less than 30 days' prior written notice to
Snap and Xoom. The Company shall provide Snap and Xoom with
certificates evidencing such insurance within 30 days after
the date hereof.
14.4. Fulfillment Services. The Company represents and warrants that
(i) no part of the Fulfillment Services violates or infringes
upon any common law or statutory rights of any person,
including, without limitation, rights relating to defamation,
contractual rights, copyrights, trade secret rights, patent
rights and rights of privacy or publicity; (ii) the
Fulfillment Services will be Year 2000 compliant at the time
of delivery and at all times thereafter and in all subsequent
updates or revisions of any kind, and shall not be materially
interrupted, delayed, decreased, or otherwise affected by
dates/times prior to, on, after or spanning January 1, 2000;
(iii) the Company has received no notice, written or oral,
alleging any such violation or infringement or demanding or
suggesting that the Company enter into a license agreement
with any third party with respect to any part of the
Fulfillment Services; (iv) all employees, independent
contractors, agents, consultants and other persons or entities
used by the Company to develop the Fulfillment Services have
assigned all of their rights in and to the Fulfillment
Services, and any related improvements, to the Company; and
(v) the Company's ownership and/or use of all necessary rights
in and to the Fulfillment Services is free of all liens,
claims, encumbrances and rights of others.
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15. LIMITATION OF DAMAGES. NO PARTY WILL BE LIABLE TO ANOTHER PARTY FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT OF
OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY (INCLUDING NEGLIGENCE), AND EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
16. NO WARRANTIES. EXCEPT AS OTHERWISE SET FORTH HEREIN, THE JEWELRY SHOP,
CONTENT PORTALS AND SNAPTV SITE ARE PROVIDED "AS IS" AND THE
INFORMATION CONTAINED THEREIN IS NOT WARRANTED TO BE FREE FROM ERROR.
SNAP, XOOM AND THE COMPANY DISCLAIM ALL WARRANTIES, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO
THE JEWELRY SHOP, CONTENT PORTALS AND SNAPTV SITE.
17. Mutual Indemnification.
17.1. Indemnification by Snap. Snap shall indemnify, defend and hold
the Company harmless from and against any costs, losses,
liabilities and expenses, including all court costs,
reasonable expenses and reasonable attorney's fees
(collectively, "Losses") that the Company may suffer, incur or
be subjected to by reason of any legal action, proceeding,
arbitration or other claim by a third party, whether commenced
or threatened, to the extent arising out of or as a result of
(i) any breach of this Agreement by Snap, (ii) any claim that
the intellectual property of Snap or provided by Snap
hereunder infringes a patent, copyright, trade secret or other
intellectual property right of any third party; or (iii)
except to the extent the Company is required to indemnify Snap
under Section 17.3 or where Xoom is required to indemnify the
Company under Section 17.2, the operation of the Snap Sites
(other than the Xoom Site) or the use of the Company Database
by Snap.
17.2. Indemnification by Xoom. Xoom shall indemnify, defend and hold
the Company harmless from and against any Losses that the
Company may suffer, incur or be subjected to by reason of any
legal action, proceeding, arbitration or other claim by a
third party, whether commenced or threatened, to the extent
arising out of or as a result of (i) any breach of this
Agreement by Xoom; (ii) any claim that intellectual property
of Xoom or provided by Xoom hereunder infringes a patent,
copyright, trade secret or other intellectual property right
of any third party; or (iii) except to the extent the Company
is required to indemnify Xoom under Section 17.3, (A) the
emails sent by Xoom or a third party pursuant to Section 8.4
or 8.6, (B) the products, other than Company Products, sold by
Xoom pursuant to Section 8.4, (C) the operation of the Xoom
Site, or (D) the use of the Company Database by Xoom.
17.3. Indemnification by Company. The Company shall indemnify,
defend and hold each of Snap and Xoom harmless from and
against any Losses that Snap or Xoom may suffer, incur or be
subjected to by reason of any legal action, proceeding,
arbitration or other claim by a third party, whether commenced
or threatened, to the extent arising out of or as a result of
(i) any breach of this Agreement by the Company, including,
without limitation, a breach of the warranties,
representations and covenants described in Section 14, (ii)
the use of Company Content by Snap in accordance with this
Agreement; (iii) the operation of the SnapTV Site, the
Company's Television Home Shopping Service or the Fulfillment
Services; (iv) any claim that the intellectual property of the
Company or provided by the Company hereunder, the SnapTV Site
or the Company Content infringes
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a patent, copyright, trade secret or other intellectual
property right of any third party; or (v) the offer or sale of
Company Products by the Company on or through the Company's
Television Home Shopping Service, SnapTV Site or any emails
sent by Xoom or a third party pursuant to Section 8.4 or 8.6.
17.4. Indemnification Procedures. If any party entitled to
indemnification under this Section (an "Indemnified Party")
makes an indemnification request to the other, the Indemnified
Party shall permit the other party (the "Indemnifying Party")
to control the defense, disposition or settlement of the
matter at its own expense; provided that the Indemnifying
Party shall not, without the consent of the Indemnified Party
enter into any settlement or agree to any disposition that
imposes an obligation on the Indemnified Party that is not
wholly discharged or dischargeable by the Indemnifying Party,
or imposes any conditions or obligations on the Indemnified
Party other than the payment of monies that are readily
measurable for purposes of determining the monetary
indemnification or reimbursement obligations of Indemnifying
Party. The Indemnified Party shall notify the Indemnifying
Party promptly of any claim for which Indemnifying Party is
responsible and shall cooperate with the Indemnifying Party in
every commercially reasonable way to facilitate defense of any
such claim; provided that the Indemnified Party's failure to
notify Indemnifying Party shall not diminish Indemnifying
Party's obligations under this Section except to the extent
that Indemnifying Party is materially prejudiced as a result
of such failure. An Indemnified Party shall at all times have
the option to participate in any matter or litigation through
counsel of its own selection and at its own expense.
18. Miscellaneous.
18.1. Subject to the following sentences, this Agreement shall be
binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and assigns of the
parties hereto. No party may assign or otherwise transfer this
Agreement, except in connection with a merger, reorganization,
or transfer of all or substantially all of the assets of such
party to which this Agreement relates, provided that the
assignee or transferee shall agree in writing to be bound by
this Agreement; provided, however, that Snap and Xoom may
assign this Agreement to NBC Internet, Inc. or any of its
direct or indirect subsidiaries in connection with the
reorganization of Snap and Xoom provided that NBC Internet,
Inc. or such subsidiary signs a counterpart to this Agreement
and agrees to be bound by it. Any purported assignment made in
contravention of this Section 18.1 shall be null and void from
its inception.
18.2. Relationship of Parties. This Agreement will not be construed
to create a joint venture, partnership or the relationship of
principal and agent between any of the parties hereto, nor to
impose upon any party any obligations for any losses, debts or
other obligations incurred by another party except as
expressly set forth herein. In no event will Snap, Xoom or the
Company be liable for the actions, omissions, duties or
obligations of any other party under this Agreement.
18.3. Applicable Law; Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, applicable to contracts executed and to be performed
entirely in such state. Each party irrevocably and
unconditionally submits, to the exclusive jurisdiction of any
state or federal court sitting in the County of New York, New
York, in any suit, action or proceeding arising out of or
relating to this Agreement and for recognition or enforcement
of any judgment relating thereto. Each party irrevocably and
unconditionally (i) waives any objection which it may now or
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hereafter have to the laying of venue in such jurisdiction of
any such suit, action or proceeding and (ii) accepts, with
regard to any such action or proceeding, the personal
jurisdiction of such New York courts and waives any defense or
objection that it might otherwise have to such courts'
exercise of personal jurisdiction with respect to it. Any and
all service of process shall be effective against any party if
given by registered or certified mail, return receipt
requested, or by any other means of mail which requires a
signed receipt, postage prepaid.
18.4. Confidentiality. In connection with the activities
contemplated by this Agreement, each party may have access to
confidential or proprietary technical or business information
of another party, including without limitation (i) proposals,
ideas or research related to possible new products or
services; (ii) financial statements and other financial
information; (iii) any reporting information in Section 11
herein; and (iv) the terms of this Agreement and the
relationship among the parties (collectively, "Confidential
Information"). Each party will take reasonable precautions to
protect the confidentiality of each of the other party's
Confidential Information, which precautions will be at least
equivalent to those taken by such party to protect its own
Confidential Information. Except as required by law or as
necessary to perform under this Agreement, no party will
knowingly disclose the Confidential Information of any other
party or use such Confidential Information for its own benefit
or for the benefit of any third party. Each party's
obligations in this Section with respect to any portion of
another party's Confidential Information shall terminate when
the party seeking to avoid its obligation under such Section
can document that: (i) it was in the public domain at or
subsequent to the time it was communicated to the receiving
party ("Recipient") by the disclosing party ("Discloser")
through no fault of Recipient; (ii) it was rightfully in
Recipient's possession free of any obligation of confidence at
or subsequent to the time it was communicated to Recipient by
Discloser; (iii) it was developed by employees or agents of
Recipient independently of and without reference to any
information communicated to Recipient by Discloser; (iv) it
was communicated by the Discloser to an unaffiliated third
party free of any obligation of confidence; or (v) the
communication was in response to a valid order by a court or
other governmental body, was otherwise required by law or was
necessary to establish the rights of either party under this
Agreement.
18.5. Press Release. No party will make any public statement or
other announcement (including without limitation, issuing a
press release) or pre-briefing any member of the press or
other third party relating to the terms or existence of this
Agreement without the prior written approval of the other
parties. Notwithstanding the foregoing and Section 18.4, the
parties may issue an initial joint press release, the timing
and wording of which will be subject to each party's
reasonable approval, regarding the relationship between the
parties.
18.6. Injunctive Relief. Each party agrees that in the event of a
breach or alleged breach of Sections 18.4 or 18.5 above that
the other parties shall not have an adequate remedy at law,
including monetary damages, and that the other parties shall
consequently be entitled to seek a temporary restraining
order, injunction, or other form of equitable relief against
the continuance of such breach, in addition to any and all
remedies to which any other party shall be entitled.
18.7. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
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18.8. Survival. Termination or expiration of this Agreement for any
reason shall not release any party from any liabilities or
obligations set forth in this Agreement which (i) the parties
have expressly agreed shall survive any such termination or
expiration, or (ii) remain to be performed or by their nature
would be intended to be applicable following any such
termination or expiration.
18.9. Taxes. Each party will be responsible for any and all taxes,
duties and similar costs imposed upon, due to, or arising from
the payments hereunder to such party, including those properly
imposed upon each party's net income by any state, local,
federal or foreign taxing authority having all necessary
jurisdiction over such party.
18.10. Force Majeure. If any party shall be delayed in its
performance of any obligation hereunder or be prevented
entirely from performing any such obligation due to causes or
events beyond its reasonable control, including without
limitation any act of God, fire, strike or other labor
problem, such delay or non-performance shall be excused. A
party may terminate this Agreement if another party's
performance is delayed or prevented entirely for any such
reason for more than 30 days.
18.11. Dispute Resolution. In the event that any dispute arises
hereunder, the parties agree that prior to commencing
litigation, arbitration, or any other legal proceeding, each
party shall send an officer of such party to negotiate a
resolution of the dispute in good faith at a time and place as
may be mutually agreed. Each officer shall have the power to
bind its respective party in all material respects related to
the dispute. If the parties cannot agree on a time or place,
upon written notice from either party to the other, the
negotiations shall be held at the principal executive offices
of Snap twenty one days following such notice (or on the next
succeeding business day, if the twenty first day is a weekend
or holiday).
18.12. Notices. All notices and other communications provided for
hereunder shall be in writing and delivered by hand or sent by
first class mail or overnight courier or sent by facsimile
(with such facsimile to be confirmed promptly in writing sent
by first class mail or overnight courier) sent as follows:
If to Snap, addressed to:
SNAP! LLC
One Beach Street
San Francisco, California 94133
Attention: Mark Markunas
Telecopier: 415-392-9088
With a copy to:
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, New York 10112
Attention: Vice President, Corporate Law
Group
Fax: (212) 977-7165
If to Xoom, addressed to:
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Xoom.com, Inc.
300 Montgomery Street, Suite 300
San Francisco, California 94104
Attention: General Counsel
Telecopier: 415-288-2578
If to the Company, addressed to:
ValueVision International, Inc.
6740 Shady Oak Road
Eden Prairie, Minnesota 55344-3433
Attention: Chief Financial Officer
Fax: (612) 947-0188
With a copy to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, CA 90071
Attention: Michael W. Sturrock
Fax: (213) 891-8763
or to such other address or addresses or facsimile number or
numbers as any of the parties hereto may most recently have
designated in writing to the other parties hereto by such
notice. All such communications shall be deemed to have been
given or made when so delivered by hand or sent by facsimile
or one business day after being sent by overnight courier or
three business days after being sent by first class mail.
18.13. Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or
remedy by any party shall not preclude or waive its right to
seek any or all other remedies. Said rights and remedies are
given in addition to any other rights the parties may have by
law, statute, ordinance or otherwise.
18.14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed a duplicate
original and all of which, when taken together, shall
constitute one and the same document.
18.15. Amendment; Waiver. This Agreement may be amended only by a
written instrument duly executed by all parties. Except as
otherwise provided in this Agreement, any failure of any of
the parties to comply with any obligation, covenant, agreement
or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
18.16. Severability. In the event that any of the provisions of this
Agreement are held to be unenforceable or invalid by any court
of competent jurisdiction, the validity and enforceability of
the remaining provisions will not be affected thereby.
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18.17. Entire Agreement. This Agreement, the Trademark License
Agreement, the Warrant Purchase Agreement dated as of the date
hereof among Snap, the Company and Xoom and the exhibits and
schedules hereto and thereto contain the entire agreement
between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral and written agreements
and understandings between the parties hereto with regard to
such subject matter.
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IN WITNESS WHEREOF, the parties have caused this Interactive Promotion Agreement
to be executed by their duly authorized representatives on the dates indicated
below.
SNAP! LLC VALUEVISION INTERNATIONAL, INC.
By: /s/ Edmond Sanctis By: /s/ Gene McCaffery
-------------------------------------------- -----------------------------------------
(Signature) (Signature)
Name: Edmond Sanctis Name: Gene McCaffery
------------------------------------------ ---------------------------------------
(Please print) (Please print)
Title: C.O.O. Title: Chief Executive Officer
----------------------------------------- --------------------------------------
Date: September 13, 1999 Date: September 13, 1999
------------------------------------------ ---------------------------------------
XOOM.COM, INC.
By: /s/ Chris Kitze
-----------------------------
(Signature)
Name: Chris Kitze
---------------------------
(Please print)
Title: Chairman
-----------------------------
Date: September 13, 1999
-----------------------------
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EXHIBIT A
FTE Factors
By Hour and By Day
HOURS MON TUE WED THU FRI SAT SUN TOTAL
12M - 1A 0.17 0.21 0.23 0.24 0.25 0.30 0.26 1.66
1A - 2A 0.17 0.14 0.16 0.17 0.21 0.34 0.24 1.43
2A - 3A 0.15 0.10 0.15 0.14 0.19 0.41 0.17 1.31
3A - 4A 0.09 0.08 0.11 0.11 0.12 0.18 0.13 0.82
4A - 5A 0.10 0.10 0.13 0.12 0.12 0.10 0.11 0.78
5A - 6A 0.17 0.17 0.19 0.17 0.18 0.18 0.16 1.22
6A - 7A 0.29 0.30 0.49 0.34 0.37 0.55 0.30 2.64
7A - 8A 0.42 0.48 0.55 0.59 0.65 1.36 0.50 4.55
8A - 9A 0.51 0.68 0.62 0.61 0.79 1.57 0.68 5.46
9A - 10A 0.61 0.70 0.72 0.72 1.14 1.74 1.03 6.66
10A - 11A 0.65 0.74 0.70 0.77 1.15 1.83 1.16 7.00
11A - 12N 0.76 0.73 0.71 0.66 1.02 1.33 1.21 6.42
12N - 1P 0.46 0.49 0.58 0.48 0.56 0.93 1.04 4.54
1P - 2P 0.50 0.47 0.54 0.60 0.57 0.99 1.09 4.76
2P - 3P 0.50 0.56 0.57 0.48 0.55 0.95 0.74 4.35
3P - 4P 0.49 0.53 0.53 0.54 0.69 0.82 0.72 4.32
4P - 5P 0.48 0.53 0.50 0.58 0.80 0.89 0.65 4.43
5P - 6P 0.44 0.48 0.49 0.51 0.77 0.85 0.79 4.33
6P - 7P 0.47 0.45 0.69 1.01 0.79 1.70 0.81 5.92
7P - 8P 0.69 0.58 0.83 1.03 0.84 1.90 0.88 6.75
8P - 9P 0.55 0.92 0.75 1.03 0.98 1.55 0.96 6.74
9P - 10P 0.62 0.92 0.85 1.03 0.95 1.69 0.65 6.71
10P - 11P 0.53 0.70 0.52 0.52 0.54 0.77 0.60 4.18
11P - 12M 0.34 0.45 0.39 0.37 0.47 0.58 0.42 3.02
- --------------------------------------------------------------------------------------------------------------------
TOTAL 10.16 11.51 12.00 12.82 14.70 23.51 15.30 100.00
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EXHIBIT B
MOCK UP OF THE "AS SEEN ON SNAPTV" CONTENT PORTAL
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