Exhibit 10.7
MICROSOFT STANDARD MERCHANT AGREEMENT
This Agreement, by and between MICROSOFT CORPORATION ("MS"), a Washington
corporation, with its principal offices at On Xxxxxxxxx Xxx, Xxxxxxx, XX 00000
and Internet Xxxxxxxxxxx.xxx, a Limited liability corporation, with its
principal offices at 000 Xxxxxxx Xxx., 0xx xxxxx, Xxx Xxxx, XX 00000
("Merchant") is made and entered into as of the latter of the two signature
dates below (the "Effective Date").
Merchant and MS agree as follows:
1. LINKS TO WEBSITES: MS shall include within the web site currently titled "The
Microsoft Plaza" or such replacement sites which MS may provide from time to
time under this Agreement (the "Plan Site") either a text link or logo link (as
provided by Merchant in accordance with the specifications provided by MS) (the
"Merchant Link") to Merchant's web site (the "Merchant Site"). The placement
type and position of the Merchant Link within the Plaza Site shall be at MS'
sole discretion. MS may, in its sole discretion, include the Merchant Link to
the Merchant Site within other web sites owned, controlled or operated by MS or
any affiliated company, including without limitation MSNBC, Computing Central,
Sidewalk, Microsoft Start, MSN Premier, xxx.xxx and xxxxxxxxx.xxx (the
"Microsoft Site(s)"). The inclusion, placement type and position of the Merchant
Link within any Microsoft Site shall be at MS' sole discretion. Merchant shall
include a logo link to the Plaza Site on the web page linked to by the Merchant
Link included in the Plaza Site (the "Plaza Link Page") in a mutually acceptable
location in accordance with the Logo Linking Guidelines attached hereto so
Exhibit A. Merchant shall include a similar reciprocal logo link, as may be
provided by MS from time to time, to the applicable Microsoft Sites in
accordance with the logo linking guidelines for such logo link as provided from
time to time by MS.
2. PROMOTIONS: Merchant shall submit to MS, at least fifteen (15) days prior to
the first day of each month during the Term, information regarding current
promotions being offered by Merchant which may be used by MS in its sole
discretion, in the pre-programmed Daily Specials area of the Plaza Site or the
Microsoft Sites during the applicable month. MS shall provide the guidelines for
such programs and Merchant shall provide all information in accordance with such
guidelines.
3. CUSTOMER SERVICE: Merchant shall be solely responsible for the Merchant Site
(including all usage by users which linked to the Merchant Site through the
Plaza Site and/or any Microsoft Site) including but not limited to customer
service, web operations, product support, quality and availability of products
and/or services made available at the Merchant Site, fulfillment of orders and
returns. Merchant shall ensure that all users of the Merchant Site placing an
order for product(s) and/or service(s) are timely advised of the status of such
purchase(s) including the timely confirmation of all orders via electronic mail.
Merchant shall provide electronic mall capabilities between the user and
Merchant. Merchant shall ensure that the Merchant Link meets or exceeds the
industry performance standards for links from the Plaza Site and the Microsoft
Sites to Merchant's Site.
4. MERCHANT REPORTING: Merchant shall develop, implement and maintain the
technology required to track usage of the Merchant Site by users linking to the
Merchant Site from the Plaza Site and/or any Microsoft Site and provide MS with
monthly usage reports no later than ten (10 days following the end of each month
of the Term. Such reports shill include, at a minimum, traffic from refuting URL
to the Merchant Site, number of unique users, number of daily orders, total
revenue and average revenue per order.
5. FEES: During the Term of this Agreement, Merchant shall pay MS five hundred
dollars (US $500) per month no later than the fifth day of each month of the
Term (the "Guaranteed Fee). Additionally, Merchant shall pay MS fifty percent
(50%) of the commission earned by Xxxxxxxxxxx.xxx, to a minimum limit of 5% and
a maximum limit of 15% per applicable order, less actual returns and actual bad
debt applicable to such Net Sales incurred during the applicable period (the
"Commission"). Commissions shall be due monthly to MS less the Guaranteed Fee
for the applicable month no later than five (5) days following the last day of
each month of the Term. As used herein "Commission earned" shall reflect the
difference, as percentage, between what merchandise is sold for and what
Xxxxxxxxxxx.xxx pays to its suppliers for the merchandise for merchandise sold
to users who have linked to the Merchant site through the Merchant Link included
in the Plaza Site or any Microsoft Site. Merchant shall submit to MS
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within ten (10) days after the end of each month of the Term complete and
accurate reports, in the form requested by MS of the Gross Revenue for such
month and any other information relevant to the calculation of fees hereunder.
Merchant shall also indicate in such reports how such amounts were calculated.
Receipt or acceptance by MS of any reports or payments shall not prevent MS from
questioning the accuracy of such reports or payments at any time, up to two (2)
years after receipt of the report or payment, and in the event that any mistake
is discovered in any such report or payment, and Merchant is apprised of it,
Merchant shall immediately rectify the mistake.
6. AUDITS: During the Term of this Agreement and for two (2) years thereafter,
Merchant agrees to keep all usual and proper records and books of account and
all usual and proper entries relating to the calculation of Gross Revenue,
including, without limitation, any specific items required to be reported under
this Agreement. During the above referenced period, MS shall have the right to
cause an audit and/or inspection to be made of the applicable Merchant records
and facilities in order to verify statements issued by Merchant and Merchant's
compliance with the terms of this Agreement. Any such audit shall be conducted
by an independent certified public accountant selected by MS' (other than on a
contingent fee basis). Merchant agrees to provide MS' designated audit or
inspection team access to the relevant Merchant records and facilities. Such
audits shall be made no more often than once every twelve (12) months. If an
audit reveals that Merchant has under-paid MS by five percent (5%) or more of
the amounts due for any audited period of time, Merchant agrees, in addition to
recomputing and making immediate payment to MS of all amounts due, plus interest
at the highest prime rate set forth from time to time in the Wall Street Journal
in the United States during the period that such amount is outstanding plus two
percentage points (or, if less, at a rate equal to the highest rate permitted
under applicable law), based on the actual and true amounts due and owing, to
pay MS all reasonable costs and expenses incurred by MS in conducting such
audit, including, but not limited to, any amounts paid to any auditor or
attorney.
7. TERM: The term of this Agreement (the "Term") shall begin on the Effective
Date and shall continue for a period of twelve ([12]) months following the
Effective Date. The Term shall automatically extend for consecutive six (6)
month periods unless either party notifies the other party in writing of its
intent not to renew the Term at least thirty (30) days prior to the expiration
date of the initial term or any renewal period. Notwithstanding the foregoing,
either party shall have the right to terminate this agreement upon sixty (60)
days written notice to the other party. If either MS or Merchant defaults under
this Agreement, the non-defaulting party will notify the other in writing. If
the failure is not cured within ten (10) business days after written notice is
received by the notified party, or if, in the event that the default is
incapable of being cured within ten (10) business days and the notified party
does not undertake a good faith effort to cure the failure within the ten (10)
business day period, the non-defaulting party may terminate this Agreement with
no further obligation to the notified party; except for payment of any amount
properly due pursuant to Section 5.
8. REMOVAL OF LINK: in the event that MS receives a claim of infringement
concerning the Merchant Link or a deem which alleges a breach of Section 3, the
parties agree that MS may, in addition to any other remedies provided for
herein, immediately remove the Merchant Link from the Plaza Site at its sole
discretion, pending receipt of a non-infringing replacement link or satisfactory
resolution of the claim and any such removal shall not constitute a breach of
this Agreement.
9. WARRANTIES: Merchant warrants, represents and agrees that (a) all products
and/or services offered, sold or otherwise provided as part of the Merchant Site
are made, offered, sold or otherwise provided in compliance with applicable laws
and will not infringe the copyrights, trademarks, service marks or any other
proprietary right of any third party, (b) except as specifically provided for in
Exhibit A or as otherwise agreed to in writing by the parties, Merchant will not
use in any manner any of MS or any affiliated companies' trade names,
trademarks, logos or product names, (c) the Merchant Site is in compliance with
all applicable laws, and (d) Merchant has the power and authority to enter into
and perform its obligations under this Agreement. MS warrants, represents and
agrees that (a) the Plaza Site is in compliance with all applicable laws, and
(b) MS has the power and authority to enter into and perform its obligations
under this Agreement. THIS SECTION CONTAINS THE ONLY WARRANTIES, EXPRESS OR
IMPLIED, MADE BY MERCHANT AND MS. ANY AND ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, ARE EXPRESSLY EXCLUDED AND DECLINED, EACH PARTY DISCLAIMS ANY IMPLIED
WARRANTIES, PROMISES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE AND/OR NON-INFRINGEMENT, WHETHER AS TO THE PLAZA SITE, THE
MERCHANT SITE,
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ANY SERVICES RENDERED BY MS AND/OR THE TECHNOLOGY DEPLOYED IN CONNECTION
THEREWITH.
10. INDEMNIFICATION: The parties agree to indemnify, defend, and hold each other
and their successors, officers, directors and employees harmless from any and
all actions, causes of action, claims. demands, costs, liabilities, expenses
(including reasonable attorneys' fees) and damages arising out of or in
connection with any claim made by a third party which, if true, would be (a) a
breach by Merchant of Section 3; or (b) a breach by either party of any warranty
set forth in this Agreement. The party seeking indemnification shall notify the
indemnifying party in writing of any claim for which indemnification is sought.
11. LIMITATION OF LIABILITY: IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, INCIDENTAL, OR SPECIAL DAMAGES WHATSOEVER, INCLUDING
WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION,
LOSS OF BUSINESS INFORMATION, AND THE LIKE, INCURRED BY THE OTHER PARTY ARISING
OUT OF THIS AGREEMENT (PROVIDED THAT THIS LIMITATION SHALL NOT LIMIT EITHER
PARTY'S OBLIGATION TO INDEMNIFY THE OTHER PARTY FOR THIRD PARTY CLAIMS WHICH
INCLUDE SUCH DAMAGES), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES. BECAUSE SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF
LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT
APPLY.
12. CONFIDENTIALITY: If MS and Merchant have entered into a MS Non-Disclosure
Agreement, MS and Merchant agree that the terms of such agreement shall be
deemed incorporated herein, and further, that all terms and conditions of this
Agreement shell be deemed Confidential Information as defined therein. If MS and
Merchant have not entered into a MS Non-Disclosure Agreement, then Merchant
agrees that at all times during the term of this Agreement, and for five (5)
years thereafter, Merchant will hold in strictest confidence, and will not use
or disclose to any third party, any confidential information of MS. The term
"confidential information of MS" shall mean an non-public information that MS
designates as being confidential, or which, under the circumstances of
disclosure ought to be treated as confidential. "Confidential information of MS"
includes, without limitation, the terms and conditions of this Agreement,
information relating to released or unreleased MS software or hardware products,
marketing or promotion of any MS product, business policies or practices of MS
customers or suppliers of MS, or information received from others that MS is
obligated to treat as confidential. If Merchant has any questions as to what
comprises such confidential information, Merchant agrees to consult with MS.
"Confidential information of MS" shall not include information that was known to
Merchant prior to MS's disclosure to Merchant, or information that becomes
publicly available through no fault of Merchant.
13. NOTICES: All notices and requests in connection with this Agreement shall be
deemed given as of the day they are received either by messenger, delivery
service, or in the United States of America mails, postage prepaid, certified or
registered, return receipt requested, and addressed to the party signing this
Agreement as set forth in the first paragraph with a copy to MS' Law and
Corporate Affairs department or to such other address as the party to receive
the notice or request so designates by at least ten (10) days prior written
notice to the other.
14. GENERAL PROVISIONS: Merchant is an independent contractor, and nothing in
this Agreement shall be construed as creating an employer-employee relationship,
partnership, or joint venture between the parties. This Agreement shall be
governed by the laws of the State of Washington and the parties consent to the
exclusive jurisdiction and venue in the state and federal courts sitting King
County, Washington, USA. In any suit or action to enforce any right or remedy
under this Agreement or to interpret any provision of this Agreement, the
prevailing party will be entitled to recover its costs, including reasonable
attorneys' fees. This Agreement and any rights and/or obligations hereunder may
be assigned by MS but may not be assigned by Merchant without MS' prior written
approval. Any attempted assignment, sub-license, transfer, encumbrance or other
disposal without such consent shall be void and shall constitute a material
default and breach of this Agreement. Except as otherwise provided, this
Agreement shall be binding upon and inure to the benefit of the parties'
successors and lawful assigns. The section headings used in this Agreement are
intended for convenience only and shall not be deemed to affect in any manner
the meaning or intent of this Agreement or any provision hereof. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior and
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contemporaneous agreements or communications. This Agreement shall not be
modified except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of Merchant end MS by their respective duly
authorized representatives. No waiver of any breach of any provision of this
Agreement shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorized representative of
the waiving party. In the event that any provision of this Agreement conflicts
with governing law or if any provision is held to be null, void or otherwise
ineffective or invalid by a court of competent jurisdiction, (i) such provision
shall 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 shall
remain in full force and effect. This Agreement does not constitute an offer by
MS and it shall not be effective until signed by both parties.
MICROSOFT CORPORATION Xxxxxxxxxxx.xxx
By /s/ X. Xxxxxxxx By /s/ Xxx Xxxxxxx
--------------------------------- --------------------------------------
Name (Print) X. Xxxxxxxx Name (Print) Xxx Xxxxxxx
----------------------- ----------------------------
Title [ILLEGIBLE] Title President
------------------------------ -----------------------------------
Date 3/4/98 Date March 1, 1998
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Merchant Contact Info:
Name: Ben Nerasin, Internet Fashion Mall LLC
Address: 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxx@xxxxxxxxxxx.xxx
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EXHIBIT A
GUIDELINES FOR DISPLAYING THE MICROSOFT PLAZA LINK LOGO
These are the Microsoft policies for displaying the Microsoft Plaza link logo by
merchants who have executed a MICROSOFT STANDARD MERCHANT AGREEMENT (the
"Agreement"). Please consult Microsoft's other trademark and logo policies for
questions concerning other brands.
1. Except as Microsoft may authorize elsewhere, you may display only the link
logo shown below ("Logo"). By downloading the Logo and signing the
Agreement you agree to be bound by these Policies.
2. You shall display the Logo on your Plaza Link Page, as this term is
defined in the Agreement, and you may display the Logo on all other pages
included in the Merchant Site, as this term is defined in the Agreement,
which are linked to by users of the Plaza Site but not in any other
manner. It must always be an active link to The Microsoft Plaza homepage
at xxxx://xxx.xxxxx.xxx.xxx/. HTML code for the link is shown below.
3. The Logo GIF includes the words "To Microsoft Plaza", describing the
significance of the Logo on your site (i.e., the Logo is a link to The
Microsoft Plaza, not an endorsement of your site). You may not remove or
alter this or any other element of the Logo.
4. You may only display the Logo on your Plaza Link Page and other pages in
the Merchant Site that make accurate references to The Microsoft Plaza.
The Logo must be displayed "above the fold" (as such term is generally
used within the Internet industry) and/or adjacent to those references.
Your web page title and other trademarks and logos must appear at least as
prominent as the Logo. You may not display the Logo in any manner that
implies sponsorship, endorsement, or license by Microsoft or any
affiliated company.
5. The Logo must appear by itself, with a minimum spacing (the height of the
Logo) between each side of the Logo and other graphic or textual elements
on your page. The Logo may not be used as a feature or design element of
any other logo.
6. Except for size subject to the terms herein, you may not alter the Logo in
any manner, including proportions, colors, elements, etc., or animate,
morph or otherwise distort its perspective or two-dimensional appearance.
7. You may not display the Logo on any site that disparages Microsoft or any
affiliated company, or its products or services, infringes any
intellectual property or other rights of Microsoft or any affiliated
company, or violates any state, federal or international law.
8. These Policies do not grant a license or any other right in Microsoft's
logos or trademarks. Microsoft reserves the right in its sole discretion
to terminate or modify permission to display the Logo at any time.
Microsoft reserves the right to take action against any use that does not
conform to these Policies, infringes any Microsoft intellectual property
or other right, or violates other applicable law.
9. MICROSOFT DISCLAIMS ANY WARRANTIES THAT MAY BE EXPRESS OR IMPLIED BY LAW
REGARDING THE LOGO, INCLUDING WARRANTIES AGAINST INFRINGEMENT.
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Exhibit B
Co-Marketing Agreement
1. Xxxxxxxxxxx.xxx will feature the Plaza on their New section for a minimum
of four weeks over the course of the contract with dates to be mutually
agreed upon with MS.
2. Xxxxxxxxxxx.xxx will provide the Plaza with co-marketing opportunities
once per quarter over the course of the contract may include but are
not limited to press releases, emails to user base, branding at trade
shows and/or other opportunities to be mutually agreed upon with MS.
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