<PAGE>
STRATEGIC ALLIANCE & MARKETING AGREEMENT
This Agreement (AGREEMENT) is entered into as of July 24, 2000 (the EFFECTIVE
DATE), by and between RCI, Inc., a Delaware corporation having offices located
at 725 Concord Avenue, Concord, MA 02138 (RCI) and Asiasmart Pte Ltd, a company
incorporated in Singapore having offices located at #08-05 Singapore Post
Center, 10 Eunos Road 8, Singapore 408600 (ASMT).
BACKGROUND
WHEREAS, RCI provides business-to-business electronic commerce services
on an intranet basis to businesses and not-for-profit institutions ("Customers")
who typically have intensive knowledge requirements and make high-volume
purchases on a subscription basis;
WHEREAS, ASMT is an on-line internet provider of consumer interest magazines
in Asia; and
WHEREAS, RCI and ASMT recognize that leveraging RCI's catalog, order
process and operations expertise via its ASMT sales, marketing and distribution
channels presents a significant and mutually-beneficial opportunity to both RCI
and ASMT (the "Parties")
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, ASMT and RCI agree as follows:
AGREEMENT
In consideration of the premises and mutual covenants set forth below, RCI and
ASMT agree as follows:
1. DEFINITIONS
1.1. DEFINED TERMS. For purposes of this Agreement, the following terms have
the respective meanings set forth below:
ASMT CATALOG means the catalog from which ASMT Customers can purchase,
directly from ASMT, ASMT Titles as well as Knowledge Products (Phase II only),
and that bears the ASMT logo and trademark.
ASMT CHANNELS means all legal Internet distribution channels throughout
the Territory that ASMT customarily uses for ASMT Services during the Term of
this Agreement.
ASMT CUSTOMER means any person or entity that orders Knowledge Products
using the ASMT Web-Site(s) and services, but excluding any person or entity that
is already an RCI customer at the time of such order.
ASMT SERVICES means services offered by ASMT including filling the gaps
of library serials collections, locating, ordering, receiving, inspecting,
collating, filling, administering and shipping all Orders.
ASMT SITE means the web site and pages that a user's web browser will
generate as a result of requesting URLs in the "ASMT" Internet domain.
ASMT TITLES means any magazines, subscriptions, serials, books or other
publications listed in the ASMT Catalog, excluding Knowledge Products for
purposes of Phase I, and including Knowledge Products for purposes of Phase II.
DEVELOPMENT means the Phase II integration whereby the RCI Catalog will
be integrated into the ASMT Catalog by a mutually agreeable manner and means so
as to permit ASMT Customers to access and order Knowledge Products from ASMT at
the ASMT Site.
<PAGE>
GUARANTEED LOWEST PRICE means the lowest price authorized by the
publisher of any given RCI Title available to the general public on the Internet
in the Territory.
GROSS MARGIN means the aggregate gross sale amount received by RCI from
ASMT Customers for all Orders, ***1/.
HTML means hypertext mark-up language.
INITIAL ORDER means any new order for a Knowledge Product placed by an
ASMT Customer arising out of having accessed the RCI Catalog (Phase I) or the
ASMT Catalog (Phase II) through or at the ASMT Site.
INTELLECTUAL PROPERTY means the respective patents, trade secrets,
copyrights, trademarks, industrial designs and other intellectual property of
the Parties, including without limitation the RCI Trademarks, the ASMT
Trademarks, related sales material, RCI Titles, and any such Intellectual
Property contained in the RCI kStore Site and the RCI Site.
INTERNET means the global information system that (i) is logically
linked together by a globally unique address space based on the internet
protocol (IP) or its subsequent extension and/or follow-ons; (ii) is able to
support communications using the Transmission Control Protocol/Internet Protocol
(TCP/IP) suite or its subsequent extensions/follow-ons, and/or other
IP-compatible protocols; and (iii) provides, uses or makes publicly accessible,
high level services layered on the communications and related infrastructure
described herein.
KNOWLEDGE PRODUCTS means any magazines, books, journals, subscriptions,
serials, market research reports, or other publications, embodied in paper or
electronic media, that are identified in any and all RCI Catalogs.
ORDER means individually or collectively, any Initial Order(s) and/or
Renewal Order(s) issued by an ASMT Customer to ASMT during the Term of this
Agreement, via a direct linkage to the ASMT Web-Site.
RCI CATALOG means the list of RCI Titles, as updated from time to time
by RCI but excluding any third party catalog(s) and/or associated content that
RCI may, from time to time, make available pursuant to a separate agreement
between RCI and any such third party.
RCI kSTORE SITE means, for purposes of this Agreement, the web site
location prepared by RCI through which ASMT Customers may, during Phase I,
obtain access through the ASMT Site to view the listing Knowledge Products, and
through which ASMT will, during both Phase I and Phase II, be permitted to place
orders and pay for Knowledge Product subscription purchases on-line based upon
Orders received by ASMT.
RCI SITE means (1) the web site and pages that a user's web browser
will generate as a result of requesting URLs in the "RCI" 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.
RCI TITLE means any Knowledge Products listed in RCI's then-current
catalog appearing on the RCI kStore Site.
RENEWAL ORDER means the renewal of an Initial Order.
TERM means the period beginning on the Effective Date and ending upon
expiration or termination of this Agreement, as set forth in Section 7.1 hereto.
---------------------
1/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
-2-
<PAGE>
TERRITORY means anywhere in the world.
TRADEMARK means names, trademarks, services marks, trade names, labels,
logos, designs or other designations and all goodwill associated therewith. The
RCI Trademarks are set forth in Exhibit A (hereby incorporated by reference), as
may be updated by RCI from time to time. The ASMT Trademarks are set forth in
Exhibit B (hereby incorporated by reference), as may be updated by ASMT from
time to time.
URL means universal 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 PART Section 4.3
AUDITING PARTY Section 4.3
CONFIDENTIAL INFORMATION Section 6.1
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)
OBJECTIVES Section 2.2
QUARTERLY STATEMENT Section 4.2
2. PHASE I AND PHASE II
PHASE I requires that a simple hyperlink be established between the RCI
Site and the ASMT Site. RCI will provide ASMT with a URL in connection with
which ASMT shall be responsible for creating the HTML to link the RCI Site with
the ASMT Site in a way that will permit potential ASMT Customers to click a
designated location on the ASMT Site and enter the RCI Site for view-only access
(i.e. no electronic ordering capability from RCI) to the RCI Catalog and
associated RCI Titles. Customers will be able to order Knowledge Products only
from ASMT, and on the basis set forth herein. Any Knowledge Products ordered by
ASMT Customers from ASMT would be ordered and paid for by ASMT from RCI.
PHASE II will involve integration of the RCI Catalog within the ASMT
Catalog such that the RCI Titles will be included with the ASMT Titles in the
ASMT Catalog and co-branded under ASMT and RCI's logos and trademarks. ASMT
Customers will be able to order Knowledge Products only from ASMT, and on the
basis set forth herein. Any Knowledge Products ordered by ASMT Customers from
ASMT would be ordered and paid for by ASMT from RCI through the ASMT kStore
Site.
2.1. RCI'S RESPONSIBILITIES:
a. PHASES I AND II
(i) ACCOUNT EXECUTIVE: RCI will assign an account executive to act as a
contact person for all issues with respect to both Phases.
(ii) ASMT kSTORE SITE. RCI will provide ASMT with RCI's standard
kStore Site installation and set-up package, assistance in tailoring the kStore
Site to accommodate ASMT's name and logo, and any mutually agreeable specialized
customization for the ASMT kStore Site beyond the standard installation, all at
RCI's then-current and applicable rates
(iii) ORDER PROCESSING: RCI will process and fulfill all Orders issued
to RCI by ASMT, PROVIDED THAT they are in accordance with the requirements of
Section 5.1 a. All customer service issues with respect to such Orders shall be
deemed to be between RCI and ASMT alone, and not between RCI and any ASMT
Customers. However, RCI nonetheless reserves the right, and shall be entitled
but not be obligated, to deal with any and all customer service issues directly
with the ASMT Customers.
-3-
<PAGE>
(iv) PUBLISHER'S POLICIES: RCI will honor the policy regarding
cancellations and refunds provided by the publisher of the applicable Knowledge
Product, PROVIDED THAT RCI reserves its right to change its policy regarding
refunds and cancellations at any time, PROVIDED THAT such change shall not be
inconsistent with the relevant publisher's policy, if applicable.
(v) TITLE SEARCHES: RCI will perform title searches on whatever basis
is RCI's usual and customary practice for doing so, for purposes of identifying
potential new additions to the RCI Catalog. RCI will consider all requests made
by ASMT to add any particular product or title to the RCI Catalog and will use
reasonable efforts to respond to such requests promptly. However RCI shall be
entitled to deny any requests as well as suppress any titles which are not in
line with RCIs' business strategy. Accordingly, from time to time during the
Term, RCI may, at its sole discretion, make corrections, enhancements,
revisions, updates, upgrades and other changes to the RCI Catalog unrelated to
any requests by ASMT or ASMT Customers.
(vi) PARTNER: RCI shall be entitled to identify ASMT as a partner on
RCI's Site and include ASMT in appropriate and mutually agreeable marketing
material and collateral with ASMT's prior written consent, such consent not to
be unreasonably withheld.
(vii) EXPENSES. RCI shall be responsible for the costs it incurs and
its own expenses in performing its obligations during both Phases, except as
specified in subparagraph (ii) above.
b. PHASE II ONLY
RCI TITLES. RCI will provide ASMT with its then-current RCI Catalog,
and will grant ASMT royalty-free personal and non-transferable licenses pursuant
to the provisions of Section 3 below.
2.2. ASMT'S RESPONSIBILITIES:
a. PHASE I ONLY
(i) It will be ASMT's responsibility alone to create the HTML necessary
to permit potential ASMT Customers to click on the RCI URL locator
(i.e. an RCI-branded button) on the ASMT Site and thereby obtain access
to the RCI Site for purposes of viewing the RCI Catalog and associated
RCI Titles.
(ii) ASMT shall ensure that the RCI-branded button is at a location on
the ASMT Site that is best suited for and consistent with ASMT's
obligations to market, promote and sell RCI Title subscriptions on a
best efforts basis.
b. PHASES I AND II
(i) ACCOUNT EXECUTIVE: ASMT will assign an account executive to act as
a contact person for all issues with respect to both Phases.
(ii) ASMT kSTORE: ASMT shall have the ASMT kStore fully operational on
the ASMT Site and the RCI Catalog fully accessible on the ASMT Site by potential
ASMT Customers within ninety (90) days after RCI has performed its obligations
pursuant to subparagraph 2.1 a.(ii) above.
(iii) CO-BRANDED SITE: ASMT agrees that RCI shall have no
responsibility, and that ASMT would have exclusive responsibility, for
developing, implementing and maintaining any customized and co-branded kStore
site in accordance with specific requirements to be agreed upon between the
Parties.
(iv) ASMT CATALOG. Subject to the terms and conditions of this
Agreement, ASMT shall ensure on a best efforts basis that the RCI Catalog on the
ASMT Site is continually updated to reflect the then-most current edition of the
RCI Catalog. However, RCI shall always be entitled to require that ASMT modify
the RCI Catalog accessed through the ASMT Site to delete certain offerings for
whatever reason, including but not limited to, changing business strategies for
any segment(s) of the Territory, expiration, termination, or modification of
RCI's agreements with publishers and distributors of the RCI Titles. ASMT shall
not be entitled to add to (without RCI's prior permission), but may delete
(without RCI's permission), any RCI Title from the ASMT Catalog, for legal,
cultural, business or customer request reasons. In addition, RCI shall be
entitled to add additional titles to the RCI Catalog at any time, as well as
require that such titles be added to the ASMT Catalog as well.
-4-
<PAGE>
(v) MARKETING, SALES & DISTRIBUTION. During the Term of this Agreement,
ASMT agrees to use its best efforts to market, promote and sell RCI Title
subscriptions throughout the Territory to ASMT Customers through ASMT Channels,
and at all times in accordance with the provisions of this Agreement, including
but not limited to Section 3 below. ASMT shall not, nor permit any of its
resellers, distributors or any other entities in any way affiliated with ASMT
to, place or accept any Orders other than with or on behalf of ASMT
respectively. While ASMT shall be free to set its own prices with respect to the
prices it will charge for RCI Title subscriptions purchased by ASMT Customers,
both parties acknowledge and agree that offering to sell such subscriptions at
the Guaranteed Lowest Price will provide the best opportunity to sell the
maximum amount of RCI Title subscriptions at any point in time during this
Agreement.
(vi) KNOWLEDGE PRODUCT ORDERS: ASMT shall fill all Orders placed by
ASMT Customers for Knowledge Products by Issuing corresponding ASMT purchase
orders to RCI. All ASMT purchase orders must comply with the requirements of
Section 4.1 a, and ASMT alone shall be responsible for shipping, and delivering
(including the procurement of any export licenses or the like required in order
to effectuate delivery) all Knowledge Products ordered by ASMT once RCI has sent
the Knowledge Products to an ASMT-designated location in San Francisco,
California, F.O.B. Cambridge, Massachusetts.
(vii) DISCLAIMER: The ASMT Site must at all times during the Term of
this Agreement, contain a prominent disclaimer (immediately adjacent to the
RCI-branded button in Phase I for as long as access to the RCI Titles will be
through the RCI Catalog as opposed to the ASMT Catalog), stating without
qualification that ASMT is not in any way affiliated with RCI and in connection
with which ASMT is providing the link to the RCI Site (for Phase I).
(viii) PARTNER: If and to the extent requested by RCI, ASMT agrees to
identify RCI on the ASMT Site as a strategic business partner and in as
prominent a manner and location as ASMT identifies any other strategic partners
on its web site PROVIDED, HOWEVER, that the manner, means, content and style of
each such identification has been pre-approved by RCI.
(ix) PUBLISHER'S POLICIES: ASMT will honor RCI's policy regarding
cancellations and refunds with respect to cancellation of any RCI Title
subscriptions, and agrees to make prompt refunds to ASMT Customers in accordance
with RCI's then-current policy in that regard.
(x) EXPENSES. ASMT shall be responsible for the costs it incurs and its
own expenses in performing its obligations in accordance with this Agreement
during both Phases, in addition to those arising out of
subparagraph 2.1 a(ii) above.
3. LICENSES & INTELLECTUAL PROPERTY
3.1. LICENSES TO ASMT. Subject to the terms set forth herein, RCI hereby
grants to ASMT a non-exclusive, non-assignable right and license (excluding
the right to grant any sublicenses) to:
(i) use the RCI Catalog in the Territory for the sole and limited
purpose of (a) marketing, promoting and offering for sale, RCI Title
subscriptions to ASMT Customers throughout the Territory using ASMT Channels;
(b) accepting Orders for RCI Title subscriptions from ASMT Customers; and (c)
maintaining the database containing information regarding such Orders which
must, at a minimum, set forth the ASMT Customer name, address, ASMT subscription
number, and whatever other information is reasonably required by RCI; and
(ii) use the RCI Trademarks in the Territory for the sole and limited
purpose of marketing, promoting and offering for sale the RCI Title
subscriptions in accordance with the requirements of this Agreement, and with
the further proviso and requirements that any and all such uses of the RCI
Trademarks shall be in full compliance with RCI's Trademark guideline as well
any other requirements which RCI may reasonably impose from time to time,
provided that ASMT is notified of such requirements.
3.2. VISITATION: Upon reasonable notice from RCI in each applicable case,
ASMT shall permit RCI to visit all locations on the Internet including
Intranet and other internal networks where ASMT is conducting such activities
using any RCI Trademarks to ensure that it/they is/are being used in full
compliance with the specifications and requirements provided by RCI from time
to time. It is understood that, under certain circumstances, ASMT may need
the consent of third party(s) to effectuate the visitation by RCI and in such
circumstances, RCI will work with ASMT to facilitate the review of the usage
of the RCI Trademarks.
-5-
<PAGE>
3.3. RESTRICTION ON USE OF CONFIDENTIAL INFORMATION. Nothing in this Section
or this Agreement shall be deemed to grant either Party a license to use the
other Party's Confidential Information (as defined below) beyond the
limitations on such use set forth in Section 7 below.
3.4. INTELLECTUAL PROPERTY. Subject to the terms hereof, each Party shall
inform the other Party of any changes in or additions to the informing
Party's Trademarks, and shall amend either Exhibit A or Exhibit B
accordingly. Subject to the foregoing provisions of this Agreement, each
Party shall use commercially reasonable efforts as the case may be to
correctly reference the other Party's Trademarks and other proprietary rights
in any marketing, advertising, promotional materials, sales literature or
publicity permitted hereunder, as required by law or as reasonably requested
by the other Party. Each Party's Trademarks and Confidential Information (as
defined below) shall remain the sole and exclusive property of such Party and
the other Party shall have no rights thereto, except as otherwise expressly
provided herein, and the goodwill associated therewith shall inure to the
benefit of the owner of such Trademark. Upon any expiration or termination of
this Agreement, the license to use the Trademarks shall terminate.
4. PURCHASES, PAYMENTS AND AUDITS
4.1. ORDERS FOR KNOWLEDGE PRODUCTS.
a. PHASES I AND II. All Knowledge Products purchased by ASMT Customers
shall be deemed to have been purchased directly from ASMT. On ASMT's receipt of
any Order for Knowledge Products from ASMT Customers, ASMT shall promptly issue
a corresponding Order to RCI for the same Knowledge Products identified in such
order, which Order shall be in a form reasonably acceptable to RCI. At a
minimum, such Order forms must specify the Titles being ordered, the quantity
and duration of each Title subscription being purchased, the applicable ASMT
Customer ID number (CID). RCI shall not be obligated to accept any Order that
does not meet these requirements.
b. PAYMENTS TO RCI. For both Phases, ASMT shall be responsible for all
payments due for Knowledge Products purchased, and agrees to make all such
payments to RCI promptly, without deduction or any manner of withholding, and
regardless of whether ASMT has received the corresponding payment(s) from the
ASMT Customer who purchased such Products. Payments shall be deemed due on
ASMT's receipt of each invoice.
4.2. PAYMENTS TO ASMT. Subject to the terms of this Agreement:
a. RCI shall, on a quarterly basis, pay ASMT ***2/ of RCI's Gross
Margin on all Initial Orders, and ***3/ of RCI's Gross Margin on all Renewal
Orders. The Gross Margin is currently ***4/ on most transactions, but this is
not guaranteed and may change.
b. For every Order which RCI enters manually, ASMT will be charged a
handling fee equivalent to ***5/ for each ASMT/RCI Title included in the
Order; this amount will be deducted from any payments due ASMT under
subparagraph a. above.
-----------------------------
2/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
3/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
4/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
5/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
-6-
<PAGE>
4.3 PAYMENTS TO RCI. Subject to the terms and conditions of this Agreement:
In partial consideration for the rights and license granted with
respect to Phase I, ASMT agrees to pay RCI a one-time, non-refundable fee of
***6/. In lieu of such up-front payment and at ASMT's option, ASMT may elect to
have RCI instead deduct the total amount from any payments due ASMT per Section
4.2 above.
4.4. QUARTERLY STATEMENTS. Within thirty (30) days after the end of each
calendar quarter after the Effective Date and for as long as any amounts are due
in accordance with this Section 4, RCI shall submit a formal quarterly statement
to ASMT that sets forth the Gross Margin received by RCI during the relevant
quarter and the quarterly payment due to ASMT calculated in accordance with
Section 4.2 above, and any handling fees that will be deducted to that
quarterly payment.
4.5. AUDITS. During the Term of this Agreement and for one (1) year
thereafter, each Party (for purposes of this Section 4. only, the "Auditing
Party") shall have the right, not more than once in any twelve (12)-month
period, to have the relevant books and records of the other Party (the
"Audited Party") for the other Party's immediately preceding financial year
audited by an independent certified public accountant chosen by the Auditing
Party, for the sole purpose of ascertaining the accuracy of the Audited
Party's reports under this Agreement. Each Party shall maintain accurate
books and records relating to such matters. Such audits shall be scheduled
within thirty (30) days following delivery of a notice by the Auditing Party
to the Audited Party, and conducted during normal business hours, in a manner
that does not unreasonably interfere with the Audited Party's normal business
activities. The Auditing Party shall require the auditor to execute a
confidentiality agreement, acceptable to the Audited Party, which shall
prohibit the auditor from disclosing any information ascertained from the
audit to any Party, including the Auditing Party. The auditor will be
permitted solely to confirm the accuracy of the Audited Party's reports or to
advise the Auditing Party of any discrepancies limited to any monetary
amount(s) discovered through the audit. In the event that any audit
determines that the reported payments paid to the Auditing Party under this
Agreement was less than the amount due to the Auditing Party, the Audited
Party shall promptly pay the Auditing Party the amount of such underpayment
and all accrued interest thereon at the rate of 1.5% per annum from the date
that such payment was due. In addition, if any audit determines that the
reported payments paid to the Auditing Party under this Agreement was less
than ***7/ of the actual amount due to the Auditing Party for the period in
question, the actual out-of-pocket cost of such audit shall be borne by the
Audited Party; otherwise, the cost of the audit shall be borne by the
Auditing Party.
4.6. TAXES. All taxes and charges, other than income taxes, that may be imposed
by any governmental taxing authority on any sales pursuant to this Agreement
shall be paid by the Party assessed such taxes or charges.
5. REPRESENTATIONS AND WARRANTIES
5.1. AUTHORIZATION. Each Party hereby represents and warrants to the other that:
(a) it has the requisite power and authority to execute, deliver and perform
this Agreement and to consummate the transactions contemplated hereby; (b) this
Agreement has been duly authorized, executed and delivered by such Party,
constitutes the legal, valid and binding
-----------------------
(footnote continued from previous page)
6/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
7/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion, has
been filed with the Securities and Exchange Commission separately.
-7-
<PAGE>
obligations of such Party and is enforceable against such Party in accordance
with its terms, except to the extent such enforceability may be limited by
bankruptcy, reorganization, insolvency or similar laws of general applicability
governing the enforcement of the rights of creditors or by the general
principles of equity (regardless of whether considered in a proceeding at law
or in equity); and (c) to the best of its knowledge, it has provided the other
Party with the information known to it that materially affects the other Party's
ability to perform the other Party's obligations under this Agreement.
5.2. NON-INFRINGEMENT. Each Party hereby represents and warrants to the other
Party that (i) it will not provide any Intellectual Property to the other Party
which it knows or reasonably believes infringes upon or violate the intellectual
property rights or any other rights of any third party or violate any applicable
law or regulation; (ii) it has not been charged or threatened with infringement
or violation of any intellectual property right or any other rights of any
person or entity in connection with the Intellectual Property to be provided to
the other Party hereunder; (iii) the Intellectual Property and other information
provided by each Party (including without limitation, the RCI Title, the RCI
ASMT kStore Site, the RCI Link File, the ASMT Link File, and each Party's
Trademarks) to the other Party will not knowingly contain any defects, viruses,
worms, date bombs, time bombs, or other code that will or could damage,
interrupt, or interfere with any software or data of the other Party.
5.3. INDEMNIFICATION. Each Party hereby warrants and represents to the other
Party that it is entitled to enter into and perform this Agreement, free of
any claims of any third party(s). In the event of any breach by either Party
(the "Indemnifying Party") of this warranty, whether or not with full
knowledge or intent, the Indemnifying Party agrees to indemnify and hereby
holds the other Party (the "Indemnified Party") harmless from and against any
and all liability, costs, expenses and damages, however characterized,
incurred by the Indemnified Party and/or otherwise arising out of each and
any such breach.
5.4. THIRD PARTY RIGHTS. Each Party represents and warrants to the other
Party that: (a) it is not bound by any agreement or obligation (and will not
enter into any agreement or obligation) that could materially interfere with
the performance of its obligations under this Agreement; and (b) no approval,
authorization or consent of any governmental or regulatory authority is
required to be obtained or made by it in order for it to enter into and
perform its obligations under this Agreement. ASMT represents that it has
entered into an agreement with ***8/ who provides popular titles to ASMT, but
ASMT's performance of its obligations under that agreement will not
materially interfere with the performance of its obligations under this
Agreement
5.5. DISCLAIMER. EXCEPT FOR THE WARRANTIES SET FORTH IN THIS SECTION 5, EACH
PARTY DISCLAIMS ALL WARRANTIES WITH RESPECT TO THE PRODUCTS AND SERVICES
CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR USE.
6. CONFIDENTIALITY
6.1. CONFIDENTIAL INFORMATION. "Confidential Information" means all financial,
business, marketing, operations, technical, and economic information, whether
tangible or intangible, that is disclosed by either Party (the "Disclosing
Party") or any of Disclosing Party's suppliers, employees, contractors or
customers to the other Party (the "Recipient Party"), if such information is
disclosed (i) in writing or by way of any other media that is marked as
"confidential" or "proprietary" information; (ii) orally or visually, provided
that, such oral or visual disclosure is followed by written confirmation by the
Disclosing Party within three (3) business days of such disclosure. Confidential
Information shall also be deemed to include any information which by virtue of
its very nature and/or the circumstances surrounding its disclosure to the
Recipient Party, a reasonable person would consider it to be confidential,
whether or not labeled as "confidential" or "proprietary" information. A.
Confidential Information does not include any information or portion thereof
that the Recipient Party can demonstrate by documented evidence (1) was known to
the Recipient Party before receipt thereof under this Agreement; (2) is
disclosed to the Recipient by a third person who has a right to make such
disclosure without any obligation of confidentiality to the Disclosing Party;
--------------------------
8/ Confidential treatment has been requested for this portion of this
exhibit. A complete copy of this exhibit, including this redacted portion,
has been filed with the Securities and Exchange Commission separately.
-8-
<PAGE>
(3) is or becomes generally known in the trade or to the public without
violation of this Agreement by the Recipient Party; (4) is independently
developed by an employee, agent, or contractor of Recipient Party who neither
had access to, nor in any way benefited from, the Disclosing Party's
Confidential Information; or (5) is approved in writing by the Disclosing Party
for release; and (B) only the specific information that meets the exclusions
shall be excluded, and not any other information that happens to appear in
proximity to such excluded portions (for example, a portion of a document may be
excluded without affecting the confidential nature of those portions that do not
themselves qualify for exclusion); and (C) Confidential Information includes
summaries and other materials prepared by or on behalf of a Recipient Party that
restate, summarize or otherwise use any Confidential Information of a Disclosing
Party except to the extent that such summaries and other materials qualify for
exclusion under this Section.
6.2. NONDISCLOSURE AND LIMITATIONS ON USE. Each Recipient agrees (a) to keep
secret and maintain the Confidential Information as confidential and to hold the
Confidential Information in trust for the exclusive benefit of the Disclosing
Party; (b) to use or copy the Confidential Information solely to perform its
obligations under this Agreement; (c) to segregate the Confidential Information
from the Recipient Party's other information and from that of third Parties; (d)
not to copy the Confidential Information unless reasonably necessary to perform
services under this Agreement; (e) to notify promptly the Disclosing Party upon
learning about any court order or other legal requirement that purports to
compel disclosure of any Confidential Information and to cooperate with the
Disclosing Party in the exercise of the Disclosing Party's right to protect the
confidentiality of the Confidential Information before any tribunal or
governmental agency; (f) not to disclose the Confidential Information to any
person or entity not a Party to this Agreement other than such of Recipient's
contractors, agents or employees who (i) have a need to know the Confidential
Information for a purpose permitted hereunder; and (ii) are apprised of the
confidential nature of the Confidential Information; and (g) subject to Section
8.3b, to return promptly to the Disclosing Party or to destroy, at the option of
the Disclosing Party and at any time upon the Disclosing Party's request, any
and all materials containing Confidential Information. Each Party shall (1)
promptly notify the other Party of any actual or suspected unauthorized use or
disclosure of the other Party's Confidential Information for a period of two
years from the date of termination of this Agreement of which it has knowledge
and will cooperate in the investigation of such unauthorized use or disclosure;
(2) be liable for breaches of confidentiality by its employees, contractors or
agents; and (3) include the other Party's reasonable proprietary rights notices
on any media or products embodying the other Party's Confidential Information,
including partial copies thereof. Nothing contained herein shall prevent a
Recipient Party from disclosing the Disclosing Party's Confidential Information
to any tribunal or governmental agency, so long as the notice in this Section
6.2 is promptly given; provided that, such disclosure shall not alter the status
of such information hereunder for all other purposes as Confidential Information
unless and until such information is actually made public by the tribunal or
agency.
6.3. 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. RCI may, however, issue whatever manner of press release
or publication it considers appropriate for purposes of announcing the
execution of this Agreement. Each Party shall, however, be entitled to
provide information to the extent required under securities laws or other
applicable laws or regulations, or governmental or court order. Subject to
the terms of this Agreement, 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
7. TERM AND TERMINATION
7.1. TERM. This Agreement shall commence upon the Effective Date and, subject to
early termination pursuant to Section 7.2, shall continue in effect until the
third anniversary of the Effective Date (the "Initial Term") and shall be
automatically renewed for successive one (1) year periods after the expiration
of the Initial Term unless either Party provides the other Party with written
notice of its intent not to renew this Agreement at least ninety (90) days prior
to the expiration of the then current term.
7.2. TERMINATION.
a. Either Party may terminate this Agreement upon ninety (90) days'
written notice to the other Party if the other Party breaches any of
its material obligations under this Agreement and such breach remains
unremedied for a period of 30 days after receipt of such notice. Any
notice given pursuant to this Section 7.2 must set forth with
specificity the alleged material obligations breached by the other
Party.
b. This Agreement shall terminate automatically, with no further action
by either Party, if (i) a receiver is appointed for either Party or its
property, (ii) either Party makes an assignment for the benefit of its
creditors,
-9-
<PAGE>
(iii) any proceedings are commenced by, for or against either Party
under any bankruptcy, insolvency or debtor's relief law for the
purpose of seeking a reorganization of such Party's debts, and such
proceeding is not dismissed within ninety (90) calendar days of its
commencement, unless such period is extended by mutual written
consent, or (iv) either Party is liquidated or dissolved.
c. Either Party may terminate this Agreement for no cause on sixty (60)
days prior written notice to the other Party.
7.3. EFFECT OF TERMINATION.
a. THEN-CURRENT ORDERS. Upon termination of this Agreement, and subject
to the provisions of subparagraph c. (Other Obligations) below, all
obligations of each Party shall terminate, provided, however, that (a)
ASMT will continue to perform all obligations relating to pending
Orders and (b) RCI shall provide ongoing customer service to ASMT
Customers at no less a level of service than it provides to its other
customers.
b. CONFIDENTIAL INFORMATION. Promptly after all obligations to existing
Customers are performed pursuant to clause (a) hereof, each Party shall
return to the other Party or certify in writing to the other Party that
it has destroyed all documents and other tangible items it or its
employees or agents have received from the Disclosing Party which
constitute Confidential Information of the Disclosing Party; PROVIDED,
HOWEVER, that for twelve (12) months following termination of this
Agreement RCI may retain information regarding Customers, solely for
the purposes of fulfilling RCI's customer support obligations set forth
herein.
c. OTHER OBLIGATIONS. The provisions of Sections 4. (solely with
respect to payment obligations accrued prior to termination); Section
4.5 (Audit Rights), Section 5 (Representations and Warranties), Section
6 (Confidentiality), Section 7 (Term & Termination), Section 8 (Risk
Allocation) and Section 9 (Miscellaneous) shall survive any expiration
or termination of this Agreement.
7.4. TERMINATION/NON-RENEWAL RIGHTS. It is expressly understood and agreed that
the rights of termination and non-renewal set forth in this Section 7 are final,
and that the Parties have considered the possibility of such termination or
non-renewal and the possibility of loss and damage resulting therefrom, in
making expenditures pursuant to the performance of this Agreement. The Parties
expressly agree that the notice periods in this Agreement are reasonable under
the contemplated circumstances.
8. RISK ALLOCATION
8.1. LIMITATION OF LIABILITY. TO THE EXTENT ENFORCEABLE AT LAW, AND EXCEPT WITH
RESPECT TO EACH PARTY'S OBLIGATIONS UNDER SECTIONS 5 (REPRESENTATIONS AND
WARRANTIES) 6 (CONFIDENTIALITY), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR
SIMILAR DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION LOST PROFITS OR LOST
REVENUES), WHETHER SUCH LIABILITY IS PREDICATED ON CONTRACT, STRICT LIABILITY,
STATUTE, REGULATION, OR ANY OTHER THEORY. EACH PARTY SHALL BE LIABLE TO THE
OTHER PARTY FOR ANY DIRECT DAMAGES ARISING OUT OF OR RELATING TO ITS PERFORMANCE
OR FAILURE TO PERFORM UNDER THIS AGREEMENT, PROVIDED THAT THE TOTAL LIABILITY OF
EITHER PARTY TO THE OTHER PARTY FOR DIRECT DAMAGES SHALL, WITH THE EXCEPTIONS
NOTED WITHIN THIS PROVISION, BE LIMITED IN THE AGGREGATE TO, IN THE CASE OF RCI,
THE AMOUNT PAID BY RCI TO ASMT UNDER THIS AGREEMENT AT THE TIME SUCH LIABILITY
IS FINALLY DETERMINED; IN THE CASE OF ASMT, ITS LIABILITY FOR DIRECT DAMAGES
SHALL, WITH THE SAME EXCEPTIONS, BE LIMITED IN THE AGGREGATE TO THE AMOUNT
RECEIVED BY ASMT UNDER THIS AGREEMENT AT THE TIME SUCH LIABILITY IS FINALLY
DETERMINED.
EACH PARTY ACKNOWLEDGES AND AGREES THAT THE FOREGOING LIMITATIONS OF LIABILITY
ARE ALSO INTENDED TO LIMIT EACH PARTY'S LIABILITY TO ANY AND ALL THIRD PARTIES
TO THE EXTENT PERMITTED AT LAW. HOWEVER, NOTHING CONTAINED IN THIS PROVISION OR
THIS AGREEMENT IS INTENDED OR SHALL OTHERWISE OPERATE TO RESULT IN EITHER PARTY
BEING RESPONSIBLE OR LIABLE TO ANY THIRD PARTY FOR ANY LIABILITY OR DAMAGES THAT
WERE CAUSED BY OR WHICH ARE OTHERWISE ATTRIBUTABLE TO THE OTHER PARTY.
-10-
<PAGE>
ACCORDINGLY, IN THE EVENT AND TO THE EXTENT THAT ANY SUIT, CLAIM OR ALLEGATION
OF ANY KIND, NATURE OR DESCRIPTION IS BROUGHT AGAINST EITHER PARTY BY ANY THIRD
PARTY, FOR DAMAGES (REGARDLESS OF HOW CHARACTERIZED) THAT WERE CAUSED BY OR ARE
OTHERWISE ATTRIBUTABLE TO THE OTHER PARTY, THE PARTY CLAIMED AGAINST SHALL BE
FREE TO IMPLEAD, JOIN, OR OTHERWISE CLAIM AGAINST THE OTHER PARTY WITH RESPECT
TO SUCH THIRD PARTY CLAIM. TO THE EXTENT THAT THE PARTY ORIGINALLY CHARGED
INCURS ANY MANNER OF EXPENSES IN CONNECTION WITH SUCH CLAIM OR ITS DEFENSE, THE
OTHER PARTY SHALL BE OBLIGATED TO PROMPTLY REIMBURSE THE OTHER PARTY FOR ALL
SUCH COSTS AND EXPENSES, AS WELL AS FOR ANY DAMAGES THAT MAY HAVE BEEN AWARDED
AGAINST THAT PARTY, WITHOUT LIMIT.
8.2. INJUNCTIVE RELIEF. The Parties agree that the remedy at law for any breach
of the provisions of Sections 3, 5, and/or 6 of this Agreement shall be
inadequate and the non-breaching Party shall be entitled to injunctive relief in
addition to any other remedies that may be available to the non-breaching Party.
9. MISCELLANEOUS
9.1. INDEPENDENT CONTRACTORS. For all purposes of this Agreement, each Party
shall be and act as an independent contractor or and not as a partner, joint
venturer, employee or agent of the other. No franchise is created hereby.
Neither Party shall have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other Party or to bind
the other Party to any other contract, agreement or undertaking with any third
Party except as specifically provided for herein. The Parties' use of the term
"partner" or its equivalent is for marketing purposes only, and shall have no
effect on the legal relationship between the Parties hereto.
9.2. FORCE MAJEURE. Neither Party shall be liable or responsible in any manner
for failure or delay in performance of any obligation under this Agreement when
such failure or delay is due to the result, in whole or in substantial part, to
any cause beyond the reasonable control of the Party whose performance is
delayed or rendered impossible thereby if reasonable steps are taken to resolve
the reason for such failure or delay and the reason for such failure or delay is
promptly transmitted to the other Party. If the delay exceeds ninety (90) days
from the initial occurrence each Party shall have the right to terminate this
agreement upon thirty (30) days prior written notice to the other Party.
9.3. ASSIGNMENT. This Agreement and the provisions hereof shall be binding upon
and inure to the benefit of and be enforceable by the Parties hereto and their
successors and assigns. Neither Party may assign, transfer, or sublicense its
rights or obligations under this Agreement without prior written consent of the
other Party. Notwithstanding the foregoing or any other provision of this
Agreement, (a) RCI shall have the right to assign this Agreement and any rights
hereunder, without ASMT's consent, (i) in connection with any merger,
consolidation or any sale of RCI'S business or of all or substantially all of
RCI's assets or any other transaction in which more than fifty percent (50%) of
RCI's voting securities are transferred, or (ii) to any subsidiary or affiliate
of RCI (PROVIDED THAT RCI shall provide written notice to ASMT identifying such
subsidiary or affiliate); and (b) ASMT shall have the right to assign this
Agreement and any rights hereunder, without RCI's consent, (i) in connection
with any merger, consolidation, any sale of all or substantially all of ASMT's
business or assets or any other transaction in which more than fifty percent
(50%) of ASMT's voting securities are transferred, or (ii) to any subsidiary or
affiliate of ASMT (PROVIDED THAT ASMT shall provide written notice to RCI
identifying such subsidiary or affiliate).
Neither Party may assign this Agreement to a direct competitor of the other
Party as listed in the EXHIBIT C hereto.
9.4. NOTICES. Any notices, waivers and other communications required or
permitted hereunder shall be in writing and shall be deemed to be fully given
when delivered by hand or dispatched (with reasonable evidence of receipt) by
confirmed facsimile transmission, or the next business day after being
dispatched by internationally-recognized overnight courier or mail service,
addressed to the Party to whom the notice is intended to be given at the
following or such other address as either Party may designate by like notice:
RCI: RCI, Inc.
15 Southwest Park
Westwood, MA
02090
Phone (617) 497-5800
Fax (617) 497-6825
Attn. Mr. Robert Rea, Business Development Manager
ASMT: AsiaSmart Inc.
-11-
<PAGE>
9.5. CONTACT PERSONS. Each Party shall designate a Partner Relations Manager to
implement the obligations of each such Party hereunder and to be available to
respond to inquiries during the normal business hours of such Party.
9.6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with substantive laws of the Commonwealth of Massachusetts, without
regard for any choice or conflict of law rule or principle that would result in
the application of the substantive law of any other jurisdiction. Any dispute
relating to or arising out of this Agreement shall be resolved by a federal or
state court located in the Suffolk County in Boston, and each Party hereby
submits to the exclusive jurisdiction of such court and explicitly waives any
venue and inconvenient forum objections thereto. The prevailing Party shall be
entitled to recover its costs and expenses (including reasonable attorneys'
fees) from the other Party.
9.7. SEVERABILITY. If any term or provision of this Agreement or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of such term
or provisions to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected, and each term and provision
of this Agreement shall be valid and be enforced to the fullest extent permitted
by law.
9.8. NO THIRD-PARTY BENEFICIARIES. No person(s) not a Party to this Agreement is
an intended beneficiary of this Agreement, and no person(s) not a Party to this
Agreement shall have any right to enforce any term of this Agreement.
9.9. WAIVER. No provision of this Agreement shall be deemed to have been waived
unless the specific provision is expressly waived in writing signed by the
waiving Party. No failure by any Party to insist upon the strict performance of
any provision of this Agreement, or to exercise any right to remedy consequent
upon a breach thereof, shall constitute a waiver of any other provision of this
Agreement or a waiver of such provision with respect to any subsequent breach,
unless expressly provided in writing.
9.10. ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the Parties relating to the subject matter hereof and supersedes all prior or
contemporaneous oral or written agreements on the same subject matter.
9.11. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
9.12. FURTHER ASSURANCES. Each Party covenants and agrees that, subsequent to
the execution and delivery of this Agreement and without any additional
consideration, it will execute and deliver any further legal instruments and
perform any acts which are or may become reasonably necessary to effectuate the
purposes of this Agreement.
9.13. CAPTIONS. Titles and headings in this Agreement are for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
9.14. AMENDMENTS. This Agreement may be modified or amended only by a document
duly executed by authorized representatives of each Party.
-12-
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representative as of the date first written
above.
ASIASMART ROWECOM
By: /S/ STEPHEN TAN By: /S/ JEFFREY SANDS
--------------------------- -----------------------------
Name: Stephen Tan Name: Jeffrey Sands
Title: Chief Executive Officer Title: Vice President of Business
Development
-13-
<PAGE>
EXHIBIT A
RCI TRADEMARKS
kSTORE
-14-
<PAGE>
EXHIBIT B
ASMT TRADEMARKS
-15-
<PAGE>
EXHIBIT C
RCI DIRECT COMPETITORS:
o Blackwell Ltd.
o Ebsco Industries, Inc.
o
o FatBrain.com, Inc.
o
o Wholly-owned subsidiaries of each of the above
-16-
