Confidential
INTERACTIVE MARKETING AGREEMENT
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This Interactive Marketing Agreement (the "Agreement"), dated as of March
15, 2000 (the "Effective Date"), is between America Online, Inc. ("AOL"), a
Delaware corporation, with offices at 22000 AOL Way, Dulles, Virginia 20166, and
PurchasePro.com, Inc. ("Purchase Pro"), a Nevada corporation, with offices at
3291 N. Buffalo Drive, Las Vegas Nevada 89129. AOL and Purchase Pro may be
referred to individually as a "Party" and collectively as the "Parties."
INTRODUCTION
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AOL and Purchase Pro each desires to enter into an interactive marketing
relationship under which AOL will promote and distribute a jointly developed
interactive marketplace referred to and further defined herein as the "AOL
Exchange". This relationship is further described below and is subject to the
terms and conditions set forth in this Agreement. Defined terms that are used
but not defined in the body of this Agreement are defined in the Schedule of
Definitions attached as Exhibit B.
AOL and Purchase Pro are also entering into a co-development relationship
under which they will jointly develop the AOL Exchange. This relationship is set
forth in the Technology Development Agreement of the same date as this Agreement
between AOL and Purchase Pro (the "Technology Development Agreement").
TERMS
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1. PROMOTION, DISTRIBUTION AND MARKETING.
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1.1. AOL Promotion of AOL Exchange. During the first two (2) years of the
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Initial Term, AOL will provide the Promotions for the AOL Exchange
described in the carriage plan attached as Exhibit A (the "Initial
Carriage Plan") . If AOL elects to receive the Third Year Carriage
Payment from Purchase Pro pursuant to Section 3.2(b)(i) or if AOL
becomes entitled to receive a payment from Purchase Pro pursuant to
Section 3.2(b)(iii), the Parties will work together in good faith and
mutually agree on appropriate Promotions for the third year of the
Initial Term and set them forth in a written carriage plan (the
"Third Year Carriage Plan"). If AOL elects to receive the Renewal
Term Carriage Payment from Purchase Pro pursuant to Section
3.2(c)(i), the Parties will work together in good faith and mutually
agree on appropriate Promotions for the Renewal Term and set them
forth in a written carriage plan (the "Renewal Term Carriage Plan").
Subject to Purchase Pro's reasonable approval, AOL will have the
right to fulfill its promotional commitments with respect to any of
the foregoing by providing Purchase Pro comparable promotional
placements in appropriate alternative areas of the AOL Network. In
addition, if AOL is unable to deliver any particular Promotion, AOL
will work with Purchase Pro to provide Purchase Pro, as its sole
remedy, a comparable promotional placement. AOL reserves the right to
redesign or modify the organization, structure, "look and feel,"
navigation and other elements of the AOL Network at any time. In the
event such modifications materially and adversely affect any specific
Promotion, AOL will work with Purchase Pro to provide Purchase Pro,
as its sole remedy, a comparable promotional placement. For the
purposes of this Section 1.1, a "comparable" Promotion shall mean a
Promotion (or more than one Promotion) in an alternative area or
areas of the AOL Network which alternative area(s) receive similar or
better levels of traffic and traffic with similar or better
demographic characteristics.
1.2. Impressions Commitment.
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1.3. Content of Promotions. The Promotions will link only to the AOL
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Exchange. The specific Content to be contained within the Promotions
described in the Initial Carriage Plan, the Third Year Carriage Plan,
and the Renewal Term Carriage Plan will be determined by AOL. AOL
will ensure that the Promotions accurately represent the AOL Exchange
and any specific offerings of the AOL Exchange which are highlighted
in such Promotions. Except to the extent expressly described in this
Agreement, the specific form, placement, duration and nature of the
Promotions will be as determined by AOL in its reasonable editorial
discretion consistent with the editorial composition of the
applicable screens.
1.4. Purchase Pro Promotion of Co-Branded Site and AOL. As set forth in
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fuller detail in the Purchase Pro Cross-Promotion Plan attached as
Exhibit C-1, during the Term Purchase Pro will promote AOL as a major
Interactive Service partner of Purchase Pro and will promote the
availability of the AOL Exchange through the AOL Network. In each
case in which Purchase Pro promotes an Interactive Service other than
AOL, it will either (a) promote AOL at least as prominently as it
promotes any other Interactive Service within the same promotion, or
(b) provide AOL with a separate promotion which is comparable to the
promotion provided to the other Interactive Service.
1.5. Creation of AOL Exchange. Purchase Pro and AOL will jointly develop
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the AOL Exchange in accordance with the terms of the Technology
Development Agreement. In the event that the AOL Exchange is not
available for commercial use immediately upon execution of this
Agreement, or at any time during the Term, Purchase Pro shall allow
AOL, at AOL's election, to promote, and distribute the pages of the
Purchase Pro Interactive Site which Purchase Pro uses to allow a user
to access and use, the Purchase Pro Exchange from the Effective Date
until such time as the AOL Exchange is available for commercial use
(e.g., not a beta test version) in accordance with the requirements
of the Technology Development Agreement or for any other time period
during which the AOL Exchange is not available for commercial use in
accordance with the terms of the Technology Development Agreement,
including,
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without limitation, upon a termination or material breach of the
Technology Development Agreement. During such time as the AOL
Exchange is not available for commercial use, (a) all Promotions
shall point to the Purchase Pro Exchange and all Impressions to such
Promotions shall count toward the Impressions Commitment, (b) all AOL
Users who register for the Purchase Pro Exchange shall be "tagged"
and such AOL Users shall be AOL Subscribers and Registered Users, (c)
Purchase Pro shall offer AOL Exclusive Offers to AOL Users who enter
the Purchase Pro Exchange in accordance with Section 6.6, and (d)
Purchase Pro shall honor within the Purchase Pro Exchange the prices,
terms, and conditions set for the AOL Exchange in accordance with
Section 6.2.
1.6. Advertising Sales in AOL Exchange. AOL will own all advertising
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inventory, including without limitation all advertising, revenue-
generating and promotional positions, such as sponsorships and
premium placements, within the AOL Exchange and will have the
exclusive right to license and/or sell all such advertising
inventory. AOL will not sell any Advertisements within the AOL
Exchange promoting any offerings of a Purchase Pro Competitor which
are directly competitive with any then-current (as of the time the
Advertisement is sold) offerings of the AOL Exchange (e.g., if the
AOL Exchange does not offer chemical supplies, AOL may sell
Advertisements promoting the availability of chemical supplies
through another Exchange).
2. PREFERRED TREATMENT.
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2.1. Other Exchanges.
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2.1.1. AOL may (a) create an Exchange or Marketplace for any third
party using the technology co-developed by the Parties
pursuant to the Technology Development Agreement, (b)
license to any third party the right to create an Exchange
or Marketplace using the technology co-developed by the
Parties pursuant to the Technology Development Agreement, or
(c) refer to Purchase Pro any third party with whom Purchase
Pro has no existing agreement to build an Exchange or
Marketplace or which otherwise qualifies as an AOL referral
in accordance with Section 2.1.2 below for Purchase Pro to
build an Exchange or Marketplace for such third party (each
Exchange or Marketplace described in (a), (b), or (c), a
"Third Party Exchange"). AOL will make commercially
reasonable efforts to display (or have displayed) in each
Third Party Exchange and all related extended communications
that mention that Third Party Exchange (e.g., press
releases, marketing collaterals and other promotional or
marketing materials, etc.), sub-branding for Purchase Pro
(e.g., "powered by Purchase Pro"), in accordance with
reasonable sub-branding guidelines provided by Purchase Pro.
If a third party for whom AOL or Purchase Pro builds an
Exchange (or who builds its own Exchange based on technology
licensed from AOL) refuses to include such sub-branding,
notwithstanding commercially reasonable efforts to the
contrary by AOL or Purchase Pro as applicable, , then that
third party's Third Party Exchange and related extended
communications will not be required to display such sub-
branding.
2.1.2. Except as otherwise specified on Exhibit G, any entity on
the list attached hereto as Exhibit G shall be treated as an
AOL referral for the purposes of Section 2.1.1(c). In
addition, AOL will provide to Purchase Pro a list of
entities at the end of each month which entities have been
referred to Purchase Pro to discuss the building of an
Exchange or Marketplace, and all such entities shall be
treated as AOL referrals for the purposes of Section
2.1.1(c), unless Purchase Pro notifies AOL within five (5)
business days of receiving a month's list from AOL that
Purchase Pro has a pre-existing, active relationship with
one or more of the entities on the list, in which case the
identified entity(ies) will not be treated as an AOL
referral. Further, in the event that AOL refers to Purchase
Pro an entity which is among the leaders of a vertical
market, which vertical market is not them served by the
Purchase Pro Exchange, (x) such entity shall qualify as an
AOL referral purposes of Section 2.1.1(c),, (y) all Vertical
Entities for whom Purchase Pro builds an Exchange or
Marketplace at any time thereafter shall be deemed AOL
referrals for the purposes of Section 2.1.1(c), and (z) the
provisions of 3.5.2 shall apply with regard to the
participation by any Vertical Entity in either the AOL
Exchange or the Purchase Pro Exchange. AOL shall be
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CONFIDENTIAL
entitled to a sales commission in accordance with Section
3.5 from any and all Third Party Exchanges built by Purchase
Pro for all entities which qualify as AOL referrals.
Entities which qualify as AOL referrals in accordance with
this provisions shall remain AOL referrals regardless of
when or whether a Marketplace or Exchange is built for such
entities.
2.2. AOL Corporate Procurement. Within ninety (90) days after the
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Effective Date, AOL will provide Purchase Pro with a written
description of AOL's reasonable online procurement requirements. If
Purchase Pro is able to meet such requirements through the AOL
Exchange, from and after the date which is sixty (60) days after the
AOL Exchange meets AOL's reasonable online procurement requirements,
AOL will use the AOL Exchange as its primary online means of
procurement from an interactive marketplace with respect to the AOL
Properties so long as the AOL Exchange continues to meet AOL's
procurement requirements. At any time that AOL is using the AOL
Exchange for online procurement, Purchase Pro shall provide AOL with
the most favorable terms then provided by Purchase Pro to any third
party using the AOL Exchange or any Additional Purchase Pro Channel
for similar procurement activities. The Parties acknowledge and agree
that all Transaction Revenues generated by AOL's use of the AOL
Exchange for procurement activities shall count toward all
Transaction Revenue hurdles and provisions set forth in this
Agreement. AOL will make good faith efforts to cause its suppliers
who engage in online procurement to participate in the AOL Exchange.
2.3. ISP Services. In the event that Purchase Pro determines that it
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wishes to sell or offer for free directly or in conjunction with a
partner, Internet access to its customers as an ISP or VISP (as those
terms are commonly understood in the Internet industry) (either as a
standalone product or as part of a bundled offering), Purchase Pro
shall provide AOL with written notice of its intentions and a period
of sixty (60) days after such notice to negotiate with Purchase Pro
to be the exclusive supplier of such Internet access. Purchase Pro
shall not conclude any agreement with any such third party without
offering AOL the opportunity to make a last bid to be the supplier of
such Internet access and shall choose AOL as its Internet access
supplier if AOL offers terms which are at least as favorable as the
terms offered by such third party. The foregoing shall not prevent
Purchase Pro from (i) allowing an ISP to participate as a Supplier
in, or selling to an ISP standard advertising space within, the
Purchase Pro Exchange or any Additional Purchase Pro Channel, or (ii)
allowing a third party to bundle participation in the Purchase Pro
Exchange with such third party's ISP services and at least one other
product or service of an entity other than Purchase Pro or the third
party ISP in a package from which Purchase Pro derives revenue solely
for the customer's participation in the Purchase Pro Exchange.
2.4. Suppliers in AOL Exchange. AOL shall have the right to encourage all
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of its current advertising, marketing, commerce, and other business
partners to become suppliers in the AOL Exchange prior to such AOL
partners being approached by Purchase Pro to become suppliers in the
AOL Exchange or the Purchase Pro Exchange, provided that this
sentence shall not affect any existing relationship of Purchase Pro.
The Parties shall work together after the Effective Date to determine
the procedures by which they reduce or eliminate or channel conflict
in this area
3. PAYMENTS.
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3.1. Transaction Revenues at Beginning of the Term. During the Term,
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Purchase Pro shall be entitled to one hundred percent (100%) of the
Transaction Revenues, subject to AOL's right to certain sales
commissions on such Transaction Revenues in accordance with this
Section 3.1, Section 3.2(b)(ii), 3.2(c)(ii), or 3.5.2 below. From the
second anniversary of the Effective Date, until such time as AOL
becomes entitled to a fifty percent (50%) sales commission in
accordance with Section 3.2, 3.3, or 3.5.2 below, AOL shall be
entitled to a sales commission equal to twenty-five percent (25%) of
Transaction Revenues.
3.2. Non-Refundable Payments and Sales Commissions During the Initial
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Term. Purchase Pro will pay AOL non-refundable payments as follows:
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(a) Payment #1: A guaranteed payment of Fifty Million Dollars (US
$50,000,000), payable as follows:
(1) Twenty Five Million Dollars (US $25,000,000) upon
execution of this Agreement;
(ii) Three Million Five Hundred Seventy One Thousand Four
Hundred Twenty-Nine Dollars (US $3,571,429) on June 30,
2000;
(iii) Three Million Five Hundred Seventy One Thousand Four
Hundred Twenty-Nine Dollars (US $3,571,429) on September 30,
2000;
(iv) Three Million Five Hundred Seventy One Thousand Four
Hundred Twenty-Nine Dollars (US $3,571,429) on December 30,
2000;
(v) Three Million Five Hundred Seventy One Thousand Four
Hundred Twenty-Nine Dollars (US $3,571,429) on March 31,
2001;
(vi) Three Million Five Hundred Seventy One Thousand Four
Hundred Twenty-Nine Dollars (US $3,571,429) on June 30,
2001;
(vii) Three Million Five Hundred Seventy One Thousand Four
Hundred Twenty-Nine Dollars (US $3,571,429) on September 30,
2001; and
(viii) Three Million Five Hundred Seventy One Thousand Four
Hundred Twenty-Nine Dollars (US $3,571,429) on December 30,
2001.
(b) Payment #2:
(i) If, within the first two (2) years following the Effective
Date, the Transaction Revenue Run Rate plus Purchase Pro's
share of the Advertising Revenue Run Rate plus Third Party
Revenue Run Rate less applicable sales commissions to AOL
plus Vertical Entity Transaction Revenue Run Rate less
applicable sales commissions payable to AOL (collectively,
the "Purchase Pro Initial Revenues Run Rate") equal or
exceed One Hundred Million Dollars (US $100,000,000) (the
"First Revenue Run Rate Threshold"), Purchase Pro, upon
reaching the First Revenue Run Rate Threshold (the "Third
Year Payment Date") shall, at AOL's option: pay to AOL an
additional guaranteed payment of Twenty Five Million Dollars
(US $25,000,000) (the "Third Year Carriage Payment") within
thirty (30) days following the Third Year Payment Decision
Date; or
(ii) If, within the first two (2) years following the Effective
Date, Transaction Revenues plus Purchase Pro's share of
Advertising Revenues plus Third Party Transaction Revenue
less applicable sales commissions payable to AOL plus
Vertical Entity Transaction Revenues less applicable sales
commissions payable to AOL (collectively, the "Purchase Pro
Initial Revenues") equal or exceed One Hundred Million
Dollars (US $100,000,000)(the "First Revenue Threshold"),
and AOL did not elect to receive the Third Year Carriage
Payment pursuant to Section 3.2(b)(i), Purchase Pro, upon
reaching the First Revenue Threshold (the "Third Year
Revenue Achievement Date") shall thereafter pay to AOL a
sales commission equal to fifty percent (50%) of Transaction
Revenues commencing from and after the Third Year Revenue
Achievement Date; or
(iii) If, within the first two (2) years following the Effective
Date, the Purchase Pro Initial Revenues Run Rate is less
than the First Revenue Run Rate Threshold and the Purchase
Pro Initial Revenues are less than the First Revenue
Threshold, then Purchase Pro shall pay to AOL, within thirty
(30) days following the second anniversary of the Effective
Date, an additional
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guaranteed payment in an amount equal to: Twenty Five
Million Dollars (US $25,000,000) multiplied by the product
of the Purchase Pro Initial Revenues Run Rate during the
first two years after the Effective Date divided by the
First Revenue Run Rate Threshold. For example, if the actual
Purchase Pro Initial Revenues Run Rate generated during the
first two years after the Effective Date is $80,000,000,
then Purchase Pro would pay AOL $20,000,000 ($25,000,000
multiplied by 0.8, which is the product of the $80,000,000
Purchase Pro Initial Revenues Run Rate divided by the
$100,000,000 First Revenue Run Rate Threshold).
(c) Payment #3:
(i) If, within the first three (3) years following the
Effective Date, the Purchase Pro Initial Revenues Run Rate
equals or exceeds an amount equal to two times the total fixed
cash payments (not including sales commissions) made by
Purchase Pro to AOL pursuant to 3.2(a) and 3.2(b)(the "Second
Revenue Run Rate Threshold"), AOL shall elect, within forty-
five (45) days after the date on which the earlier of the
Second Revenue Run Rate Threshold is reached (the "Renewal
Decision Trigger Date"), whether or not to renew this
Agreement. If AOL elects to renew this Agreement, Purchase Pro
shall, at AOL's option, pay to AOL an additional guaranteed
payment of Twenty Five Million Dollars (US $25,000,000)(the
"Renewal Term Carriage Payment") within thirty (30) days
following the Renewal Decision Trigger Date. Notwithstanding
the foregoing, if AOL did not elect to receive a Twenty-Five
Million Dollar payment after the Third Year Payment Date, AOL
shall not be entitled to elect a Twenty Five Million Dollar
payment for the Renewal Term.; or
(ii) If AOL elects not to renew this Agreement within 45 days
after the Renewal Decision Trigger Date, or if AOL elects to
renew this Agreement but does not elect to receive the Renewal
Term Carriage Payment, AOL shall be entitled to a sales
commission equal to fifty percent (50%) of the Transaction
Revenues commencing from and after the date on which the
Purchase Pro Initial Revenues equals or exceeds an amount
equal to two times the total fixed cash payments (not
including sales commissions) made by Purchase Pro to AOL
during the (the "Second Revenue Threshold"). In such event,
upon reaching the Second Revenue Threshold (the "Renewal
Revenue Date") Purchase Pro shall thereafter pay to AOL a
sales commission equal to fifty percent (50%) of Transaction
Revenues commencing from and after the Renewal Revenue Date.
AOL acknowledges and agrees that if AOL elected to receive a
50% sales commission after the Third Year Payment Date, the
Second Revenue Threshold shall not entitle AOL to any
additional sales commission (i.e., AOL simply will continue to
receive the same 50% sales commission on Transaction Revenues
that it began receiving after the Third Year Revenue Date)
3.3. Transaction Revenues After the Term. After the Term, Purchase Pro
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shall be entitled to one hundred percent (100%) of the Transaction
Revenues generated by AOL Subscribers, subject to AOL's right to
certain sales commissions on such Transaction Revenues in accordance
with this Section 3.3. If during the Term AOL has earned and/or
elected the right to receive a sales commission equal to fifty
percent (50%) of Transaction Revenues generated by AOL Subscribers,
AOL shall continue to be entitled to a sales commission equal to
fifty percent (50%) of such Transaction Revenues, in perpetuity. If,
at the end of the Term, AOL has not yet earned or elected to receive
a fifty percent (50%) sales commission on Transaction Revenues in
accordance with Section 3.2 , then (i) the "Third Revenue Threshold"
shall be set at an amount equal to two times the total fixed cash
payments (not including sales commissions) made by Purchase Pro to
AOL during the Term plus an amount equal to ten percent (10%) thereof
and (ii) AOL shall be entitled to a sales commission equal to fifty
percent (50%) of Transaction Revenues generated by AOL Subscribers in
excess of the Third Revenue Threshold amount in perpetuity,
commencing from and after the date upon which the Purchase Pro
Initial Revenues exceeds the Third Revenue Threshold amount (i.e.,
the date the Third Revenue Threshold is achieved). Sections 3.7, 3.8
and 3.9 along with the terms of Exhibit F hereto shall continue to
apply with respect to all activities of the Parties related to
sharing Transaction Revenues after the term. Except as otherwise
specified in Section 5.3, AOL shall be entitled to one hundred
percent (100%) of all Transaction Revenues not generated by AOL
Subscribers and any
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other revenues generated through the AOL Exchange by AOL Post-Term
Subscribers after the termination or expiration of the Term.
3.4. Advertising Revenues. During the Term, Purchase Pro shall be entitled
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to one hundred percent (100%) of the Advertising Revenues generated
from sales of Advertisements within the pages of the AOL Exchange
other than the main banner Advertisement on each such page until such
time as the total Purchase Pro share of the Advertising Revenues
generated to date equals One Million Dollars (US $1,000,000)(the
"First Advertising Trigger Date"). From the First Advertising Trigger
Date through the date on which the total Advertising Revenues
generated to date (including the initial $1,000,000 and including
both AOL's and Purchase Pro's shares of Advertising Revenues
thereafter) equals Fifteen Million Dollars (US $15,000,000)(the
"Second Advertising Trigger Date"), Purchase Pro shall be entitled to
seventy percent (70%) and AOL shall be entitled to thirty percent
(30%) of the Advertising Revenues generated from sales of
Advertisements within the pages of the AOL Exchange other than the
main banner Advertisement on each such page. From the Second
Advertising Trigger Date until the end of the Term, Purchase Pro
shall be entitled to thirty percent (30%) and AOL shall be entitled
to seventy percent (70%) of the Advertising Revenues generated from
sales of Advertisements within the pages of the AOL Exchange other
than the main banner Advertisement on each such page. During the
Term, AOL shall be entitled to one hundred percent (100%) of the
Advertising Revenues from (a) the main banner Advertisement on each
page within the AOL Exchange and (b) any pages preceding,
introducing, promoting or otherwise linking to the AOL Exchange.
Purchase Pro shall not be entitled to any Advertising Revenues after
termination or expiration of this Agreement. In the event that AOL
does not elect to renew this Agreement for a Renewal Term, the
advertising revenue sharing set forth in this Section shall survive
the expiration of the Initial Term for a period of two (2) years.
During such two year survival period (if any), AOL shall sell
advertising inventory within the AOL Exchange in a substantially
similar manner to the manner in which AOL sold advertising inventory
during the third year of the Initial Term, except in the case of a
material change in market conditions.
3.5. Third Party Transaction Revenues.
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3.5.1. During the Term, Purchase Pro shall be entitled to one
hundred percent (100%) of the Third Party Transaction
Revenues, subject to AOL's right to a sales commission equal
to fifty percent (50%) of all Third Party Transaction
Revenues, subject to the next sentence. Notwithstanding the
foregoing, if Purchase Pro has built a Third Party Exchange,
Purchase Pro shall be entitled to one hundred percent (100%)
of Third Party Transaction Revenues from that Third Party
Exchange during the Term, free of any sales commissions to
AOL, until such Third Party Transaction Revenues equal the
total actual costs incurred by Purchase Pro in building that
Third Party Exchange.
3.5.2. AOL shall be entitled to (a) a sales commission equal to
fifty percent (50%) of Transaction Revenues derived from the
participation of any Vertical Entity in the AOL Exchange
beginning on the date on which such Vertical Entity begins
its participation in the AOL Exchange (i.e., without regard
to any hurdles set forth herein), in perpetuity, and (b) a
sales commission equal to fifty percent of Vertical Entity
Transaction Revenues beginning on the date on which such
entity begins its participation in the Purchase Pro Exchange,
in perpetuity.
3.6. Late Payments; Wired Payments. All amounts owed hereunder not paid
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when due and payable will bear interest from the date such amounts
are due and payable at the prime rate in effect at such time. All
payments to AOL required hereunder will be paid in immediately
available, non-refundable U.S. funds wired to the "America Online"
account, Account Number 323070752 at The Chase Manhattan Bank, 1
Chase Manhattan Plaza, New York, NY 10081 (ABA: 021000021). All
payments to Purchase Pro required hereunder will be paid in
immediately available, non-refundable U.S. funds wired to Wells
Fargo, 3800 Howard Hughes Parkway, Las Vegas, NV 89109, Contact: Rick
Bokum, ABA/Routing #:121000248, Account #:4588 532440, Beneficiary:
PurchasePro.com, Inc.
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3.7. Auditing Rights.
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3.7.1. Purchase Pro will maintain complete, clear and accurate
records of all expenses, revenues and fees in connection
with the performance of this Agreement. For the sole purpose
of ensuring compliance with this Agreement, AOL (or its
representative) will have the right to conduct a reasonable
and necessary inspection of portions of the books and
records of Purchase Pro which are relevant to Purchase Pro's
performance pursuant to this Agreement. Any such audit may
be conducted after 20 business days prior written notice is
given by AOL to Purchase Pro; provided, however, that such
audits may not be conducted more than once in any given
twelve (12) month period and the same time period may not be
audited more than once. The audit report and all of the
books and records reviewed by AOL shall be Purchase Pro's
Confidential Information. AOL shall bear the expense of any
audit conducted pursuant to this Section 3.7 unless such
audit shows an error in AOL's favor amounting to a
deficiency to AOL in excess of 5% of the actual amounts paid
and/or payable to it under this Agreement, in which event
Purchase Pro shall bear the reasonable expenses of the
audit. Purchase Pro shall pay AOL the amount of any
deficiency or AOL shall pay Purchase Pro the amount of any
overpayment finally determined as a result of such audit
within 30 days after such final determination.
3.7.2. AOL will maintain complete, clear and accurate records of
all expenses, revenues and fees in connection with the sale
of advertisements in the AOL Exchange. For the sole purpose
of ensuring compliance with this Agreement, Purchase Pro (or
its representative) will have the right to conduct a
reasonable and necessary inspection of portions of the books
and records of AOL which are relevant to AOL 's performance
pursuant to this Agreement. Any such audit may be conducted
after 20 business days prior written notice is given by
Purchase Pro to AOL; provided, however, that such audits may
not be conducted more than once in any given twelve (12)
month period and the same time period may not be audited
more than once. The audit report and all of the books and
records reviewed by Purchase Pro shall be AOL 's
Confidential Information. Purchase Pro shall bear the
expense of any audit conducted pursuant to this Section 3.7
unless such audit shows an error in Purchase Pro's favor
amounting to a deficiency to Purchase Pro in excess of 5% of
the actual amounts paid and/or payable to it under this
Agreement, in which event AOL shall bear the reasonable
expenses of the audit. AOL shall pay Purchase Pro the amount
of any deficiency or Purchase Pro shall pay AOL the amount
of any overpayment finally determined as a result of such
audit within 30 days after such final determination.
3.8. Taxes. Each party will collect and pay and indemnify and hold the
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other harmless from, any sales, use, excise, import or export value
added or similar tax or duty, including any penalties and interest,
that is applicable to its activities under this Agreement as well as
any costs associated with the collection or withholding thereof,
including attorneys' fees.
3.9. Reports.
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3.9.1. Sales Reports. Sections 3.9.1.1 through 3.9.1.4 do not apply
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until Version III (as defined in the Technology Development
Agreement) is deployed as part of the AOL Exchange in full
production mode. Prior to that time, the parties will
cooperate to exchange reports of information on a mutually
agreed basis, consistent with the need reasonably to track
and monitor each party's performance of this Agreement and
AOL's requirements to track the operation and performance of
the AOL Exchange and AOL Subscriber activity. Pursuant to
the Technology Development Agreement, the Parties will work
together to build systems that will allow at least the
following reporting, together with the ability to directly
access the reported data.
3.9.1.1. AOL shall be entitled to a monthly report in an
AOL-designated and Purchase Pro-approved format,
detailing for the AOL Exchange (a) by category of
revenue and (b) by AOL Subscriber, both actual
Transaction Revenues earned or collected during
the previous month, and the Transaction Revenue
Run Rate for the previous month.
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3.9.1.2. AOL shall be entitled to a monthly report in an
AOL-designated and Purchase Pro-approved format,
detailing for AOL Subscriber activity within the
Purchase Pro Exchange (a) by category of revenue,
and (b) by AOL Subscriber, both actual Transaction
Revenues earned or collected during the previous
month, and the Transaction Revenue Run Rate for
the previous month.
3.9.1.3. In addition, each payment to be made by a Party
pursuant to 3.11 or 5.3 will be accompanied by a
report containing information, set forth by
category of revenue, which supports the payment,
including information identifying gross revenues
and all items deducted or excluded from gross
revenues to produce the Transaction Revenues,
Advertising Revenues, Third Party Transaction
Revenues, and/or Post-Term Transaction Revenues
with respect to which the payment is being made.
3.9.1.4. During the Term, AOL will provide Purchase Pro in
an automated manner with a monthly report in a
Purchase Pro-approved format, detailing
Advertisements sold in the AOL Exchange during the
previous month, Advertising Revenues collected by
AOL during the previous month, and the Advertising
Revenue Run Rate for the previous month.
3.9.1.5. At any time that the Transaction Revenue Run Rate
is within Ten Million Dollars (US $10,000,000) of
a threshold set forth in Section 3, Purchase Pro
shall provide AOL with a weekly report setting
forth the Transaction Revenue Run Rate for that
week.
3.9.1.6. After the Term, AOL shall be entitled to a monthly
report in an AOL-designated and Purchase Pro-
approved format, detailing for AOL Post-Term
Subscriber activity within the Purchase Pro
Exchange (a) by category of revenue, and (b) by
AOL Post-Term Subscriber. After the Term, Purchase
Pro shall not be entitled to any reports regarding
activity within the AOL Exchange except as
specified in Section 3.9.1.3.
3.9.2. Usage Reports. During any time period for which there is a
-------------
carriage plan in accordance with Section 1.1, AOL shall
provide Purchase Pro with standard usage information related
to the Promotions and Impressions (e.g. a schedule of the
Impressions delivered by AOL at such time) which is similar
in substance and form to the reports provided by AOL to
other interactive marketing partners with carriage programs
similar to Purchase Pro. Purchase Pro acknowledges that such
information may be Confidential Information as defined
herein.
3.9.3. Registered User Reports. Purchase Pro shall provide AOL in
-----------------------
an automated manner with a monthly report in an AOL-
designated and Purchase Pro-approved format, detailing the
number of Registered Users during the previous month.
3.9.4. Ownership of Data. The Parties shall jointly own (a) all
-----------------
data and reports regarding activity within the AOL Exchange
during the Term and regarding activity resulting during the
Term in Transaction Revenues, Advertising Revenues and/or
Third Party Transaction Revenues, .and (b) data and reports
regarding AOL Subscriber activity within the Purchase Pro
Exchange during the Term, which reports and data shall be
the Confidential Information of each Party, provided that
Each shall be entitled to use such reports in it's business
operations, subject to the terms of this Agreement and all
applicable law, and each party shall be entitled to disclose
such information in aggregate form.
3.10. Registered Users and AOL Subscribers. Each person who successfully
------------------------------------
completes the registration process within the AOL Exchange will
become a Registered User and an AOL Subscriber and will be marked
with an AOL identifier "tag" in order to enable the proper tracking
of Transaction Revenues.
3.11. Party Obligated to Make Payments. At any time during or after the
--------------------------------
Term that this Agreement entitles the Party not collecting
Transaction Revenues or Post-Term Transaction Revenues to retain or
be paid a
9
CONFIDENTIAL
portion of Transaction Revenues or Post-Term Transaction Revenues,
the Party collecting Transaction Revenues or Post-Term Transaction
Revenues (or any portion of either) shall pay the other Party the
amount to which the other Party is entitled on a quarterly basis
within thirty days after the end of the quarter in which such
Transaction Revenues or Post-Term Transaction Revenues were
generated. Any Party collecting Advertising Revenues shall pay the
other Party any portion of such revenue to which the other Party is
entitled on a quarterly basis within thirty days of the end of the
quarter in which such Advertising Revenues were generated. Any Party
collecting Third Party Transaction Revenues shall pay the other Party
any portion of such revenue to which the other Party is entitled on a
quarterly basis within thirty days of the end of the quarter in which
such Third Party Transaction Revenues were generated.
4. WARRANTS. Concurrently with the execution hereof, and as a condition
--------
precedent to AOL's obligations hereunder, Purchase Pro shall enter into the
Common Stock Subscription Warrant Agreement with AOL (the "Warrant
Agreement").
5. TERM; RENEWAL; TERMINATION.
--------------------------
5.1. Term. Unless earlier terminated as set forth herein, the initial term
----
of this Agreement will be three (3) years (the "Initial Term").
5.2. Renewal. Upon conclusion of the Initial Term, AOL shall have the
-------
right to renew this Agreement for one two-year renewal term (the
"Renewal Term") by providing written notice to Purchase Pro of AOL's
election to renew at least ninety (90) days prior to the expiration
of the Initial Term or as set forth in Section 3.2(c). As used in
this Agreement, the "Term" means the Initial Term and the Renewal
Term, if any.
5.3. Continued Links. Upon expiration of the Term, AOL may, at its
---------------
discretion, continue to promote one or more "pointers" or links from
the AOL Network, including, without limitation from the AOL Exchange
or any other Marketplace or Exchange then operated by AOL, to the
Purchase Pro Exchange (collectively, a "Continued Link"). So long as
AOL maintains a Continued Link, (a) Purchase Pro shall pay to AOL a
sales commission equal to fifty percent (50%) of Post-Term Purchase
Pro Transaction Revenues, (b) AOL shall pay to Purchase Pro a sales
commission equal to fifty percent (50%) of Post-Term AOL Transaction
Revenues and (c) Sections 3.7, 3.8 and 3.9 along with the terms of
Exhibit F hereto shall continue to apply with respect to the
Continued Link and any transactions and payments arising therefrom.
In the event that market conditions have materially changed between
the Effective Date and the institution of the Continued Link, the
Parties shall negotiate in good faith to determine whether a sales
commission other than fifty percent, or a payment structure other
than a sales commission, is appropriate.
5.4. Termination for Breach. Except as expressly provided elsewhere in
----------------------
this Agreement, either Party may terminate this Agreement at any time
in the event of a material breach of the Agreement by the other Party
which remains uncured after thirty (30) days' written notice thereof
to the other Party, or such shorter period as may be specified
elsewhere in this Agreement. Notwithstanding the foregoing, in the
event of a material breach of a provision that expressly requires
action to be completed within an express period shorter than 30 days,
either Party may terminate this Agreement if the breach remains
uncured after written notice thereof to the other Party. In the event
that the Technology Development Agreement is terminated while this
Agreement remains in full force and effect, those provisions of the
Technology Development Agreement which are specifically referenced
herein shall survive and shall be incorporated herein by reference.
5.5. Termination for Bankruptcy/Insolvency. Either Party may terminate
this Agreement immediately following written notice to the other
Party if the other Party (i) ceases to do business in the normal
course, (ii) becomes or is declared insolvent or bankrupt, (iii) is
the subject of any proceeding related to its liquidation or
insolvency (whether voluntary or involuntary) which is not dismissed
within ninety (90) calendar days or (iv) makes an assignment for the
benefit of creditors.
CONFIDENTIAL
10
5.6. Termination on Change of Control. In the event of a Change of Control
--------------------------------
of Purchase Pro by an AOL Competitor, as of the first to occur of the
date of first public announcement of such transaction, the publicly
announced date of execution of the principal agreement for such
transaction (e.g., a Stock Purchase Agreement or Merger Agreement
pursuant to which such Change in Control is to be acquired) or the
publicly announced closing date of such transaction, then AOL may
terminate this Agreement at any time within ninety (90) days after
such first to occur date by providing thirty (30) days prior written
notice of such intent to terminate. If AOL terminates this Agreement
pursuant to this Section 5.5 (a) in the first two years after the
Effective Date, the payments set forth in Section 3.2(a) and the fixed
payment due under clause 3.2(b)(ii) shall immediately accelerate and
such payments shall be retained in full by AOL, (b) in the third year
after the Effective Date, the fixed payments due in Section 3.2(b)
shall immediately accelerate if not yet paid and such payments shall
be retained in full by AOL, or (c) during the Renewal Term, the fixed
payments due in the Renewal Term shall immediately accelerate if not
yet paid and such payments shall be retained in full by AOL.
5.7. Press Releases and Media Plan. A joint press release in substantially
-----------------------------
the form attached hereto as Exhibit C-3 will be issued by the Parties
promptly after execution of this Agreement. In addition, the Parties
agree that: (a) they will conduct one joint analyst call and one joint
institutional investor call with respect to this Agreement as soon as
practicable after execution of this Agreement, (b) if and at such time
as AOL begins to use the AOL Exchange as AOL's primary source for
online procurement, Purchase Pro may issue a press release announcing
that AOL has chosen the AOL Exchange and the Purchase Pro solution as
the primary means of AOL's online corporate procurement, (c) AOL will
re-announce this Agreement and the AOL Exchange as a reasonably
prominent part of AOL's overarching business-to-business announcement
(currently scheduled for June 2000), and (d) the Parties may make any
other joint announcements during the Term upon which the Parties
mutually agree. Each Party will submit to the other Party, for its
prior written approval, which will not be unreasonably withheld or
delayed, any press release or any other public statement ("Press
Release") regarding the transactions contemplated under this
Agreement. Notwithstanding the foregoing, either Party may issue Press
Releases and other disclosures as required by law without the consent
of the other Party and in such event, the disclosing Party will
provide at least five (5) business day prior written notice of such
disclosure, or such shorter period of time as is required by law from
the time that the disclosing party becomes aware of the required
disclosure. The failure by one Party to obtain the prior written
approval of the other Party prior to issuing a Press Release (except
as required by law) shall be deemed a material breach of this
Agreement. Because it would be difficult to precisely ascertain the
extent of the injury caused to the non-breaching party, in the event
of such material breach, the non-breaching party may elect to either
(a) terminate this Agreement immediately upon notice to the other
Party, or (b) as liquidated damages, elect to modify the Impression
Commitment by fifteen percent (15%) (either an increase in Impressions
if AOL has materially breached the Agreement or a decrease in
Impressions if Purchase Pro has materially breached the Agreement).
The Parties agree that the liquidated damages set forth are a
reasonable approximation of the injury that would be suffered by the
non-breaching Party.
6. AOL EXCHANGE AND PURCHASE PRO EXCHANGE.
---------------------------------------
6.1. Access from AOL Exchange to Purchase Pro Exchange. AOL shall have the
-------------------------------------------------
right to determine which area(s) within the Purchase Pro Exchange
shall be accessible to AOL Users from within the AOL Exchange or
through the Promotions or other AOL navigational tools. Purchase Pro
shall take all steps necessary to block AOL User access to areas
within the Purchase Pro Exchange identified by AOL as not permissible
for AOL User access.
6.2. Terms and Conditions. AOL shall have the right to determine the
---------------------
pricing, terms and conditions related to subscriptions to the AOL
Exchange and all other products and services offered by AOL or
Purchase Pro or the agents of either within the AOL Exchange, provided
that the prices, terms, and conditions set by AOL, and the pricing
components for which charges are set by AOL, shall be competitive with
the prices, terms, and conditions and pricing components of the five
(5) leading Exchanges (of which one shall be the Purchase Pro
Exchange) in the e-commerce business to business market for similar
subscriptions,
11
products and services. In any event, AOL shall have the right to
determine subscription fees charged to high volume buyers and to SOHO
business users in AOL's sole discretion.
6.3. Hosting. AOL will have the right to host the AOL Exchange in
--------
accordance with the provisions of Sections 3.4(a) and 4.3(a) the
Technology Development Agreement.
6.4. User Interface; Suppliers. AOL shall have the right to design and
--------------------------
control the GUI, layout, design, and "look and feel" of the Phase III
Version in accordance with Section 4.3(b) of the Technology
Development Agreement. AOL shall have the right to control which
Suppliers have access to the AOL Exchange and which other Exchanges or
Marketplaces may be linked to the AOL Exchange in accordance with
Section 4.3(d) of the Technology Development Agreement.
6.5. Operating Standards. Purchase Pro shall ensure that the Purchase Pro
--------------------
Exchange and the AOL Exchange comply with the Operating Standards set
forth in Section ___ of the Technology Development Agreement; provided
that if AOL elects to host (or have a third party host) the AOL
Exchange in accordance with Section 6.3 above, AOL and not Purchase
Pro shall be responsible for ensuring that the AOL Exchange complies
with the provisions of the Technology Development Agreement which
would normally be performed by the Party performing hosting
activities. To the extent standards are not established in the
Technology Development Agreement with respect to any aspect or portion
of the Purchase Pro Exchange or the AOL Exchange, Purchase Pro or AOL
(as applicable) will provide such aspect or portion at a level of
accuracy, quality, completeness, and timeliness which meets or exceeds
prevailing standards of Exchanges in the e-commerce business-to-
business industry. In the event Purchase Pro fails to comply with any
material terms of this Agreement, AOL will have the right (in addition
to any other remedies available to AOL hereunder) to decrease the
promotion it provides to The AOL Exchange and/or the Purchase Pro
Exchange hereunder (and to decrease or cease any other contractual
obligation hereunder) until such time as Purchase Pro corrects its
non-compliance (and in such event, AOL will be relieved of the
proportionate amount of the Impressions Commitment made to Purchase
Pro by AOL hereunder corresponding to such decrease in promotion) and
any revenue threshold(s) set forth in Sections 3.2 and 3.3 will each
be adjusted proportionately to correspond to such decrease in
promotion and other obligations during the period of non-compliance.
6.6. Exclusive Offers/Member Benefits. Purchase Pro will generally make
--------------------------------
available through the AOL Exchange any special or promotional offers
generally made available by or on behalf of Purchase Pro through the
Purchase Pro Exchange. In addition, Purchase Pro shall make available
through the AOL Exchange on a regular and consistent basis special
offers exclusively available to AOL Users (the "AOL Exclusive
Offers"). In addition, the Parties may discuss opportunities to create
additional AOL Special Offers that are designed and funded as mutually
agreed by the Parties. The AOL Exclusive Offers made available by
Purchase Pro, in general, shall provide a substantial member benefit
to AOL Users, either by virtue of a meaningful price discount, product
enhancement, unique service benefit or other special feature and may
include AOL Exclusive Offers such as those listed on Exhibit C-2
attached hereto. Purchase Pro will provide AOL with reasonable prior
notice of the nature of the AOL Exclusive Offers and the commencement
and ending dates of AOL Exclusive Offers so that AOL can market the
availability of such AOL Exclusive Offers in the manner AOL deems
appropriate in its editorial discretion, including, without
limitation, inclusion of such AOL Exclusive Offers in the welcome kit
for Netscape business users.
6.7. Traffic Flow. Purchase Pro will implement prominent links or other
------------
navigational tools from the Purchase Pro Exchange back to the AOL
Exchange or to the AOL Properties. Purchase Pro will ensure that
navigation back to the AOL Exchange or the AOL Properties from the
Purchase Pro Exchange, whether through a particular pointer or link,
the "back" button on an Internet browser, the closing of an active
window, or any other return mechanism, shall not be interrupted by
Purchase Pro through the use of any intermediate screen or other
device not specifically requested by the user, including without
limitation through the use of any html popup window or any other
similar device.
7. NETSCAPE TOOLS, UTILITIES AND PROGRAMMING
-----------------------------------------
12
7.1 Netscape Programming. AOL will provide Purchase Pro with content and
--------------------
programming targeted at its business users through co-branded areas
(including branding and attribution using an AOL designated name or
logo, based on mutually agreed design guideline templates and other
co-branding requirements). Purchase Pro will integrate AOL's content
and programming throughout the Purchase Pro web based applications and
will provide navigational links throughout the Purchase Pro web based
applications to the co-branded areas containing the AOL programming.
The Parties will mutually agree upon the nature of the specific AOL
content and programming to be integrated on the Purchase Pro web based
applications and the carriage/integration plan for such content and
programming on the Purchase Pro web based applications. AOL will own
all advertising inventory in the co-branded areas described in this
Section 7.1, and will have the exclusive right to sell such inventory.
All pages on which such content and programming appears will be served
from an AOL-designated domain, such as
http://www.purchasepro. netscape.com and AOL will record the traffic
------------------------------------
for auditing/reporting purposes.
7.2 Co-Branded Instant Messenger. Purchase Pro shall prominently promote
----------------------------
and distribute a co-branded version of AOL Instant Messenger through
the Purchase Pro Exchange in accordance with the terms of an AOL
Instant Messenger distribution agreement (the "AIM Agreement") to be
negotiated and finalized by the Parties within thirty (30) days after
the Effective Date until such time as AOL's new generation instant
messaging product is available for distribution through the Purchase
Pro Exchange. At such time as AOL's new generation instant messaging
product is available for distribution through the Purchase Pro
Exchange, the Parties shall execute a new distribution agreement
relevant to that product and upon such execution, and the terms of the
AIM Agreement attached hereto as Exhibit G shall become null and void.
7.3 Netscape Business Directory. AOL will integrate Purchase Pro into the
---------------------------
Netscape Business Directory. Purchase Pro will offer to its business
users the opportunity to be integrated into the Netscape Business
Directory. All such integration will be subject to all generally
applicable terms of the Netscape Business Directory, as available
online, except (i) as to the payment of fees by Purchase Pro and (ii)
to the extent inconsistent with or in conflict with this Agreement.
Purchase Pro understands and agrees that the Netscape Business
Directory product may be structured by AOL to be provided by AOL or a
third party, and that, if provided by a third party, AOL shall not be
required to force such third party to accept the terms of this Section
7.3, and Purchase Pro may not be able to so participate (but shall do
so if requested by such third party, except (i) as to the payment of
fees by Purchase Pro and (ii) to the extent inconsistent with or in
conflict with this Agreement).
7.4 Netscape Business Card. Purchase Pro will be integrated into a co-
----------------------
branded Netscape Business Card (subject to all generally applicable
terms thereof, except (i) as to the payment of fees by Purchase Pro
and (ii) to the extent inconsistent with or in conflict with this
Agreement). Purchase Pro will offer to its merchant partners and
business users as an opt-in feature of any registration process on
Purchase Pro's generally available Web site the opportunity to be
integrated into a co-branded Netscape Business Card. Purchase Pro
understands and agrees that the Netscape Business Card product may be
structured by AOL to be provided by AOL or a third party, and that, if
provided by a third party, AOL shall not be required to force such
third party to accept the terms of this Section 7.4, and Purchase Pro
may not be able to so participate (but shall do so if requested by
such third party, except (i) as to the payment of fees by Purchase Pro
and (ii) to the extent inconsistent with or in conflict with this
Agreement).
7.5 Netscape Browser. During the Term, Purchase Pro shall incorporate the
----------------
most recent commercially released version of the Netscape browser as
the default browser within all Purchase Pro products.
7.6 CD Fulfillment. AOL shall produce one million (1,000,000) CD-ROMs
--------------
containing the client software for one of the AOL Properties (the
specific AOL Property to be selected by AOL in its discretion) and the
software supporting the Purchase Pro Exchange (the "Purchase Pro
Exchange CDs") and one million (1,000,000) CD-ROMs containing the
client software for one of the AOL Properties (the specific AOL
Property to be selected by AOL in its discretion) and the software
supporting the AOL Exchange (the "AOL Exchange CDs"). Purchase Pro
shall distribute the Purchase Pro Exchange CDs in Office Depot
13
retail outlets. The Parties shall mutually determine the method of
distribution (and allocation of related costs) of the AOL Exchange
CDs.
8. MANAGEMENT COMMITTEE/ARBITRATION.
--------------------------------
8.1. Management Committee. The Parties will act in good faith and use
--------------------
commercially reasonable efforts to promptly resolve any claim,
dispute, claim, controversy or disagreement (each a "Dispute") between
the Parties or any of their respective subsidiaries, affiliates,
successors and assigns under or related to this Agreement or any
document executed pursuant to this Agreement or any of the
transactions contemplated hereby. If the Parties cannot resolve the
Dispute within such time frame, the Dispute will be submitted to the
Management Committee for resolution. For ten (10) days following
submission of the Dispute to the Management Committee, the Management
Committee will have the exclusive right to resolve such Dispute;
provided further that the Management Committee will have the final and
exclusive right to resolve Disputes arising from any provision of the
Agreement which expressly or implicitly provides for the Parties to
reach mutual agreement as to certain terms. If the Management
Committee is unable to amicably resolve the Dispute during the ten-day
period, then the Management Committee will consider in good faith the
possibility of retaining a third party mediator to facilitate
resolution of the Dispute. In the event the Management Committee
elects not to retain a mediator, the dispute will be subject to the
resolution mechanisms described below. "Management Committee" will
mean a two person committee made up of a senior executive from each of
the Parties for the purpose of resolving Disputes under this Section 8
and generally overseeing the relationship between the Parties
contemplated by this Agreement. Neither Party will seek, nor will be
entitled to seek, binding outside resolution of the Dispute unless and
until the Parties have been unable amicably to resolve the Dispute as
set forth in this Section 8 and then, only in compliance with the
procedures set forth in this Section 8.
8.2. Arbitration. Except for Disputes relating to issues of proprietary
------------
rights, including but not limited to intellectual property and
confidentiality, any Dispute not resolved by amicable resolution as
set forth in Section 8.1 will be governed exclusively and finally by
arbitration. Such arbitration will be conducted by the American
Arbitration Association ("AAA") in Washington, D.C. and will be
initiated and conducted in accordance with the Commercial Arbitration
Rules ("Commercial Rules") of the AAA, including the AAA Supplementary
Procedures for Large Complex Commercial Disputes ("Complex
Procedures"), as such rules will be in effect on the date of delivery
of a demand for arbitration ("Demand"), except to the extent that such
rules are inconsistent with the provisions set forth herein.
Notwithstanding the foregoing, the Parties may agree in good faith
that the Complex Procedures will not apply in order to promote the
efficient arbitration of Disputes where the nature of the Dispute,
including without limitation the amount in controversy, does not
justify the application of such procedures.
8.3. Selection of Arbitrators. The arbitration panel will consist of three
-------------------------
arbitrators. Each Party will name an arbitrator within ten (10) days
after the delivery of the Demand. The two arbitrators named by the
Parties may not be an employee or Director of the naming Party or any
of its affiliates at the time or at any time during the preceding
twelve months, or a consultant or contractor of the naming Party or
any of its affiliates at the time or at any time during the preceding
six months, but otherwise may have prior relationships with the naming
Party which, in a judicial setting, would be considered a
disqualifying conflict of interest. The third arbitrator, selected by
the first two, should be a neutral participant, with no prior working
or other relationship with either Party. If the two arbitrators are
unable to select a third arbitrator within ten (10) days, a third
neutral arbitrator will be appointed by the AAA from the panel of
commercial arbitrators of any of the AAA Large and Complex Resolution
Programs. If a vacancy in the arbitration panel occurs after the
hearings have commenced, the remaining arbitrator or arbitrators may
not continue with the hearing and determination of the controversy,
unless the Parties agree otherwise.
8.4. Governing Law. The Federal Arbitration Act, 9 U.S.C. Secs. 1-16, and
--------------
not state law, will govern the arbitrability of all Disputes. The
arbitrators will allow such discovery as is appropriate to the
purposes of arbitration in accomplishing a fair, speedy and cost-
effective resolution of the Disputes. The arbitrators will reference
the Federal Rules of Civil Procedure then in effect in setting the
scope and timing of
14
discovery. The Federal Rules of Evidence will apply in toto. The
arbitrators may enter a default decision against any Party who fails
to participate in the arbitration proceedings.
8.5. Arbitration Awards. The arbitrators will have the authority to award
-------------------
compensatory damages only. Any award by the arbitrators will be
accompanied by a written opinion setting forth the findings of fact
and conclusions of law relied upon in reaching the decision. The award
rendered by the arbitrators will be final, binding and non-appealable,
and judgment upon such award may be entered by any court of competent
jurisdiction. The Parties agree that the existence, conduct and
content of any arbitration will be kept confidential and no Party will
disclose to any person any information about such arbitration, except
as may be required by law or by any governmental authority or for
financial reporting purposes in each Party's financial statements.
8.6. Fees. Each Party will pay the fees of its own attorneys, expenses of
-----
witnesses and all other expenses and costs in connection with the
presentation of such Party's case (collectively, "Attorneys' Fees").
The remaining costs of the arbitration, including without limitation,
fees of the arbitrators, costs of records or transcripts and
administrative fees (collectively, "Arbitration Costs") will be borne
equally by the Parties. Notwithstanding the foregoing, the arbitrators
may modify the allocation of Arbitration Costs and award Attorneys'
Fees in those cases where fairness dictates a different allocation of
Arbitration Costs between the Parties and an award of Attorneys' Fees
to the prevailing Party as determined by the arbitrators.
8.7. Non Arbitrable Disputes. Any Dispute that is not subject to final
--------------------------
resolution by the Management Committee or to arbitration under this
Section 8 or by law (collectively, "Non-Arbitration Claims") will be
brought in a court of competent jurisdiction in the State of New York.
Each Party irrevocably consents to the exclusive jurisdiction of the
courts of the State of New York and the federal courts situated
therein, over any and all Non-Arbitration Claims and any and all
actions to enforce such claims or to recover damages or other relief
in connection with such claims.
9. STANDARD TERMS. The Standard Online Commerce Terms & Conditions set forth
--------------
on Exhibit E attached hereto and Standard Legal Terms & Conditions set
forth on Exhibit F attached hereto are each hereby made a part of this
Agreement.
15
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
AMERICA ONLINE, INC. PURCHASEPRO.COM, INC.
By: _______________________________ By: _______________________________
Name Name:
Title: Title:
16
CONFIDENTIAL MATERIAL. REDACTED
AND FILED SEPARATELY WITH THE
COMMISSION. (2 pages redacted)
EXHIBIT A
17
CONFIDENTIAL MATERIAL. REDACTED
AND FILED SEPARATELY WITH THE
COMMISSION.
18
II. During the Term, subject to the terms and conditions hereof, Purchase Pro
shall have the right to use the following Keyword Search Term which will link to
the Co-Branded Site: PurchasePro.com, plus any additional keywords which are
company names, domain names, trademarks, service marks, or trade names of
Purchase Pro and which are proposed by Purchase Pro and approved by AOL
(approval not to be unreasonably withheld).
19
EXHIBIT B
Definitions
-----------
The following definitions will apply to this Agreement:
Additional Purchase Pro Channel. Any distribution channel other than the AOL
--------------------------------
Exchange through which Purchase Pro makes available an offering comparable in
nature to the AOL Exchange.
Advertising Revenues. Aggregate cash amounts collected by AOL or its agents, as
--------------------
the case may be, arising from the license or sale of advertisements, promotions,
links or sponsorships, including without limitation placement fees
("Advertisements"), that appear within the AOL Exchange, other than classified
advertisements and slotting fees, less applicable Advertising Sales Commissions.
Advertising Revenue Run Rate. Total Advertising Revenues as of the date on
-----------------------------
which the Advertising Run Rate is calculated plus all future amounts of
Advertising Revenues which AOL has a bona fide and unconditional right to
collect as of the date on which the Advertising Revenue Run Rate is calculated.
Advertising Sales Commission. Actual amounts paid as commission to third party
----------------------------
agencies or actual amounts paid to AOL sales staff not to exceed ten percent
(10%) by either buyer or seller in connection with sale of the Advertisement.
AOL Competitor. Amazon, AT&T, Ariba, Microsoft, Yahoo, and Commerce One AOL
---------------
shall have the right to substitute one new entity to this list in place of an
existing entity once during each year of the Term after the first such year by
providing thirty (30) days advance written notice of such substitution during
such year to Purchase Pro, provided that the entity added must be an Interactive
Service and provided further that AOL shall not add an entity to this list after
Purchase Pro has disclosed to AOL that Purchase Pro is in bona fide discussions
with such party to enter into a Change of Control resulting in control of
Purchase pro by such entity (until after the suspension of such discussions if
unsuccessful).
AOL Exchange. The Exchange to be developed and created by AOL and Purchase Pro
-------------
in accordance with the Technology Development Agreement and promoted by AOL
hereunder.
AOL Interactive Site. Any Interactive Site which is managed, maintained, owned
--------------------
or controlled by AOL or its agents.
AOL Look and Feel. The elements of graphics, design, organization,
------------------
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with Interactive Sites within the AOL Service or AOL.com.
AOL Member. Any authorized user of the AOL Service, including any sub-accounts
----------
using the AOL Service under an authorized master account.
AOL Network. (i) The AOL Service, (ii) AOL.com, (iii) CompuServe, (iv)
-----------
Netcenter, and (vi) any other product or service owned, operated, distributed or
authorized to be distributed by or through AOL or its affiliates worldwide (and
including those properties excluded from the definitions of the AOL Properties).
It is understood and agreed that the rights of Purchase Pro relate only to the
AOL Properties and the partner sites expressly identified in the Initial
Carriage Plan and not generally to the AOL Network.
AOL Post-Term Subscriber. Any person or entity who registers within the AOL
-------------------------
Exchange after termination or expiration of the Term or enters the Purchase Pro
Exchange and exhibits an AOL "tag" after termination or expiration of the Term,
unless such person or entity is an AOL Subscriber.
AOL Properties. AOL Service, AOL.com, CompuServe and Netcenter.
----------------
20
AOL Subscriber. Any person or entity who registers within the AOL Exchange
--------------
during the Term or enters the Purchase Pro Exchange and exhibits an AOL "tag"
during the Term. Any person or entity who has previously satisfied the
definition of AOL Subscriber will remain an AOL Subscriber, and any Transaction
Revenues generated by such person or entity will be subject to this Agreement,
in perpetuity.
AOL Service. The standard narrow-band U.S. version of the America Online(R)
-----------
brand
service, specifically excluding (a) AOL.com, Netcenter or any other AOL
Interactive Site, (b) the international versions of an America Online service
(e.g., AOL Japan), (c) the CompuServe(R) brand service and any other CompuServe
products or services (d) "Driveway," "ICQ(TM)," "AOL NetFind(TM)," "AOL Instant
Messenger(TM)," "Digital City," "NetMail(TM)," "Electra", "Thrive", "Real Fans",
"Love@AOL", "Entertainment Asylum," "AOL Hometown," "My News" or any similar
independent product, service or property which may be offered by, through or
with the U.S. version of the America Online(R) brand service, (e) any
programming or Content area offered by or through the U.S. version of the
America Online(R) brand service over which AOL does not exercise complete
operational control (including, without limitation, Content areas controlled by
other parties and member-created Content areas), (f) any yellow pages, white
pages, classifieds or other search, directory or review services or Content
offered by or through the U.S. version of the America Online(R) brand service,
(g) any property, feature, product or service which AOL or its affiliates may
acquire subsequent to the Effective Date and (h) any other version of an America
Online service which is materially different from the standard narrow-band U.S.
version of the America Online brand service, by virtue of its branding,
distribution, functionality, Content or services, including, without limitation,
any co-branded version of the service or any version distributed through any
broadband distribution platform or through any platform or device other than a
desktop personal computer.
AOL User. Any user of the AOL Service, AOL.com, CompuServe, Digital City,
--------
Netcenter, or the AOL Network.
AOL.com. AOL's primary Internet-based Interactive Site marketed under the
-------
"AOL.COM(TM)" brand, specifically excluding (a) the AOL Service, (b) Netcenter,
(c) any international versions of such site, (d) "ICQ," "AOL NetFind(TM)," "AOL
Instant Messenger(TM)," "NetMail(TM)," "AOL Hometown," "My News" or any similar
independent product or service offered by or through such site or any other AOL
Interactive Site, (e) any programming or Content area offered by or through such
site over which AOL does not exercise complete operational control (including,
without limitation, Content areas controlled by other parties and member-created
Content areas), (f) any programming or Content area offered by or through such
site which was operated, maintained or controlled by the former AOL Studios
division (e.g., Electra), (g) any yellow pages, white pages, classifieds or
other search, directory or review services or Content offered by or through such
site or any other AOL Interactive Site, (h) any property, feature, product or
service which AOL or its affiliates may acquire subsequent to the Effective Date
and (i) any other version of an America Online Interactive Site which is
materially different from AOL's primary Internet-based Interactive Site marketed
under the "AOL.COM(TM)" brand, by virtue of its branding, distribution,
functionality, Content or services, including, without limitation, any co-
branded versions or any version distributed through any broadband distribution
platform or through any platform or device other than a desktop personal
computer.
Change of Control. (a) The consummation of a reorganization, merger or
-----------------
consolidation or sale or other disposition of substantially all of the assets of
a party or (b) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1933,
as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either (i) the then outstanding
shares of common stock of such party; or (ii) the combined voting power of the
then outstanding voting securities of such party entitled to vote generally in
the election of directors.
Component Products. Any of the following products or services: (i)
------------------
communications or community tools, products or services (e.g., instant
messaging, chat, voice-activated chat, voice message, IP telephony, e-mail,
message boards), (ii) search engines, navigation services, or
directories/listings (e.g., web search, white pages, yellow pages, member
directories, open directories), (iii) personalization services (e.g.,
homesteading/personal web publishing, calendar functions, "You've Got Pictures"
or other similar photographic services), (iv) shopping guides, decision guides,
`robots', or other similar shopping or decision aids, or (v) commerce/content
aggregation.
CompuServe. The standard, narrow-band U.S. version of the CompuServe brand
----------
service, specifically excluding (a) any international versions of such service,
(b) any web-based service including "compuserve.com", "cserve.com" and "cs.com",
or any similar product or service offered by or through the U.S. version of the
CompuServe brand service, (c)
21
Content areas owned, maintained or controlled by CompuServe affiliates or any
similar "sub-service," (d) any programming or Content area offered by or through
the U.S. version of the CompuServe brand service over which CompuServe does not
exercise complete or substantially complete operational control (e.g., third-
party Content areas), (e) any yellow pages, white pages, classifieds or other
search, directory or review services or Content and (f) any co-branded or
private label branded version of the U.S. version of the CompuServe brand
service, (g) any version of the U.S. version of the CompuServe brand service
which offers Content, distribution, services and/or functionality materially
different from the Content, distribution, services and/or functionality
associated with the standard, narrow-band U.S. version of the CompuServe brand
service, including, without limitation, any version of such service distributed
through any platform or device other than a desktop personal computer and (h)
any property, feature, product or service which CompuServe or its affiliates may
acquire subsequent to the Effective Date.
Confidential Information. 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 Members, AOL
Users, AOL Subscribers and Purchase Pro customers, technical processes and
formulas, source codes, product designs, sales, cost and other unpublished
financial information, product and business plans, projections, and marketing
data. The foregoing definition notwithstanding, a party's confidentiality
obligations hereunder shall not apply to "Confidential Information" (a) already
lawfully known to or independently developed by the receiving Party, (b)
disclosed in published materials, (c) generally known to the public, or (d)
lawfully obtained from any third party.
Content. Text, images, video, audio (including, without limitation, music used
-------
in synchronism or timed relation with visual displays) and other data, products,
advertisements, promotions, URLs, links, pointers and software, including any
modifications, upgrades, updates, and enhancements thereto and related
documentation.
Exchange. An on-line aggregation of Marketplaces enabling customers to
--------
purchase, sell and otherwise procure goods and services over the Internet across
a multitude of vertical and horizontal business markets, industries and
segments.
Impression. User exposure to the applicable Promotion, as such exposure may be
----------
reasonably determined and measured by AOL in accordance with its standard
methodologies and protocols.
Interactive Service. An entity offering as a substantial portion of its
-------------------
business one or more of the following: (i) online or Internet access and
connectivity services (e.g., an ISP or VISP) sold or offered for free under its
own brands or trademarks or as a product or service which another entity may
private label or co-brand; (ii) an interactive site or service competitive with
one or more of the AOL Properties and featuring a broad selection of aggregated
third party interactive text, images, video, or audio content covering a broad
range of subjects and targeted at a broad audience (e.g., a major portal or an
online service); (iii) a search and directory service that searches over a broad
range of categories of Internet websites, but not a content or e-commerce site
focused on or marketing or selling a narrow or specific selection of products or
selected subject range or targeted at a specific or selected demographic group
or a retailer focused on a specific market or vertical category, or (iv) a
license to offer to end-users through an Interactive Site communications
software capable of serving as the principal means through which a user creates,
sends and receives electronic mail or real time online messages.
Interactive Site. The aggregate pages of an interactive website or area,
----------------
including, by way of example and without limitation, (i) an Purchase Pro site on
the World Wide Web portion of the Internet or (ii) a channel or area delivered
through a "push" product such as the Pointcast Network.
Keyword Search Terms. (a) The Keyword(TM) online search terms made available on
--------------------
the AOL Service, combining AOL's Keyword(TM) online search modifier with a term
or phrase specifically related to Purchase Pro (and determined in accordance
with the terms of this Agreement), and (b) the Go Word online search terms made
available on CompuServe, combining CompuServe's Go Word online search modifier
with a term or phrase specifically related to Purchase Pro and determined in
accordance with the terms of this Agreement).
Licensed Content. All Content offered by Purchase Pro through the AOL Exchange
----------------
or the Purchase Pro Exchange pursuant to this Agreement or otherwise provided by
Purchase Pro or on its behalf by its agents in connection herewith
22
(e.g., offline or online promotional Content, Promotions, AOL "slideshows",
etc.), including in each case, any modifications, upgrades, updates,
enhancements, and related documentation.
Marketplace. A public or private interactive on-line network for the purchase,
-----------
sale and procurement of goods and services over the Internet in a specific
business market, industry or segment, including all related service and content
offerings.
Netcenter. Netscape's primary Internet-based Interactive Site marketed under
---------
the "Netscape Netcenter(TM)" brand, specifically excluding (a) the AOL Service,
(b) AOL.com, (c) any international versions of such site, (d) "ICQ," "AOL
Netfind(TM)," "AOL Instant Messenger(TM)," "NetMail(TM)," "AOL Hometown," "My
News," "Digital City(TM)," or any similar independent product or service offered
by or through such site or any other AOL Interactive Site, (e) any programming
or Content area offered by or through such site over which AOL does not exercise
complete operational control (including, without limitation, Content areas
controlled by other parties and member-created Content areas), (f) any
programming or Content area offered by or through the U.S. version of the
America Online(R) brand service which was operated, maintained or controlled by
the former AOL Studios division (e.g., Electra), (g) any yellow pages, white
pages, classifieds or other search, directory or review services or Content
offered by or through such site or any other AOL Interactive Site, (h) any
property, feature, product or service which AOL or its affiliates may acquire
subsequent to the Effective Date and (i) any other version of an AOL or Netscape
Communications Corporation Interactive Site which is materially different from
Netscape Communications Corporation's primary Internet-based Interactive Site
marketed under the "Netscape Netcenter(TM)" brand, by virtue of its branding,
distribution, functionality, Content or services, including, without limitation,
any co-branded versions and any version distributed through any broadband
distribution platform or through any platform or device other than a desktop
personal computer (e.g. Custom Netcenters built specifically for third parties).
Netscape. Netscape Communications Corporation, a wholly owned subsidiary of
--------
AOL.
Post-Term AOL Transaction Revenues. Aggregate amounts generated in connection
----------------------------------
with access to, or products or services provided to any Purchase Pro Post-Term
Subscriber who enters the AOL Exchange from the Purchase Pro Exchange,
including, without limitation, slotting fees, classified advertising fees,
subscription fees, license fees, group buying fees, transaction processing fees,
seminar fees, administration fees, transaction fees and revenue shares payable
to AOL, but excluding amounts collected for sales or use taxes or duties (if
any), actual shipping charges paid to third parties, Advertising Revenues,
revenue shares and sales commissions payable by AOL to third parties, and actual
costs incurred by AOL in connection with operating the AOL Exchange and
providing such products and services plus ten percent of such actual costs.
Post-Term AOL Transaction revenues shall not in any event include subscription
fees paid to Purchase Pro by Purchase Pro Post-Term Subscribers.
Post-Term Purchase Pro Transaction Revenues. Aggregate amounts generated in
-------------------------------------------
connection with access to, or products or services provided to any AOL Post-Term
Subscriber who enters the Purchase Pro Exchange from the AOL Exchange,
including, without limitation, slotting fees, classified advertising fees,
subscription fees, license fees, group buying fees, transaction processing fees,
seminar fees, administration fees, transaction fees and revenue shares payable
to Purchase Pro, but excluding amounts collected for sales or use taxes or
duties (if any), actual shipping charges paid to third parties, amounts that
would be considered Advertising Revenues if they had been collected by AOL,
revenue shares and sales commissions payable by Purchase Pro to third parties,
and actual costs incurred by Purchase Pro in connection with operating the
Purchase Pro Exchange and providing such products and services plus ten percent
of such actual costs. Post-Term Purchase Pro Transaction revenues shall not in
any event include subscription fees paid to AOL by AOL Post-Term Subscribers.
Promotions. The promotions described on Exhibit A, any comparable promotions
----------
delivered by AOL in accordance with Section 1.1, and any additional promotions
of the AOL Exchange provided by AOL (including, without limitation, additional
Keyword Search Terms and other navigational tools, and any Purchase Pro
trademarks or logos or any headline, picture, story, teaser, icon, link or any
other content or service which originates from, describes or promotes Purchase
Pro).
Purchase Pro Competitor. Ariba, Commerce One, I2, Intelisys, and VerticalNet.
-----------------------
Purchase Pro shall have the right to (a) add one entity to this list during the
first year after the Effective Date by providing thirty (30) days advance
written notice to AOL of the entity to be added, provided that the entity added
must be the platform provider for an Exchange or
23
Marketplace and (b) substitute one new entity to this list in place of an
existing entity once during each year of the Term after the first such year by
providing thirty (30) days advance written notice of such substitution during
such year to AOL of the entity to be added and the entity to be removed,
provided that the entity added must be the platform provider for an Exchange or
Marketplace.
Purchase Pro Interactive Site. Any Interactive Site (other than the AOL Exchange
-----------------------------
and any Purchase Pro "private marketplace") which is managed, maintained, owned
or controlled by Purchase Pro.
Purchase Pro Exchange. Any Exchange owned, operated, or maintained by Purchase
---------------------
Pro (in whole or in part) which is accessible from the AOL Exchange either
directly or indirectly.
Purchase Pro Post-Term Subscriber. Any person or entity who registers within
---------------------------------
the Purchase Pro Exchange, unless such person or entity is an AOL Subscriber.
Registered Users. All persons or entities who enter the AOL Exchange or a Third
----------------
Party Exchange and pass through the registration process therefor. Each
individual user within a legal entity (e.g., each employee of a corporation)
shall be counted as a separate Registered User.
Remnant Inventory. Advertising inventory which is unsold at the end of the
-----------------
business day prior to the day on which that inventory will run. If Purchase Pro
has purchased Remnant Inventory, Purchase Pro's creative will be slotted into
such unsold inventory by AOL from time to time in accordance with internal AOL
policies. AOL does not guarantee that Remnant Inventory Impressions will be
delivered on any particular day(s) or that such Impressions will be delivered
evenly over the Term. Further, AOL does not guarantee placement on any
particular screen or group of screens (except that Channel level Remnant
Inventory will be run only within the specified Channel).
Renewal Term. See Section 5.2.
------------
Run of Service Inventory. A collection of inventory made up of all areas of the
------------------------
relevant AOL property or service. If Advertiser has purchased Run of Service
Inventory, AOL will place Advertiser's creative in different locations
throughout the relevant property or service in accordance with AOL internal
policies. Run of Service Impressions will be delivered reasonably evenly over a
given time period. Advertiser may not control placement within a Run of Service
Inventory purchase and AOL does not guarantee placement on any particular screen
or group of screens (except that Run of Channel Inventory will be run only in
the specified Channel).
Term. See Section 5.1.
----
Third Party Exchange. See Section 2.1.
--------------------
Third Party Transaction Revenues. (a) Aggregate amounts of Purchase Pro or AOL
--------------------------------
gross revenue generated in connection with access to, or products or services
provided in connection with a Third Party Exchange, including, without
limitation, slotting fees, classified advertising fees, subscription fees,
integration fees, maintenance fees, production fees, license fees, group buying
fees, web site development fees, hosting fees, catalog building services fees,
transaction processing fees, seminar fees, administration fees, transaction fees
and revenue shares payable to Purchase Pro or AOL, but excluding amounts
collected for sales or use taxes or duties (if any), actual shipping charges
paid to third parties, Advertising Revenues revenue shares and sales
commissions payable by Purchase Pro or AOL to third parties, and actual costs
incurred by Purchase Pro in connection with operating such Third Party Exchange
and providing such products and services plus ten percent of such actual costs;
and (b) aggregate amounts generated in connection with access to, or products or
services provided to any user who originated in a Third Party Exchange in
connection with the Purchase Pro Exchange, including, without limitation,
slotting fees, classified advertising fees, subscription fees, integration fees,
maintenance fees, production fees, license fees, group buying fees, web site
development fees, hosting fees, catalog building services fees, transaction
processing fees, seminar fees, administration fees, transaction fees and revenue
shares payable to Purchase Pro, but excluding amounts collected for sales or use
taxes or duties (if any), actual shipping charges paid to third parties, amounts
that would be considered Advertising Revenues if they had been collected by AOL,
revenue shares and sales commissions payable by Purchase Pro to third parties,
and actual costs incurred by
24
Purchase Pro in connection with operating such Third Party Exchange and
providing such products and services plus ten percent of such actual costs.
Third Party Transaction Revenue Run Rate. Total Third Party Transaction
----------------------------------------
Revenues earned as of the date on which the Third Party Transaction Revenue Run
Rate is calculated plus all future amounts of Third Party Transaction Revenues
for twelve (12) months which either Party has a bona fide and unconditional
right to collect as of the date on which the Third Party Transaction Revenue Run
Rate is calculated. Specifically, subscription revenues shall be calculated as
follows for the purposes of determining Third Party Transaction Revenue Run
Rate: Third Party Transaction Revenue Run Rate shall include future
subscription revenues for twelve (12) months for each then-current subscriber to
the Third Party Exchange, minus one percent (1%) per month of such subscription
revenues.
Transaction Revenues. (a) Aggregate amounts of Purchase Pro or AOL gross
--------------------
revenue generated in connection with access to, or products or services
provided in connection with, the AOL Exchange, including, without limitation,
slotting fees, classified advertising fees, subscription fees, integration fees,
maintenance fees, production fees, license fees, group buying fees, web site
development fees, hosting fees, catalog building services fees, transaction
processing fees, seminar fees, administration fees, transaction fees and revenue
shares payable to Purchase Pro or AOL, but excluding amounts collected for sales
or use taxes or duties (if any), actual shipping charges paid to third parties,
Advertising Revenues, revenue shares and sales commissions payable by Purchase
Pro or AOL to third parties, and actual costs incurred by Purchase Pro in
connection with operating the AOL Exchange and providing such products and
services plus ten percent of such actual costs; and (b) aggregate amounts
generated in connection with access to, or products or services provided to any
AOL Subscriber in connection with the Purchase Pro Exchange, including, without
limitation, slotting fees, classified advertising fees, subscription fees,
integration fees, maintenance fees, production fees, license fees, group buying
fees, web site development fees, hosting fees, catalog building services fees,
transaction processing fees, seminar fees, administration fees, transaction fees
and revenue shares payable to Purchase Pro, but excluding amounts collected for
sales or use taxes or duties (if any), actual shipping charges paid to third
parties, amounts that would be considered Advertising Revenues if they had been
collected by AOL, revenue shares and sales commissions payable by Purchase Pro
to third parties, and actual costs incurred by Purchase Pro in connection with
operating the Purchase Pro Exchange and providing such products and services
plus ten percent of such actual costs.
Transaction Revenue Run Rate. Total Transaction Revenues earned as of the date
----------------------------
on which the Transaction Revenue Run Rate is calculated plus all future amounts
of Transaction Revenues for twelve (12) months which either Party has a bona
fide and unconditional right to collect as of the date on which the Transaction
Revenue Run Rate is calculated. Specifically, subscription revenues shall be
calculated as follows for the purposes of determining Transaction Revenue Run
Rate: Transaction Revenue Run Rate shall include future subscription revenues
for twelve (12) months for each then-current AOL Subscriber, minus one percent
(1%) per month of such subscription revenues.
Vertical Entity. Each entity doing business in a certain vertical market, in
---------------
the event that AOL refers to Purchase Pro an entity which is among the leaders
of that vertical market if that vertical market is not served by the Purchase
Pro Exchange at the time of such referral.
Vertical Entity Transaction Revenues. Aggregate amounts of Purchase Pro or AOL
------------------------------------
gross revenue generated in connection with access to, or products or services
provided in connection with, the Purchase Pro Exchange with regard solely to
Vertical Entities, including, without limitation, slotting fees, classified
advertising fees, subscription fees, integration fees, maintenance fees,
production fees, license fees, group buying fees, web site development fees,
hosting fees, catalog building services fees, transaction processing fees,
seminar fees, administration fees, transaction fees and revenue shares payable
to Purchase Pro or AOL, but excluding amounts collected for sales or use taxes
or duties (if any), actual shipping charges paid to third parties, amounts that
would be Advertising Revenues if collected by AOL, revenue shares and sales
commissions payable by Purchase Pro or AOL to third parties, and actual costs
incurred by Purchase Pro in connection with operating the Purchase Pro Exchange
and providing such products and services plus ten percent of such actual costs.
Vertical Entity Transaction Revenue Run Rate. Total Vertical Entity Transaction
--------------------------------------------
Revenues earned as of the date on which the Vertical Entity Transaction Revenue
Run Rate is calculated plus all future amounts of Vertical Entity Transaction
25
Revenues for twelve (12) months which either Party has a bona fide and
unconditional right to collect as of the date on which the Vertical Entity
Transaction Revenue Run Rate is calculated.
26
EXHIBIT C-1
Purchase Pro Cross-Promotion
----------------------------
A. Within the main Purchase Pro Interactive Site which Purchase Pro uses to
operate the Purchase Pro Exchange, Purchase Pro shall include the following
(collectively, the "AOL Promos"): (i) a promotional banner or button (at
least 90 x 30 pixels or 70 x 70 pixels in size) appearing "above the fold"
on the first screen of such Purchase Pro Interactive Site, to promote the
AOL Service in accordance with the terms of AOL's Affiliate program
(including the payment of bounties by AOL), the terms of which can be found
at www.affiliate.aol.com; and (ii) a "Netscape Now" feature (at least 90 x
30 pixels or 70 x 70 pixels in size) through which users can obtain
promotional information about Netscape products or services download or
order the then-current version of client software for such Netscape
products or services in accordance with the terms of the Netscape Affiliate
program (including the payment by AOL of bounties) which can be found at
http://www.netscape.com/affiliate/welcome.html. In addition, within such
Purchase Pro Interactive Site, Purchase Pro shall provide prominent
promotion for the keywords granted to Purchase Pro hereunder.
B. In Purchase Pro's television, radio, print and "out of home" (e.g., buses
and billboards) advertisements for the Purchase Pro Exchange and in
articles or items featuring such Purchase Pro Exchange in publications,
programs, features or other forms of media over which Purchase Pro
exercises at least partial editorial control beyond mere regulation or
approval of the use of Purchase Pro's name, logo or trademarks, Purchase
Pro will include one or more specific references or mentions of the
availability of the AOL Exchange through the AOL Network in the same manner
as references to the Purchase Pro Exchange (e.g., verbal if the reference
to the Purchase Pro Exchange is verbal), which are at least as prominent as
any references that Purchase Pro makes to the location of the Purchase Pro
Exchange (by way of site name, related company name, URL or otherwise), and
will promote AOL as a major access provider in a manner at least as
prominent as any promotion provided by Purchase Pro to any other
Interactive Service. Without limiting the generality of the foregoing,
Purchase Pro's listing of the "URL" for the Purchase Pro Exchange will be
accompanied by an equally prominent listing of the "keyword" term on AOL
for the AOL Exchange. This will be done with the following treatment:
"America Online Keyword: PurchasePro.com" or another AOL-approved method.
C. Upon AOL's request, the Purchase Pro Exchange shall prominently promote the
AOL Component Products then-available through the AOL Exchange. Purchase
Pro shall not be required to pay AOL any fees to license such AOL Component
Products.
27
EXHIBIT C-2
AOL Exclusive Offers
--------------------
. Three free months (i.e., no subscription fee) of participation in the AOL
Exchange
. One Hundred Dollars ($100) "shopping certificate" (or equivalent) to spend
on products within the AOL Exchange
28
EXHIBIT C-3
Joint Press Release
-------------------
AMERICA ONLINE AND PURCHASEPRO.COM JOIN FORCES IN STRATEGIC ALLIANCE TO CREATE
UNIVERSAL B2B EXCHANGE
Multi-Million Dollar Development and Marketing Agreement To Create Next
Generation E-Marketplaces For Businesses Of All Sizes
DULLES, VA and LAS VEGAS, NV (March 20, 2000) - America Online, Inc. (NYSE:
AOL), the world's leading interactive services company, and PurchasePro.com
(NASDAQ: PPRO), the leader in browser-based, business-to-business electronic
commerce, today announced a three-year strategic alliance to provide business
users of several AOL brands with a complete electronic commerce solution powered
by PurchasePro.com. Under the agreement, the companies will co-develop future
technologies and business exchanges to better enable businesses of all sizes and
across all industries to increase sales and reduce supply costs.
The companies will co-develop a business exchange for the millions of
business users across AOL, AOL.COM, CompuServe and Netscape Netcenter.
PurchasePro.com will power the easy-to-use, interactive marketplace with its
robust leading browser-based e-commerce solution allowing users to source, bid,
negotiate, buy and sell their products and services across multiple vertical and
horizontal business markets. The exchange interfaces will be tailored
specifically to the size and type of business. The co-branded
AOL/PurchasePro.com business marketplace is expected to roll out by the end of
second quarter 2000.
"Our strategic alliance with PurchasePro.com will enable us to work
together to deliver the most advanced, scalable, end-to-end e-commerce solution
to businesses of all sizes," said Bob Pittman, President and Chief Operating
Officer of America Online, Inc.. "Our co-branded marketplace will deliver each
business a solution that will give them the ability to manage the electronic
buying and selling process with greater ease-of-use and convenience."
"Together, AOL and PurchasePro.com will create the future of B2B electronic
commerce - a flexible commerce exchange platform that integrates millions of
business users across the AOL brands into a powerful mass marketplace," said
Charles E. Johnson, Chairman and CEO of PurchasePro.com. "Our relationship with
AOL further solidifies our leadership position in reaching the critical mass of
businesses with our browser-based end-to-end solution."
"By adding the breadth of PurchasePro.com's resources to our current
business-to-business offerings, we can offer users of our key brands a complete
e-commerce solution, providing real value by saving them both time and money,"
said Jim Martin, Senior Vice President and General Manager of Netscape
Netcenter.
AOL and PurchasePro.com will create this next generation B2B marketplace by
combining their existing, proprietary technologies with new technologies to be
co-developed and co-owned by the two companies. The marketplace will be
entirely browser-based and will facilitate e-commerce for the smallest to the
largest of businesses. Under terms of the agreement the companies will jointly
develop future functionality that will continue to revolutionize the B2B sector.
A blended team of AOL and PurchasePro.com product engineers will lead the
development process.
In addition, PurchasePro.com will distribute a co-branded version of AOL
Instant Messenger (AIM) on its Web site, www.purchasepro.com, enabling
PurchasePro.com customers to easily communicate with buyers, suppliers and
others in real time.
The AOL/PurchasePro.com business exchange will allow any sized company to
easily interact with its own suppliers, reducing purchasing costs significantly.
In addition, the marketplace will link businesses with new buyers and suppliers
to increase sales and develop new efficiencies, with every step of the buying
and selling relationships occurring online.
29
Under the agreement, the two companies will share advertising and
transaction revenue and AOL will have the opportunity to earn performance-based
warrants.
About America Online, Inc.
Founded in 1985, America Online, Inc., based in Dulles, VA, is the world's
leader in interactive services, Web brands, Internet technologies and e-commerce
services. America Online, Inc. operates two worldwide Internet services:
America Online, with more than 21 million members, and CompuServe, with more
than 2.5 million members; several leading Internet brands including ICQ, AOL
Instant Messenger and Digital City, Inc.; the Netscape Netcenter and AOL.COM
portals; the Netscape Navigator and Communicator browsers; AOL MovieFone, the
nation's No. 1 movie listing guide and ticketing service; Spinner Networks and
NullSoft, Inc., leaders in Internet music; and Digital Marketing Services, a
company specializing in online rewards programs and online market research.
Through its strategic alliance with Sun Microsystems, the company develops and
offers easy-to-deploy, end-to-end e-commerce and enterprise solutions for
companies operating in the Net Economy.
About PurchasePro.com
PurchasePro.com is a leading provider of Internet business-to-business
electronic commerce services. The company's e-commerce solution is composed of
public and private marketplaces where businesses can buy and sell a wide range
of products and services in an efficient, competitive and cost-effective manner.
The Company has designed its e-marketplaces to meet the needs of customers and
their strategic business partners.
A key element of its strategy is to develop sales and marketing relationships,
such as those it has with IBM, Sprint Corporation, Advanstar Communications and
Office Depot, Inc. The company provides extensive support and training
programs. For more information, call toll-free at 888/830-4600 or in Las Vegas
at 702/316-7000. PurchasePro.com may be accessed at its Web site,
www.purchasepro.com.
# # #
NOTE TO EDITORS: PurchasePro.com is a trademark of PurchasePro.com, Inc. All
other trademarks or registered trademarks are the property of their respective
owners.
This press release includes forward looking statements which are subject to a
number of risks and uncertainties, including the risks and uncertainties
associated with rapidly changing technologies such as the Internet, the risks of
technology development and the risks of competition. Actual results could differ
materially. For more information about these risks and uncertainties, see the
SEC filings of PurchasePro.com, Inc, including the section entitled "Factors
That May Affect Results" in its 10-Q filing for the quarterly period ended
December 31, 1999 and the section entitled "Risk Factors" in its registration
statement on Form S-1/A filed on February 10, 2000 with the Securities and
Exchange Commission, which is available from the company on request and on the
Internet at the SEC's Website, www.sec.gov.
MEDIA CONTACTS:
America Online
David Theis
703-265-1491
PurchasePro.com
Anthony Timmons
(702) 316-7000
Shandwick International
Tom Tanno/Tawana Clark
(310) 785-9002
INVESTOR CONTACTS:
PurchasePro.com
30
Richard St. Peter, CFO
(702) 316-7000
Morgen-Walke Associates
Brooke Deterline
(415) 296-7383
31
EXHIBIT D
[INTENTIONALLY DELETED]
32
EXHIBIT E
Standard Online Commerce Terms & Conditions
-------------------------------------------
1. Provision of Other Content. In the event that AOL notifies Purchase Pro
--------------------------
that (i) as reasonably determined by AOL, any Content within the AOL Exchange
violates AOL's then-standard Terms of Service (as set forth on the America
Online brand service at Keyword term "TOS"), for the AOL Service or any other
AOL Property, AOL's advertising policies, or the terms of this Agreement or (ii)
AOL reasonably objects to the inclusion of any Content within the AOL Exchange
(other than any specific items of Content which may be expressly identified in
this Agreement), then Purchase Pro will take commercially reasonable steps to
block access by AOL Users to such Content using Purchase Pro's then-available
technology. In the event that Purchase Pro cannot, through its commercially
reasonable efforts, block access by AOL Users to the Content in question, then
Purchase Pro will provide AOL prompt written notice of such fact. AOL may then,
at its option, restrict access from the AOL Network to the Content in question
using technology available to AOL. Purchase Pro will cooperate with AOL's
reasonable requests to the extent AOL elects to implement any such access
restrictions.
2. Contests. Purchase Pro will take all steps necessary to ensure that any
--------
contest, sweepstakes or similar promotion conducted or promoted through the AOL
Exchange (a "Contest") complies with all applicable federal, state and local
laws and regulations.
3. Navigation. Subject to Section 1.6 of the Agreement, AOL will be entitled
----------
to establish navigational icons, links and pointers connecting the AOL Exchange
(or portions thereof) with other content areas on the AOL Network. Additionally,
in cases where an AOL User performs a search for Purchase Pro through any search
or navigational tool or mechanism that is accessible or available through the
AOL Network (e.g., Promotions, Keyword Search Terms, or any other promotions or
navigational tools), AOL shall have the right to direct such AOL User to the AOL
Exchange or the Purchase Pro Exchange, or any other public Purchase Pro Exchange
or Marketplace determined by AOL in its reasonable discretion.
4. AOL Look and Feel. Purchase Pro acknowledges and agrees that AOL will own
-----------------
all right, title and interest in and to the elements of graphics, design,
organization, presentation, layout, user interface, navigation and stylistic
convention (including the digital implementations thereof) which are generally
associated with online areas contained within the AOL Network, subject to
Purchase Pro's ownership rights in the Platform and the Purchase Pro Exchange
and any Purchase Pro trademarks or copyrighted material within the AOL Exchange.
Purchase Pro acknowledges and agrees that AOL owns all right, title, and
interest in and to the AOL frame (and any other visible elements of client
software) appearing around the AOL Exchange or the Purchase Pro Exchange when an
AOL User is viewing such Exchange.
5. Management of the AOL Exchange. Purchase Pro will review, delete, edit,
------------------------------
create, update and otherwise manage the AOL Exchange, in a timely and
professional manner and in accordance with the terms of this Agreement. The AOL
Exchange shall comply with AOL's then-current Terms of Service and any similar
then-current terms for the other AOL Properties, AOL's then-current advertising
standards, and any other standard terms which AOL chooses to implement regarding
the AOL Exchange (collectively, the "AOL Policies"). AOL shall provide Purchase
Pro with copies of, or online access to, each of the AOL Policies, and any
changes thereto, at least thirty (30) days prior to the date on which such
policies or changes become effective. Purchase Pro represents and warrants that
it will take all necessary steps to ensure that the AOL Exchange complies with
all applicable laws and regulations and the AOL Policies. AOL will have no
obligations with respect to the Content or Products available on or through the
AOL Exchange, including, but not limited to, any duty to review or monitor any
such Content or Products.
6. Management of the Purchase Pro Exchange. Purchase Pro will review, delete,
---------------------------------------
edit, create, update and otherwise manage the Purchase Pro Exchange, in a timely
and professional manner and in accordance with the terms of this Agreement.
Purchase Pro represents and warrants that it will take all necessary steps to
ensure that the Purchase Pro Exchange complies with all applicable laws and
regulations.
7. Purchase Pro Content. Purchase Pro warrants that the Licensed Content: (i)
--------------------
will not infringe on or violate any copyright, trademark, U.S. patent or any
other third party right, including without limitation, any music performance or
other music-related rights; (ii) will not violate AOL's then-applicable Terms of
Service for the AOL Service or any other AOL Property, or AOL's ad policies; and
(iii) will not violate any applicable law or regulation, including those
relating to contests, sweepstakes or similar promotions. Additionally, Purchase
Pro represents and warrants that it owns or has a valid license to all rights to
any Licensed Content for use in AOL "slideshow" or other formats embodying
elements such as graphics, animation and sound, free and clear of all
encumbrances and without violating the rights of any other person or entity.
Except as contemplated by Section 5.7 of this Agreement, Purchase Pro shall not
in any manner state or imply that AOL recommends or endorses Purchase Pro or
Purchase Pro's Content (e.g., no statements that Purchase Pro is an "official"
or "preferred" provider of products or services for AOL).
8. Duty to Inform. Each party will promptly inform other party of any
--------------
information related to the AOL Exchange or the Purchase Pro Exchange which such
party believes is reasonably likely to lead to a claim, demand, or liability of
or against AOL, Purchase Pro and/or the affiliates of either by any third party.
33
9. Customer Service. Purchase Pro will be responsible for performing all
----------------
customer service with regard to the Purchase Pro Exchange. AOL and Purchase Pro
will each perform customer service responsibilities with regard to the AOL
Exchange in accordance with Sections 2, 3, and 4 of the Technology Development
Agreement.
10. Overhead Accounts. To the extent AOL has granted Purchase Pro any overhead
-----------------
accounts on the AOL Service, Purchase Pro will be responsible for the actions
taken under or through its overhead 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 overhead Account issued to Purchase
Pro, but Purchase Pro will not be liable for charges incurred by any overhead
account relating to AOL's standard monthly usage fees and standard hourly
charges, which charges AOL will bear. Upon the termination of this Agreement,
all overhead 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 overhead
account.
11. Navigation Tools. Any Keyword Search Terms to be directed to the AOL
----------------
Exchange shall be (i) subject to availability for use by Purchase Pro and (ii)
limited to the combination of the Keyword search modifier combined with a
registered trademark of Purchase Pro (e.g. "AOL keyword: XYZ Company Name"). AOL
reserves the right to revoke at any time Purchase Pro's use of any Keyword
Search Terms which do not incorporate one or more registered trademarks or
registered service marks of Purchase Pro. Purchase Pro 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 Purchase Pro holds in the company
name, domain name, trademark, service mark, trade name or other search modifier
relating to Purchase Pro that is part thereof (the "Purchase Pro Referent") when
utilized independent of the Keyword Search Term. Without limiting the generality
of the foregoing or the rights of Purchase Pro to use and/or register the
Purchase Pro Referent independent of the Keyword Search Term , (i) Purchase Pro
will not: (a) attempt to register or otherwise obtain trademark protection in
any Keyword Search Term; or (b) use any Keyword Search Term, except for the
purposes expressly required or permitted under this Agreement and (ii) AOL will
not: (a) attempt to register or otherwise obtain trademark or service mark
protection in or other registration of any Purchase Pro Referent; or (b) use any
Purchase Pro Referent, 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 AOL Exchange, such bookmarks will be subject to AOL's
control at all times. Upon the termination of this Agreement, Purchase Pro's
rights to any Keyword Search Terms and bookmarking will terminate (without
affecting Purchase Pro's rights in and to the Purchase Pro Referent).
12. Merchant Certification Program. If and to the extent applicable to Purchase
------------------------------
Pro and the development and operation of the AOL Exchange, Purchase Pro will
participate in any generally applicable "Certified Merchant" program operated by
AOL or its authorized agents or contractors, other than with respect to the
payment of fees or inconsistent with this Agreement or the Technology Agreement.
Each Certified Merchant in good standing will be entitled to place on its
affiliated Interactive Site an AOL designed and approved button promoting the
merchant's status as an AOL Certified Merchant.
13. Reward Programs. On the AOL Exchange, Purchase Pro shall not offer,
---------------
provide, implement or otherwise make available any promotional programs or plans
that are intended to provide customers with rewards or benefits in exchange for,
or on account of, their past or continued loyalty to, or patronage or purchase
of, the products or services through use of the AOL Exchange (e.g., a
promotional program similar to a "frequent flier" program), unless such
promotional program or plan is provided exclusively through AOL's "AOL Rewards"
program, accessible on the AOL Service at Keyword: "AOL Rewards."
14. Search Terms. To the extent this Agreement sets forth any mechanism by
------------
which the AOL Exchange will be promoted in connection with specified search
terms within any AOL product or service, Purchase Pro hereby represents and
warrants that Purchase Pro has all consents, authorizations, approvals,
licenses, permits or other rights necessary for Purchase Pro to use such
specified search terms. Notwithstanding the foregoing, AOL shall have the right
to suspend the use of any search term if AOL has reason to believe continued use
may subject AOL to liability or other adverse consequences.
34
EXHIBIT F
Standard Legal Terms & Conditions
---------------------------------
1. 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, or other promotional materials,
excluding Press Releases, related to the AOL Exchange, the Purchase Pro Exchange
and/or referencing the other Party and/or its trade names, trademarks, and
service marks (the "Promotional Materials"); provided, however, that either
Party's use of screen shots of the AOL Exchange for promotional purposes will
not require the approval of the other Party so long as America Online(R) is
clearly identified as the source of such screen shots; and provided further,
however, that, 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 in Promotional
Materials, will not require the approval of the other Party. Each Party will
solicit and reasonably consider the views of the other Party in designing and
implementing such Promotional Materials. Once approved, the Promotional
Materials may be used by a Party and its affiliates for the purpose of promoting
the AOL Exchange and the content contained therein and reused for such purpose
until such approval is withdrawn with reasonable prior notice. In the event
such approval is withdrawn, existing inventories of Promotional Materials may be
depleted.
2. License. Subject to the other provisions of this Agreement, Purchase Pro
-------
hereby grants AOL a non-exclusive worldwide license to market, license,
distribute, reproduce, display, perform, transmit and promote the Purchase Pro
Exchange and the Licensed Content (or any portion thereof, including, without
limitation, any Licensed Content contained within the AOL Exchange) through such
areas or features of the AOL Network as AOL deems appropriate. Purchase Pro
acknowledges and agrees that the foregoing license permits AOL to distribute
portions of the Licensed Content in synchronism or timed relation with visual
displays prepared by Purchase Pro or AOL (e.g., as part of an AOL "slideshow").
In addition, AOL Users will have the right to access and use the AOL Exchange
and the Purchase Pro Exchange upon proper registration and payment of applicable
subscription and other fees associated with such access and use.
3. Trademark License. In designing and implementing the Materials and subject
-----------------
to the other provisions contained herein, Purchase Pro will be entitled to use
the following trade names, trademarks, and service marks of AOL: the "America
Online(TM)" brand service, "AOL(TM)" service/software and AOL's triangle logo;
and AOL and its affiliates will be entitled to use the trade names, trademarks,
and service marks of Purchase Pro for which Purchase Pro holds all rights
necessary for use in connection with this Agreement (collectively, together with
the AOL marks listed above, the "Marks"); provided that such Party: (i) does not
create a unitary composite mark involving a Mark of the other Party without the
prior written approval of such other Party; (ii) displays symbols and notices
clearly and sufficiently indicating the trademark status and ownership of the
other Party's Marks in accordance with applicable trademark law and practice and
(iii) complies with Section 5 of this Exhibit G.
4. Ownership of Trademarks. Each Party acknowledges the ownership right of
-----------------------
the other Party in the Marks of the other Party and agrees that all use of the
other Party's Marks will inure to the benefit, and be on behalf, of the other
Party. Each Party acknowledges that its utilization of the other Party's Marks
will not create in it, nor will it represent it has, any right, title, or
interest in or to such Marks other than the licenses expressly granted herein.
Each Party agrees not to do anything contesting or impairing the trademark
rights of the other Party.
5. Quality Standards. Each Party agrees that the nature and quality of its
-----------------
products and services supplied in connection with the other Party's Marks will
conform to quality standards reasonably set by the other Party. Each Party
agrees to supply the other Party, upon request, with a reasonable number of
samples of any Materials publicly disseminated by such Party which utilize the
other Party's Marks. Each Party will comply with all applicable laws,
regulations, and customs and obtain any required government approvals pertaining
to use of the other Party's marks.
6. Infringement Proceedings. Each Party agrees to promptly notify the other
------------------------
Party of any unauthorized use of the other Party's Marks of which it has actual
knowledge. Each Party will have the sole right and discretion to bring
proceedings alleging infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide the other Party
with its reasonable cooperation and assistance, at the other Party's expense and
reasonable written request, with respect to any such infringement proceedings.
7. 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 this Agreement and to perform the acts required of it
hereunder; (ii) the execution of this 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, this 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 this Agreement.
35
Purchase Pro hereby represents and warrants that it possesses all
authorizations, approvals, consents, licenses, permits, certificates or other
rights and permissions necessary to operate the AOL Exchange and the Purchase
Pro Exchange.
8. Confidentiality. Each Party acknowledges that Confidential Information may
---------------
be disclosed to it by 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 have a reasonable need to access and/or use such
Confidential Information to perform such Party's obligations hereunder, who will
each agree to comply with this section (either specifically or pursuant to a
general confidentiality obligation or agreement). Notwithstanding the
foregoing, either Party may issue a press release or other disclosure containing
Confidential Information without the consent of the other Party, to the extent
such disclosure is required by law, rule, regulation or government or court
order. In such event, the disclosing Party will provide at least five (5)
business days prior written notice of such proposed disclosure to the other
Party. Further, in the event such disclosure is required of either Party under
the laws, rules or regulations of the Securities and Exchange Commission or any
other applicable governing body, such Party will (i) redact mutually agreed-upon
portions of this Agreement to the fullest extent permitted under applicable
laws, rules and regulations and (ii) submit a request to such governing body
that such portions and other provisions of this Agreement receive confidential
treatment under the laws, rules and regulations of the Securities and Exchange
Commission or otherwise be held in the strictest confidence to the fullest
extent permitted under the laws, rules or regulations of any other applicable
governing body.
9. Limitation of Liability; Disclaimer; Indemnification.
----------------------------------------------------
9.1 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 USE OR INABILITY TO USE THE
AOL NETWORK, THE AOL SERVICE, AOL.COM, THE AOL EXCHANGE OR THE PURCHASE PRO
EXCHANGE, 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 SECTION 9.3. EXCEPT
AS PROVIDED IN SECTION 9.3, (I) LIABILITY ARISING UNDER THIS AGREEMENT WILL BE
LIMITED TO DIRECT, OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE MAXIMUM
LIABILITY OF ONE PARTY TO THE OTHER PARTY FOR ANY CLAIMS ARISING IN CONNECTION
WITH THIS AGREEMENT WILL NOT EXCEED THE AGGREGATE AMOUNT OF FIXED GUARANTEED
PAYMENT OBLIGATIONS OWED BY PURCHASE PRO HEREUNDER IN THE YEAR IN WHICH THE
EVENT GIVING RISE TO LIABILITY OCCURS; PROVIDED THAT EACH PARTY WILL REMAIN
LIABLE FOR THE AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER
PARTY PURSUANT TO THE AGREEMENT.
9.2 No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
-------------------------------
AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS
ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE PURCHASE
PRO EXCHANGE, THE AOL EXCHANGE, THE AOL NETWORK OR THE AOL PROPERTIES, 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, EACH PARTY SPECIFICALLY
DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY OF THE AOL EXCHANGE.
Notwithstanding the foregoing, nothing contained in this Agreement shall
restrict or limit in any way, any duty, representation, or warranty of either
Party pursuant to the Technology Development Agreement.
9.3 Indemnity. Each 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 this Agreement.
9.4 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) business 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) business 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 unless such Party disputes in good faith that it has an
obligation to Indemnify against such Action.
36
In the event the Indemnifying Party disputes in good faith that it has an
obligation to indemnify against such Action, the Indemnified Party shall proceed
to defend the Action until such time as the dispute is resolved in accordance
with Section 8 if this Agreement. If, upon resolution of the dispute, the
Indemnifying Party is found to have an obligation to defend the Action, the
Indemnifying Party shall promptly reimburse the Indemnified Party for all
reasonable costs incurred in defending the Action during the period of dispute
resolution. 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) business 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 (if any), to compromise or defend (and
control the defense of) such Action. In such case, the Indemnifying Party will
reasonably cooperate, at its own expense, unless such Party disputes in good
faith that it has an obligation to Indemnify against such Action, 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. In the event the Indemnifying Party disputes in
good faith that it has an obligation to indemnify against such Action, the
Indemnifying Party shall reasonably cooperate at the Indemnified Party's expense
until such time as the dispute is resolved in accordance with Section 8 if this
Agreement. If, upon resolution of the dispute, the Indemnifying Party is found
to have an obligation to reasonably cooperate at it's own expense, the
Indemnifying Party shall promptly reimburse the Indemnified Party for all
reasonable costs incurred in obtaining the Indemnifying Party's cooperation
during the period of dispute resolution. 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.
10. Acknowledgment. AOL and Purchase Pro 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 this Agreement are intended to limit
the circumstances and extent of liability. The provisions of this Section 9 will
be enforceable independent of and severable from any other enforceable or
unenforceable provision of this Agreement.
11. Solicitation of AOL Users. During the Term and for a two year period
-------------------------
thereafter, Purchase Pro will not use the AOL Network (including, without
limitation, the e-mail network contained therein) to solicit AOL Users on behalf
of another Interactive Service or on behalf of any Exchange or Marketplace.
Without limiting the generality of the foregoing, during the Term and for a two
year period thereafter, Purchase Pro shall not use any information obtained
pursuant to this Agreement to solicit any person or entity to participate in any
Exchange or Marketplace (as a subscriber, supplier, buyer, seller, advertiser,
or any other type of participant) except as specifically contemplated herein.
The foregoing sentence shall not restrict Purchase Pro's activities undertaken
using information obtained other than pursuant to this Agreement. More
generally, Purchase Pro will not send unsolicited, commercial e-mail (i.e.,
"spam") or other online communications to AOL Users through use of the AOL
Network, 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 or other online communication is being sent has voluntarily either (i)
engaged in a transaction with Purchase Pro or (ii) provided information to
Purchase Pro through a contest, registration (including becoming a Registered
User), or other communication, which included reasonable notice to the AOL User
that the information provided could result in commercial e-mail or other online
communication being sent to that AOL User by Purchase Pro or its agents. Any
commercial e-mail or other online communications to AOL Users which are
otherwise permitted hereunder, 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 or into the AOL product
or service in question). Purchase Pro will provide users of the Purchase Pro
Exchange and the AOL Exchange a means to opt-out of receiving future commercial
email or other online communications, other than emails to Registered Users as
necessary for the normal operation of the Purchase Pro Exchange (e.g., monthly
billing statements from Purchase Pro).
12. AOL User Communications. To the extent that Purchase Pro is permitted to
-----------------------
communicate with AOL Users under this Exhibit G, in any such communications to
AOL Users on or off the AOL Exchange (including, without limitation, e-mail
solicitations), Purchase Pro will not actively encourage AOL Users to take any
action knowingly and purposefully inconsistent with the scope and purpose of
this Agreement, including without limitation, (i) using an Exchange other than
the AOL Exchange or the Purchase Pro Exchange or any Third Party Exchange or any
Marketplace or Exchange linked or networked thereto, (ii) bookmarking of an
Interactive Site other than the AOL Exchange, or (iii) changing the default home
page on the AOL browser. Additionally, with respect to such AOL User
communications, in the event that Purchase Pro encourages an AOL User to use the
products or services of Purchase Pro through communications to an email address
or screename associated with the AOL Properties (e.g., JohnDoe@aol.com,
JohnDoe@Netscape.com, etc.), Purchase Pro shall ensure that (a) the AOL Exchange
is promoted as the primary location through which the AOL User should use such
products or services, and (b) any link to an Exchange within such communication
shall be a link to the AOL Exchange.
13. Collection and Use of User Information. Purchase Pro and AOL each 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) the stricter of AOL's standard privacy policies,
available on the AOL Service at the keyword term "Privacy" or Purchase Pro's
standard privacy policies which shall be posted prominently on the Purchase Pro
37
Exchange. Purchase Pro will not disclose User Information collected hereunder
to any third party in a manner that identifies AOL Users as end users of an AOL
product or service or use User Information collected under this Agreement to
market another Interactive Service. When end users are required to register to
access and use the AOL Exchange, such registration processes will be seamlessly
integrated with Netscape's "Universal Registration" or AOL's "SNAP" system (or
such other registration process developed by AOL) and be consistent with AOL's
and Purchase Pro's then-current privacy policies. AOL and Purchase Pro will
jointly own all end user data collected by AOL or Purchase Pro in connection
with the use of the AOL Exchange, including without limitation during any
registration process thereon, and in connection with the use of the Purchase Pro
Exchange by AOL Subscribers. Except as otherwise provided herein, neither Party
shall provide access to such data to any third party without prior written
consent of the other Party. Purchase Pro will have no ownership rights in any
data relating to AOL's third party partners, and Purchase Pro will not at any
time use any such data obtained by it without AOL's prior written consent other
than to the extent that Purchase Pro reasonably is required to integrate such
data into or use such data in the operation of the AOL Exchange or other
functionality expressly designated by AOL.
14. Excuse. Neither Party will be liable for, or be considered in breach of or
------
default under this Agreement on account of, any delay or failure to perform as
required by this Agreement 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.
15. Independent Contractors. The Parties to this Agreement are independent
-----------------------
contractors. Neither Party is an agent, representative or employee 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. This Agreement will not be interpreted or
construed to create an association, agency, joint venture or partnership between
the Parties or to impose any liability attributable to such a relationship upon
either Party.
16. Notice. Any notice, approval, request, authorization, direction or other
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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 the AOL Network (to screenname
"AOLNotice@AOL.com" 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 Purchase Pro, except as otherwise specified herein, the notice address will
be the address for Purchase Pro 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 e-mail
address, to be as reasonably identified by AOL.
17. Launch Dates. In the event that any terms contained herein relate to or
------------
depend on the commercial launch date of the AOL Exchange 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.
18. No Waiver. The failure of either Party to insist upon or enforce strict
---------
performance by the other Party of any provision of this Agreement or to exercise
any right under this 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.
19. Return of Information. Upon the expiration or termination of this
---------------------
Agreement, each Party will, upon the written request of the other Party, return
or destroy (at the option of the Party receiving the request) all confidential
information, documents, manuals and other materials specified the other Party,
except as provided in the Technology Development Agreement.
20. Survival. The Sections of this Agreement (including all exhibits hereto)
--------
which survive expiration or termination of this Agreement by their terms, any
Sections of this Agreement (including all exhibits hereto) which are necessary
to enable or support any obligation which survives by its terms, and any payment
obligations accrued prior to termination or expiration, will all survive the
completion, expiration, termination or cancellation of this Agreement.
21. Entire Agreement. This Agreement, together with the Technology Development
----------------
Agreement, sets forth the entire agreement and supersedes any and all prior
agreements of the Parties with respect to the transactions set forth herein.
Neither Party will be bound by, and each Party specifically objects to, any
term, condition or other provision which is different from or in addition to the
provisions of this Agreement (whether or not it would materially alter this
Agreement) and which is proffered by the other Party in any correspondence or
other document, unless the Party to be bound thereby specifically agrees to such
provision in writing.
22. Amendment. No change, amendment or modification of any provision of this
---------
Agreement will be valid unless set forth in a written instrument signed by the
Party subject to enforcement of such amendment, and in the case of AOL, by an
executive of Vice President level or above.
23. Further Assurances. Each Party will take such action (including, but not
------------------
limited to, the execution, acknowledgment and delivery of
38
documents) as may reasonably be requested by any other Party for the
implementation or continuing performance of this Agreement.
24. Assignment. Except as provided in the following sentence, Purchase Pro
----------
will not assign this Agreement or any right, interest or benefit under this
Agreement without the prior written consent of AOL (which will not be
unreasonably withheld). Assignment and assumption of the Agreement to and by any
successor to Purchase Pro by way of a sale of all or substantially all of its
assets or a merger or consolidation will be not subject to AOL's prior written
approval, so long as the acquirer or resulting entity is financially solvent and
able to perform Purchase Pro's obligations under this Agreement. 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.
25. Construction; Severability. In the event that any provision of this
--------------------------
Agreement conflicts with the law under which this Agreement is to be construed
or if any such provision is held invalid by a court with jurisdiction over the
Parties to this 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.
26. Remedies. Except where otherwise specified, the rights and remedies
--------
granted to a Party under this 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; provided that, in connection with any dispute hereunder, a Party
will be not entitled to offset any amounts that it claims to be due and payable
from the other Party against amounts otherwise payable by such Party to the
other Party.
27. Applicable Law. Except as otherwise expressly provided herein, this
--------------
Agreement will be interpreted, construed and enforced in all respects in
accordance with the laws of the State of New York except for its conflicts of
laws principles.
28. Export Controls. Both Parties will adhere to all applicable laws,
---------------
regulations and rules relating to the export of technical data and will not
export or re-export any technical data, any products received from the other
Party or the direct product of such technical data to any proscribed country
listed in such applicable laws, regulations and rules unless properly
authorized.
29. Headings. The captions and headings used in this Agreement are inserted
--------
for convenience only and will not affect the meaning or interpretation of this
Agreement.
30. Counterparts. This 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.
39
EXHIBIT G
Initial List of AOL Referrals
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Confidential material redacted and filed separately with the Securities and
Exchange Commission. (10 pages redacted)
Interactive Marketing Agreement - America Online Inc. and PurchasePro.com Inc.
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