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EXHIBIT 10.32
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THE VITAMIN SHOPPE & ONHEALTH NETWORK COMPANY
SPONSORSHIP AGREEMENT
This agreement, dated as of March 31, 1999, describes the terms and conditions
of a sponsorship and advertising agreement between Vitamin Shoppe Industries,
Inc. ("Vitamin Shoppe"), which markets and sells vitamins and nutritional
supplements on the Internet at the website xxxx://xxx.xxxxxxxxxxxxx.xxx (or any
successor website, the "Vitamin Shoppe Website") and OnHealth Network Company
("OnHealth") which maintains a health-related site on the Internet at the
website xxxx://xxx.xxxxxxxx.xxx (or any successor website, the "OnHealth
Website"; and together with the Vitamin Shoppe Website, the "Sites").
1. Advertising Placements.
a. Banner Impressions. During the Term (as defined below), OnHealth will
deliver [*****] Vitamin Shoppe impressions (at an intended rate of [*****] Q1,
[*****] Q2, [*****] Q3, [*****] Q4) through a combination of banner
advertisements; tile advertisements and Vitamin Shoppe logos, each of which will
consist of Vitamin Shoppe Advertising Content (as defined below) and each of
which shall contain a Vitamin Shoppe link, as follows:
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AD TYPE DETAILS CREATIVES/ESTIMATED
IMPRESSIONS
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[*****] [*****] [*****]
[*****] [*****] [*****]
[*****] [*****] [*****]
[*****] [*****] [*****]
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AD TYPE DETAILS CREATIVES/ESTIMATED
IMPRESSIONS
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[*****] [ * * * * * ] [*****]
[*****] [ * * * * * ] [*****]
[*****] [ * * * * * ] [*****]
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A "Vitamin Shoppe impression" shall mean the display of a Vitamin Shoppe
advertisement or promotional creative to an end user of the OnHealth Web site.
Vitamin Shoppe agrees and acknowledges that the term "similarly situated" will
take into consideration the volume of advertising purchase, CPM payments,
exclusivity, return promotional efforts, and other consideration offered by each
sponsor or advertiser to OnHealth.
b. Sponsored Areas. During the Term, in no way limiting the other
obligations OnHealth pursuant to the other subsections of this Section 1,
Vitamin Shoppe will receive the following sponsorship and promotional placements
on the OnHealth Website:
(i) Vitamin Shoppe shall be the exclusive vitamin retail
advertiser or sponsor of the Vitamin and Mineral Index area and the Herbal Index
area of the OnHealth Website (collectively, the "Vitamin Shoppe Areas"). That
is, OnHealth shall not place advertisements for any other online or offline
retailer who sell vitamins, minerals and dietary supplements. In furtherance of
the foregoing, OnHealth shall prominently promote the Vitamin Shoppe Website
through a combination of above-the-fold persistent banner advertisements and
side bar advertisements, each of which will consist of Vitamin Shoppe
Advertising Content and each of which shall contain a Vitamin Shoppe link, as
follows:
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AD TYPE DETAILS CREATIVES/ESTIMATED
IMPRESSIONS
-----------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
[*****] [*****] [*****]
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(ii) Vitamin Shoppe shall be treated no less favorably in
Vitamin Shoppe Areas than any other similarly situated sponsor of the OnHealth
Website is treated within its sponsored areas of the OnHealth Website.
OnHealth's obligations with respect to each Vitamin Shoppe Area of the OnHealth
Website set forth in this Section 1(b) shall also apply to all areas which are
successors or replacements to such areas and to all new vitamin, mineral and
herbal areas on the OnHealth Website launched on the OnHealth Website after the
date of this Agreement.
c. Vitamin and Herbs Section of Shopping Channel. During the Term,
OnHealth will at all times display Vitamin Shoppe Advertising Content,
including, without limitation, images of and specials on Vitamin Shoppe
products, in the Vitamin and Herbs Section of the Shopping Channel on the
OnHealth Website. OnHealth's obligations to the Vitamin Shoppe with respect to
the Vitamin and Herbs Section of the Shopping Channel on the OnHealth Website
set forth in this Section 1(c) shall also apply to all areas which are
successors or replacements to such areas and to all new areas for the online
sale of vitamin, mineral and herbal on the OnHealth Website launched on the
OnHealth Website after the date of this Agreement.
d. Newsletter Promotion. During the Term of this Agreement, OnHealth
will, once per month, include a text ad (or other Vitamin Shoppe Advertising
Content approved by Vitamin Shoppe) which shall contain a Vitamin Shoppe link in
OnHealth's weekly email Newsletter which OnHealth delivers to OnHealth users who
subscribe thereto.
e. Minimum Impressions. When OnHealth provides [*****] Vitamin Shoppe
impressions, OnHealth's requirement to provide rotating banners under Section
1.a cease, but sponsorship and Shopping Channel placements under Sections 1.b
and 1.c will continue persistently for the rest of the Term.
2. Exclusivity.
a. Category Exclusivity. During the Term, the Vitamin Shoppe will be
the sole and exclusive vitamin and supplement retail sponsor of, and the sole
and exclusive vitamin and supplement retail advertiser on, the OnHealth Website.
That is, OnHealth shall not place any advertisements, logos, promotional links,
buttons, branded content, or other promotions for any Vitamin Shoppe Competitor
on the OnHealth Website. Vitamin Shoppe recognizes that other advertisers may
have vitamins and supplements as part of this overall product line, but these
are not their primary focus. For purposes of this Agreement the term "Vitamin
Shoppe Competitor" means any online or offline specialty retailer whose primary
focus is vitamins and/or nutritional supplements. As of the Effective Date,
Vitamin Shoppe Competitors include without limitation the entities listed in
Exhibit A. The parties acknowledge and agree that some of the listed entities
may cease to be Vitamin Shoppe Competitors if they change their business during
the Term.
b. Vitamin, Herb and Supplement Advertisement Exclusivity. During the
Term, OnHealth shall not place any advertisements or other promotions for the
online or offline retail sale of any vitamin, herb or nutritional supplement
product for any advertiser, EXCEPT for then-current OnHealth Site ecommerce
partner for the "Drug Store" and "Health and Beauty" categories. The parties
acknowledge that initially [*****] is the ecommerce partner for the "Drug Store"
category, and "SelfCare" may be the initial ecommerce partner for the "Health
and Beauty" category.
3. Vitamin Shoppe Advertising Content.
a. For each of the promotional placements described in Section I
hereof, Vitamin Shoppe shall provide OnHealth with all content including all
trademarks, logos, banners and tile ads (the "Vitamin Shoppe Advertising
Content") which will be displayed on the OnHealth Website. The parties hereto
agree to cooperate and work together in the establishment of all links, buttons,
logos, tiles and banners placed pursuant to this Agreement. Links from one
party's Site to the other party's Site shall in no way alter the look, feel or
functionality of the linked Site.
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b. OnHealth hereby confirms and agrees that during the Term Vitamin
Shoppe shall be able to serve up its own advertising using [*****] software and
tags, and that OnHealth shall not do anything which would interfere or hamper
such serving. Notwithstanding anything in this Agreement, all non-public
information regarding end users' access to Vitamin Shoppe Advertising Content
(including Vitamin Shoppe banner advertisements and e-commerce tiles), including
the number of end users viewing and clicking information with respect thereto,
shall be deemed to be Confidential Information of Vitamin Shoppe (collectively,
"Vitamin Shoppe Confidential Advertising Information"). To the extent that in
connection with OnHealth's advertising efforts, or otherwise, any third party
may or will receive any Vitamin Shoppe Confidential Advertising Information from
or through OnHealth, OnHealth agrees that prior to such third party receiving
any such information OnHealth will enter into an agreement with such third party
pursuant to which such third party will agree to keep any such Vitamin Shoppe
Confidential Advertising Information received by such third party confidential
to the same extent as OnHealth is required to keep such information confidential
under the Agreement. Vitamin Shoppe agrees that OnHealth may include data from
Vitamin Shoppe Confidential Advertising Information as part of aggregated
information about the OnHealth Site without restriction, so long as the Vitamin
Shoppe Confidential Advertising Information is not specifically identified as
pertaining to Vitamin Shoppe.
c. Vitamin Shoppe links established hereby may link, in Vitamin
Shoppe's sole discretion after reasonable notice to OnHealth, to either the
Vitamin Shoppe Website or to Vitamin Shoppe's Vitamin Buzz Website ("Vitamin
Buzz").
4. Confidentiality.
a. Generally. For the purposes of this Agreement, "Confidential
Information" means non-public information about the disclosing party's business
or activities that is proprietary and confidential, which shall include, without
limitation, all business, financial, technical and other information of a party
marked or designated "confidential" or by its nature or the circumstances
surrounding its disclosure should reasonably be regarded as confidential.
-Confidential Information includes not only written or other tangible
information, but also information transferred orally, visually, electronically
or by any other means. Confidential Information will not include information
that (i) is in or enters the public domain without breach of this Agreement,
(ii) the receiving party lawfully receives from a third party without
restriction on disclosure and without breach of a nondisclosure obligation or
(iii) the receiving party knew prior to receiving such information from the
disclosing party or develops independently.
b. Exclusions. Each party agrees (i) that it will not disclose to any
third party or use any Confidential Information disclosed to it by the other
except as expressly permitted in this Agreement and (ii) that it will take all
reasonable measures to maintain the confidentiality of all Confidential
Information of the other party in its possession or control, which will in no
event be less than the measures it uses to maintain the confidentiality of its
own information of similar importance.
c. Exceptions. Notwithstanding the foregoing, each party may disclose
Confidential Information (i) to the extent required by a court of competent
jurisdiction or other governmental authority or otherwise as required by law,
provided, however, that with respect to filing obligations under the securities
laws, each party will, to the extent that it is required to file this Agreement,
file this Agreement in redacted form reasonably approved by the other party
prior to such filing or (ii) on a "need-to-know" basis under an obligation of
confidentiality to its legal counsel, accountants, banks and other financing
sources and their advisors. Except as set forth in this Section 4(c), the terms
and conditions of the Agreement will be deemed to be the Confidential
Information of each party and will not be disclosed without the prior written
consent of the other party.
5. Vitamin Shoppe User Data.
a. All users on the Vitamin Shoppe Website, including, users linked
to the Vitamin Shoppe Website from the OnHealth Website, will be deemed to be
customers of the Vitamin Shoppe. Accordingly, all rules, policies and operating
procedures of Vitamin Shoppe concerning customer orders, customer service and
sales will apply to those customers. Vitamin Shoppe may change its policies and
operating procedures at any time. Vitamin Shoppe
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will determine the prices to be charged for products and other merchandise sold
on the Vitamin Shoppe Website in accordance with its own pricing policies.
Prices and availability on the Vitamin Shoppe Website may vary from time to
time. The parties hereto hereby agree that title to any user information of any
users of the Vitamin Shoppe Website, including but not limited to the name,
address and e-mail address of users, obtained by Vitamin Shoppe from such users
shall be owned by the Vitamin Shoppe.
b. All users on the OnHealth Website, including, users linked to the
OnHealth Website from the Vitamin Shoppe Website, will be deemed to be customers
of the OnHealth. Accordingly, all rules, policies and operating procedures of
OnHealth concerning customer orders, customer service and sales will apply to
those customers. OnHealth may change its policies and operating procedures at
any time. OnHealth will determine the prices to be charged for services,
products and other merchandise sold by OnHealth on the OnHealth Website in
accordance with its own pricing policies. The parties hereto hereby agree that
title to any user information of any users of the OnHealth Website, including
but not limited to the name, address and e-mail address of users, obtained by
OnHealth from such users shall be owned by the OnHealth.
c. The parties acknowledge and agree that each may separately collect
the same user data from its respective web site, in which case each party shall
have such rights in the data as dictated by the rules, policies and operating
procedures of its web site and applicable law.
6. OnHealth Branding on Linked Pages. Vitamin Shoppe shall, with the
assistance of OnHealth, activate on the Vitamin Shoppe Website, [*****] reverse
link to the OnHealth Website, which shall be provided by OnHealth, which will
allow OnHealth users who link to the Vitamin Shoppe Website through a link
established hereby, to return to the OnHealth Website. Such reverse link will
appear above-the-fold on the initial Vitamin Shoppe Website page to which the
OnHealth user links. Also, Vitamin Shoppe shall include a link to the OnHealth
Website from the "thank you" page, or any successor or replacement page,
presented to OnHealth Customers on the Vitamin Shoppe Website. OnHealth
acknowledges that Vitamin Shoppe may wish to redesign the Vitamin Shoppe Website
during the Term, in which case the parties shall discuss in good faith
alternative placement and/or design of links to the OnHealth Website to provide
substantially the same benefit to OnHealth.
7. Licenses.
a. Generally. Subject to the terms and conditions hereof, Vitamin
Shoppe hereby represents and warrants that it has the power and authority to
grant, and does hereby grant to OnHealth a [*****] to reproduce and display all
logos, trademarks, trade names and similar identifying material relating to
Vitamin Shoppe (the "Vitamin Shoppe Marks") solely in connection with the
promotion, marketing and distribution of the parties and the Sites in accordance
with the terms hereof, provided, however, that OnHealth shall, other than as
specifically set forth in this Agreement, not make any specific use of any
Vitamin Shoppe Xxxx without first submitting a sample of such use to Vitamin
Shoppe and obtaining its prior consent, which consent shall not be unreasonably
withheld. The foregoing license shall terminate upon the effective date of the
expiration or termination of this Agreement.
Subject to the terms and conditions hereof, OnHealth hereby represents
that it has the power and authority to grant, and does hereby grant to Vitamin
Shoppe a [*****] to reproduce and display all logos, trademarks, trade names and
similar identifying material relating to OnHealth (the "OnHealth Marks") solely
in connection with the promotion, marketing and distribution of the parties and
the Sites in accordance with the terms hereof, provided, however, that Vitamin
Shoppe shall, other than as specifically set forth in this Agreement, not make
any specific use of any OnHealth Marks without first submitting a sample of such
use to OnHealth and obtaining its prior consent, which consent shall not be
unreasonably withheld. The foregoing license shall terminate upon the effective
date of the expiration or termination of this Agreement.
b. Intellectual Property Ownership. Each party shall retain all
right, title, and interest (including all copyrights, patents, service marks,
trademarks and other intellectual property rights) in its Site. Except for the
license granted pursuant to this Agreement, neither party shall acquire any
interest in the other party's Site or any other services or materials, or any
copies or portions thereof, provided by such party pursuant to this Agreement.
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c. Removal of Materials. Each party reserves the right (but does not
assume the obligation) to reject or remove any content, information, data,
logos, trademarks and other materials (collectively, "Materials") provided by
the other from its servers at any time if, in its reasonable opinion, it
believes that any such Materials infringe any third-party intellectual property
right, are libelous or invade the privacy or violate other rights of any person,
violate applicable laws or regulations, or jeopardize the health or safety of
any person. Each party will use reasonable efforts to contact the other prior to
removing any of its Materials from its servers and will work with the other to
resolve the issue as quickly as possible.
8. Term.
a. The initial term (the "Initial Term"; and together with all
extensions and renewals, the "Term") will begin on the date set forth above and
expire on the [*****] year anniversary of the date (the "Launch Date") on which:
(i) each of the Vitamin Shoppe Areas of the OnHealth Website are operational;
and (ii) the banner advertisements are established in accordance with the terms
of Section 1 of this Agreement, subject to earlier termination as set forth in
this Agreement. If the Launch Date has not occurred by [*****], Vitamin Shoppe
shall, in its sole discretion, be entitled to terminate this Agreement without
any liability and receive a refund of all amounts, other than the initial
nonrefundable [*****] set up fee, paid by Vitamin Shoppe to OnHealth pursuant to
this Agreement prior to the date of such termination.
b. On or before the [*****] day prior to the expiration of the
initial Term, OnHealth shall deliver a written notice to Vitamin Shoppe to
notify Vitamin Shoppe of the commencement of the extension negotiation period.
Between the [*****] and [*****] day prior to the expiration of the initial Term,
OnHealth and Vitamin Shoppe shall in good faith negotiate to extend the term of
this Agreement on such terms as the parties may then agree.
9. Press Release. OnHealth and The Vitamin Shoppe will issue a joint press
release regarding the partnership by a mutually agreed upon date.
10. OnHealth Customers; Communication.
a. Vitamin Shoppe will provide OnHealth a monthly report of the
aggregate number of OnHealth users who have linked from the OnHealth Website to
the Vitamin Shoppe Website pursuant to a link established hereby and who during
such visit purchased, for the first-time ever, a product on the Vitamin Shoppe
Website (each, a "unique OnHealth Customer"). As used in the prior sentence,
"purchased" mean that a product from the Vitamin Shoppe Website was paid for,
shipped and has not been returned by the customer for a period of 30-days from
the date of shipment.
b. OnHealth Contacts: Xxxxx Xxxxxxx, Commerce Manager
Xxxxxx@xxxxxxxx.xxx
000-000-0000
Alexandra D'Xxxx, North Eastern Ad Director
Xxxxxxxxxx@xxxxxxxx.xxx
000-000-0000
All creatives (ad units) Xxxxx Xxxxxxxx, Production Manager
should be sent to: xxxxxx@xxxxxxxx.xxx
000-000-0000
OnHealth will provide required specifications for advertising banners and other
placements upon request.
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11. Cost Structure.
a. The fee for the placements and other rights provided under this
Agreement for the Term is [*****], of which [*****] shall be paid within [*****]
business days of the date of this Agreement, with the balance to be paid in
twelve payments of [*****] due by the last day of each month of the Term
commencing on the month of the Launch Date. The initial [*****] fee, in
consideration of the exclusivity granted hereunder and for the cost of setting
up the Vitamin Shoppe promotions on the OnHealth Website, shall be deemed earned
and due as of the Effective Date.
b. After OnHealth delivers [*****] OnHealth Customers, Vitamin Shoppe
will pay OnHealth [*****] for each additional unique OnHealth Customer delivered
to Vitamin Shoppe. Such payments, if any, shall be made by the last day of the
month following the month in which such payments arose.
c. Depending on availability, Vitamin Shoppe shall have the option to
purchase additional banner advertisements from OnHealth at a [*****], which
OnHealth represents is significantly lower than OnHealth's current published
rate. Should OnHealth's published rate [*****] Vitamin Shoppe may purchase such
additional banner advertisements at a cost [*****] of OnHealth's [*****].
d. On Health will use commercially reasonable efforts to maintain the
OnHealth Website and display the Vitamin Shoppe Advertising Content pursuant to
the terms of this Agreement twenty four hours per day each day during the Term.
OnHealth shall install and maintain a commercially acceptable system of
collecting information about impressions and other data relating to the use of
the Advertising Content. OnHealth warrants to Vitamin Shoppe that it will make
reasonable effort to perform under this agreement in a competent manner. If
despite OnHealth's efforts, for any 24 hour period a majority of the Vitamin
Shoppe promotions or placements, or the links contained therein, are not
viewable or operational (a "Blackout Period"), and by the end of the term
OnHealth has not delivered all impressions required above, OnHealth shall
provide Vitamin Shoppe with a [*****] to be paid by Vitamin Shoppe hereunder
pursuant to Section 11(a) of this Agreement and the Term shall be extended by an
amount of time equal to the Blackout Period. In the event a Blackout Period
lasts more than seventy-two (72) consecutive hours, Vitamin Shoppe's payment
obligations will be suspended until end of Blackout Period, and the Term shall
be suspended for the duration of such Blackout Period.
12. General.
a. Each party hereby agrees to indemnify and hold harmless the other
party and its subsidiaries and affiliates, and their respective directors,
officers, employees, agents, shareholders, partners, members and other owners,
against any and all claims, actions, demands, liabilities, losses, damages,
judgments, settlements, costs and expenses (including reasonable attorneys'
fees) (any or all of the foregoing hereinafter referred to as "Losses") insofar
as such Losses (or actions in respect thereof) arise out of or are based on (i)
any representation or warranty made by it herein being untrue, (ii) any breach
by it of any covenant or agreement made by it herein; (iii) the use by it of any
trademarks or Content other than in accordance with the terms hereof ; and (iv)
the development, operation, maintenance of its Site and Content (as defined
below). For purposes herein, "Content" shall mean, with respect to each party,
the content as delivered by such party to the other party pursuant to this
Agreement, and the content owned or licensed by such party and contained on such
party's Site. The foregoing obligations are contingent upon the indemnified
party: (i) promptly notifying the indemnifying party of any claim, suit, or
proceeding for which indemnity is claimed; (ii) cooperating reasonably with the
indemnifying party at the latter's expense; and (iii) allowing the indemnifying
party to control the defense or settlement thereof. The indemnified party will
have the right to participate in any defense of a claim and/or to be represented
by counsel of its own choosing at its own expense.
b. NEITHER PARTY SHALL HAVE ANY LIABILITY TO ANY PERSON FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY DESCRIPTION, WHETHER ARISING
OUT OF WARRANTY OR CONTRACT, NEGLIGENCE OR OTHER TORT, OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, ANY DAMAGES RESULTING FROM LOST PROFITS OR LOST BUSINESS
OPPORTUNITY.
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c. No purported waiver of any provision hereof shall be binding
unless set forth in a writing signed by the party to be charged thereby. Any
waiver shall be limited to the circumstance or event specifically referenced in
the written waiver document and shall not be deemed a waiver of any other term
of this Agreement or of the same circumstance or event upon any recurrence
thereof.
d. Neither party shall assign, transfer or sell all or any part of
its rights or obligations hereunder, by operation of law or otherwise, without
the prior written approval of the other party, provided, that a party's rights
and obligation hereunder may be transferred to a successor of all or
substantially all of the business and assets of the party regardless of how the
transaction or series of related transactions is structured, provided, that the
successor party agrees to be bound by all of the terms and conditions of this
Agreement. Notwithstanding the foregoing, either party may assign this Agreement
to a wholly owned subsidiary that operates the party's respective website.
c. This Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of Washington without consideration or
application of its conflict of law provisions.
VITAMIN SHOPPE INDUSTRIES, INC. ONHEALTH NETWORK COMPANY
Name: /s/ X.X. Xxxxxx Name: [SIGNATORY]
---------------------------- ----------------------------
Title: CEO Title: North Eastern Ad Director
--------------------------- ---------------------------
Date: May 20, '99 Date: 5/20/99
---------------------------- ----------------------------
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EXHIBIT A
VITAMIN SHOPPE COMPETITORS
[*****]
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