Strategic Alliance And Marketing Agreement 09/27/99

STRATEGIC ALLIANCE AND MARKETING AGREEMENT


This Strategic Alliance and Marketing Agreement (the "Agreement") is made as of this 27th day of September, 1999 (the "Effective Date") by and between OFFICE.COM INC., a Delaware corporation ("Office.com") and ROWECOM INC., a Delaware corporation ("RoweCom").


WHEREAS, Office.com is developing a destination web site for small to medium- sized businesses (together with any successor sites, the "Office.com Site" as further defined below); such site is to provide online news, easy-to-use tools, and other services on the Internet;


WHEREAS, RoweCom provides business-to-business electronic commerce services to businesses and not-for-profit institutions interested in purchasing subscriptions, books and other knowledge products and services of a professional nature and, in connection therewith, RoweCom collaborates with such entities to enhance existing intranet networks to enable such entities to purchase subscriptions, books and other knowledge products and services via their intranets; and


NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, Office.com and RoweCom agree as follows:


1. DEFINITIONS


1.1. DEFINED TERMS. For purposes of this Agreement, the following terms have
the respective meanings set forth below:


a. GROSS MARGIN means the aggregate amount received by RoweCom on an
Initial Order or a Renewal Order, less: (i) payments to third-party
----
publishers or strategic partners in generating such Order, (ii) credits,
refunds and allowances separately and actually credited to customers in
connection with such Order for defective, damaged, outdated, and
returned or cancelled RoweCom Titles; (iii) offered and taken trade and
cash discounts, rebates, trade commissions and distribution fees in
amounts customary to the trade and as required to do business in the
country in which they are made; and (iv) sales, excise, use, turnover,
inventory, value-added and similar taxes and duties, not including net
income tax. Gross Margin shall not include special outbound packing,
transportation, insurance, and handling charges, separately billed to
the customer or prepaid.


B. HTML means hypertext mark-up language.


C. INITIAL ORDER means an initial order for a RoweCom Title placed by an
Office.com Customer through the RoweCom kStore.


D. KNOWLEDGE PRODUCTS means any magazines, books, journals, subscriptions,
serials, market research reports, or other publications, embodied in
paper or electronic media.


E. LAUNCH DATE means the date on which the RoweCom kStore is substantially
complete and functional in all material respects for Office.com
Customers or


potential Office.com Customers, and in no event shall be later than
the date of the Office.com Site Launch, scheduled for one (1) month
after the Effective Date of this Agreement. RoweCom will assist
Office.com in the launch of the RoweCom kStore, integrated with
Office.com's SPIM, at the time of such Office.com Site Launch.


F. OFFICE.COM CHANNEL means all marketing and distribution channels
including but not limited to the Office.com Site, affinity group web
sites created by Office.com during the Term hereof, and direct marketing
and other marketing and distribution channels related to the Office.com
Site and utilized by Office.com.


G. OFFICE.COM CONTENT means any materials provided by Office.com to RoweCom
in connection with this Agreement, including any Office.com logos or
images, the SPIM, and related materials.


H. OFFICE.COM CUSTOMER means any person or entity that orders at least one
(1) RoweCom Title through the RoweCom kStore.


I. OFFICE.COM SITE means (1) the web site and pages that a user's web
browser will generate as a result of requesting URLs in the "office.com"
Internet domain, other than such pages intended for testing,
development, or other internal purposes; and (2) any web pages or sites
that are replacements for such web pages or site.


J. OFFICE.COM SITE LAUNCH means the point in time when the Office.com Site
is first made available for use by the general public via the public
Internet.


K. INTELLECTUAL PROPERTY means the respective patents, trade secrets,
copyrights, trademarks, industrial designs and other intellectual
property of the parties, including without limitation the RoweCom
Trademarks, the Office.com Trademarks, related sales collateral, RoweCom
Content, and any such Intellectual Property contained in the RoweCom
kStore, Office.com Content, and/or the Office.com Site.


L. RENEWAL ORDER means the renewal of an Initial Order.


M. ROWECOM CONTENT means the list of all RoweCom Titles provided through
the RoweCom kStore, as updated by RoweCom from time to time, but
excluding any Office.com Content. Subject to Section 3.2(g) below,
RoweCom shall have and retain sole editorial discretion over RoweCom
Content.


N. ROWECOM KSTORE means a customized, co-branded Office.com/RoweCom web
site prepared by RoweCom and subject to the joint approval of Office.com
and RoweCom. The RoweCom kStore will contain a catalog of RoweCom
Titles, order processing, and other features, and will have a URL
address determined by RoweCom.


O. ROWECOM TITLE means any Knowledge Product that RoweCom is authorized by
a publisher to sell and that is listed in the RoweCom kStore, as updated
from time to time.


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P. TERM means the period beginning on the Effective Date and ending upon
expiration or termination of this Agreement, as set forth in Section 7
hereto.


Q. TRADEMARK means names, trademarks, services marks, trade names, labels,
logos, designs or other designations and all goodwill associated
therewith. The RoweCom Trademarks are set forth in Exhibit B (hereby
---------
incorporated by reference), as may be updated by RoweCom from time to
time. The Office.com Trademarks are set forth in Exhibit C (hereby
---------
incorporated by reference), as may be updated by Office.com from time to
time.


R. URL means uniform resource locator.


1.2. OTHER DEFINED TERMS. Each of the following terms have the meanings ascribed
to it in the section set forth opposite such term:


AGREEMENT Preamble


AUDITED PARTY Section 4.3


AUDITING PARTY Section 4.3


BUY BOXES Section 2.1


CONFIDENTIAL
INFORMATION Section 6.1


DHTML Section 2.1


DISCLOSING PARTY Section 6.1


EFFECTIVE DATE Preamble


INDEMNITOR Section 8.3(a)


INDEMNITEES Section 8.3(a)


INITIAL TERM Section 7.1


LOSSES Section 8.3(a)


OFFICE.COM Preamble


OFFICE.COM LINK
FILE Section 2.2


OFFICE.COM DIRECT
COMPETITOR Section 3.5 and Exhibit D (hereby incorporated
---------
by reference)
QUARTERLY
STATEMENT Section 4.2


ROWECOM Preamble


ROWECOM DIRECT
COMPETITOR Section 3.5 and Exhibit D
---------


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ROWECOM LINK FILE Section 2.1


RECIPIENT Section 6.1


VERTICAL
NAVIGATION BAR Section 2.1


2. LINKAGE


2.1. SITE LINKS TO THE ROWECOM KSTORE. Subject to the terms of this Agreement
but in no event later than December 15, 1999, provided that the RoweCom
kStore is completed and functional in all material respects for the
Office.com Site Launch, Office.com will place a hypertext link to a page
within the RoweCom kStore within the second sub-level of the hierarchical
dynamic HTML ("DHTML") site navigation display appearing on the upper left
corner of each page (the "Vertical Navigation Bar") of the Office.com Site.
Office.com shall have the right to change the appearance and/or
functionality of the Vertical Navigation Bar, as is more fully set forth in
Section 3.12, provided that, during the Term hereof, Office.com shall
provide a hypertext link of equivalent prominence (in Office.com's
reasonable determination) to a page within the RoweCom kStore. In addition
and not in lieu of the foregoing, the RoweCom kStore may also be accessible
through links from purchasing and online transaction opportunities for
contextually relevant items in selected product categories ("Buy Boxes"),
located on the Office.com Site, the size, number and placement of which
shall be within Office.com's sole discretion. RoweCom shall provide the
textual and/or graphic content, when applicable, of these links to
Office.com as one or more computer-readable files in an Internet standard
file format (such files being, collectively, the "RoweCom Link File").


2.2. SITE LINKS TO THE OFFICE.COM SITE. Subject to the terms of this Agreement
but in no event later than the Launch Date, RoweCom will place a hypertext
link to the Office.com Site, with a URL address determined by Office.com,
from each page of the RoweCom kStore, the location, size and placement of
which link shall be mutually agreed to by the parties. Office.com will
provide the textual and/or graphic content, when applicable, of these links
to RoweCom as one or more computer-readable files in an Internet standard
file format (such files being, collectively, the "Office.com Link File").


2.3. EXPENSES. Each party shall be responsible for its own expenses in
performing its obligations under this Agreement.


3. OBLIGATIONS OF THE PARTIES.


3.1. Office.com Obligations. Subject to the terms of this Agreement, Office.com
shall:


a. Assign an account executive for RoweCom kStore implementation, and to
act as an Office.com contact for the daily operations of the RoweCom
kStore;


b. Provide one or more hypertext links from the Office.com Site to the
RoweCom kStore as set forth in Section 2.1 of this Agreement;


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C. List RoweCom as a partner on the Office.com Site in the same manner as
Office.com lists its other partners on the Office.com Site, and, upon
mutual agreement by both parties, in advertising, promotional, and/or
publicity materials;


D. Make payments to RoweCom, and provide Quarterly Statements, in
accordance with Section 4 hereof for all advertising within the
RoweCom kStore.


E. Market and sell advertising on the RoweCom kStore, and collect
revenues for such advertising.


3.2. ROWECOM OBLIGATIONS. Subject to the terms of this Agreement, RoweCom shall:


a. At RoweCom's expense, develop, host, maintain, and integrate
Office.com's SPIM into, the RoweCom kStore, subject to the approval of
the parties;


B. Assign an account executive for RoweCom kStore implementation, and to
act as Office.com's primary contact for the daily operations of the
RoweCom kStore;


C. Provide hypertext links from the RoweCom kStore to the Office.com Site
as set forth in Section 2.2 of this Agreement;


D. Process Initial Orders and Renewal Orders received from Office.com
Customers, collect amounts from such Office.com Customers, comply with
all applicable laws and regulations, fulfill Initial Orders and
Renewal Orders, process address changes for Office.com Customers, and
provide customer service on Initial Orders and Renewal Orders
consistent with the terms set forth in Exhibit E (hereby incorporated
---------
by reference), including but not limited to assigning a customer
service representative to provide customer support and respond to
claims from Office.com Customers;


E. Provide, to the extent permitted by applicable laws and regulations,
information to Office.com regarding Office.com Customers, Initial
Orders and Renewal Orders in accordance with the terms of this
Agreement, including but not limited to names, addresses, telephone
numbers, email addresses, and product purchase information;


F. Honor the policy regarding cancellations and refunds provided by the
publisher of the applicable RoweCom Title, provided that RoweCom
reserves its right to change its policy regarding refunds and
cancellations and will promptly and conspicuously post on the RoweCom
kStore, and promptly provide written notice to Office.com of, any such
change(s);


g. Perform title searches for additions to RoweCom Content and use its
best efforts to add to RoweCom Content a particular Knowledge Product
requested by Office.com or an Office.com Customer or potential
Office.com Customer within three (3) business days of such request.
From time to time during the Term, RoweCom may, at its sole
discretion, make corrections, enhancements, revisions, updates,
upgrades and other changes to RoweCom Content unrelated to any
requests by Office.com or Office.com Customers. In the event that (1)
RoweCom cannot or will not add requested materials to the RoweCom
Content within the time specified above, or (2) RoweCom ceases to
offer a particular RoweCom Title, Office.com shall be


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entitled to contract directly with the publisher or any other provider
of such Knowledge Product for the right to offer such titles on or
through the Office.com Site, provided that, Office.com shall provide
at least seven (7) days advance written notice of such intent to seek
such Knowledge Product from a publisher or other third party provider.


H. No later than the launch of version 4.0 of the RoweCom kStore (which
RoweCom intends to enable by December 15, 1999, and shall in any event
enable no later than January 15, 2000), provide discounts on all
Knowledge Products (other than market research reports and RoweCom's
800 most popular titles) ordered by Office.com Customers in accordance
with RoweCom's then-current pricing and discounts, including, as
applicable, providing the lowest price available on all large
circulation and general interest magazines sold through the RoweCom
kStore;


I. Provide technical support to Office.com in connection with the
installation, operation, and maintenance of the RoweCom kStore; and


j. Make payments, and provide Quarterly Statements, to Office.com in
accordance with Section 4 hereof for all Initial Orders and Renewal
Orders.


3.3. DEVELOPMENT: RoweCom and Office.com shall cooperate in good faith with
regard to (a) implementation of the RoweCom kStore, (b) linking the RoweCom
kStore to the Office.com Site, (c) conformance of the RoweCom kStore with
Office.com's proprietary SPIM, (d) the development of a RoweCom kStore 4.0
design, and (e) such other matters as the parties agree to address jointly.


3.4. LICENSES.


a. LICENSES TO OFFICE.COM. Subject to the terms set forth herein, RoweCom
hereby grants to Office.com:


(1) a limited, world-wide, non-exclusive, non-transferable, non-
assignable (except as set forth in Section 9.3), royalty-free
right and license (excluding the right to sublicense) to store,
copy, distribute, transmit, adapt, and display the RoweCom
kStore, RoweCom Content, and the RoweCom Link File as delivered
under Section 2.1 solely to (i) market, promote, and offer
RoweCom Content to Office.com Customers or potential Office.com
Customers through Office.com Channels, (ii) to market and promote
the Office.com Site generally, subject to the terms of this
Agreement and particularly Section 3.6 hereof, and (iii) comply
with Office.com's obligations under Section 3.1 of this
Agreement;


(2) a limited, world-wide, non-exclusive, non-assignable (except as
set forth in Section 9.3), royalty-free right and license
(excluding the right to sublicense) to use the RoweCom Trademarks
solely to promote and market the RoweCom kStore and RoweCom
Content in accordance with the terms of this Agreement. Upon
reasonable notice from RoweCom, Office.com shall permit RoweCom
to visit all locations on the Internet where Office.com delivers
services using the RoweCom Trademarks to ensure that (a) such
services are delivered in a manner consistent with the


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service standards employed by RoweCom and (b) the RoweCom
Trademarks used in connection with such services are in
compliance with the specifications provided to Office.com from
time to time. It is understood that, under certain circumstances,
Office.com may need third party consents to effectuate the
visitation by RoweCom. In such circumstances, Office.com will
work with RoweCom to facilitate the review of the usage of the
RoweCom Trademarks.


B. LICENSE TO ROWECOM. Subject to the terms set forth herein, Office.com
hereby grants to RoweCom a limited, world-wide, non-exclusive, non-
assignable (except as set forth in Section 9.3), royalty-free right and
license (excluding the right to sublicense) to use the Office.com
Trademarks and Office.com Content (excluding the SPIM) solely to (i)
promote and market the RoweCom kStore and the RoweCom Content in
accordance with the terms of this Agreement, and (ii) to comply with its
obligations under Section 3.2 of this Agreement. RoweCom agrees that,
upon reasonable notice from Office.com, RoweCom shall permit Office.com
to visit all locations on the Internet where RoweCom delivers services
using the Office.com Trademarks to ensure that (1) such services are
delivered in a manner consistent with the service standards employed by
Office.com and (2) the Office.com Trademarks used in connection with
such services are in compliance with the specifications provided to
RoweCom from time to time. It is understood that, under certain
circumstances, RoweCom may need third party consents to effectuate the
visitation by Office.com. In such circumstances, RoweCom will work with
Office.com to facilitate the review of the usage of the Office.com
Trademarks.


C. RESTRICTION ON USE OF CONFIDENTIAL INFORMATION Nothing in this Section
3.4 shall allow either party to use the other party's Confidential
Information beyond the limitations on such use set forth in Section 6
below.


3.5. EXCLUSIVITY. Subject to Section 7.2(d), it is hereby understood and agreed
by the parties that RoweCom shall be the exclusive provider of those
Knowledge Products set forth on Exhibit A attached hereto (and hereby
---------
incorporated by reference) under the caption "Knowledge Products Provided
by RoweCom and Subject to Exclusivity", and a non-exclusive provider of all
other Knowledge Products for the Office.com Site. Subject to the terms of
Section 3.2(g), during the Term of this Agreement, Office.com agrees not to
enter into a similar arrangement or agreement for linking, co-branding,
development and integration of the Office.com Site with any RoweCom Direct
Competitors (as defined in Exhibit D) for the provision of those Knowledge
---------
Products set forth on Exhibit A, through the Office.com Site, provided
---------
however that nothing in this Agreement shall prevent Office.com from (a)
accepting banners, sponsorships and advertising from any third party on the
Office.com Site, including a RoweCom Direct Competitor, so long as such
banners, sponsorships, and advertising do not specifically reference those
Knowledge Products subject to the exclusivity provisions as set forth on
Exhibit A, and (b) offering, selling, promoting, and/or marketing
---------
discounted or trial subscriptions to Office.com Customers or potential
Office.com Customers for all Knowledge Products published by up to twenty
(20) publishers per one (1) year period that this Agreement is in effect.
Nothing herein shall be deemed to similarly limit RoweCom from selling,
promoting, marketing, or otherwise distributing Knowledge Products through
other vendors or channels, provided, however, that during the first three
(3) months of the


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Term of this Agreement, RoweCom shall not make available any web site or
other service that is linked, co-branded, developed, or integrated with any
Office.com Direct Competitor (as defined in Exhibit D).


3.6. PUBLICITY. Neither party shall originate or cause to be issued any
publicity or news release or otherwise make any public announcement or
statements, written or oral, with respect to this Agreement or the terms
hereof or the transactions contemplated hereby unless mutually agreed by
the parties in writing (not be unreasonably withheld or delayed),
provided that, each party may provide information to the extent required
-------- ----
under securities laws or other applicable laws or regulations, or
governmental or court order. Neither party shall use the name of the other
party or any adaptation thereof or any of such other party's Trademarks in
any advertising, promotional or sales literature, or in any other form of
publicity without prior written consent (which consent will not be
unreasonably withheld or delayed) obtained from the other party in each
case. Notwithstanding the foregoing, a party shall not be in breach of this
Section 3.6 as a result of the incidental appearance of the other party's
web site, Content, Link File, or Trademarks in any public demonstration of
such party's web site or services generally.


3.7. OWNERSHIP AND USE OF OFFICE.COM CUSTOMER INFORMATION.


A. RoweCom will tag each Office.com Customer or potential Office.com
Customer who visits the ...