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EXHIBIT 10.39
AMENDED AND RESTATED MARKETING AND PROMOTION AGREEMENT
This Amended and Restated Marketing and Promotion Agreement (hereinafter
the "Agreement") is executed as of June 8, 2000 by and between Safeway Inc., a
Delaware corporation, with a place of business at 5918 Stoneridge Mall Road
Pleasanton, California 94588 ("Safeway") and Pets.com, Inc., a Delaware
corporation, with a place of business at 435 Brannan Street, San Francisco,
California 94107 ("Pets.com").
RECITALS
WHEREAS, Pets.com is the successor-in-interest to Petstore.com, Inc., a
Delaware corporation ("Petstore.com") pursuant to an Asset Purchase Agreement of
even date herewith whereby Pets.com will acquire substantially all of the key
assets of Petstore.com upon the closing of such agreement (the "Purchase
Agreement");
WHEREAS, in connection with the Asset Purchase Agreement, Pets.com has
succeeded to the rights and obligations of Petstore.com pursuant to that certain
Marketing and Promotion Agreement effective as of December 2, 1999 between
Petstore.com and Safeway (the "Original Marketing Agreement");
WHEREAS, Pets.com and Safeway desire to amend and restate the Original
Marketing Agreement as set forth herein;
WHEREAS, Pets.com and Safeway agree that this Agreement is conditioned
upon the closing of the Purchase Agreement and that this Agreement shall become
effective only upon the closing of the Purchase Agreement;
WHEREAS, Pets.com maintains the World Wide Web site currently at the
universal resource locator ("URL") http://www.pets.com.com (the "Pets.com Site")
and Safeway maintains the World Wide Web site at the URL http://www.safeway.com
(the "Safeway Site"); and
WHEREAS, Safeway and Pets.com desire to engage in mutual marketing and
promotional activities as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, the adequacy and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
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1.1 "Checkout" means that page on the Pets.com Site where
Customers may purchase the Pets.com Products and which utilizes Pets.com's back
end technology for order fulfillment and credit card management.
1.2 "Clickthrough" means when a user of a site (as designated by
a particular URL) clicks on a Link and moves from one web page at a given URL to
a different web page or URL; Clickthroughs can occur within a site or can Link
from one site to another site.
1.3 "Customer" means a user of the Pets.com Site.
1.4 "Effective Date" means the date of closing of the Purchase
Agreement.
1.5 "Link" means a hypertext graphic and/or textual link which
may be initiated by clicking an icon, logo, button, image or text to establish a
direct connection to a site by means of a Clickthrough.
1.6 "Pets.com Artwork" means all copyrighted works and/or
Pets.com Mark artwork provided by Pets.com to Safeway.
1.7 "Pets.com Marks" means Pets.com's or its licensors'
trademarks and servicemarks (including word marks, designs and logos) and
tradenames utilized by Pets.com on Pets.com's services and products provided
through the Pets.com Site from time to time.
1.8 "Pets.com Products" means the Pets.com-branded products and
services and third party branded products and services made available by
Pets.com to Customers on the Pets.com Site for purchase through the Checkout.
1.9 "Safeway Artwork" means all copyrighted works and/or Safeway
Mark artwork provided by Safeway to Pets.com.
1.10 "Safeway Content" means the textual and any pictorial
content, including Safeway Artwork, related to the Safeway brand which is
provided to Pets.com by Safeway for use on the Pets.com Site.
1.11 "Safeway Marks" means Safeway's or its licensor's trademarks
(including word marks, designs and logos) and tradenames utilized by Safeway
from time to time, including without limitation both the "Safeway" and "Safeway
SELECT" brands.
2. PROMOTIONS OF SAFEWAY ON THE PETS.COM SITE.
2.1 SAFEWAY TRADEMARK LICENSE FOR THE PETS.COM SITE. Safeway
grants to Pets.com a worldwide, non-exclusive license to use, reproduce,
distribute, publicly perform and publicly display the Safeway Marks (and Safeway
Content as applicable) on the Pets.com Site and on promotional material relating
to the Pets.com Site as contemplated by this Agreement. Pets.com will use the
Safeway Marks in accordance with Safeway's written trademark guidelines as
provided to Pets.com by Safeway from time to time. Safeway will have the right
to request
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samples of Pets.com's use of Safeway Marks and to require Pets.com to correct
any nonconforming use within a reasonable time period.
2.2 DEFAULT FRONT PAGE. During the term of this Agreement, in
order to facilitate the promotion of the Safeway brand on the Pets.com Site,
Pets.com will commit to certain front page promotions on the Pets.com Site that
include Safeway Content. Pets.com will include Safeway Content, which may
contain brand representations selected by Safeway and provided to Pets.com, on a
rotating basis on the default front page of the Pets.com Site (using the same
type of graphics and/or icons that Pets.com utilizes on other areas of the
default front page). Pets.com will show such planned use of the Safeway brand
representations to Safeway for Safeway's prior approval and Safeway shall have
ten (10) days to approve such proposed Safeway brand representations. If Safeway
does not approve or reject such use within the ten (10) day period, such use
will be deemed approved. Safeway will have the right to disapprove any use of
the Safeway brand representations submitted to Safeway under the terms of this
Agreement if Safeway determines, in the exercise of Safeway's good faith
judgment, that the use in question would impair the value and goodwill
associated with Safeway, the Safeway Marks, or the Safeway Site, by reason of
(i) failure to satisfy the general quality standards as displayed by the Safeway
Site and Safeway's related advertising and promotional material, (ii) use of
materials which are unethical, immoral, or offensive to good taste; (iii)
failure to carry proper copyright or trademark notices; or (iv) any other
reasonable cause.
3. WARRANTY DISCLAIMER.
3.1 FOR PETS.COM. Pets.com makes no express or implied warranty
with respect to the operation of the Pets.com Site, the quantity of users which
will Clickthrough the Pets.com Site, or any other matter hereunder. PETS.COM
DISCLAIMS ALL WARRANTIES OF ANY KIND WITH RESPECT TO THE PETS.COM SITE, THE
PETS.COM PRODUCTS AND THE SOFTWARE RELATED THERETO, WHETHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THIRD PARTY RIGHTS.
3.2 FOR SAFEWAY. Safeway makes no express or implied warranty
with respect to the operation of the Safeway Site, the quantity of users which
will Clickthrough the Safeway Site, or any other matter hereunder. SAFEWAY
DISCLAIMS ALL WARRANTIES OF ANY KIND WITH RESPECT TO THE SAFEWAY SITE, THE
SAFEWAY PRODUCTS AND THE SOFTWARE RELATED THERETO, WHETHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THIRD PARTY RIGHTS.
4. MARKETING AND ADVERTISING OF THE PETS.COM SITE BY SAFEWAY.
4.1 MARKETING IN GENERAL. During the first year of this
Agreement, Safeway will promote Pets.com as set forth in the marketing plan
attached hereto as Exhibit A (the ("Safeway Promotional Activities"). Prior to
the end of the first year, the parties shall develop a
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marketing plan for the remaining term of this Agreement. The marketing plan for
the remaining term will be at least of the scope as the plan set forth on
Exhibit A. Although the parties have every confidence that the discussions and
planning activities for the marketing plan after the first year will occur in a
timely and productive manner so as to have a plan in place for the remaining
term of this Agreement, in order to insure that at all times the parties are
operating under some form of marketing plan, if the parties should fail to agree
on the marketing plan for the remaining term of this Agreement as of the one
year anniversary of this Agreement, the parties agree that until the new plan is
agreed upon for such period, the marketing plan attached hereto as Exhibit A
will be reimplemented as a guide for the nature and type of promotions to be
conducted in the interim.
4.2 SAFEWAY PROMOTIONAL ACTIVITIES. The parties will mutually
agree, on a case by case basis as to which party will have primary
responsibility for proposing the design and content of particular ads and
promotions and such party will propose such design and content proposals for
review and subject to approval by the other party through the mechanisms of the
planning process mutually agreed upon by the parties. Safeway will make
reasonable efforts to run all advertisements and promotions which incorporate
the Pets.com brand in coordination with the marketing cycles and seasonal
focuses of Pets.com's business.
4.3 PRIMARY CONTACTS. Within ten (10) days of the execution of
this Agreement, each party agrees to designate a primary point of contact who
will work with the other party with the goal of optimizing the relationship
between the parties under this Agreement.
4.4 APPROVAL OF ADVERTISING AND PROMOTIONS MATERIALS.
4.4.1 STANDARD APPROVAL PROCESS. With respect to each
unique item of Advertising and Promotions Material which Safeway proposes to use
to advertise and/or promote Pets.com and the Pets.com Site, Safeway will submit
to Pets.com for review and approval the following materials:
(i) proposed written copy for any Advertising and
Promotions Material, with attached rough art showing how the Pets.com Artwork
will be used in connection with the copy; and
(ii) final layout (in story board form, three
dimensional drawings or other appropriate format) with final copy (and pantone
colors, if applicable); and
(iii) a final printed sample of each article of
Advertising and Promotions Material, where feasible (for example, in the case of
shopping bag graphics, a shopping bag, or in the case of printed brochures or
catalogs, copies of the actual brochure or catalog).
Except in the case where the Promotional Plan otherwise
designates a specific rollout and approval schedule which indicates the actual
timeframes and processes for a particular promotion, Safeway will be required to
comply with the foregoing approval steps for
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each items of Advertising and Promotions Material, obtaining Pets.com's written
approval at each step of the procedure, unless, by prior written notice from
Pets.com, Safeway is exempted from any such step with respect to a specific item
of Advertising and Promotions Material. Safeway, when submitting such
Advertising and Promotions Materials to Pets.com for approval, will describe the
proposed uses of the Advertising and Promotions Materials (including the media
to be used in exploiting the same) and the duration of such proposed uses, both
of which shall be subject to Pets.com's approval. In such cases, approval of the
Advertising and Promotions Materials will extend only to those proposed uses,
durations of use, etc., described in Safeway's approval request submissions.
4.4.2 FLEXIBLE APPROVAL PROCESS. The parties agree that
certain categories of promotional activities may lend themselves to a tiered
approval process where (i) the parties may mutually agree upon the general form
and format for a promotion and may engage in a process to pre-approve certain
portions of the promotion that will be key components and (ii) the parties will
defer selection of other elements until right before launch and will process
such deferred elements under a mutually agreed upon schedule involving short
turnaround times for approvals. Such flexible approval process activities will
be so designated in the Promotion Plan and Budget for the applicable time
period.
4.5 APPROVAL STANDARDS. Pets.com will have the right to
disapprove any Advertising and Promotions Materials submitted to Pets.com under
the terms of this Agreement if Pets.com determines, in the exercise of
Pets.com's reasonable good faith judgment, that the materials in question would
impair the value and goodwill associated with Pets.com, the Pets.com Marks, or
the Pets.com Site, by reason of (i) failure to satisfy the general quality
standards as displayed by the Pets.com Site and Pets.com's related advertising
and promotional material, (ii) use of materials which are unethical, immoral, or
offensive to good taste; (iii) failure to carry proper copyright or trademark
notices; or (iv) any other reasonable cause. In any case where the Advertising
and Promotions materials are promoting multiple merchant partners of Safeway, if
other merchant partners approve of the materials but Pets.com has disapproved
the materials, Pets.com may request to have the Pets.com brand removed from the
final materials. In addition, Advertising and Promotions materials which are
subject to approval by multiple merchant partners may require careful scheduling
of review procedures and Pets.com agrees to cooperate and facilitate such
process of providing timely review.
4.6 TIME FOR APPROVAL. Except in the case where the mutually
agreed upon timeline for an advertising or promotion activity designates a
shorter review and approval period in the written plan for such activity based
on the planning process, Pets.com will use reasonable efforts to notify Safeway
in writing of Pets.com's approval or disapproval of any materials submitted to
Pets.com under Section 4.4 ("Approval of Advertising and Promotions Materials")
within five (5) days after Pets.com's receipt of the same. If the timeline
specifically allocates a shorter review and approval period, Pets.com will use
reasonable efforts to comply with such shorter timeframe, however such review
and approval period will not be less than twenty-four (24) hours. In addition,
in any instance where the review and approval period is less than five (5) days,
Safeway agrees to use commercially reasonable efforts to insure that the
designated Pets.com representative tasked with such review, based on the
applicable plan, will be personally
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notified when such materials have been made available so as to trigger
commencement of the review and approval period. Pets.com will provide Safeway
with the name of the designated Pets.com representative, in writing (and may
change the designated Pets.com representative by means of prior written notice,
from time to time). If Pets.com has not approved or rejected the applicable
materials within the designated timeframe, Pets.com will be deemed to have
approved the materials.
4.7 NO USE OF UNAPPROVED ADVERTISING AND PROMOTIONS MATERIALS.
Unless otherwise provided in this Agreement, Safeway will not have the right to
produce, distribute, display or use any Advertising and Promotions Materials
that bear the Pets.com brand unless Safeway has complied with all of the
approval procedures and requirements set forth in Section 4.4 ("Approval of
Advertising and Promotions Materials"), and has obtained Pets.com's prior
approval of such Advertising and Promotions Materials in accordance with the
terms of this Agreement. Failure by Safeway to comply with the provisions of
Section 4.4 ("Approval of Advertising and Promotions Materials") shall
constitute a material breach by Safeway of the terms of this Agreement.
4.8 PETS.COM TRADEMARK LICENSE. Pets.com grants to Safeway a
worldwide, non-exclusive license to use, reproduce, distribute, publicly perform
and publicly display the Pets.com Marks solely in connection with Safeway's
development and production of the Advertising and Promotions Materials pursuant
to Section 4 ("Marketing and Advertising of the Pets.com Site by Safeway"). All
use of the Pets.com Marks by Safeway will be in accordance with Pets.com's
written trademark guidelines as provided to Safeway by Pets.com from time to
time.
4.9 PETS.COM AUDIT RIGHTS. Pets.com may cause an audit to be made
of the applicable records of Safeway, at Pets.com's expense, in order to verify
the dissemination, placement and actual circulation of the various elements of
the promotions. Such audit will be conducted upon no less than thirty (30) days
advance written notice to Safeway and will be conducted during Safeway's regular
business hours at Safeway's offices and in such a manner so as not to interfere
with Safeway's normal business activities. Such audits will be made no more
often than once every twelve (12) months during the term of this Agreement and a
final audit may be conducted within six (6) months of the termination of this
Agreement. Such audit will be performed by an independent certified public
accountant reasonably acceptable to Safeway.
4.10 INVENTORY MANAGEMENT AND PRODUCT FULFILLMENT. Safeway and
Pets.com agree to discuss in good faith the possibility of an agreement for an
inventory management and product fulfillment relationship that could include
co-located warehouse facilities.
5. LINK TO THE PETS.COM SITE FROM THE SAFEWAY SITE.
5.1 CONSTRUCTION OF THE LINK. As promptly as practicable after
the Effective Date, Pets.com will make available to Safeway a Link to the
Pets.com Site and associated Link graphics in accordance with the terms of
Section 5.2 ("Link Graphics"), which, subject to the terms and conditions
hereof, shall be displayed on the Safeway Site continuously throughout the
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term of this Agreement. Safeway will construct and display such Link and the
associated Link graphics on the Safeway Site within 10 days after the Link is
made available by Pets.com. Safeway will promote the Pets.com Site Link on the
default home page of the Safeway Site and will treat the Pets.com Site Link as a
"merchant partner" on the Safeway Site, which will mean that no other
non-affiliated brand will have a larger presence on the Safeway Site and that
the Pets.com brand will be of equal presence in terms of relative size,
prominence and frequency of appearance.
5.2 LINK GRAPHICS. Pets.com will deliver graphic files in
electronic format to be used by Safeway to implement the image for the Pets.com
Site Link on the Safeway Site. Subject to the terms and conditions of this
Agreement, Pets.com hereby grants to Safeway a non-exclusive license to
reproduce and display the Links, including any Pets.com Artwork and/or Pets.com
Marks incorporated into the Links, solely in connection with the promotional
relationship contemplated by this Section 5 ("Link to the Pets.com Site From the
Safeway Site"). Such license will terminate upon the effective date of the
expiration or termination of this Agreement. Safeway will make the new Link
image available in beta format to Pets.com by means of password access to a
non-public server where the new Safeway Site page with the Link image is
displayed for Pets.com review and approval prior to launch as a component of the
Safeway Site. Safeway will not make the new Link page available for public
access on the World Wide Web until Pets.com has given its written approval of
the beta format. Safeway agrees that the actual implementation of the Link
images and page layout on the Safeway site will conform to that approved by
Pets.com, on an ongoing basis, unless Pets.com agrees to subsequent layout and
image changes, in writing, in accordance with the foregoing procedures.
5.3 AUDIT REPORTS. Safeway may cause an audit to be made of the
applicable records of Pets.com, at Safeway's expense, in order to verify
Pets.com's compliance with this Agreement. Such audit shall be conducted upon no
less than thirty (30) days advance written note to Pets.com and will be
conducted during Pets.com's regular business hours at Pets.com's offices and in
such a manner so as not to interfere with Pets.com's normal business activities.
Such audits will be made no more often than once every twelve (12) months during
the term of this Agreement and a final audit may be conducted within six (6)
months of the termination of this Agreement. Such audit will be performed by an
independent certified public accountant reasonably acceptable to Pets.com.
5.4 NON-EXCLUSIVE AGREEMENT. Except as set forth on Exhibit A
hereto or as otherwise agreed in writing by the parties, the parties acknowledge
and agree that the relationship hereunder shall be non-exclusive.
5.5 PETS.COM OBLIGATIONS WITH RESPECT TO THE PETS.COM SITE.
Pets.com will maintain sole responsibility for all costs of the Pets.com Site,
including development, management, tracking, support, and maintenance. Pets.com
will make commercially reasonable efforts to ensure that access to the Pets.com
Site is uninterrupted during the term of the Agreement although Pets.com will
not be responsible for problems associated with the World Wide Web in general.
As between Safeway and Pets.com, Pets.com will be solely responsible for product
availability, product fulfillment and customer service for all Pets.com Products
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offered and/or sold on the Pets.com Site. Subject to Section 6.1, Pets.com is
under no obligation to offer for sale, list, or to continue to list, any
particular Pets.com Product on the Pets.com Site but rather may, in Pets.com's
sole discretion, determine which of the Pets.com Products Pets.com desires to
offer for sale to Customers. Accordingly, Pets.com may, in Pets.com's sole
discretion, include or remove any Safeway Content, or other materials consistent
with Pets.com's product selection decisions.
5.6 SAFEWAY'S OBLIGATIONS WITH REGARD TO THE SAFEWAY SITE. Other
than Pets.com content which is to be delivered by Pets.com at Pets.com's cost
for the Pets.com Link image on the Safeway Site, pursuant to Section 5.2 ("Link
Graphics"), Safeway will maintain sole responsibility for all costs for the
Safeway Site, including development, management, support, and maintenance.
Safeway will make commercially reasonable efforts to ensure that access to the
Safeway Site via the Internet is uninterrupted during the term of the Agreement,
although Safeway will not be responsible for problems associated with the World
Wide Web in general.
6. SALE OF THE SAFEWAY PRODUCTS ON THE PETS.COM SITE.
6.1 As promptly as practicable after the Effective Date, Pets.com
will offer the same line of Safeway's premium private-label brand pet food
products which are carried in the Safeway stores (the "Safeway Products") on the
Pets.com Site. Pets.com will place such products in the product listings area of
the Pets.com Site with equal prominence to the other premium pet food products
which are available in the product listings area on the Pets.com Site. The
parties will cooperate in good faith to develop and mutually agree upon a
fulfillment, distribution and promotion plan for the sale of the Safeway
Products on the Pets.com Site which will set forth the activities required in
order to make the Safeway Products available to Customers. The parties will
cooperate in good faith to develop the fulfillment, distribution and promotion
plan as promptly as practicable after the Effective Date.
7. INTELLECTUAL PROPERTY.
7.1 RESPONSIBILITIES. Each party will use the appropriate
trademark and trademark symbol (either (TM) or (R)) and copyright symbol ((C)),
and clearly indicate ownership of trademarks and copyrights, as reasonably
required by the party having ownership rights in and to the Intellectual
Property (the "Owner Party"), whenever using any of the trademarks or copyrights
of the Owner Party pursuant to this Agreement. Each party agrees that, as
between the parties, (a) the Owner Party's trademarks and copyrights and the
goodwill associated therewith are and will remain the sole property of the Owner
Party; (b) this Agreement does not confer in either party any right of ownership
in the other party's trademarks or copyrights; (c) all uses by the other party
of the Owner Party's trademarks and/or copyrights will inure to the benefit of
the Owner Party; (d) all use by the other party of the Owner Party's trademarks
or copyrights shall be in accordance with the Owner Party's policies on such
use, as communicated by the Owner Party to the other party in writing from time
to time; and (e) when using the Owner Party's materials, if any such materials
contain copyright, patent, trademark or other notices
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evidencing the Owner Party's ownership of rights in intellectual property, the
other party will not delete, modify, remove or diminish the prominence of any
such notices.
7.2 CONFIDENTIALITY.
7.2.1 SCOPE. For purposes of this Agreement, "Confidential
Information" shall mean all nonpublic information, whether in oral, written or
other tangible form that the party disclosing the information (the "Discloser")
designates as being confidential or which, under the circumstances surrounding
disclosure, the receiving party (the "Recipient") knows or has reason to know
should be treated as confidential, including without limitation, the terms and
conditions of this Agreement. Such obligations with respect to Confidential
Information will not be applicable to information which is in the public domain,
received by the Recipient from a third party without an obligation of
confidentiality or independently developed by the Recipient.
7.2.2 OBLIGATION OF CONFIDENTIALITY. During the term of
this Agreement, the disclosing party ("Discloser") may provide Confidential
Information to the receiving party ("Recipient") to further the business
objectives of this Agreement. Recipient shall hold the Confidential Information
in strict confidence, provided that the Confidential Information may be
disclosed to such of Recipient's employees, contractors and advisors who have a
need to know for the purpose of fulfilling Recipient's obligations under this
Agreement. Recipient and its employees, contractors and advisors may use the
Confidential Information solely for the purpose of fulfilling Recipient's
obligations under this Agreement. Each party, as Recipient, may provide a copy
of this Agreement to its legal, accounting and other like professional service
providers as necessary to permit such professional service providers to perform
their duties to Recipient. Without Discloser's prior written consent, Recipient
shall not, and shall direct such individuals not to, disclose the Confidential
Information in whole or in part, except to the extent required by law. Recipient
shall employ all reasonable steps to protect the Confidential Information from
unauthorized or inadvertent disclosure or use, including, without limitation,
all such steps that it takes to protect its own information that it considers to
be confidential information. It is further understood and agreed that money
damages would be not be a sufficient remedy for any breach of Recipient's
obligations under Section 7.2 ("Confidentiality") by Recipient and that
Discloser shall be entitled to specific injunctive relief as a remedy for any
such breach. Such remedy shall not be deemed to be the exclusive remedy for the
breach of obligations under Section 7.2 ("Confidentiality") but shall be in
addition to all other available legal or equitable remedies.
7.3 PUBLICITY. The parties will issue a mutually agreed-upon
joint press release announcing the execution of this Agreement. Except as
provided otherwise herein, each party will submit to the other party, for its
prior written approval, which shall not be unreasonably withheld or delayed, any
other press release or other promotional release referencing the other party,
except that a party may make any and all public disclosures required by
applicable securities laws or stock exchange rules.
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7.4 CUSTOMER DATA. Each of the parties accumulates customer data
in the ordinary course of its business which may be useful for marketing and
promotional purposes. Subject to each party's obligations with respect to
confidentiality, privacy policies, contractual restrictions or otherwise, the
parties agree to share aggregate data statistics (but not personally
identifiable data) and also agree to post or send out such promotions as may be
mutually agreed upon by the parties from time to time, subject to the foregoing
limitations, on behalf of the other party, using the customer data.
8. INDEPENDENT CONTRACTOR. Safeway and Pets.com shall at all times be
acting as independent contractors in the performance of their obligations under
this Agreement. No employee of either party shall be deemed to be acting as
agent or employee of the other party. When such employees act under the terms of
this Agreement, they shall at all times be under the supervision and management
of their employer. This Agreement does not create or constitute a partnership,
joint venture or agency relationship nor the grant of a franchise.
9. INDEMNIFICATION.
9.1 INDEMNITY OBLIGATION. Each party (the "Indemnifying Party")
will defend, indemnify and hold harmless the other party (the "Indemnified
Party") from and against any and all claims, actions, losses, liabilities,
damages, settlements, judgments, arbitration awards, costs and expenses
including reasonable outside attorney's fees and expenses (collectively
"Claims") resulting from the Indemnified Party's permitted use of materials
obtained from the Indemnifying Party under this Agreement (including, without
limitation, copyrights, trademarks, tradenames, service marks, logos, and/or
slogans, of the Indemnifying Party) based on infringement of alleged
infringement or violation or alleged violation of the trademark, copyright or
other proprietary, publicity or privacy rights of any third party.
9.2 PROCEDURE. If the Indemnified Party desires to be indemnified
hereunder, such party shall give prompt notice to the Indemnifying Party
specifying all relevant details of the Claim. The Indemnified Party will
cooperate in all reasonable respects and may participate in such defense with
counsel of its own choice, provided that the Indemnified Party will in that
instance be responsible for all expenses relating to such separate counsel. No
settlement of a Claim may be made by the Indemnified Party without the
Indemnifying Party's prior approval, which shall not be unreasonably withheld.
10. REPRESENTATION. Each party represents and warrants to the other
party that: (i) such party has the full corporate right, power and authority to
enter into this Agreement and to perform the acts required of it thereunder; and
(ii) the execution of this Agreement by such party, and the performance by such
party of its obligations and duties hereunder, do not and will not violate any
agreement to which such party is a party or by which it is otherwise bound.
11. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES
ARISING OUT OF THIS AGREEMENT OR ITS TERMINATION AND IRRESPECTIVE OF WHETHER
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.
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12. TERM. The term of this Agreement shall be two (2) years commencing
on the Effective Date, unless sooner terminated in accordance with the terms of
this Agreement.
13. TERMINATION.
13.1 EVENTS OF DEFAULT. If an event of default as described in
(i), (ii) or (iii) below occurs, the nonbreaching party may terminate this
Agreement by issuing a notice of termination subject to a thirty (30) day cure
period. The Agreement will automatically terminate upon expiration of the cure
period unless the breaching party has effectuated a cure prior to expiration of
such cure period. The following will be events of default:
(i) Material breach of the terms of this Agreement.
(ii) Admission in writing of an inability to pay debts as
they mature or the making an assignment for the benefit of creditors.
(iii) Filing of a petition under any bankruptcy act,
receivership statute or similar law or stature, by either party, or the filing
of such a petition by any third party against either party, or the making of an
application for a receiver by either party, where such petition or application
is not dismissed or otherwise favorably resolved within thirty (30) days.
13.2 TERMINATION IN THE EVENT OF TERMINATION OF THE PURCHASE
AGREEMENT. This Agreement shall automatically terminate in the event that the
Purchase Agreement is terminated prior to the closing thereof.
13.3 EFFECT OF TERMINATION. Upon termination of this Agreement,
Pets.com will remove the Safeway Link, all Safeway Marks and Safeway Content,
from the Pets.com Site and Safeway will remove the Pets.com Link from the
Safeway Site. Within thirty (30) business days after any termination or
expiration of this Agreement each party shall immediately deliver to the other
party (or destroy, if requested by the other party) all copies of Confidential
Information or other materials then in its possession owned by such other party.
14. NOTICES. All notices given under this Agreement must be in writing
and personally delivered, or sent by registered or certified mail (return
receipt requested), facsimile or overnight courier. Notices will be deemed given
on the date received.
15. OTHER PROVISIONS.
15.1 SURVIVAL. The parties' rights and obligations under Section
3 ("Warranty Disclaimer"), Section 7.2 ("Confidentiality"), Section 8
("Independent Contractor"), Section 9 ("Indemnification"), Section 11
("Limitation of Liability"), Section 13 ("Termination") and Section 15 ("Other
Provisions") will survive any suspension, termination or expiration of this
Agreement.
15.2 BINDING EFFECT. This Agreement shall be binding and shall
inure to the benefit of the parties hereto, and their respective heirs,
successors and assigns.
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15.3 WAIVER. No failure or delay of any party to exercise any
right or remedy under the terms of this Agreement shall affect such right or
remedy or constitute a waiver. No waiver of any default under this Agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions, and will not be effective unless made in writing
and signed by the waiving party.
15.4 FORCE MAJEURE. Neither party is liable for, and will not be
considered in default or breach of this Agreement on account of, any delay or
failure to perform as a result of earthquake, flood, strike/lockout, Act of God
or other cause or condition beyond such party's reasonable control which such
party is unable to overcome by the exercise of reasonable diligence, provided
that the affected party will use reasonable efforts to resume normal performance
as promptly as possible; and provide further that the financial condition of a
party shall not excuse any delay or nonperformance.
15.5 GOVERNING LAW; VENUE; ATTORNEYS' FEES. This Agreement shall
be governed by and construed in accordance with the laws of the State of
California. All actions relating to this Agreement shall be venued solely within
the State of California and the parties hereby commit to the jurisdiction of
such state. In any legal proceeding between the parties relating to the
enforcement or interpretation of any rights arising out of or relating to this
Agreement, the prevailing party will entitled to recover its reasonable
attorneys' fees and court costs.
15.6 DISPUTE RESOLUTION. All disputes, claims, and controversies
arising between the parties to this Agreement in connection with any provision
of this Agreement which are not resolved within fifteen (15) days after either
party delivers written notice to the other party of the dispute, claim or
controversy, may be submitted by either party to binding arbitration in San
Francisco, California before an attorney, retired judge or other arbitrator
mutually approved by the parties and the parties waive any objection to venue.
The arbitration will be conducted in accordance with the then current Commercial
Arbitration Rules of the American Arbitration Association. The arbitrator will
have the right to award or include in the award any relief which he or she deems
proper, including, without limitation, money damages (with interest on unpaid
amounts from date due), specific performance and injunctive relief. The award
and decision of the arbitrator will be conclusive and binding upon all parties.
Judgment on the award may be entered in any court of competent jurisdiction and
each waives any right to contest the validity or enforceability of any
arbitration award. The costs of any arbitration proceedings, including filing
fees, arbitrator's fees, court reporting fees, and transcript costs, will be
borne by the non-prevailing party; provided that if it is not clear that one
party has prevailed, the arbitrator shall have discretion to allocate a
proportionate share of such expenses among the parties in accordance with the
arbitrator's determination of fairness.
15.7 ASSIGNMENT. Neither party may assign this Agreement except
that either party may assign this Agreement in connection with a merger,
acquisition or sale of assets. Any assignment contrary to this Section will be
void and of no effect.
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<PAGE> 13
15.8 AMENDMENTS. This Agreement shall not be modified,
supplemented or amended except by a writing signed by both parties.
15.9 PARTIAL INVALIDITY. If a government agency, arbitrator or
court of competent jurisdiction shall hold any provision of this Agreement to be
illegal, invalid or unenforceable, the remaining provisions of such agreement
shall remain in full force and effect.
15.10 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement between the parties with respect to the subject matter herein, and
supersedes all previous and contemporaneous agreements, understandings and
arrangements, whether oral or written, with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
SAFEWAY INC. PETS.COM, INC.
By: /s/ Michael Minasi By: /s/ Paul G. Manca
--------------------------- -------------------------------
(Signature) (Signature)
Name(print): Michael Minasi Name(print): Paul G. Manca
-------------------- --------------------------
Title (print): Vice President Title (print): Chief Financial Officer
------------------ -----------------------
Date: 6/8/2000 Date: 6/8/2000
--------------------------- ----------------------------------
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EXHIBIT A
MARKETING PLAN
[*]
*CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
