<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 22, 2000
REGISTRATION NO. 333-32176
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PAPEREXCHANGE.COM, INC.
(exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
DELAWARE 5113 04-3505848
(STATE OF INCORPORATION) PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
CLASSIFICATION CODE NUMBER INDENTIFICATION NO.)
</TABLE>
545 BOYLSTON STREET
8(TH) FLOOR
BOSTON, MA 02116
(617) 536-4310
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
KENT DOLBY, CHIEF EXECUTIVE OFFICER
PAPEREXCHANGE.COM, INC.
545 BOYLSTON STREET
8(TH) FLOOR
BOSTON, MA 02116
(617) 536-4310
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO THE AGENT FOR
SERVICE, SHOULD BE SENT TO:
<TABLE>
<S> <C>
JOHN R. UTZSCHNEIDER KEITH F. HIGGINS
JONATHAN K. BERNSTEIN JOHN B. AYER
BINGHAM DANA LLP ROPES & GRAY
150 FEDERAL STREET ONE INTERNATIONAL PLACE
BOSTON, MA 02110 BOSTON, MA 02110
(617) 951-8000 (617) 951-7000
(617) 951-8736 (FAX) (617) 951-7050 (FAX)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ______
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the registrant in connection
with the sale of the securities being registered. All amounts are estimates
except the SEC registration fee, the NASD fee and the Nasdaq National Market
listing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
------------
<S> <C>
SEC registration fee........................................ $ 30,360
NASD fee.................................................... *
Nasdaq National Market listing fee.......................... $ 5,000
Printing expenses........................................... *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Transfer agent and registrar fees........................... *
Miscellaneous............................................... *
--------
Total................................................. *
========
</TABLE>
- ------------------------
* To be provided by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act").
As permitted by the Delaware General Corporation Law, our Certificate of
Incorporation includes a provision that eliminates the personal liability of our
directors for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to us
or our stockholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of the Delaware General Corporation Law (regarding unlawful
dividends and stock purchases) or (iv) for any transaction from which the
director derived an improper personal benefit.
As permitted by the Delaware General Corporation Law, our Bylaws provide
that (i) we are required to indemnify our directors and officers to the fullest
extend permitted by the Delaware General Corporation Law, subject to certain
very limited exceptions, (ii) we may indemnify our other employees and agents as
set forth in the Delaware General Corporation Law, (iii) we are required to
advance expenses, as incurred, to our directors and executive officers in
connection with a legal proceeding to the fullest extend permitted by the
Delaware General Corporation Law, subject to certain very limited exceptions and
(iv) the rights conferred in the Bylaws are not exclusive.
Reference is also made to Section of the Underwriting Agreement, which
provides for the indemnification of officers, directors and controlling persons
of us against certain liabilities. The indemnification provision in the
Registrant's Certificate of Incorporation and Bylaws entered into
II-1
<PAGE>
between us and each of our directors and executive officers may be sufficiently
broad to permit indemnification of our directors and executive officers for
liabilities arising under the Securities Act.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
During the period from April 1998 (inception) through March 1, 2000, we sold
and issued the following securities:
1. In April 1998, one investor purchased 50% of the membership interests of
PaperExchange.com, LLC. That investor contributed $2,000,000 in aggregate
capital contributions for those membership interests. Also in April of
1998, four other investors contributed an aggregate of $125,000 in cash
and other assets in exchange for the remaining 50% of the membership
interests.
2. In April 1999, PaperExchange issued 6,000,000 membership interests to
one investor for aggregate consideration of $1,000,000.
3. In August 1999, PaperExchange issued 966,714 membership interests to
nine investors for aggregate consideration of approximately $1,300,000.
4. In October 1999, PaperExchange issued warrants to nine investors to
purchase an aggregate of 5,000,001 membership interests at an exercise
price of $2.00 per share.
5. In December 1999, PaperExchange issued 441,754 membership interests in
exchange for a promissory note issued by the investor to us in the amount
of $1,052,632.
6. In December 1999, PaperExchange granted options to purchase 1,767,020
shares of common stock to its chief executive officer for an aggregate
exercise price of $4,210,526.
7. In December 1999, PaperExchange issued and sold 1,572,515 membership
interests to five investors for aggregate consideration of $10,000,000.
8. In February 2000, PaperExchange issued 1,479,894 shares of common stock
to one investor for an aggregate consideration of $10,000,000.
9. Also in February 2000, PaperExchange agreed to issue 503,164 shares of
common stock to one investor for approximately $3,400,000.
10. In February 2000, PaperExchange granted options to purchase
450,000 shares of common stock for an aggregate exercise price of
$4,383,000.
11. In March 2000, PaperExchange issued 519,149 shares of common stock at a
purchase price equal to $9.74 per share and a warrant to purchase up to
519,149 shares of common stock at an exercise price of $11.56 per share
to one investor.
12. In March 2000, PaperExchange issued 527,639 shares of common stock to
one investor at a purchase price equal to $9.74 per share.
13. Since inception, PaperExchange has granted options to purchase an
aggregate of 3,706,000 shares of common stock to a number of its
employees, officers, and consultants.
The issuances of above securities were intended to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, or Regulation D promulgated thereunder, or, with respect to
issuances to employees and consultants under the compensatory stock option
plans, Rule 701 promulgated under Section 3(b) of the Securities Act, as
transactions by an issuer not involving a public offering or transactions
pursuant to compensatory benefits plans and contracts relating to compensation
as provided under such Rule 701. The recipients of
II-2
<PAGE>
securities in each such transaction represented their intentions to acquire the
securities for investment only and not with a view to or for sale in connection
with any distributions thereof and appropriate legends were affixed to the
instruments representing such securities issued in such transactions.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are filed as part of this registration statement:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 (a)** Registrant's Certificate of Incorporation (to be replaced by
Exhibit 3.1(b) upon the closing of this offering).
3.1 (b)* Form of Registrant's Amended and Restated Certificate of
Incorporation (to be effective upon the closing of this
offering).
3.2 (a)** Registrant's Bylaws (to be replaced by Exhibit 3.2(b) upon
the closing of this offering).
3.2 (b)* Form of Registrant's Amended and Restated Bylaws (to be
effective upon the closing of this offering).
4.1* Form of specimen stock certificate
4.2** Form of Warrant to Purchase Common Stock
5.1* Opinion of Bingham Dana LLP as to the legality of the
securities being registered.
10.1+ Listing and Strategic Alliance Agreement by and between the
Registrant and International Paper Company, each dated as of
February 16, 2000.
10.2+ Alliance Agreement, by and between the Registrant and
Impresse Corporation dated as of February 8, 2000.
10.3+ Alliance Agreement, by and between the Registrant and CH
Robinson Worldwide, Inc., dated as of January, 2000
10.4+ Co-branding Agreement, by and between the Company and
VerticalNet, Inc. dated as of September 30, 1999
10.5+ Supply Agreement, by and between the Registrant and Asia
Pulp & Paper Ltd. dated as of February 29, 2000
10.6+ Participation Warrant, dated as of March 7, 2000, to
purchase common stock between the Registrant, as issuer, and
Staples, Inc.
10.7** Purchase Agreement, by and between the Registrant, Rod
Parsley, Madison Dearborn Capital Partners III, L.P. and
Special Advisors Fund I, LLC, dated as of December 30, 1999
10.8** Purchase Agreement, by and between the Registrant and DSCKW
Irrevocable Trust dated as of December 30, 1999
10.9** Interest Purchase Agreement by and between the Registrant
and Kent Dolby dated as of December 20, 1999
10.10** Equity Option Agreement, by and between the Registrant and
Kent A. Dolby, dated as of December 20, 1999
10.11** Promissory Note issued by Kent Dolby to the Registrant dated
as of December 20, 1999
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------------- -----------
<C> <S>
10.12** Employment Agreement dated as of December 20, 1999 by and
between the Company and Kent Dolby
10.13** Employment Agreement dated as of April 9, 1998, by and
between the Registrant and Hilton Plein
10.14(a)** 1998 Equity Option Plan, as amended
10.14(b)** Form of Stock Option Agreement for 1998 Equity Option Plan,
as amended
10.15(a)** 2000 Equity Incentive Plan
10.15(b) Form of Stock Option Agreement for 2000 Equity Incentive
Plan
10.16* 2000 Directors Option Plan
10.17* 2000 Employee Stock Purchase Plan
10.18(a)** Sublease by and between the Image Bank and the Registrant
dated as of July 13, 1999, for the premises at 545 Boylston
Street, Boston, Massachusetts (2nd Floor)
10.18(b) Sublease by and between ICO, LLC and Keith Rodney Company
dated June 30, 1998 for the premises at 545 Boylston Street,
Boston, Massachusetts (8th Floor)
10.18(c) Assignment of Sublease, dated March 19, 1999, by and between
Keith Rodney Company and the Registrant
10.19** Tenancy Agreement, by and between Mr. and Mrs. J. Minshaw
and the Registrant, dated as of February 1, 2000 for the
premises at 1, 54 Montague Square, London
10.20** Park Square Building Commercial Lease, dated as of March 3,
2000, by and between OMV Associates Limited Partnership
10.21 Stockholders' Agreement dated as of February 28, 2000, among
PaperExchange.com Inc. and its stockholders named therein
10.22 Form of Promissory Note dated as of October 15, 1999
10.23 Amendment to Employment Agreement by and between the
Registrant and Hilton Plein dated as of April 9, 1998
10.24+ Listing Agreement, by and between the Registrant and
Staples, Inc., dated as of March 7, 2000
21 Subsidiaries of the Registrant
23.1** Consent of Ernst & Young LLP
23.2* Consent of Bingham Dana LLP
24.1** Power of Attorney (See page II-7)
27.1** Financial Data Schedule for the year ended December 31, 1999
</TABLE>
- ------------------------
* To be filed by amendment.
** Previously filed.
+ Seeking confidential treatment.
II-4
<PAGE>
(b) FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedule is included as part of this registration statement:
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS.
Other financial statement schedules have been omitted because they are
inapplicable or are not required under applicable provisions of regulation S-X,
or because the information that would otherwise be included in such schedules is
contained in the registrant's financial statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rules 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 1 TO ITS REGISTRATION STATEMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF BOSTON, COMMONWEALTH OF MASSACHUSETTS, ON MARCH 22, 2000.
<TABLE>
<S> <C> <C>
PAPEREXCHANGE.COM, INC.
By: /s/ KENT DOLBY
-----------------------------------------
Kent Dolby
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Chief Executive
/s/ KENT DOLBY Officer and Director
------------------------------------------- (Principal Executive March 22, 2000
Kent Dolby Officer)
/s/ DUANE DESISTO* Chief Financial Officer,
------------------------------------------- (Principal Financial and March 22, 2000
Duane DeSisto Accounting Officer)
/s/ ROBERT K. KRAFT* Chairman of the Board and
------------------------------------------- Director March 22, 2000
Robert K. Kraft
/s/ WALTER BUCKLEY* Director
------------------------------------------- March 22, 2000
Walter Buckley
/s/ WILLIAM HASKELL* Director
------------------------------------------- March 22, 2000
William Haskell
/s/ JONATHAN A. KRAFT* Director
------------------------------------------- March 22, 2000
Jonathan A. Kraft
/s/ NATHAN LEIGHT* Director
------------------------------------------- March 22, 2000
Nathan Leight
/s/ ROGER WARREN STONE* Director
------------------------------------------- March 22, 2000
Roger Warren Stone
/s/ DAVID WETHERELL* Director
------------------------------------------- March 22, 2000
David Wetherell
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ KENT DOLBY
--------------------------------------
Kent Dolby
Attorney-in-fact
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 (a)** Registrant's Certificate of Incorporation (to be replaced by
Exhibit 3.1(b) upon the closing of this offering).
3.1 (b)* Form of Registrant's Amended and Restated Certificate of
Incorporation (to be effective upon the closing of this
offering).
3.2 (a)** Registrant's Bylaws (to be replaced by Exhibit 3.2(b) upon
the closing of this offering).
3.2 (b)* Form of Registrant's Amended and Restated Bylaws (to be
effective upon the closing of this offering).
4.1* Form of specimen stock certificate
4.2** Form of Warrant to Purchase Common Stock
5.1* Opinion of Bingham Dana LLP as to the legality of the
securities being registered.
10.1+ Listing and Strategic Alliance Agreement by and between the
Registrant and International Paper Company, each dated as of
February 16, 2000.
10.2+ Alliance Agreement, by and between the Registrant and
Impresse Corporation dated as of February 8, 2000.
10.3+ Alliance Agreement, by and between the Registrant and CH
Robinson Worldwide, Inc., dated as of January, 2000
10.4+ Co-branding Agreement, by and between the Company and
VerticalNet, Inc. dated as of September 30, 1999
10.5+ Supply Agreement, by and between the Registrant and Asia
Pulp & Paper Ltd. dated as of February 29, 2000
10.6+ Participation Warrant, dated as of March 7, 2000, to
purchase common stock between the Registrant, as issuer, and
Staples, Inc.
10.7** Purchase Agreement, by and between the Registrant, Rod
Parsley, Madison Dearborn Capital Partners III, L.P. and
Special Advisors Fund I, LLC, dated as of December 30, 1999
10.8** Purchase Agreement, by and between the Registrant and DSCKW
Irrevocable Trust dated as of December 30, 1999
10.9** Interest Purchase Agreement by and between the Registrant
and Kent Dolby dated as of December 20, 1999
10.10** Equity Option Agreement, by and between the Registrant and
Kent A. Dolby, dated as of December 20, 1999
10.11** Promissory Note issued by Kent Dolby to the Registrant dated
as of December 20, 1999
10.12** Employment Agreement dated as of December 20, 1999 by and
between the Company and Kent Dolby
10.13** Employment Agreement dated as of April 9, 1998, by and
between the Registrant and Hilton Plein
10.14(a)** 1998 Equity Option Plan, as amended
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------------- -----------
<C> <S>
10.14(b)** Form of Stock Option Agreement for 1998 Equity Option Plan,
as amended
10.15(a)** 2000 Equity Incentive Plan
10.15(b) Form of Stock Option Agreement for 2000 Equity Incentive
Plan
10.16* 2000 Directors Option Plan
10.17* 2000 Employee Stock Purchase Plan
10.18(a)** Sublease by and between the Image Bank and the Registrant
dated as of July 13, 1999, for the premises at 545 Boylston
Street, Boston, Massachusetts (2nd Floor)
10.18(b) Sublease by and between ICO, LLC and Keith Rodney Company
dated June 30, 1998 for the premises at 545 Boylston Street,
Boston, Massachusetts (8th Floor)
10.18(c) Assignment of Sublease, dated March 19, 1999, by and between
Keith Rodney Company and the Registrant
10.19** Tenancy Agreement, by and between Mr. and Mrs. J. Minshaw
and the Registrant, dated as of February 1, 2000 for the
premises at 1, 54 Montague Square, London
10.20** Park Square Building Commercial Lease, dated as of March 3,
2000, by and between OMV Associates Limited Partnership
10.21 Stockholders' Agreement dated as of February 28, 2000, among
PaperExchange.com Inc. and its stockholders named therein
10.22 Form of Promissory Note dated as of October 15, 1999
10.23 Amendment to Employment Agreement by and between the
Registrant and Hilton Plein dated as of April 9, 1998
10.24+ Listing Agreement, by and between the Registrant and
Staples, Inc., dated as of March 7, 2000
21 Subsidiaries of the Registrant
23.1** Consent of Ernst & Young LLP
23.2* Consent of Bingham Dana LLP
24.1** Power of Attorney (See page II-7)
27.1** Financial Data Schedule for the year ended December 31, 1999
</TABLE>
- ------------------------
* To be filed by amendment.
** Previously filed.
+ Seeking confidential treatment.
<PAGE>
Exhibit 10.1
LISTING AND STRATEGIC ALLIANCE AGREEMENT
THIS LISTING AND STRATEGIC ALLIANCE AGREEMENT is dated as of the 16th day
of February, 2000 (this "Agreement") by and between (a) International Paper
Company, a New York corporation ("International Paper"), and (b)
PaperExchange.com, LLC, a Delaware limited liability company
("PaperExchange.com").
WHEREAS, International Paper and PaperExchange.com desire to enter into a
strategic alliance to facilitate the adoption of electronic commerce in the
pulp, paper and packaging industry and in connection therewith, International
Paper has agreed to list certain paper products on PaperExchange.com's web site
in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, International Paper and PaperExchange.com agree as follows:
1. LISTING OF PRODUCTS.
1.1. Tonnage Listing. During the first two years of this Agreement,
International Paper will use good faith reasonable efforts to list on
PaperExchange.com's web site a target of ***** tons a month of first run paper
products, across a variety of major grades (such as those listed in clauses 1.1
(a), (b), (c) and (d) below). International Paper will use reasonable commercial
efforts to ramp up to the ***** ton per month target level as soon as practical.
However, the timing of the ramp up to the quantities listed shall be determined
by International Paper, in its sole discretion.
(a) Northern hard wood roll pulp, produced from International
Paper's manufacturing facility in Erie, Pennsylvania or other U.S.
facilities;
(b) Southern hardwood or softwood bale pulp, produced from
International Paper's manufacturing facilities in Eastover, South
Carolina and Riegelwood, North Carolina or other U.S. facilities;
(c) Grades of paper for tablet, envelopes, white forms bond and
uncoated bristols, produced from International Paper manufacturing
facilities; and
(d) White multi-purpose cut-size paper grades (preferably 84
brightness) sourced from International Paper locations.
1.2. Increase in Tonnage Listing. International Paper will use its
reasonable commercial efforts to increase the amount of tonnage listed on
PaperExchange.com's web site. Whether such increase is commercially practical
shall be determined in the sole discretion of International Paper.
PaperExchange.com shall not be liable in the event International Paper's tonnage
commitment, including any increase thereof pursuant to this Section 1.2, is not
sold in full.
* Confidential Treatment Requested; material has been omitted and filed
separately with the Commission.
1
<PAGE>
1.3. Listing Prices. International Paper will list its paper products on
PaperExchange.com's web site at market prices, as determined by International
Paper.
1.4. Additional Terms and Conditions. International Paper's listing on
PaperExchange.com's web site will be subject to the same terms and conditions as
other members listing products for sale on PaperExchange.com's web site as set
forth in the Membership Agreement posted on such web site (the "Membership
Agreement"), except as otherwise provided in this Agreement. All capitalized
terms used herein without definition shall have the meanings set forth in the
Membership Agreement.
2. PROVISIONS GOVERNING TRANSACTIONS.
2.1. General. In connection with the payment by International Paper of
Transaction Fees, the parties agree that the provisions of Section 9 of the
Membership Agreement shall be modified as set forth in Sections 2.2 through 2.7.
Capitalized terms used, but not otherwise defined in this Section 2, shall have
the meaning set forth in the Membership Agreement. The parties agree that if
PaperExchange.com determines that any provision of any Membership Agreement
between PaperExchange.com and International Paper and/or its affiliates would
negatively impact the ability of PaperExchange.com to recognize the gross amount
of revenue generated by International Paper's sales of products to
PaperExchange.com in accordance with Securities Exchange Commission Staff
Accounting Bulletin No. 101 ("SAB 101") and at the time, PaperExchange.com
desires to make such a revenue recognition, PaperExchange.com and International
Paper will in good faith negotiate such changes to such Membership Agreement(s)
as would permit PaperExchange.com to comply with SAB 101.
2.2. Fees. (a) A Transaction Fee shall not be payable to PaperExchange.com
until International Paper shall ship the Product to the Buyer. If Product is not
shipped to the Buyer for any reason, International Paper shall have no liability
to PaperExchange.com with respect to a Transaction Fee related to the Product.
Transaction Fees payable by International Paper hereunder shall be due within
thirty (30) days of the shipment to the Buyer. A Transaction Fee shall not be
payable to PaperExchange.com in connection with any transaction between
International Paper and its affiliates (as defined in Section 8.2) or between
its affiliates.
(b) With respect to Credit-Approved Transactions, Section 11 of the
Membership Agreement is hereby modified to provide that PaperExchange.com shall
pay International Paper the Transaction Amount within thirty (30) days of the
date of the International Paper invoice reflecting the shipment of Product
relating to such Transaction, except in the event of a Dispute, in which case
PaperExchange.com shall only be required to pay International Paper the
Transaction Amount upon confirmation that such Dispute has been resolved.
PaperExchange.com shall pay such Transaction Amount within three (3) business
days of the date of resolution of such a Dispute; provided that in no event
shall PaperExchange.com be required to pay the Transaction Amount in less than
thirty (30) days from the date of the original International Paper invoice that
had been subject to such Dispute.
2
<PAGE>
2.3. Designated Employees. Notwithstanding the provisions of Section 2 of
the Membership Agreement, any Designated Employee of International Paper who
completes the registration form shall be considered a Member under the Rules, as
such rules are amended by this Agreement.
2.4. Modification to Rules. Notwithstanding the provisions of Section 4 of
the Membership Agreement, any amendment or change by PaperExchange.com to the
Rules after the date hereof shall not be effective as between International
Paper and PaperExchange.com to the extent that any such change shall vary any of
the terms of this Agreement.
2.5. Privacy Policy. PaperExchange.com shall not be permitted to disclose
to any third parties (a) information regarding any specific sale transaction
arising from International Paper's use of PaperExchange.com's web site or any
other information of International Paper, including information listed on
co-branded web sites, without International Paper's consent, or (b) the
existence of this Agreement, the terms hereof or the strategic alliance
described herein or any investment by International Paper or its affiliates in
the Company, without International Paper's consent (which consent shall not be
unreasonably withheld) except to the extent disclosure by PaperExchange.com is
legally required.
2.6. Termination. Section 21A of the Membership Agreement with respect to
termination of access to the Service is hereby deleted and the provisions of
Section 7 hereof substituted therefor.
2.7. Discount. International Paper shall be entitled to receive a discount
on Transaction Fees to the lowest fee schedule (by grade) in an amount which
shall equal ***** or such greater percentage as PaperExchange.com may grant from
time-to-time to other Members listing Products on the Service.
2.8. Amended and Restated Membership Agreement. International Paper and
PaperExchange.com agree that within 30 days of the date hereof they will enter
into an amended and restated membership agreement in the form posted on
PaperExchange.com's web site, but incorporating the changes described in
Sections 2.2 through 2.7. PaperExchange.com will use commercially reasonable
efforts to post such amended and restated membership agreement on its web site
such that when an International Paper employee logs on to PaperExchange.com's
web site, he will be presented with the amended and restated membership
agreement and not PaperExchange.com's standard form of membership agreement.
3. BETA INTEGRATION PROJECT.
On a mutually agreeable timetable, PaperExchange.com and International
Paper will engage in the development of a plan to implement an integration
project. As part of such project, PaperExchange.com and International Paper
shall endeavor to link International Paper's internal information technology
system for a specific facility or production unit to
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
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PaperExchange.com's web site in order to facilitate internet-based transactions
through PaperExchange.com's web site. Such project may include inventory,
production scheduling, billing, and receivable system integration, all subject
to International Paper's approval. Each party shall be responsible for the costs
of its own staff time with respect to this integration project.
PaperExchange.com will allocate reasonable information technology resources to
such integration project, and will use commercially reasonable efforts not to
allow other strategic technology projects (including with other paper companies)
to interfere with the success, or speed, of such integration project.
4. GOOD FAITH COMMITMENT TO EXPAND STRATEGIC ALLIANCE.
International Paper's "corporate" division will promote the concept of
working with PaperExchange.com to its business groups during the term of this
Agreement, and will in good faith encourage its business groups to experiment
with using PaperExchange.com rather than alternative third party-provided
electronic commerce solutions. Such encouragement shall in no way prohibit
International Paper, any business group of International Paper, or any
subsidiary or affiliate of International Paper from pursuing the development of
electronic commerce solutions internally or from working with any third party
entity in connection with the development of electronic commerce solutions.
5. PROMOTION OF RELATIONSHIP.
In order to achieve "buy-in" and expand internal sponsorship of the sale
of products through PaperExchange.com's web site, International Paper will
communicate internally to all of its business group about the strategic alliance
described in this Agreement. In order to ensure the successful implementation of
this Agreement, International Paper and PaperExchange.com will appoint employees
to the following positions:
(a) International Paper: One "corporate" employee to serve as
overall champion and coordinator of this Agreement (with such
employee reporting directly to John Balboni). Such employee would
have as his primary responsibility the coordination of this effort
within International Paper.
(b) International Paper: In each business group participating in the
sale of paper through PaperExchange.com, one employee identified as
a coordinator/champion. Such employee would not need to be dedicated
full time to implementing this Agreement, but would be available to
be called upon to jump start the process, solve ongoing problems,
etc.
(c) PaperExchange.com: One full time employee to serve as overall
champion and coordinator of this Agreement (with such employee
reporting directly to Kent Dolby).
(d) PaperExchange.com: The necessary support/service staff to assist
International Paper employees in the utilization of
PaperExchange.com's web-
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site based exchange as well as to ensure high completion rates on
potential transactions.
At the end of the first 12 months of this Agreement, International Paper and
PaperExchange.com will reassess the allocation of employees and their efforts in
connection with this strategic alliance in order to determine whether such
resources are being appropriately utilized.
6. ACCESS TO INFORMATION.
PaperExchange.com will make available to its Members, and specifically
International Paper, aggregated transaction information, including, but not
limited to, average pricing data by grade and by region, as soon as transaction
volumes reach levels that produce meaningful statistical information in
PaperExchange.com's good faith judgment.
7. TERM AND TERMINATION.
7.1. Term. This Agreement shall continue until January 31, 2002, unless
earlier terminated as provided below.
7.2. Termination Upon Bankruptcy, Etc. This Agreement may be terminated by
either party in the event that the other party shall voluntarily be adjudicated
a bankrupt or insolvent, seek or consent to the appointment of a receiver or
trustee for itself, file a petition seeking relief under the bankruptcy or other
similar laws of the United States, make a general assignment for the benefit of
creditors, or be unable to pay its debts as they mature, or a court shall enter
an order, judgement or decree appointing a receiver or trustee for it.
7.3. Termination Upon Default. Either party may terminate this Agreement
in the event that the other party shall be in default of its obligations
hereunder and such default shall continue for a period of forty-five (45) days
after written notice thereof.
7.4. Termination Related to Rate of Completion of Transactions.
International Paper shall have the right to terminate this Agreement upon thirty
(30) days written notice in the event that in its good faith judgment the
services provided by PaperExchange.com's web site are not meeting its business
needs.
7.5. Change of Control. International Paper shall have the right to
terminate this Agreement upon thirty (30) days written notice in the event of
the sale of 51% or more of the voting interests in, the sale of substantially
all of the assets of, or the merger or consolidation of PaperExchange.com, to or
with any person or entity or affiliate of any person or entity engaged primarily
in the manufacture of paper or paper-related products.
8. GENERAL
8.1. Notices. All notices and other communications hereunder shall be in
writing or by written telecommunication, and shall be deemed to have been duly
given if delivered
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personally or if mailed by certified mail, return receipt requested, postage
prepaid, or if sent by overnight courier, or sent by written telecommunication,
as follows:
If to International Paper, to:
International Paper Company
Two Manhattanville Road
Purchase, NY 10577
Attention: John Balboni
Vice President, Electronic Business
Fax: (914) 397-1909
with a copy to:
International Paper Company
Two Manhattanville Road
Purchase, NY 10577
Attention: General Counsel
Fax: (914) 397-1909
If to PaperExchange.com, to:
545 Boylston Street
Boston, Massachusetts 02116
Attention: President and CEO
Fax: (617) 536-1573
with a copy to:
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
Attention: Jonathan K. Bernstein
Telecopier No.: (617) 951-8736
Any such notice shall be effective (a) if delivered personally, when
received, (b) if sent by overnight courier, when receipted for, (c) if mailed,
three (3) days after being mailed as described above, and (d) if sent by written
telecommunication, when dispatched.
8.2. Entire Agreement. This Agreement contains the entire understanding of
the parties relating to the subject matter hereof and supersedes all prior
agreements and understandings relating thereto, including any Membership
Agreements previously entered into by and between PaperExchange.com and
International Paper and/or any of International Paper's affiliates and/or any
employees of International Paper or any of its affiliates. This Agreement shall
not be amended except by a written instrument hereafter signed by all of
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the parties hereto. For purposes of this Agreement "affiliate" shall mean any
person, directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with another specified person. The term
"control," as used in the immediately preceding sentence, shall mean with
respect to a corporation or limited liability company the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting rights
attributable to the controlled corporation or limited liability company, and,
with respect to any individual, partnership, trust, other entity or association,
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled entity.
8.3. Governing Law. The validity and construction of this Agreement shall
be governed by and construed in accordance with the internal laws (and not the
choice-of-law rules) of The State of New York.
8.4. Sections and Section Headings. The headings of sections and
subsections are for reference only and shall not limit or control the meaning
thereof.
8.5. Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of the other party hereto.
8.6. Severability. In the event that any covenant, condition, or other
provision herein contained is held to be invalid, void, or illegal by any court
of competent jurisdiction, the same shall be deemed to be severable from the
remainder of this Agreement and shall in no way affect, impair, or invalidate
any other covenant, condition, or other provision contained herein.
8.7. Construction of Agreement. In the event that any provision of this
Agreement conflicts with or is inconsistent with a provision in the Membership
Agreement, the terms and conditions of this Agreement shall govern. Any
references herein to a "Member" or "Members" of PaperExchange.com shall refer to
those persons or entities entering into Membership Agreements with
PaperExchange.com.
8.8. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.9. Public Statements or Releases. Each of the parties hereto agrees that
no party to this Agreement will make, issue or release any public announcement,
statement or acknowledgment of the existence of, or reveal the status of, this
Agreement or the transactions provided for herein, without first obtaining the
consent of the other party hereto.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered as a sealed
instrument as of the date and year first above written.
INTERNATIONAL PAPER COMPANY
By: /s/ C. Cato Ealy
---------------------------------------
Name: C. Cato Ealy
-------------------------------------
Title: Vice President
------------------------------------
Business Development and Planning
PAPEREXCHANGE.COM, LLC
By: /s/ Kent Dolby
---------------------------------------
Kent Dolby, President and
Chief Executive Officer
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Exhibit 10.2
ALLIANCE AGREEMENT
This Alliance Agreement (Agreement) is entered into as of February 8, 2000
(Effective Date) by and between PaperExchange.com, LLC, a Delaware limited
liability company (PEx) and Impresse Corporation, a California corporation
(Impresse).
Background
Impresse provides business-to-business e-commerce solutions for the purchasing
and production of commercial print including project specification, quoting,
proofing, production management, reporting and billing to customers in the
printing and publishing market, including book publishers, commercial printers,
in-plant printing facilities within large corporations, and quick publishers;
PEx operates an electronic forum for the buying, selling and trading of pulp,
paper and paper packaging products. Impresse and PEx see a mutually beneficial
opportunity to serve the needs of Impresse customers to obtain access to PEx
exchange information and services in connection with the paper procurement
process.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Impresse and PEx agree as follows:
1. DEFINITIONS.
Capitalized terms used in this Agreement and not otherwise defined herein
shall have the meaning set forth below.
Affiliate means with respect to either party, any Person that, directly or
indirectly, is controlled by, controls or is under common control with such
party. For purposes of this Agreement, control means, with respect to any
Person, the direct or indirect ownership of more than fifty percent (50%) of the
voting or income interest in such Person or the possession otherwise, directly
or indirectly, of the power to direct the management or policies of such Person.
Confidential Information means all proprietary and confidential
information of a party, including, without limitation, trade secrets, technical
information, business information, sales information, customer and potential
customer lists and identities, product sales plans, sublicense agreements,
inventions, developments, discoveries, software, know-how, methods, techniques,
formulae, data, processes and other trade secrets and proprietary ideas, whether
or not protectable under patent, trademark, copyright or other intellectual
property laws provided by either party to the other party pursuant to this
Agreement in written or other tangible medium and marked as confidential, or if
disclosed orally or displayed, confirmed in writing at the time of disclosure,
except any portion thereof which: (a) is known to the receiving party, as
evidenced by the receiving party's written records, before receipt thereof under
this Agreement; (b) is disclosed to the receiving party by a third person who is
under no obligation of confidentiality to the disclosing party hereunder with
respect to such information and who otherwise has a right to make such
disclosure; (c) is or becomes generally known in the trade through no fault of
the receiving party; (d) is independently developed by the receiving party, as
evidenced by the receiving party's written records, without access to such
information; or (e) is the subject of a subpoena or other validly issued
administrative or judicial process requesting disclosure of such Confidential
Information; provided, the party that receives such order or process provide
prompt notice to the disclosing party and permits the disclosing party to
contest or narrow such request for disclosure and thereafter complies with such
subpoena or other process.
Content means the PEx Content and the Impresse Content, as the case may
be.
Force Majeure means any event beyond the control of the parties,
including, without limitation, failures of computers, computer-related
equipment, hardware or software, fire, flood, riots, strikes, epidemics, war
(declared or undeclared and including the continuance, expansion or new outbreak
of any war or conflict now in existence), embargoes and governmental actions or
decrees.
Impresse Content means the information and materials available on
Impresse's Site described on Attachment B attached hereto, including, as
applicable, text as well as graphical, video and audio information.
Impresse Sites means any Sites owned, operated or controlled by Impresse,
including the Site located at www.impresse.com (and any successors thereto);
provided, that with respect to any "storefront" or similar derivative Sites
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
<PAGE>
created by Impresse, the inclusion of such Sites as Impresse Sites for purposes
of this Agreement shall be made by Impresse, in its sole discretion.
Integration means the (a) computer object codes (machine readable format);
(b) specifications; (c) executable Application Program Interface (API) modules;
(d) API information; (e) configuration files, reference data files, help files
and spreadsheets used to maintain any reference data; (f) assembly, test,
installation and service instructions; (g) engineering, programming, service and
maintenance notes and logs; (h) technical, operating and service and maintenance
manuals; (i) hardware reference manuals; user documentation; (j) training
materials; and (k) other data, information and know-how, which is necessary and
desirable to design, manufacture, assemble, service, maintain, install, operate,
use or test the software integration between the Impresse Impresse.com network
software described in Attachment B and the PEx [exchange] software described in
Attachment B, together with any additions, developments, enhancements,
improvements, updates and other changes in such software made during the term of
this Agreement.
Person means any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
limited liability partnership, unincorporated organization, government (or any
agency or political subdivision thereof) or other legal entity or organization.
PEx Content means the information and materials described on Attachment B
attached hereto, including, as applicable, text as well as graphical, video and
audio information.
PEx Sites means any Sites owned, operated or controlled by PEx, including
without limitation the Site located at www.paperexchange.com (and any successors
thereto).
Site means an Internet World Wide Web site.
Trademarks means (i) the trademarks described on Attachment C, and (ii)
any other trademarks, as may be agreed upon in writing from time to time by the
parties for use by the parties in connection with the activities contemplated by
this Agreement.
Other Defined Terms. Each of the following terms have the meanings
ascribed to it in the section set forth opposite such term:
Agreement Recitals
Alliance Manager(s) Section 2.8
Change Control Document Section 2.4
Change Request Section 2.4
Effective Date Recitals
Final Specifications Section 2.1; Attachment B
Fix Period Section 2.6
Impresse Recitals
Impresse Content Section 2.7; Attachment B
Impresse Link Section 2.6
Impresse Services Section 3.1
Impresse-sourced Customer(s) Section 4.1
Indemnifying Party Section 7.3
indemnitees Section 7.3
Links Section 2.6
Losses Section 7.2
Material Nonconformity Section 2.6
Milestone Delivery Section 2.2
Milestone Requirements Section 2.2
Milestone Schedule Section 2.2; Attachment A
Net Revenue Section 4.1
PEx Recitals
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PEx Link Section 2.6
PEx Services Section 3.1
Redelivery Section 2.6
Requirements Section 2.1
Target Date Section 2.2
Test Period Section 2.5
2. INTEGRATION DEVELOPMENT
2.1 Specifications. The parties acknowledge that as of the Effective Date, the
complete specifications for the Integration have not been developed (the Final
Specifications). The objectives for the Integration include, but are not limited
to, (a) allow Impresse customers to search paper available on the PEx site, (b)
allow Impresse customers to procure paper posted on the PEx Site, (c) allow
Impresse customers to submit a request-for-quote on the PEx Site and (d) record
transactions completed on the PEx Site by Impresse-sourced Customers (as defined
below). The Integration implementing these objectives shall include at least the
functionality and performance features (the Requirements) as specified in
Attachment B. The Requirements are expected to be augmented, changed and refined
during the period commencing February 10, 2000 and ending April 1, 2000 and such
changes shall not require Change Requests (as defined in Section 2.4), except to
the extent they represent new business processes. As agreement is reached as to
detailed functional requirements and specifications and the performance
requirements, they will be specified in Attachment B.
2.2 Integration Construction. Each party will, at its own cost, will use
reasonable efforts to develop and deliver the components of the Integration
assigned to it under Attachment B by the target date set forth in Attachment B
(the Target Date). Subject to adjustment in accordance with Section 2.4, each
party will meet all Milestone Dates set forth in Attachment A (the Milestone
Schedule). On or before each Milestone Date listed in the Milestone Schedule,
each party shall complete the activities described in the Milestone Schedule
(each, a Milestone Delivery) that meet (i) the corresponding Milestone
Requirement(s) set forth opposite such Milestone Date, as well as (ii) all
Milestone Requirements for all previous Milestones (that is, the Milestone
Requirements are cumulative). Impresse will begin the Integration prior to
beginning integration efforts with any other paper procurement provider.
Impresse will also complete the Integration in accordance with the Final
Specifications prior to the completion of any integration with any other paper
procurement provider. PEx will begin the Integration prior to beginning
integration efforts with any other print purchasing and production management
provider. PEx will also complete the Integration in accordance with the Final
Specifications prior to the completion of integration with any other print
purchasing and production management provider. Notwithstanding the provisions of
this Section 2.2, it is understood and agreed that each party may simultaneously
work on other integration efforts and that the "priority" efforts specified in
the preceding two sentences will expire 7 months following the Effective Date.
2.3 Date Adjustments. PEx and Impresse each agree to perform the tasks assigned
to it in the Milestone Schedule. Each party acknowledges that delays in
performance by either party may cause delays in performance by the other party.
If either party's failure to timely meet its obligations under the Milestone
Schedule causes a material delay in the other party's performance, all dependent
Milestone Dates shall be adjusted day-for-day to account for such delay.
2.4 Change Procedures. Each party will have the right to inspect the progress of
the other party's work on the Integration at all reasonable times during the
development process and to confer with the other party to confirm compliance
with the Milestone Schedule, and each party will consult with the other party
concerning any matters that could cause a material delay in completion of the
Integration. No changes to the Milestone Schedule will be made without written
approval of the parties. Each party may request amendments to Milestone Schedule
to effect changes in the Integration. If either party wishes to make a change it
shall notify Impresse of the requested change specifying the change with
sufficient details to enable the other party to evaluate it (a Change Request).
Within five business days following the date of the receipt of a Change Request,
the receiving party shall deliver a document that: (a) assesses the impact of
the change on the schedule, and (b) incorporates a description of the requested
change (a Change Control Document). If the receiving party accepts the Change
Control Document, then the provisions of this Agreement shall be deemed amended
to incorporate such change in accordance with the Change Control Document. It is
the intent of the parties that the Milestone Schedule has been defined broadly
enough to accomplish the goals for the Integration and that within the Milestone
Schedule, no Change Requests will be required.
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2.5 Acceptance Testing. (a) Commencing upon receipt by each party of each
Milestone Delivery that is the responsibility of the other party, the receiving
party will, during the Test Period (as specified in the Milestone Schedule
opposite such Milestone Date), test the Milestone Delivery to determine whether
all applicable Milestone Requirements have been met. If one or more Milestone
Requirements are not met, the receiving party shall so notify the delivering
party, stating the problems encountered. The delivering party shall have the
time period set forth in the Milestone Schedule for the applicable Milestone
Delivery (the Fix Period) to cure the problem and to redeliver the failed
Milestone Delivery to the receiving party (a Redelivery). After receipt by the
receiving party of the Redelivery, the receiving party shall have a new Test
Period (of the same duration as the initial Test Period for such Deliverable
unless a different period of time is specified in the Milestone Schedule) to
re-examine and test the Milestone Delivery. If a Milestone Delivery is late or
if the Redelivery of a Milestone Delivery is Materially Nonconforming, the
receiving party may terminate this Agreement pursuant to Section 8.2. Material
Nonconformity or Materially Nonconforming means as to any Milestone Delivery,
Redelivery or the Integration, errors or other failure(s) to meet the applicable
Milestone Requirements that (i) are not cured within the applicable cure period
or Fix Period and (ii) in either party's (each as a receiving party) reasonable
judgment, individually or in the aggregate, materially and adversely affect the
receiving party's ability to perform the business functions that are represented
by or are within the scope of the applicable Milestone Delivery or the
Integration.
(b) The absence of notification by a receiving party within the Test
Period that one or more Milestone Requirements have not been met will not
indicate acceptance of all or any part of any Milestone Delivery, it being
understood that each party (as a receiving party) retains the right to reject
the Milestone Delivery unless, upon completion of testing of the final Milestone
Delivery, all functional and performance specifications set forth in the
Milestone Schedule have been met (Final Acceptance).
(c) It is understood and agreed that a Milestone Delivery or Redelivery
need not be error-free to have achieved any particular Milestone Requirement,
but a receiving party may rightfully reject any Milestone Delivery or Redelivery
that is Materially Nonconforming. Notwithstanding the foregoing, Final
Acceptance will not relieve the delivering party of its obligation to correct
nonconformities in accordance with this Section 2.55. Acceptance of the
Integration will not relieve either party (each as a delivering party) of its
obligation to use reasonable commercial efforts to correct all identified
nonconformities in a timely fashion.
2.6 Implementation. (a) Within [NUMBER (#)] days following acceptance of the
Integration, each party shall implement the Integration (or the relevant
components of the Integration, as the case may be) at such party's Site using
the procedure specified in the documentation for the Integration. The schedule
for the implementation and launch of the PEx Service on the Impresse Site and
the Impresse Services on the PEx Site is set forth in Attachment A.
(b) Implementation will result in the establishment of a series of
[graphic and textual] links on Impresse's Site (each, a Impresse Link), which
will establish a direct hyperlink connection from entries in Impresse's Site to
PEx's Site. PEx shall activate on the PEx Site a series of reverse links to the
Impresse Site (each, a PEx Link and together with the Impresse Link, the Links),
to allow Impresse customers who connect to the PEx Site through a Link to return
to the Impresse Site. The Links shall be rendered in the form specified in
Attachment C.
(c) PEx shall be solely responsible for the operation and maintenance of
the PEx website and for all materials that appear on the PEx Site, except for
the Impresse Content (if any). PEx will provide, install, repair, maintain and
pay for the communications, computer and peripheral equipment, services and
facilities supporting the PEx Site. Impresse will provide, install, repair,
maintain and pay for the communications, computer and peripheral equipment,
services and facilities necessary to deliver the Impresse Content to the PEx
website. Impresse shall be solely responsible for the operation and maintenance
of the Impresse Site and for all materials that appear on the Impresse Site,
except for the PEx Content. Impresse will provide, install, repair, maintain and
pay for the communications, computer and peripheral equipment, services and
facilities supporting the Impresse website. PEx will provide, install, repair,
maintain and pay for the communications, computer and peripheral equipment,
services and facilities necessary to deliver the PEx Content to the Impresse
website.
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2.7 Maintenance. (a) PEx will transmit to Impresse, in accordance with the
specifications set forth on Attachment C and the schedule set forth on
Attachment C, the PEx Content. Impresse will transmit to PEx, in accordance with
the specifications set forth on Attachment C and the schedule set forth on
Attachment C, the Impresse Content. Thereafter, each party will transmit to the
other updates of the Content provided to the other party in accordance with the
specifications and schedule set forth on Attachment C.
(b) Within 24 hours of receiving notice from PEx of errors or inaccuracies
in the PEx Content, PEx will investigate and use reasonable efforts to correct
such errors and inaccuracies using its personnel or, for Content supplied by
third parties, by referring such matter to the third party responsible for such
portion of the PEx Content. PEx's personnel will be available from Monday to
Friday from 9 AM-8 PM E.S.T., to provide technical assistance to Impresse and
the Impresse Customers concerning PEx Content.
(c) Within 24 hours of receiving notice from PEx of errors or inaccuracies
in the Impresse Content, Impresse will investigate and use reasonable efforts to
correct such errors and inaccuracies. Impresse's personnel will be available
from Monday to Friday from 9 AM to 8 PM P.S.T., to provide technical assistance
to PEx.
(d) Each party covenants that it will (i) cooperate with the other party
in order to establish and maintain the Links; and (ii) display on its Site only
those Links and branded images of the other party that are provided by the other
party, and will substitute any new reasonable images provided by other party
from time to time.
(e) Each party will be solely responsible for the development, operation
and maintenance of its Site and for all materials that appear on its Site. Such
responsibilities include, but are not limited to: (i) the technical operation of
its Site and all related equipment (including the installation, repair,
maintenance of all communications, computer and peripheral equipment, services
and facilities as may be necessary to host, maintain and provide access to such
Site and the other party's Site); (ii) the accuracy and appropriateness of
materials posted on its Site; (iii) ensuring that materials posted on its Site
do not violate any law, rule or regulation, or infringe upon the rights of any
third party (including, for example, copyright, trademarks, privacy or other
personal or proprietary rights); and (iv) ensuring that materials posted on its
Site are not libelous or otherwise illegal. Except as otherwise specified in
Sections 6.2 and 7.2, each party disclaims all liability for all such matters
with respect to the other party's Site.
2.8 Alliance Managers. Each party will designate an individual (Alliance
Manager) for the Alliance who will have the authority to represent such party in
all matters concerning such Alliance and will be responsible for coordinating
such party's responsibilities for such Alliance, including requesting and
approving changes. All Alliance-related communications that concern performance
shall be addressed to the designated Alliance Manager. If either party replaces
its Alliance Manager, that party shall promptly notify the other party of such
replacement.
3. MARKETING ARRANGEMENT.
3.1 Appointment. (a) Subject to the terms of this Agreement, PEx hereby appoints
Impresse as a provider of commercial print procurement and production management
services including project specification, quoting, proofing, production
management, reporting and billing to customers in the printing and publishing
market, including book publishers, commercial printers, in-plant printing
facilities and quick publishers for PEx customers that purchase or exchange
goods on PEx's website (Impresse Services). Impresse hereby accepts the
appointment as a provider.
(b) Subject to the terms of this Agreement, Impresse hereby appoints PEx
as a provider of electronic exchange services (including auction and reverse
auction services) for the purchase, sale or exchange of pulp, paper and paper
packaging products (PEx Services). PEx hereby accepts the appointment as a
provider.
(c) Subject to the terms set forth in this Agreement, PEx will also
provide Impresse with the opportunity to participate in joint marketing
activities and client proposal opportunities for customers in the pulp, paper
and printing industries, as PEx deems appropriate. Subject to the terms set
forth in this Agreement, Impresse will also provide PEx with the opportunity to
participate in joint marketing activities and client proposal opportunities for
customers in the paper and printing industries, as Impresse deems appropriate.
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(d) Neither party shall have the right to make commitments of any kind for
or on behalf of the other party without the prior written consent of the other
party, in each and every case.
3.2 Marketing Efforts. (a) Subject to the provisions of this Agreement, PEx and
Impresse will jointly work together to create a mutual understanding of
opportunities which are of priority interest and assist each party in focusing
their marketing efforts. The parties shall also work to identify target
customers and develop proposals for potential customers to propose a solution
encompassing Impresse Services and PEx Services.
(b) PEx, in its reasonable business discretion, may include appropriate
individuals from Impresse in PEx sales calls to printers, publishers, and other
PEx customers.
(c) PEx will promote Impresse's print purchasing and production
management services to other business-to-business e-commerce sites that are
seeking print purchasing and production management services; and will promote
Impresse as a premier partner.
(d) PEx will use reasonable efforts to help Impresse expand into other
printing and paper segments in which it currently does not operate (e.g.,
consumer packaging and containerboard packaging).
(e) Impresse will promote PEx's electronic exchange services to its
customers who produce, buy, trade or distribute paper products. PEx will be
listed first and be the primary option in allowing for paper procurement within
the areas of the Impresse Site relating to Impresse's paper procurement
services.
(f) PEx will develop and provide, with input from Impresse, marketing
material to demonstrate how paper, printing, and related customers
of Impresse can benefit from this alliance. The parties will each
pay ***** of the costs of the preparation of such marketing
materials. PEx will grant Impresse a royalty-free license to use
this material in conjunction with the transactions contemplated by
this Agreement.
(g) PEx will promote Impresse as a premier partner, by displaying logos,
links and promotional information in locations on its site similar
to other premier partners. PEx will also provide to Impresse
complementary banner advertisements for the term of this alliance.
3.3 Resources. (a) Each party shall furnish the other party at no cost
reasonable quantities of promotional materials, such as sales literature and
procedures manuals (the Services Information) in order for the other party to
promote the Impresse Services or the PEx Services, as the case may be, as
provided for in this Agreement. Except as otherwise agreed by the parties, each
party may use such Services Information without any limitation on disclosure. In
any event, each party hereby grants the other party permission to disclose
certain of the Services Information to be designated and furnished by such party
to customers without the requirement for non-disclosure agreements. Each party
represents and warrants that the Services Information as provided by it to the
other party shall be accurate in all material respects when provided, and each
party undertakes to update such of its Services Information when necessary.
(b) Impresse shall devote commercially reasonable efforts to support PEx's
promotion and sales efforts, including the following general activities: (i)
answering technical questions and providing PEx with proposal assistance and
tutorial assistance relating to the Impresse Services; (ii) supplying experts to
support detailed technical presentations and meetings relating to the Impresse
Services; (iii) providing quotations for standard and custom configurations for
the Impresse Services; and (iv) responding to phone calls from prospective
customers.
4. REVENUE ALLOCATIONS
4.1 Revenue Sharing. PEx will pay Impresse a commission equal to ***** percent
***** of PEx's Net Revenue in respect of sales of products and services to
Impresse-sourced Customers on the PEx Site. Net Revenue means fees received by
PEx from the sale of PEx Services to Impresse-sourced Customers less charges in
respect of (i) outbound shipping, packaging, credit clearing, insurance and
delivery, separately billed to the Impresse-sourced Customers or prepaid; (ii)
taxes, duties, and similar governmental charges (not including PEx's net income
tax); (iii) rebates, discounts and refunds remitted to the Impresse-sourced
Customers; and (iv) returns by the Impresse-sourced
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
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Customers. Impresse-sourced Customers means customers that procure paper from
the PEx Site through the Impresse Site and excludes those arriving through
general links or banner advertisements.
4.2 Payment. PEx shall make payments required under Section 4.1 not later than
[(thirty (30)] days following each March 31, June 30, September 30 and December
31 commencing on March 31, 2000 for periods in which payments are due under
Section 4.1. All payments shall be stated and paid in U.S. Dollars. Revenue
received in currencies other than U.S. Dollars, shall be converted to U.S.
Dollars using the exchange rate in effect as of the date that the payment is
received by PEx. All payments will be reduced by any applicable withholding
taxes. PEx and Impresse will cooperate to minimize, to the extent legally
permissible, the tax liabilities related to the transactions contemplated by
this Agreement; provided such cooperation shall not cause any adverse tax
consequences to be incurred by either party which would not have been incurred
under the terms and conditions as described in this Agreement. Each party shall
provide and make available to the other party any resale certificates,
information regarding out-of-state or out-of-country sales, and other exemption
certificates or information reasonably requested by the other party.
4.3 Taxes. All payments required by this Agreement are exclusive of federal,
state, local and foreign taxes, duties, tariffs, levies and similar assessments.
When applicable, such taxes shall appear as separate items on a party's invoice
or statement to the other party. Payment of such taxes or charges shall be the
responsibility of the party whose obligation it is under this Agreement to make
the payment in respect of which such taxes or charges are assessed, excluding
any taxes based upon the other party's net income or property. In lieu thereof,
a party shall provide to the other party a tax or other levy exemption
certificate acceptable to the taxing or other levying authority.
4.4 Statements. During the term of this Agreement and for a period of at least
two (2) years following any termination or expiration, PEx shall maintain
records sufficient to determine the number of Impresse-sourced Customers using
the PEx Services at the PEx Site, Net Revenue and payments due Impresse under
Section 4.1. Within forty-five (45) days following the last day of each month in
which payments are due under Section 4.1, PEx shall provide Impresse with a
report showing Net Revenue received for the most recently ended three-month
period. Such reports shall be submitted to Impresse whether or not any Net
Revenue has been received during the period. Such reports shall include at
least: (a) the number of Impresse-sourced Customers that access the PEx Services
via the Impresse Site; (b) the quantities of PEx Services sold to such
Impresse-sourced Customers on PEx's Site (or any successor site or affiliated
Site), (c) the billings thereon that comprise Net Revenue; (d) the calculation
of commissions thereon; and (e) the total commissions so computed and due
Impresse.
4.5 Audits. At its expense, Impresse shall have the right, not more than once in
any twelve (12) month period, to have PEx's applicable books and records audited
by an independent accountant to ascertain the accuracy of PEx statements and
payments under this Agreement; provided, that such audits shall include no more
than the current calendar year and the immediately preceding two (2) full
calendar years. Audits shall be scheduled within thirty (30) days of written
notice by Impresse to PEx, and conducted during PEx's normal business hours, in
a manner that does not unreasonably interfere with PEx's normal business
activities. If an audit discloses any underpayment by PEx, then PEx shall pay
such amount to Impresse within thirty (30) days after conclusion of the audit.
In the event that any audit discloses that the amount paid by PEx to Impresse
with respect to the audited period was less than ninety-five percent (95%) of
the amount due then PEx shall also promptly reimburse Impresse for the cost of
such audit.
5. PUBLICITY; CONFIDENTIALITY; PROPRIETARY RIGHTS; LICENSES
5.1 Publicity. (a) Except as is necessary to comply with applicable laws and
regulations or to enforce their respective rights under this Agreement, or to a
party's legal or financial advisors, and except as otherwise agreed to by the
parties in writing, the parties shall: (i) keep the material terms of this
Agreement confidential, (ii) agree upon the text and the exact timing of an
initial public announcement relating to the transactions contemplated by this
Agreement as soon as possible after the Effective Date (such agreement not to be
unreasonably withheld or delayed) and (iii) agree on the text and the timing of
any subsequent public announcements or advertising regarding this Agreement or
the transactions contemplated herein. If this Agreement is required to be filed
by either party with the Securities and Exchange Commission, such party shall
not file this Agreement with the Securities and Exchange
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Commission without first notifying the other party and seeking confidential
treatment for any provisions of this Agreement that the other party believes
would disclose trade secrets, confidential commercial or financial information
that would impair the value of the contractual rights represented by this
Agreement or provide detailed commercial and financial information to
competitors or third parties.
(b) Except as otherwise provided in Section 5.5, neither party shall use
the name of the other party or any director, officer or employee of the other
party or any adaptation thereof without the prior written approval of the other
party; provided that subject to approval of the text of any promotional
material(s) or disclosures: (i) Impresse shall have the right to promote PEx as
a preferred provider of internet exchange services for pulp, paper and paper
packaging products and its relationship with PEx as a provider of paper
procurement and production management services as set forth in this Agreement in
its marketing collateral and in customer presentations and (ii) PEx shall have
the right to promote Impresse as its preferred provider of print procurement and
production management services for PEx customers in its marketing collateral and
in customer presentations.
(c) The parties shall engage in at least one joint presentation or
demonstration of the Integration and their alliance at a suitable industry event
or trade conference selected by mutual agreement of the parties and scheduled
within twelve (12) months following the Effective Date.
5.2 Confidentiality. (a) It is contemplated that in the course of the
performance of this Agreement each party may, from time to time, disclose
Confidential Information to the other. Each party agrees to take all
reasonable steps to prevent disclosure of Confidential Information and not to
use any Confidential Information except for the limited purposes set forth in
this Agreement.
(b) All Confidential Information made available hereunder, including
copies thereof, shall be returned or destroyed upon the first to occur of (i)
termination of this Agreement or (ii) written request by the discloser.
(c) This Agreement supercedes the terms of the mutual Non-Disclosure
Agreement (NDA) executed by the parties as of November 16, 1999 with respect to
the treatment of Confidential Information received at any time on or after the
Effective Date.
5.3 Proprietary Rights. (a) This Agreement does not convey to PEx any ownership
rights in any Impresse Content, the portions of the Integration created by
Impresse or the Impresse Services or in any intellectual property rights
embodied in such Impresse Content, portions of the Integration created by
Impresse or Impresse Services by implication, estoppel or otherwise except for
the rights expressly granted under this Agreement. Title to the Impresse
Content, portions of the Integration created by Impresse and Impresse Services
and the intellectual property rights embodied in the Impresse Content, portions
of the Integration created by Impresse and Impresse Services shall at all times
remain vested in Impresse or its licensors; provided, that with respect to the
portions of the Integration for which Impresse retains title, Impresse hereby
grants and agrees to grant PEx a non-exclusive, perpetual, fully paid-up and
royalty-free license to use such portions of the Integration and intellectual
property to the extent necessary for PEx to make use of, market and distribute
the PEx Services alone or in combination with other technology and information
as part of PEx's business during the term of this Agreement.
(b) This Agreement does not convey to Impresse any ownership rights in any
PEx Content, the portions of the Integration created by PEx or the PEx Services
or in any intellectual property rights embodied in such PEx Content, portions of
the Integration created by PEx or PEx Services by implication, estoppel or
otherwise except for the rights expressly granted under this Agreement. Title to
the PEx Content, the portions of the Integration created by PEx and PEx Services
shall at all times remain vested in PEx or its licensors; provided, that with
respect to the portions of the Integration for which PEx retains title, PEx
hereby grants and agrees to grant Impresse a nonexclusive, perpetual, fully
paid-up and royalty-free license to use such portions of the Integration and
intellectual property to the extent necessary for Impresse to make use of,
market and distribute the Impresse Services alone or in combination with other
technology and information as part of Impresse's business during the term of
this Agreement.
5.4 Enabling Licenses. (a) Each party hereby grants to the other party a
worldwide, paid-up and royalty-free license to (i) market, use, reproduce and
display the portion of the Integration (if any) owned by such party to
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potential customers and personnel and (ii) use the Integration to develop
enhancements, modifications, and derivative works of the Integration for the
purpose of (1) training personnel; and (2) providing PEx Services to PEx
customers or Impresse Services to Impresse Customers, as the case may be.
(b) PEx hereby grants to Impresse a non-exclusive, non-transferable
license to use, reproduce, display and transmit the PEx Content, solely in
connection with the development, maintenance and operation of the Impresse Site,
subject to and in accordance with the terms, conditions and provisions of this
Agreement. Impresse shall not remove any titles or any trademark, copyright or
patent notices, or any proprietary or restricted rights notices that appear on
the PEx Content.
(c) The parties shall confer regarding any updates, upgrades or new
releases they propose to make to the Integration in order to maintain
compatibility with their respective software and systems and neither party shall
implement any such update, upgrade or new release without simultaneously
implementing any revisions required with respect to the Integration. Each party
will provide the other party at no charge any such updates, upgrades or new
releases it makes to the Integration not later than thirty (30) days after it
initially implements such updates, upgrades and new releases.
5.5 Trademark License. (a) Subject to Impresse's compliance with this Section
5.5, PEx hereby grants to Impresse a fully paid up and royalty-free right and
license to use the PEx Trademarks in connection with the use of the PEx
Services during the term of this Agreement. Subject to PEx's compliance with
this Section 5.5, Impresse hereby grants to PEx a fully paid up and
royalty-free right and license to use the Impresse Trademarks in connection
with the delivery of the PEx Services during the term of this Agreement. All
right, title and interest to the Trademarks shall remain with PEx or
Impresse, as the case may be, and no other license relating thereto is
granted hereunder.
(b) Upon any expiration or termination of this Agreement, the license to
each party to use the Trademarks of the other party shall terminate, and each
party shall take all necessary action and execute and deliver to the other party
all necessary documents and instruments to remove such licensee party as a
registered user or recorded licensee of the other party's Trademarks.
(c) Each party will use reasonable efforts to notify the other in writing
promptly after obtaining knowledge of any infringements or imitations of the
other party's Trademarks by third parties.
(d) Each party reserves the right to modify its' Trademarks or substitute
alternative marks for any or all of its' Trademarks at any time upon thirty (30)
days written notice; provided, that the other party shall not be required to
incur any expense to re-mark or otherwise modify sales collateral to adopt such
modified, substituted or alternative marks but shall implement such marks in a
commercially reasonable manner consistent with the depletion of then existing
inventory and sales collateral.
(e) Upon request, each party shall provide the other party with a sample
of all advertising of such party that makes use of the other party's Trademarks
for purposes of permitting the other party to verify that such use of the other
party's Trademarks is consistent with the provisions of Attachment C, but the
other party's rights shall only extend to the depiction of the other party's
Trademarks in such advertising copy and not to any other content of such copy.
Neither party shall challenge, directly or indirectly, the other party's rights
in respect of such other party's Trademarks, provided, that neither party shall
waive its rights with respect to existing trademarks owned by such party. Each
party shall comply with the applicable Trademark guidelines set forth in
Attachment C.
6. REPRESENTATIONS AND WARRANTIES.
6.1 Authorization; Enforceability. Each of Impresse and PEx represent and
warrant to the other that: (a) it is a corporation or limited liability company
duly organized, validly existing and in good standing under the laws of its
organizing jurisdiction; (b) it has all requisite power and authority to enter
into this Agreement; (c) it is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder and consummate the
transactions contemplated hereby; and (d) this Agreement is a valid and binding
obligation of such party enforceable in accordance with its terms.
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6.2 Content; Integration Warranties. (a) Impresse represents and warrants to PEx
that it owns or has valid licenses to all copyrights, patents, trade secrets,
trademarks, and other proprietary or intellectual property rights relating to
the Impresse Content and has the right to grant to PEx the rights and licenses
purported to be granted by or pursuant to this Agreement, and has all other
rights necessary for the performance of its obligations under this Agreement.
PEx represents and warrants to Impresse that it owns or has valid licenses to
all copyrights, patents, trade secrets, trademarks, and other proprietary or
intellectual property rights relating to the PEx Content and has the right to
grant to Impresse the rights and licenses purported to be granted by or pursuant
to this Agreement, and has all other rights necessary for the performance of its
obligations under this Agreement.
(b) Each party represents and warrants that it owns or has valid licenses
to all copyrights, patents, trade secrets and other proprietary or intellectual
property rights relating to the portion of the Integration that it creates; and
has the right to grant to the other party the rights and licenses purported to
be granted by or pursuant to this Agreement with respect to the use of such
portion of the Integration.
(c) Each party represents and warrants that no software included in the
portion of the Integration created by such party shall contain any authorization
strings, time limiting codes or other instructions or codes that (i) prevent the
Impresse Services or the PEx Services from being fully functional at all times
or (ii) may be used to obtain access to the Impresse Services or the PEx
Services without PEx's or Impresse's, as the case may be, knowledge and
authorization.
6.3 Customer Warranties. (a) Impresse shall extend to each Customer that enters
into an agreement to acquire Impresse Services pursuant to this Agreement the
warranties and indemnification for its Impresse Services and services that it
generally extends to its customers. Impresse will provide each Customer that
enters into an agreement to acquire Impresse Services pursuant to this Agreement
support services that are at least as favorable as the support services Impresse
generally extends to its customers.
(b) It is understood and agreed that, as between the parties, Impresse
shall remain solely responsible to customers for the performance of the Impresse
Services and PEx shall remain solely responsible to customers for the
performance of the PEx Services.
7. RISK ALLOCATION
7.1 Limitation of Liability. EXCEPT FOR INFRINGEMENT OF THE OTHER PARTY'S
INTELLECTUAL PROPERTY RIGHTS OR BREACH OF CONFIDENTIALITY OBLIGATIONS UNDER
SECTION 5.2 AND EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 7.2-7.3 WITH RESPECT
TO THIRD PARTY CLAIMS, THE AGGREGATE LIABILITY OF EITHER PARTY FOR DIRECT
DAMAGES ARISING OUT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY
SHALL BE LIMITED TO THE AGGREGATE AMOUNT PAID TO EACH PARTY BY THE OTHER PARTY
AS OF THE DATE SUCH CLAIM IS FINALLY RESOLVED. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER FOR LOST PROFITS OR SAVINGS OR FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, HOWEVER CAUSED,
UNDER ANY THEORY OF LIABILITY.
7.2 Infringement Indemnification. (a) Subject to the provisions of Section 7.4,
each party shall defend, indemnify and hold harmless the other party, its
subsidiaries, parent corporations, Affiliates, officers, directors, independent
contractors, partners, shareholders, employees, agents, successors and assigns
from and against any claim, suit, demand, loss, damage, expense (including
reasonable attorney's fees of indemnitee(s) and those that may be asserted by a
third party) or liability (collectively, Losses) arising from or related to an
allegation that the Impresse Content, Integration or PEx Content or PEx
Services, as the case may be, provided by such party to the other party or a
Customer pursuant to this Agreement infringe or misappropriate any intellectual
property right of any third party.
(b) In addition to its obligations under Section 7.2(a), if any Impresse
Content, Integration, PEx Content or PEx Services is held to constitute an
infringement or misappropriation of any third party's intellectual property
rights or if in the providing party's opinion, any Impresse Content,
Integration, PEx Content or PEx Services is, or is likely to
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be held to constitute, an infringement or misappropriation, such party will at
its expense and option: (i) procure the right for the other party to continue
using the Impresse Content, Integration or PEx Content or PEx Services; (ii)
replace the Impresse Content, Integration or PEx Content or PEx Services with a
non-infringing and non-misappropriating equivalent conforming to the applicable
specifications; or (iii) modify the Impresse Content, Integration, PEx Content
or PEx Services to make it non-infringing and non-misappropriating while
conforming to the applicable specifications.
7.3 Other Claims. Subject to the provisions of Section 7.4, each of Impresse and
PEx (each, an Indemnifying Party) will defend, indemnify and hold harmless the
other party, its subsidiaries, parent corporations, affiliates, officers,
directors, partners, shareholders, employees, agents, and their successors and
assigns (collectively, the Indemnitees) from and against any Losses imposed upon
the Indemnitee(s) by any third party arising from or related to (a) personal
injury or property damage which is proximately caused by any negligence or
intentional misconduct by such Indemnifying Party (or its employees, agents or
representatives) in performing its obligations under this Agreement; (b) any
breach by the Indemnifying Party of the representations, warranties or
agreements made by it under this Agreement; or (c) the promotion, advertisement
or marketing of the Indemnitee's Content or Services by or on behalf of the
Indemnifying Party. The foregoing indemnification action shall not apply in the
event and to the extent that a court of competent jurisdiction determines that
such Losses arose as a result of any Indemnitee's negligence, intentional
misconduct or breach of this Agreement.
7.4 Procedure. To receive the benefit of indemnification under Section 7.2 or
7.3, the party seeking indemnification must promptly notify the other party in
writing of a claim or suit and provide reasonable cooperation (at the
Indemnifying Party's expense) and tender to the Indemnifying Party (and its
insurer) full authority to defend or settle the claim or suit. Neither party has
any obligation to indemnify the other party in connection with any settlement
made without the Indemnifying Party's written consent. The Indemnitee has the
right to participate at its own expense in the claim or suit and in selecting
counsel therefor. The Indemnitee shall cooperate with Indemnifying Party (and
its insurer), as reasonably requested, at Indemnifying Party's sole cost and
expense.
7.5 Insurance. Each party shall procure and maintain insurance or self-insurance
adequate to cover its obligations hereunder and which are consistent with normal
business practices of prudent companies similarly situated. It is understood
that such insurance shall not be construed to create a limit of either party's
liability with respect to its indemnification obligations under this Section 8.
Each party shall provide the other with written evidence of such insurance (or
financial information that describes the amounts available under any
self-insurance facility) upon request. Each party shall provide the other with
written notice at least fifteen (15) days prior to the cancellation, non-renewal
or material change in such insurance or self-insurance which materially
adversely affects the rights of the other party hereunder. If such party does
not obtain replacement insurance or take other measures that allow it to provide
comparable coverage within such 15-day period, the other party shall have the
right to terminate this Agreement effective at the end of such fifteen (15) day
period without notice or any additional waiting periods.
8. TERM AND TERMINATION.
8.1 Term. This Agreement shall take effect as the Effective Date and shall
remain in effect until the eighteen month anniversary of the Effective Date,
unless sooner terminated in accordance with Section 8.2 or extended in
accordance with this Section 8.1. Thereafter, this Agreement shall automatically
renew for successive 12-month terms unless either party notifies the other party
at least thirty (30) days prior to the expiration of the then current term that
it does not wish to renew this Agreement for an additional term.
8.2 Termination. Either party may terminate this Agreement at any time upon
thirty (30) days notice to the other party in the event that the other party
shall have breached any of its material obligations hereunder and shall not have
cured such default prior to the expiration of the thirty (30)-day period. In
addition, either party shall have the right to terminate this Agreement upon
thirty (30) days notice if a Force Majeure condition has prevented performance
by the other party for more than one hundred twenty (120) days. The parties may
also terminate this Agreement at any time upon mutual written agreement of the
parties.
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8.3 Effect of Termination. (a) Upon termination (including expiration) of this
Agreement:
(i) Impresse and PEx will terminate all tasks for all effected Customers
in an orderly manner, as soon as practical or in accordance with a
schedule agreed to by PEx and Impresse to minimize disruption to
customers;
(ii) 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 or created pertaining,
referring or relating to the Confidential Information of the other party;
(iii) each party shall discontinue making any representation regarding its
status as a "Preferred Provider" for the other party and shall cease
conducting any activities with respect to the joint marketing, promotion,
sale or distribution of the PEx Services and Impresse Services;
(iv) Each party will discontinue any and all use of trade names and/or
trademarks authorized for use under this Agreement, except as necessary to
fulfill its obligations to customers in accordance with this Section 8.3;
(v) Each party will discontinue any and all use of the licenses granted
under Section 5, except as necessary to fulfill its obligations to
customers in accordance with this Section 8.3; and
(vi) each party will 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 or created pursuant to
this Agreement pertaining, referring or relating to the Confidential
Information of the other party, except that each party may retain one (1)
complete copy of Confidential Information (1) for use in accordance with
Sections 8.3(a)(i) and 8.3(v) and (2) for archival purposes to assure
compliance with this Agreement.
(b) Termination of this Agreement by either party for any reason shall not
affect the rights and obligations of the parties that accrued prior to the
effective date of termination of this Agreement or release either party from
obligations to resell or license Impresse Services made prior to the date of
termination, or affect existing licenses or purchase orders for the Impresse
Services. Notwithstanding any provision of this Agreement to the contrary, each
party may continue to exercise the rights and licenses granted hereunder to the
extent necessary to allow such party to fulfill its obligations under existing
engagement agreements or included in any proposal to a Customer that was
outstanding at the time of termination. Each party specifically:
(i) may continue to market and use the other party's Services for as long
as necessary to meet any obligations or services that the first party has
undertaken with respect to customers as of the date of termination;
(ii) shall continue to have the right to use and access the other party's
Content and Integration (including all documentation and related technical
information and support) to fulfill its obligations to customers for a
period of not more than ninety (90) days following the date of
termination.
(c) The provisions of Sections 4.5, 5.1-5.5, 6, 7, 8 and 9 shall survive
any expiration or termination of this Agreement (except that Sections 5.4-5.5
shall subsequently terminate in accordance with the provisions of Section
8.3(a)-(b)). Neither party shall be entitled to damages resulting from the
termination of this Agreement in accordance with this Section 8. Subject to the
provisions of Section 5, in no event shall either party be precluded from
developing for itself, or acquiring from third party(ies), materials and
services that are competitive with the materials and services provided by the
other party upon any expiration or termination of this Agreement.
9. GENERAL PROVISIONS.
9.1 Issue Resolution. In the event that any dispute arises relating to this
Agreement, the Representatives shall promptly meet and attempt to resolve the
dispute through good faith discussions. If the Representatives are unable to
resolve any dispute to their mutual satisfaction within thirty (30) days after
they commence discussions regarding
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such dispute, and do not agree to extend the time for resolution of the issue at
the end of their meeting, then they may by mutual agreement: (a) escalate the
matter to higher levels in their organizations and, (b) if necessary, resort to
a mutually agreed alternative dispute resolution technique prior to resorting to
litigation. In the event that the parties resort to alternative dispute
resolution or litigation to resolve any matter, the successful or prevailing
party shall be entitled to recover its reasonable attorneys' fees and other
costs incurred in connection with such action, suit or proceeding, in addition
to any other relief to which such party may be entitled.
9.2 Governing Law. This Agreement shall be governed and construed in accordance
with the substantive laws of the Commonwealth of Massachusetts without regard
for any choice or conflict of laws rule or principle that would result in the
application of the substantive law of any other jurisdiction.
9.4 Amendment and Waiver. No provision of or right under this Agreement shall be
deemed to have been waived by any act or acquiescence on the part of either
party, its agents or employees, but only by an instrument in writing signed by
an authorized officer of each party. No waiver by either party of any breach of
this Agreement by the other party shall be effective as to any other breach,
whether of the same or any other term or condition and whether occurring before
or after the date of such waiver.
9.5 Independent Contractors. Each party represents that it is acting on its own
behalf as an independent contractor and is not acting as an agent for or on
behalf of any third party. This Agreement and the relations hereby established
by and between Impresse and PEx do not constitute a partnership, joint venture,
franchise, agency or contract of employment. Neither party is granted, and
neither party shall exercise, the right or authority to assume or create any
obligation or responsibility on behalf of or in the name of the other party or
its Affiliates.
9.6 Assignment. Neither party may assign its rights or obligations hereunder
without the prior written consent of the other party, which consent shall not be
unreasonably withheld; provided that the proposed assignee under this Section
9.6 agrees in writing to assume all of the obligations of the assignor party
under this Agreement.
9.7 Successors and Assigns. This Agreement shall bind and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
9.8 Notices. Unless otherwise provided herein, any notice, report, payment or
document to be given by one party to the other shall be in writing and shall be
deemed given when delivered personally or mailed by certified or registered
mail, postage prepaid (such mailed notice to be effective on the date which is
three (3) business days after the date of mailing), or sent by nationally
recognized overnight courier (such notice sent by courier to be effective one
business day after it is deposited with such courier), or sent by telefax (such
notice sent by telefax to be effective when sent, if confirmed by certified or
registered mail or overnight courier as aforesaid):
If to PEx:
PaperExchange.com, LLC
545 Boylston Street, 8th Floor
Boston, MA 02116
Attn: Chief Executive Officer
Phone: 617.536.4310
Fax: 617.536.4097
If to Impresse:
Impresse Corporation
1309 South Mary Avenue
Sunnyvale, CA 94087
Attn: Chief Executive Officer
Phone: 408.530.2300
Fax: 408.245.8336
or to such other place as any party may designate as to itself by written notice
to the other party.
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9.9 Severability. In the event any provision of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof. The parties agree that they will negotiate in good faith or
will permit a court or arbitrator to replace any provision hereof so held
invalid, illegal or unenforceable with a valid provision which is as similar as
possible in substance to the invalid, illegal or unenforceable provision.
9.10 Conflict or Inconsistency. In the event of any conflict or inconsistency
between the terms and conditions hereof and any terms or conditions set forth in
any purchase order or other document relating to the transactions contemplated
by this Agreement, the terms and conditions set forth in this Agreement shall
prevail.
9.11 Captions. Captions of the sections and subsections of this Agreement are
for reference purposes only and do not constitute terms or conditions of this
Agreement and shall not limit or affect the meaning or construction of the terms
and conditions hereof.
9.12 Word Meanings. Words such as herein, hereinafter, hereof and hereunder
refer to this Agreement as a whole and not merely to a section or paragraph in
which such words appear, unless the context otherwise requires. The singular
shall include the plural, and each masculine, feminine and neuter reference
shall include and refer also to the others, unless the context otherwise
requires.
9.13 Entire Agreement. The terms and provisions contained in this Agreement
(including the Attachments) constitute the entire understanding of the parties
with respect to the transactions and matters contemplated hereby and supersede
all previous communications, representations, agreements and understandings
relating to the subject matter hereof. No representations, inducements, promises
or agreements, whether oral or otherwise, between the parties not contained in
this Agreement or incorporated by reference in this Agreement shall be of any
force or effect. No agreement or understanding extending this Agreement or
varying its terms (including any inconsistent terms in any purchase order,
acknowledgment or similar form) shall be binding upon either party unless it is
in a writing specifically referring to this Agreement and signed by the duly
authorized representative of the applicable party.
9.14 Rules of Construction. The parties agree that they have participated
equally in the formation of this Agreement and that the language and terms of
this Agreement shall not be construed against either party by reason of the
extent to which such party or its professional advisors participated in the
preparation of this Agreement.
9.15 Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart. A facsimile
copy of this Agreement, including the signature pages hereto, shall be deemed an
original.
9.16 Force Majeure. Except as otherwise provided in this Agreement, in the event
that a delay or failure of a party to comply with any obligation, other than a
payment obligation, created by this Agreement is caused by a Force Majeure
condition, that obligation shall be suspended during the continuance of the
Force Majeure condition.
9.17 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.
Both parties represent that they have read this Agreement, understand it, and
agree to be bound by the terms and conditions stated herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers, and have duly delivered and
executed this Agreement under seal as of the date first set forth above.
PAPEREXCHANGE.COM, LLC IMPRESSE CORPORATION
By: /s/ Rod A. Parsley By: /s/ Breit E. Baitles
---------------------------- ----------------------------
Name: Rod A. Parsley Name: Breit E. Baitles
-------------------------- --------------------------
Title: VP Business Development Title: V.P. Market & Bus. Dev.
------------------------- -------------------------
Attachment A: Milestone Schedule: [to be supplied]
Attachment B: Final Specifications; Integration Software: [to be supplied]
Attachment C: Impresse Link Specifications; PEx Link Specifications; Trademarks
[attached]
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Attachment A: Milestone Schedule:
[TO BE SUPPLIED]
Attachment B: Final Specifications; Integration Software:
[TO BE SUPPLIED]
Attachment C. Integration Final Specifications
*****
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
16
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ALLIANCE AGREEMENT
This Alliance Agreement (Agreement) is entered into as of January __, 2000
(Effective Date) by and between PaperExchange.com, Inc., a Delaware limited
liability company (PEx) and CH Robinson Worldwide, Inc., a Delaware corporation
(CHR).
Background
CHR provides logistics services to customers in North America and other
geographies; PEx operates an electronic forum for the buying, selling and
trading of pulp, paper and paper packaging products. CHR and PEx see a mutually
beneficial opportunity to serve the needs of PEx customers for dependable,
cost-competitive, seamless logistics service throughout North America in respect
of products purchased through PEx.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, CHR and PEx agree as follows:
1. DEFINITIONS.
Capitalized terms used in this Agreement and not otherwise defined herein
shall have the meaning set forth below.
Affiliate means with respect to either party, any Person that, directly or
indirectly, is controlled by, controls or is under common control with such
party. For purposes of this Agreement, control means, with respect to any
Person, the direct or indirect ownership of more than fifty percent (50%) of the
voting or income interest in such Person or the possession otherwise, directly
or indirectly, of the power to direct the management or policies of such Person.
CHR Features means the (a) computer object codes (machine readable format);
(b) specifications; (c) executable Application Program Interface (API) modules;
(d) API information; (e) configuration files, reference data files, help files
and spreadsheets used to maintain any reference data; (f) assembly, test,
installation and service instructions; (g) engineering, programming, service and
maintenance notes and logs; (h) technical, operating and service and maintenance
manuals; (i) hardware reference manuals; user documentation; (j) training
materials; and (k) other data, information and know-how, which is necessary and
desirable to design, manufacture, assemble, service, maintain, install, operate,
use or test the CHR software described in Attachment B, together with any
additions, developments, enhancements, improvements, updates and other changes
in such software made during the term of this Agreement.
Confidential Information means all proprietary and confidential information
of a party, including, without limitation, trade secrets, technical information,
business information, sales information, customer and potential customer lists
and identities, product sales plans, sublicense agreements, inventions,
developments, discoveries, software, know-how, methods, techniques, formulae,
data, processes and other trade secrets and proprietary ideas, whether or not
protectable under patent, trademark, copyright or other intellectual property
laws provided by either party to the other party pursuant to this Agreement in
written or other tangible medium and marked as confidential, or if disclosed
orally or displayed, confirmed in writing at the time of disclosure, except any
portion thereof which: (a) is known to the receiving party, as evidenced by the
receiving party's written records, before receipt thereof under this Agreement;
(b) is disclosed to the receiving party by a third person who is under no
obligation of confidentiality to the disclosing party hereunder with respect to
such information and who otherwise has a right to make such disclosure; (c) is
or becomes generally known in the trade through no fault of the receiving party;
(d) is independently developed by the receiving party, as evidenced by the
receiving party's written records, without access to such information; or (e) is
the subject of a subpoena or other validly issued administrative or judicial
process requesting disclosure of such Confidential Information; provided, the
party that receives such order or process provide prompt notice to the
disclosing party and permits the disclosing party to contest or narrow such
request for disclosure and thereafter complies with such subpoena or other
process.
Force Majeure means any event beyond the control of the parties, including,
without limitation, failures of computers, computer-related equipment, hardware
or software, fire, flood, riots, strikes, epidemics, war
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
<PAGE>
(declared or undeclared and including the continuance, expansion or new outbreak
of any war or conflict now in existence), embargoes and governmental actions or
decrees.
North America means the United States of America and Canada.
Person means any individual, corporation, association, partnership (general
or limited), joint venture, trust, estate, limited liability company, limited
liability partnership, unincorporated organization, government (or any agency or
political subdivision thereof) or other legal entity or organization.
Trademarks means (i) the trademarks described on Attachment C, and (ii) any
other trademarks, as may be agreed upon in writing from time to time by the
parties for use by the parties in connection with the activities contemplated by
this AgreementCHR Services.
Other Defined Terms. Each of the following terms have the meanings
ascribed to it in the section set forth opposite such term:
Agreement Recitals
Applicable Services Section 3.2
ASC Section 3A.1
Change Control Document Section 2.5
Change Request Section 2.5
CHR Recitals
CHR Content Section 2.7; Attachment B
CHR Services Section 3.1
Competitor Section 3A.1
Effective Date Recitals
Final Acceptance Section 2.6
Final Specifications Section 2.1; Attachment B
Fix Period Section 2.6
Indemnifying Party Section 8.3
Indemnitees Section 8.3
Losses Section 8.2
Material Nonconformity Section 2.6
Milestone Delivery Section 2.2
Milestone Requirements Section 2.2
Milestone Schedule Section 2.2; Attachment A
Millennium Compliant Section 7.2
PEx Recitals
PEx Content Section 3.1
PEx Services Section 3.1
Plan Section 3.2
Provider Section 3A.1
Redelivery Section 2.6
Requirements Section 2.1
Seller Section 3A.1
Services Information Section 4.1
Source Material Section 5.3
Target Date Section 2.2
Test Period Section 2.6
2. Site Development & Resources
2.1 Specifications. The parties acknowledge that as of the Effective Date,
the complete specifications for the CHR Features have not been developed (the
Final Specifications). The objectives for the CHR Features include, but are not
limited to, (a) rapid transaction response; (b) transactional security; (c)
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access to data for reporting and ancillary functions; (d) use of XML and EDI
protocols; (e) use of existing CHR functions (when appropriate and available);
and (f) data retention. The CHR Features implementing these objectives shall
include at least the following functionality and performance features (the
Requirements) as specified at the end of this Section 2.1. The Requirements are
expected to be augmented, changed and refined during the period commencing
January 10, 2000 and ending January 31, 2000 and such changes shall not require
Change Requests (as defined in Section 2.5), except to the extent they represent
new business processes. As agreement is reached as to detailed functional
requirements and specifications and the performance requirements, they will be
specified in Attachment B. PEx shall be under no obligation to approve the Final
Specifications until it is reasonably satisfied that the Final Specifications
meet the Requirements. The Requirements are as follows:
Real-time Quote Estimates: CHR will provide real-time cost estimates when
requested by PEx users utilizing the PEx web site logistics service for
shipments originating and ending within North America.
Real-time Transactable Quotes: CHR will provide real-time transactable
quotes. Transactable quotes will be provided when requested by PEx
customers utilizing the PEx web site logistics service with regard to
specific offerings and requests posted on the site. Users requesting quote
estimates and transactable quotes will be provided real-time quotes for
both less-than-truckload and truckload shipments, along with estimated
shipping times. Intermodal quotes will be provided, with shipping times,
when the shipment is large enough to warrant intermodal transportation.
Real-time Tracking: CHR will provide real-time tracking capabilities
accessible from the PEx web site for all shipments managed by CHR. Tracking
information will include day/time of pick-up, shipment status, estimated
day/time of delivery or day/time product was delivered. PEx customers will
be able to track their shipments through the PEx site using a tracking
number provided by CHR/PEx.
Documentation: Shipping document access, generation and retrieval will be
available for bills-of-lading and other documents necessary to provide
logistics services. CHR will periodically make available additional
information technology resources to further develop and enhance PEx's
internet logistics capabilities.
2.2 CHR Features Construction. By March 31, 2000 (the Target Date), CHR
will, at its own cost, develop and deliver the CHR Features. Subject to
adjustment in accordance with Section 2.4, CHR will meet all Milestone Dates set
forth in Attachment A (the Milestone Schedule). On or before each Milestone Date
listed in the Milestone Schedule, CHR shall complete the activities described in
the Milestone Schedule (each, a Milestone Delivery) that meet (a) the
corresponding Milestone Requirement(s) set forth opposite such Milestone Date,
as well as (b) all Milestone Requirements for all previous Milestones (that is,
the Milestone Requirements are cumulative).
2.3 PEx Obligations. (a) PEx will, at its own cost, (i) define its web
site functionality and (ii) develop a user interface to offer internet quote and
tracking capabilities through the PEx web site. PEx will meet the Milestone
Dates set forth in the Milestone Schedule for these deliverables.
(b) PEx will, at its own cost allocate adequate information technology
resources to expedite implementation of the CHR Features on logistics portion of
the PEx web site, including formulation of the Final Specifications, performance
of acceptance tests and implementation of the CHR Features following acceptance.
2.4 Date Adjustments. PEx and CHR each agree to perform the tasks assigned
to it in the Milestone Schedule. Each party acknowledges that delays in
performance by either party may cause delays in performance by the other party.
Notwithstanding the foregoing, CHR agrees to exercise all reasonable efforts to
keep PEx on schedule and to notify PEx when CHR reasonably believes that PEx
should accelerate performance to fulfill PEx's obligations under the Milestone
Schedule. If PEx's failure to timely meet its obligations under the Milestone
Schedule causes a material delay in CHR's performance, all dependent Milestone
Dates shall be adjusted day-for-day to account for the delay caused by PEx.
Except in PEx's sole
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discretion, however, Milestone Dates shall not be adjusted to reflect Fix
Periods or other delays caused by CHR.
2.5 Change Procedures. PEx will have the right to inspect the progress of
work on the CHR Features at all reasonable times during the development process
and to confer with CHR to confirm compliance with the Milestone Schedule, and
PEx will be consulted concerning any matters that could cause a delay in
completion of the CHR Features. CHR acknowledges that time is of the essence for
this Agreement, and that significant delays in the completion of the CHR
Features will cause PEx significant harm. No changes to the Milestone Schedule
will be made without written approval of PEx. PEx may request amendments to
Milestone Schedule to effect changes in the CHR Features. If PEx wishes to make
a change it shall notify CHR of the requested change specifying the change with
sufficient details to enable CHR to evaluate it (a Change Request). Within five
business days following the date of CHR's receipt of a PEx Change Request, CHR
shall deliver a document that: (a) assesses the impact of the change on the
schedule, and (b) incorporates a description of the requested change (a Change
Control Document). If PEx accepts the Change Control Document, then the
provisions of this Agreement shall be deemed amended to incorporate such change
in accordance with the Change Control Document. It is the intent of the parties
that the Milestone Schedule has been defined broadly enough to accomplish PEx's
goals for the CHR Features and that within the Milestone Schedule, no Change
Orders will be required.
2.6 Acceptance Testing. (a) Commencing upon receipt by PEx of each
Milestone Delivery, PEx may, during the Test Period (as specified in the
Milestone Schedule opposite the Milestone Date), test the Milestone Delivery to
determine whether all applicable Milestone Requirements have been met. If one or
more Milestone Requirements are not met, PEx shall so notify CHR in writing,
stating the problems encountered. CHR shall have the time period set forth in
the Milestone Schedule for the applicable Milestone Delivery (the Fix Period) to
cure the problem and to redeliver the failed Milestone Delivery (a Redelivery).
After receipt by PEx of the Redelivery, PEx shall have a new Test Period to
re-examine and test the Milestone Delivery. If a Milestone Delivery is late or
if the Redelivery of a Milestone Delivery is Materially Nonconforming, PEx may
terminate this Agreement pursuant to Section 9.2. Material Nonconformity or
Materially Nonconforming means as to any Milestone Delivery, Redelivery or CHR
Features, errors or other failure(s) to meet the applicable Milestone
Requirements that (i) are not cured within the applicable cure period or Fix
Period and (ii) in PEx's reasonable judgment, individually or in the aggregate,
materially and adversely affect PEx's ability to perform the business functions
that are represented by or are within the scope of the applicable Milestone
Delivery or CHR Features.
(b) The absence of notification by PEx within the Test Period that one or
more Milestone Requirements have not been met will not indicate acceptance of
all or any part of any Milestone Delivery, it being understood that PEx retains
the right to reject the Milestone Delivery unless, upon completion of testing of
the final Milestone Delivery, all functional and performance specifications set
forth in the Milestone Schedule have been met (Final Acceptance). Any grant by
PEx to CHR of an extended period to make a conforming Milestone Delivery shall
not be deemed to waive any of PEx's rights hereunder.
(c) It is understood and agreed that a Milestone Delivery or Redelivery
need not be error-free to have achieved any particular Milestone Requirement,
but PEx may rightfully reject any Milestone Delivery or Redelivery that is
Materially Nonconforming. Notwithstanding the foregoing, Final Acceptance will
not relieve CHR of its obligation to correct nonconformities in accordance with
this Section 2.6. Neither Final Acceptance nor the conclusion of any Test Period
shall be deemed to be a waiver of any warranty claim of PEx or other obligation
of CHR. Acceptance of the CHR Features will not relieve CHR of its obligation to
use reasonable commercial efforts to correct all identified nonconformities in a
timely fashion.
2.7 Operation of PEx Logistics Site. (a) After the PEx website embodying
the CHR Features is implemented, PEx shall place a link on the PEx website and
shall display CHR's logo on the portion of the PEx web site related to logistics
services in the form specified in Attachment C. Thereafter, PEx will notify CHR
if PEx makes any change in the location, sizing or placement of the CHR logo or
any links that appear on the PEx website that transfer users to the CHR website.
If CHR does not notify PEx of its objection to such change within five (5) days,
CHR shall be deemed to have approved such change. PEx shall host and
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maintain the PEx website embodying the CHR Features at its sole cost and
expense. CHR, however, shall provide PEx, at CHR's sole cost and expense, all
relevant content as described in the Final Specifications for the CHR Features
(the CHR Content). Subject to the terms of this Agreement, CHR hereby grants PEx
an exclusive license to use, modify, enhance, reproduce, display, perform and
transmit the CHR Content.
(b) PEx shall be solely responsible for the operation and maintenance of
the PEx website and for all materials that appear on the PEx Site, except for
the CHR Content. PEx will provide, install, repair, maintain and pay for the
communications, computer and peripheral equipment, services and facilities
supporting the PEx website. CHR will provide, install, repair, maintain and pay
for the communications, computer and peripheral equipment, services and
facilities necessary to deliver the CHR Content to the PEx website.
2.8 Training; Technical Assistance. (a) CHR will provide PEx at no charge
with at least thirty (30) hours of training services covering the CHR Features.
CHR shall also provide PEx at no charge with update or "delta" training for each
major release of the CHR Features; such update training to be provided in a
timely manner to enable PEx to remain current with all improvements to the CHR
Features. CHR will provide PEx personnel with comprehensive written educational
materials as part of the training program and will ensure that PEx personnel are
afforded ample opportunity to discuss with CHR trainers the operation of the CHR
Features. PEx may use CHR training materials for purposes of training additional
PEx personnel after the initial training.
(b) CHR shall provide to PEx upon request such technical assistance and/or
additional training as PEx may reasonably request to enable PEx to more
effectively operate and use the CHR Features. Such technical assistance or
additional training shall be provided at no charge. CHR shall also provide to
PEx any service or other support information and services that would assist PEx
in marketing the CHR Services. Such service and support information and
services, to the extent they exceed an amount deemed reasonable by CHR, shall be
provided at a negotiated rate calculated to cover CHR's costs to deliver such
services.
3. MARKETING ARRANGEMENT.
3.1 Appointment. (a) Subject to the terms of this Agreement, PEx hereby
appoints CHR as PEx's Preferred Provider of logistics services for PEx customer
shipments of goods purchased, sold or exchanged on PEx's website that both
originate and end in North America (CHR Services). CHR hereby accepts the
appointment as preferred provider.
(b) Subject to the terms of this Agreement, CHR hereby appoints PEx as
CHR's Preferred Provider of electronic exchange services (including auction and
reverse auction services) for the purchase, sale or exchange of pulp, paper and
paper packaging products (PEx Services). PEx hereby accepts the appointment as
preferred provider.
(c) Subject to the terms set forth in this Agreement, PEx will also offer
CHR the opportunity to participate in joint marketing activities and client
proposal opportunities for customers in the pulp, paper and printing industries.
Subject to the terms set forth in this Agreement, CHR will also offer PEx the
opportunity to participate in joint marketing activities and client proposal
opportunities for customers in the pulp, paper and printing industries.
(d) Neither party shall have the right to make commitments of any kind for
or on behalf of the other party without the prior written consent of the other
party, in each and every case.
3.2 Market Development Strategy. (a) The parties will work together to
create a joint marketing and business development plan (Plan) each year. Each
party will use commercially reasonable efforts to implement such Plan in
connection with the marketing and sale of PEx Services and CHR Services to
customers in the pulp, paper and paper packaging industries.
(b) An Alliance Steering Committee (ASC) shall be responsible for
quarterly review and management of the Plan. The ASC shall consist of four
members, two members to be appointed by each of
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PEx and CHR. Each party may with notice to the other substitute any of its
members serving on the ASC. The initial CHR members shall be Kent Stuart and
Nick Rogge and the initial PEx members shall be Rod Parsley and Bob Brenner.
(c) The ASC shall be responsible for the management and conduct of the
Plan and shall in particular: (i) consider, review and amend the Plan from time
to time in such manner as may be appropriate; (ii) monitor progress of the Plan;
and (iii) report regularly to the management of both parties upon the progress
of the Plan.
(d) The ASC shall hold formal meetings semi-annually or at any time upon
the reasonable request of either party during the term of the Plan. Unless
otherwise agreed by the parties all meetings of the ASC shall be held in
Minneapolis and in Boston on an alternating basis, with the first meeting to be
held in Boston on or around May 5, 2000. Meetings shall be scheduled with at
least twenty-one (21) days notice; the party that seeks to convene a particular
meeting shall be responsible for the meeting notice and scheduling; provided,
that the hosting party shall be responsible for notice and scheduling of the
semi-annual meetings. The quorum for ASC meetings shall be two, provided there
are at least one member from each of PEx and CHR present.
3.3 Marketing Efforts. (a) Subject to the provisions of this Agreement,
PEx and CHR will jointly work together to create a mutual understanding of
opportunities which are of priority interest and assist each party in focusing
their marketing efforts. The parties shall also work to identify target
customers and develop proposals for potential customers to propose a solution
encompassing CHR Services and PEx Services.
(b) PEx, in its reasonable business discretion, may include appropriate
individuals from CHR in PEx sales calls to mills, converters, end-users, and
other PEx customers.
(c) PEx will request that its Board of Directors and veteran industry
sales force use reasonable efforts to provide pulp, paper and paper packaging
industry specific sales leads to CHR. Such leads shall include segments of the
industry that are currently lacking effective logistics solutions, and how such
industry participants could be marketed to by CHR for the purposes of this
Section 3. CHR may only use the information provided to them pursuant to this
Section 3.3(c) in connection with its performance under this Section 3.
(d) PEx will commit its sales force to promote a solution encompassing CHR
Services and PEx Services on visits to PEx's current and potential customers
including manufacturers, converters, brokers and printers.
(e) PEx will promote CHR's logistics services to other
business-to-business e-commerce sites that are seeking logistics services
including, but not limited to, the Internet Capital Group portfolio of
companies.
(f) CHR will promote PEx's electronic exchange services to its customers
who produce, buy, trade or distribute pulp, paper, paper packaging, or converted
paper products.
(g) CHR will, at its reasonable business discretion, develop marketing
material, in conjunction with PEx, to demonstrate how pulp, paper, paper
packaging, printing, and related customers of CHR can benefit from this
alliance.
3A. Exclusivity.
3A.1 Preferred Provider Status. Preferred Provider means as to either
party (each, a Provider), that it will be positioned internally at the other
party (each, a Seller) and externally by Seller such that the visibility Seller
affords Provider as a provider of Applicable Services, the rights Seller grants
to Provider as a provider of Applicable Services, and Provider's access to
Seller's sales organization as a provider of Applicable Services are superior to
the visibility Seller affords, the rights Seller grants, and the access to
Seller's sales organization, that Seller allows any Competitor as a provider of
Applicable Services. During the term of this Agreement and any renewal or
extension thereof, neither Seller will grant any Competitor of
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Provider the status which is equivalent to, or better than, the status and
rights accorded the other party as the Preferred Provider under this Agreement.
Applicable Services means (i) as to PEx, the PEx Services and (ii) as to CHR,
the CHR Services. Competitor means (1) as to PEx, any third party offering or
performing similar internet exchange, auction or reverse auction services for
the sale, purchase or exchange of pulp, paper, and paper packaging products; and
(2) as the CHR, any third party offering or performing substantially similar
logistics services for shipments of goods originating and ending within North
America; provided that it shall not include XPEDX, Unisource or any similar
paper distributor that includes logistics services as part of its product
offerings but for which such logistics services are not its' primary business.
3A.2 PEx Obligations. During the term of this Agreement, (i) PEx will use
CHR for all shipments of goods purchased through the PEx website originating and
ending within North America unless: (1) CHR does not provide logistics service
on any particular route; (2) CHR does not provide the particular mode of
transportation requested by a PEx member; (3) a PEx member specifically requests
an alternative logistics provider; or (4) a PEx member wishes to use their
company-owned logistics services; and (ii) PEx shall not, directly or
indirectly, by itself, through its Affiliates or through any type of joint
venture or similar affiliation with a third party enter into a strategic
partnership or integrate electronically with a CHR Competitor to offer logistics
services for shipments originating and ending within North America.
3A.3 CHR Obligations. During the term of this Agreement and for a period
of two years after the expiration or termination of this Agreement, CHR shall
not, directly or indirectly, by itself, through its Affiliates or through any
type of joint venture or similar affiliation with a third party, without prior
written approval from PEx, enter into a strategic partnership or integrate
electronically with or offer CHR Services to a PEx Competitor. CHR may, however,
continue to offer and provide logistics services directly to customers,
including those that are pulp, paper or paper packaging producers, distributors,
converters, or printers.
4. DELIVERY OF CHR SERVICES
4.1 Service Orders. (a) PEx customers shall place orders for CHR Services
by completing the purchase forms posted on the logistics portion of the PEx
website, or by other means agreed upon by the parties. No order shall be binding
upon CHR until the same shall have been accepted by CHR. CHR shall accept or
reject all orders within one (1) business day following receipt of same and
shall deliver all orders that are accepted within the time frame specified in
the order. CHR may reject any order that does not comply with the provisions of
this Agreement by providing to PEx and the PEx Customer, within one (1) business
day of its receipt of the non-complying order, a written notice specifying the
noncompliance. Any order that is not rejected in a timely manner or with
specificity shall be deemed accepted by CHR on the second business day following
CHR's receipt of the order. In case of conflict between the standard printed
terms of purchase/sale of CHR and the terms posted on the PEx website, the
latter shall prevail. When allocating resources with respect to filling orders
for CHR Services, CHR shall ensure that PEx orders are accepted and filled in a
manner that is in all material respects the same as or superior to the priority
and fill rate CHR applies to CHR Services ordered by third parties.
(b) CHR will provide PEx customers with logistics services for shipments
originating or ending outside of North America, as its resources permit,
including 24-hour customer service for issues regarding transportation including
freight quotes, shipment tracking, pick-up and delivery inquires and customer
complaints. Best efforts will be used to provide PEx with competitive prices and
to provide quotes in a timely manner (i.e., within 24 hours).
(c) When practical, PEx will promote the use of CHR's logistics services
for shipments for PEx customers that originate or end outside of North America.
CHR will provide logistics services for PEx shipments originating or ending
outside of North America, as its capabilities permit. Best efforts will be used
to provide PEx with competitive prices and to provide quotes in a timely manner,
not to exceed twenty four (24) hours following receipt of the PEx request for
CHR Services for such shipment.
4.2 Obligation to Supply. CHR shall not be in breach of this Section 4.2
if CHR's failure to supply CHR Services is due to a Force Majeure event.
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4.3 PEx Logistics Resources. (a) PEx will hire a senior level Logistics
Manager, experienced in logistics matters to manage PEx's delivery of logistics
services through the PEx website. CHR will assist PEx in its efforts to identify
and recruit a qualified candidate for the Logistics Manager position. CHR will
work with the PEx Logistics Manager on a daily basis to provide to further
develop logistics services for PEx customers.
(b) PEx will provide CHR with guidance and feedback from PEx staff
concerning the PEx Services relating to logistics and the CHR Services. Such
feedback shall be focused on information received from PEx customers concerning:
cost competitiveness of PEx price quotes, pick-up and on-time delivery
performance, customer complaints and similar matters.]
(c) PEx shall devote commercially reasonable efforts to promote the
acceptance of the CHR Services by PEx customers shall include the following
general activities performed in the reasonable business judgment of PEx: (i)
tailoring and extending PEx's existing methodologies to reflect the nuances of
logistics and CHR Services; and (ii) otherwise conducting such activities as are
reasonably appropriate for the marketing and sale of the CHR Services as part of
the PEx Services.
4.4 CHR Logistics Resources. (a) CHR shall furnish at no cost to PEx
reasonable quantities of promotional materials, such as sales literature and
procedures manuals (the Services Information)in order for PEx to promote the CHR
Services as provided for in this Agreement. Except as otherwise agreed by the
parties, PEx may use such Services Information without any limitation on
disclosure. In any event, CHR hereby grants PEx permission to disclose certain
Services Information to be designated and furnished by CHR to customers without
the requirement for non-disclosure agreements. CHR represents and warrants that
the Services Information as provided to PEx shall be accurate in all material
respects when provided, and CHR undertakes to update such Services Information
when necessary.
(b) CHR will provide PEx with its current CHR Services price list and
form(s) of CHR Services agreements in accordance with Section 5.3. CHR will
provide PEx with any revisions or updates to such materials and shall provide
additional copies of such materials upon request of PEx. With respect to CHR's
price list, CHR may update such list from time to time during the term of this
Agreement; provided that price adjustments shall not be made more often than
every ninety (90) days unless extraordinary circumstances require the adjustment
of prices to account for market phenomena.
(c) CHR shall devote commercially reasonable efforts to support PEx's
promotion and sales efforts, including the following general activities: (i)
answering technical questions and providing PEx with proposal assistance and
tutorial assistance relating to the CHR Services; (ii) supplying experts to
support detailed technical presentations and meetings relating to the CHR
Services; (iii) providing quotations for standard and custom configurations for
the CHR Services; and (iv) responding to phone calls from prospective customers.
5. PRICING; PAYMENT
5.1 Pricing. (a) PEx will quote prices for CHR Services on the logistics
portion of the PEx website that are based on the prices provided PEx by CHR
pursuant to Section 4.4(b) and include a mark-up determined in accordance with
Section 5.3. PEx will provide CHR with notice of the mark-up it adds to CHR's
prices as delivered under Section 4.4(b).
(b) CHR will act in good faith to provide PEx with competitive rates for
logistics services.
(c) Neither party shall disclose any billing or cost rates of the other
party to any Customer, potential Customer or Registered Prospect without prior
written approval of the other party.
5.2 Payment. PEx shall bill PEx customers that order CHR Services from the
PEx website at the rate determined in accordance with Section 5.1(a) and shall
pay CHR for CHR Services within thirty five (35) days after delivery to the
Customer, after deducting the portion of the fee charged the PEx Customer
ascribed to "mark-up". It is understood and agreed that PEx shall be responsible
for payment of CHR fees in respect
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of CHR Services regardless of PEx's receipt of payment from PEx customers. It is
further understood and agreed that PEx shall have sole discretion with respect
to those PEx customers that PEx permits to purchase CHR Services from the PEx
Site and that PEx may make such determinations based upon its' analysis of the
creditworthiness of such customers. All payments shall be stated and paid in
U.S. Dollars. Revenue received in currencies other than U.S. Dollars, shall be
converted to U.S. Dollars using the exchange rate in effect as of the date that
the payment is received by PEx. All payments from PEx to CHR or from CHR to PEx
will be reduced by any applicable withholding taxes. PEx and CHR will cooperate
to minimize, to the extent legally permissible, the tax liabilities related to
the transactions contemplated by this Agreement; provided such cooperation shall
not cause any adverse tax consequences to be incurred by either party which
would not have been incurred under the terms and conditions as described in this
Agreement. Each party shall provide and make available to the other party any
resale certificates, information regarding out-of-state or out-of-country sales,
and other exemption certificates or information reasonably requested by the
other party.
5.3 Post Effective Amendment. Within fourteen (14) days after the
Effective Date, the parties will attempt to specify the pricing ((Section
4.4(b)) and markup (Section 5.1) that will apply to transactions pursuant to
this Agreement. The procedure shall be as follows: CHR will provide notice to
PEx of PEx's proposed pricing, including applicable discounts. PEx will notify
CHR of its response to the CHR proposal within fourteen (14) days, including the
markup formula that PEx proposes to use, and, if PEx does not agree to such
pricing PEx shall provide a counteroffer. The parties will discuss any
differences between the pricing and discounts offered by CHR and the pricing and
discounts sought by PEx and, if no agreement is reached within seven (7) days
following PEx's notice to CHR, they will meet at a mutually acceptable location
to resolve any differences. If the parties are unable to reach agreement within
seven (7) days after meeting, either party may immediately terminate this
Agreement with notice to the other party and without need to use the procedures
specified in Section 10.2. Upon resolution of the applicable pricing, discounts
and markup formula, a memorandum supplying the missing terms will be executed
and appended to this Agreement as Amendment No. 1.
6. PUBLICITY; CONFIDENTIALITY; PROPRIETARY RIGHTS; LICENSES
6.1 Publicity. (a) Except as is necessary to comply with applicable laws
and regulations or to enforce their respective rights under this Agreement, or
to a party's legal or financial advisors, and except as otherwise agreed to by
the parties in writing, the parties shall: (i) keep the material terms of this
Agreement confidential, (ii) agree upon the text and the exact timing of an
initial public announcement relating to the transactions contemplated by this
Agreement as soon as possible after the Effective Date (such agreement not to be
unreasonably withheld or delayed) and (iii) agree on the text and the timing of
any subsequent public announcements regarding this Agreement or the transactions
contemplated herein. If this Agreement is required to be filed by CHR with the
Securities and Exchange Commission, CHR shall not file this Agreement with the
Securities and Exchange Commission without first notifying PEx and seeking
confidential treatment for any provisions of this Agreement that PEx believes
would disclose trade secrets, confidential commercial or financial information
that would impair the value of the contractual rights represented by this
Agreement or provide detailed commercial and financial information to
competitors or third parties.
(b) Except as otherwise provided in Section 6.5, neither party shall use
the name of the other party or any director, officer or employee of the other
party or any adaptation thereof without the prior written approval of the other
party; provided that subject to approval of the text of any promotional
material(s) or disclosures: (i) CHR shall have the right to promote PEx as a
preferred provider of internet exchange services for pulp, paper and paper
packaging products and its relationship with PEx as a provider of logistics
services as set forth in this Agreement in its marketing collateral and in
customer presentations and (ii) PEx shall have the right to promote CHR as its
preferred provider of logistics services for PEx customer shipments that both
originate and end in North America in its marketing collateral and in customer
presentations.
6.2 Confidentiality. (a) It is contemplated that in the course of the
performance of this Agreement each party may, from time to time, disclose
Confidential Information to the other. Each party agrees to take
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all reasonable steps to prevent disclosure of Confidential Information and not
to use any Confidential Information except for the limited purposes set forth in
this Agreement.
(b) All Confidential Information made available hereunder, including
copies thereof, shall be returned or destroyed upon the first to occur of (i)
termination of this Agreement or (ii) written request by the discloser.
6.3 Proprietary Rights. (a) This Agreement does not convey to PEx any
ownership rights in any CHR Content, CHR Features or CHR Services or in any
intellectual property rights embodied in such CHR Content, CHR Features or CHR
Services by implication, estoppel or otherwise except for the rights expressly
granted under this Agreement. Title to the CHR Content, CHR Features and CHR
Services and the intellectual property rights embodied in the CHR Content, CHR
Features and CHR Services shall at all times remain vested in CHR or its
licensors; provided, that with respect to the CHR Features for which CHR retains
title, CHR hereby grants and agrees to grant PEx a non-exclusive, fully paid-up
and royalty-free license to use such CHR Features and intellectual property to
the extent necessary for PEx to make use of, market and distribute the PEx
Services alone or in combination with other technology and information as part
of PEx's business.
(b) This Agreement does not convey to CHR any ownership rights in any
products, materials, tools and methodologies that are proprietary to PEx or to
third parties or in any intellectual property rights embodied in such products,
materials, tools and methodologies by implication, estoppel or otherwise except
for the rights expressly granted under this Agreement. Title to all such
products, materials, tools and methodologies and the intellectual property
rights embodied in such products, materials, tools and methodologies shall at
all times remain vested in PEx or its licensors.
6.4 Enabling Licenses. (a) CHR hereby grants to PEx a worldwide, paid-up
and royalty-free license to (i) market, use, reproduce and display the CHR
Features to potential customers and PEx personnel and (ii) use the CHR Features
to develop enhancements, modifications, and derivative works of the CHR Features
for the purpose of: (1) marketing, promoting and demonstrating the CHR Features
pursuant to Section 6.4(a)(i) and 6.4(b); (2) developing and demonstrating
application programs utilizing the CHR Features; (3) training PEx personnel; and
(4) providing PEx Services to PEx customers.
(b) CHR hereby grants to PEx a non-exclusive, non-transferable license to
use, reproduce, display and transmit the CHR Content, solely in connection with
the development, maintenance and operation of the PEx Site, subject to and in
accordance with the terms, conditions and provisions of this Agreement. PEx
shall place a CHR Link in a mutually agreeable location and size on each page of
the PEx Site that contains all or a portion of the CHR Content. CHR and PEx
shall mutually agree upon the method of implementing such links. PEx shall not
remove any titles or any trademark, copyright or patent notices, or any
proprietary or restricted rights notices that appear on the CHR Content. All
such titles and notices must be reproduced on all permitted copies of the CHR
Content.
(c) CHR will provide PEx at no charge any updates and upgrades it makes to
the CHR Features. CHR will also provide PEx at no charge any new releases it
makes for the CHR Features. CHR shall deliver updates and upgrades to PEx not
later than thirty (30) days after it initially implements such updates, upgrades
and new releases.
6.5 Trademark License. (a) Subject to PEx's compliance with this Sections
6.5, CHR hereby grants to PEx a fully paid up and royalty-free right and license
to use the Trademarks in connection with the promotion, marketing and sale of
the CHR Services during the term of this Agreement. Subject to Section 6.5(d),
CHR shall take such actions as are reasonably required to maintain the
Trademarks in effect, and shall inform PEx of any changes in or additions to the
Trademarks. All right, title and interest to the Trademarks shall remain with
CHR and no other license relating thereto is granted hereunder.
(b) Subject to the wind-down rights set forth in Section 9.3, upon any
expiration or termination of this Agreement, the license to PEx to use the
Trademarks shall terminate, and PEx shall take all necessary
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action and execute and deliver to CHR all necessary documents and instruments to
remove PEx as a registered user and/or a recorded licensee of the Trademarks.
(c) Each party hereto agrees to notify the other in writing promptly (but
not later than thirty (30) days) after obtaining knowledge of any infringements
or imitations of the Trademarks by third parties.
(d) CHR reserves the right to modify the Trademarks or substitute
alternative marks for any or all of the Trademarks at any time upon thirty (30)
days written notice; provided, that PEx shall not be required to incur any
expense to re-mark or otherwise modify sales collateral to adopt such modified,
substituted or alternative marks but shall implement such marks in a
commercially reasonable manner consistent with the depletion of then existing
inventory and sales collateral.
(e) Upon request of CHR, PEx shall provide CHR with a sample of all
product packaging and advertising that makes use of the Trademarks for purposes
of permitting CHR to verify that PEx's use of the Trademarks is consistent with
the provisions of Attachment C, but CHR's rights shall only extend to the
depiction of the Trademarks in such packaging and advertising copy and not to
any other content of such copy. PEx shall not challenge, directly or indirectly,
CHR's rights in respect of the Trademarks for the CHR Services, provided, that
PEx shall not waive its rights with respect to existing trademarks owned by PEx
or trademarks that PEx acquires during the term of this Agreement, and PEx shall
not waive any rights with respect to the protection of its trademarks. PEx shall
comply with the Trademark guidelines set forth in Attachment C. In the event
that PEx elects to adopt other marks for use in the promotion, marketing and
sale of the CHR Services then this Section 6.5(e) shall not apply to PEx's use
of such other marks.
7. REPRESENTATIONS AND WARRANTIES.
7.1 Authorization; Enforceability. Each of CHR and PEx represent and
warrant to the other that: (a) it is a corporation or limited liability company
duly organized, validly existing and in good standing under the laws of its
organizing jurisdiction; (b) it has all requisite power and authority to enter
into this Agreement; (c) it is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder and consummate the
transactions contemplated hereby; and (d) this Agreement is a valid and binding
obligation of such party enforceable in accordance with its terms.
7.2 CHR Features Warranty. (a) CHR represents and warrants to PEx that
owns or has valid licenses to all copyrights, patents, trade secrets,
trademarks, and other proprietary or intellectual property rights relating to
the CHR Features and the CHR Content and has the right to grant to PEx the
rights and licenses purported to be granted by or pursuant to this Agreement,
and has all other rights necessary for the performance of its obligations under
this Agreement.
(b) CHR represents and warrants that no software included in the CHR
Features shall contain any authorization strings, time limiting codes or other
instructions or codes that (i) prevent the CHR Services from being fully
functional at all times or (ii) may be used to obtain access to the CHR Services
without PEx's knowledge and authorization or (iii) may be used to, modify,
damage, disable, or compromise the security of any PEx technology, data,
information, or other proprietary or intellectual property rights including
without limitation any software, files, computer systems or networks of PEx.
(c) CHR represents and warrants that any software included in the CHR
Features shall be Millenium Compliant. Millennium Compliant means as to any
hardware, firmware, software or other technology associated with the CHR
Features, that it correctly performs all date-related operations (i) without
human intervention, other than original data entry of any date, (ii) without
regard to whether any date involved in the operation occurs in the 20th or 21st
Century and (iii) without regard to the system date at the time the calculation
is performed; provided that no failure to be Millennium Compliant shall be
deemed to have occurred if the non-compliance is due to hardware, firmware,
software or data not supplied by CHR (other than such third party hardware,
firmware, software or data that falls into either of the two following
categories: (1) with which CHR software is intended to interface, if any
agreement assigns to CHR the responsibility for ensuring the correct operation
of such interface; or (2) that is required, selected, embedded or supplied by
CHR).
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7.3 Customer Warranties. (a) CHR shall extend to each Customer that enters
into an agreement to acquire CHR Services pursuant to this Agreement the
warranties and indemnification for its CHR Services and services that it
generally extends to its customers. CHR will provide each Customer that enters
into an agreement to acquire CHR Services pursuant to this Agreement support
services that are at least as favorable as the support services CHR generally
extends to its customers.
(c) It is understood and agreed that, as between the parties, CHR shall
remain solely responsible to customers for the performance of the CHR Services
and PEx shall remain solely responsible to customers for the performance of the
PEx Services.
8. RISK ALLOCATION
8.1 LIMITATION OF LIABILITY. (a) EXCEPT FOR INFRINGEMENT OF THE OTHER
PARTY'S INTELLECTUAL PROPERTY RIGHTS OR BREACH OF CONFIDENTIALITY OBLIGATIONS
UNDER SECTION 6.2 AND EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 8.2-8.3 WITH
RESPECT TO THIRD PARTY CLAIMS, THE AGGREGATE LIABILITY OF EITHER PARTY FOR
DIRECT DAMAGES ARISING OUT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE LIMITED TO THE AGGREGATE AMOUNT PAID TO SUCH PARTY BY THE OTHER
PARTY AS OF THE DATE SUCH CLAIM IS FINALLY RESOLVED. IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR SAVINGS OR FOR ANY INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, HOWEVER
CAUSED, UNDER ANY THEORY OF LIABILITY.
(b) In addition to the limitation of liability specified in Section
8.1(a), it is understood and agreed that neither party shall be liable to the
other for money damages in respect of a breach of Section 2 and that PEX's sole
remedy for breach of Section 2 by CHR shall be the termination of this
Agreement.
8.2 Infringement Indemnification. (a) Subject to the provisions of Section
8.4, each party shall defend, indemnify and hold harmless the other party, its
subsidiaries, parent corporations, Affiliates, officers, directors, independent
contractors, partners, shareholders, employees, agents, successors and assigns
from and against any claim, suit, demand, loss, damage, expense (including
reasonable attorney's fees of indemnitee(s) and those that may be asserted by a
third party) or liability (collectively, Losses) arising from or related to an
allegation that the CHR Content, CHR Features or PEx Content or PEx Services, as
the case may be, provided by such party to the other party or a Customer
pursuant to this Agreement infringe or misappropriate any intellectual property
right of any third party.
(b) In addition to its obligations under Section 8.2(a), if any CHR
Content, CHR Features, PEx Content or PEx Services is held to constitute an
infringement or misappropriation of any third party's intellectual property
rights or if in the providing party's opinion, any CHR Content, CHR Features,
PEx Content or PEx Services is, or is likely to be held to constitute, an
infringement or misappropriation, such party will at its expense and option: (i)
procure the right for the other party to continue using the CHR Content, CHR
Features or PEx Content or PEx Services; (ii) replace the CHR Content, CHR
Features or PEx Content or PEx Services with a non-infringing and
non-misappropriating equivalent conforming to the applicable specifications; or
(iii) modify the CHR Content, CHR Features, PEx Content or PEx Services to make
it non-infringing and non-misappropriating while conforming to the applicable
specifications.
8.3 Other Claims. Subject to the provisions of Section 8.4, each of CHR and PEx
(each, an Indemnifying Party) will defend, indemnify and hold harmless the other
party, its subsidiaries, parent corporations, affiliates, officers, directors,
partners, shareholders, employees, agents, and their successors and assigns
(collectively, the Indemnitees) from and against any Losses imposed upon the
Indemnitee(s) by any third party arising from or related to (a) personal injury
or property damage which is proximately caused by any negligence or intentional
misconduct by such Indemnifying Party (or its employees, agents or
representatives) in performing its obligations under this Agreement; (b) any
breach by the Indemnifying Party of the
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representations, warranties or agreements made by it under this Agreement; or
(c) the promotion, advertisement or marketing of the Indemnitee's Content or
Services by or on behalf of the Indemnifying Party. The foregoing
indemnification action shall not apply in the event and to the extent that a
court of competent jurisdiction determines that such Losses arose as a result of
any Indemnitee's negligence, intentional misconduct or breach of this Agreement.
CHR shall require each of its Affiliates and any third party providers of
logistics services pursuant to this Agreement to indemnify, defend and hold
harmless CHR (and PEx) Indemnitees under the same terms as stated in this
Section 8.3.
8.4 Procedure. To receive the benefit of indemnification under Section 8.2
or 8.3, the party seeking indemnification must promptly notify the other party
in writing of a claim or suit and provide reasonable cooperation (at the
Indemnifying Party's expense) and tender to the Indemnifying Party (and its
insurer) full authority to defend or settle the claim or suit. Neither party has
any obligation to indemnify the other party in connection with any settlement
made without the Indemnifying Party's written consent. The Indemnitee has the
right to participate at its own expense in the claim or suit and in selecting
counsel therefor. The Indemnitee shall cooperate with Indemnifying Party (and
its insurer), as reasonably requested, at Indemnifying Party's sole cost and
expense.
8.5 Insurance. Each party shall procure and maintain insurance or
self-insurance adequate to cover its obligations hereunder and which are
consistent with normal business practices of prudent companies similarly
situated. It is understood that such insurance shall not be construed to create
a limit of either party's liability with respect to its indemnification
obligations under this Section 9. Each party shall provide the other with
written evidence of such insurance (or financial information that describes the
amounts available under any self-insurance facility) upon request. Each party
shall provide the other with written notice at least fifteen (15) days prior to
the cancellation, non-renewal or material change in such insurance or
self-insurance which materially adversely affects the rights of the other party
hereunder. If such party does not obtain replacement insurance or take other
measures that allow it to provide comparable coverage within such 15-day period,
the other party shall have the right to terminate this Agreement effective at
the end of such fifteen (15) day period without notice or any additional waiting
periods.
9. TERM AND TERMINATION.
9.1 Term. This Agreement shall take effect as the Effective Date and shall
remain in effect until the eighteen month anniversary of the Effective Date,
unless sooner terminated in accordance with Section 9.2 or extended in
accordance with this Section 9.1. Thereafter, this Agreement shall automatically
renew for successive 12-month terms unless either party notifies the other party
at least thirty (30) days prior to the expiration of the then current term that
it does not wish to renew this Agreement for an additional term.
9.2 Termination. Either party may terminate this Agreement at any time
upon thirty (30) days notice to the other party in the event that the other
party shall have breached any of its material obligations hereunder and shall
not have cured such default prior to the expiration of the thirty (30)-day
period. In addition, either party shall have the right to terminate this
Agreement upon thirty (30) days notice if a Force Majeure condition has
prevented performance by the other party for more than one hundred twenty (120)
days. The parties may also terminate this Agreement at any time upon mutual
written agreement of the parties.
9.3 Effect of Termination. (a) Upon termination (including expiration) of
this Agreement:
(i) CHR and PEx will terminate all tasks for all effected Customer in an
orderly manner, as soon as practical or in accordance with a schedule agreed
to by PEx and CHR to minimize disruption to customers;
(ii) 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 or created pertaining, referring
or relating to the Confidential Information of the other party;
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(iii) each party shall discontinue making any representation regarding its
status as a "Preferred Provider" for the other party and shall cease
conducting any activities with respect to the joint marketing, promotion,
sale or distribution of the PEx Services and CHR Services;
(iv) Each party will discontinue any and all use of trade names and/or
trademarks authorized for use under this Agreement, except as necessary to
fulfill its obligations to customers in accordance with this Section 9.3;
(v) PEx will discontinue any and all use of the licenses granted under
Section 5.5, except as necessary to fulfill its obligations to customers in
accordance with this Section 9.3; and
(vi) each party will 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 or created pursuant to this
Agreement pertaining, referring or relating to the Confidential Information
of the other party, except that each party may retain one (1) complete copy
of Confidential Information (1) for use in accordance with Sections 9.3(a)(i)
and 9.3(v) and (2) for archival purposes to assure compliance with this
Agreement.
(b) Termination of this Agreement by either party for any reason shall not
affect the rights and obligations of the parties that accrued prior to the
effective date of termination of this Agreement or release either party from
obligations to resell or license CHR Services made prior to the date of
termination, or affect existing licenses or purchase orders for the CHR
Services. Notwithstanding any provision of this Agreement to the contrary, each
party may continue to exercise the rights and licenses granted hereunder to the
extent necessary to allow such party to fulfill its obligations under existing
engagement agreements or included in any proposal to a Customer that was
outstanding at the time of termination. PEx specifically:
(i) may continue to market and use the CHR Services for a period of not
more than ninety (90) days following the date of termination to meet any
obligations or services that PEx has undertaken with respect to customers as
of the date of termination;
(ii) shall continue to have the right to use and access the CHR Content
and CHR Features (including all documentation and related technical
information and support) to fulfill its obligations to customers for a period
of not more than ninety (90) days following the date of termination.
(c) The provisions of Sections 6.1-6.5, 4.6(a), 7, 8, 9 and 10 shall
survive any expiration or termination of this Agreement (except that Sections
6.4-6.5 and 4.6(a) may subsequently terminate in accordance with the provisions
of Section 8.3(a)-(b)). Neither party shall be entitled to damages resulting
from the termination of this Agreement in accordance with this Section 9.
Subject to the provisions of Section 6, in no event shall either party be
precluded from developing for itself, or acquiring from third party(ies),
materials and services that are competitive with the materials and services
provided by the other party upon any expiration or termination of this
Agreement.
10. General Provisions.
10.1 Issue Resolution. In the event that any dispute arises relating to
this Agreement, the Representatives shall promptly meet and attempt to resolve
same through good faith discussions. If the Representatives are unable to
resolve any dispute to their mutual satisfaction within thirty (30) days after
they commence discussions regarding same, and do not agree to extend the time
for resolution of the issue at the end of their meeting, then they may by mutual
agreement: (a) escalate the matter to higher levels in their organizations and,
(b) if necessary, resort to a mutually agreed alternative dispute resolution
technique prior to resorting to litigation. In the event that the parties resort
to alternative dispute resolution or litigation to resolve any matter, the
successful or prevailing party shall be entitled to recover its reasonable
attorneys' fees and other costs incurred in connection with such action, suit or
proceeding, in addition to any other relief to which such party may be entitled.
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10.2 Governing Law. This Agreement shall be governed and construed in
accordance with the substantive laws of the Commonwealth of Massachusetts
without regard for any choice or conflict of laws rule or principle that would
result in the application of the substantive law of any other jurisdiction.
10.4 Amendment and Waiver. No provision of or right under this Agreement
shall be deemed to have been waived by any act or acquiescence on the part of
either party, its agents or employees, but only by an instrument in writing
signed by an authorized officer of each party. No waiver by either party of any
breach of this Agreement by the other party shall be effective as to any other
breach, whether of the same or any other term or condition and whether occurring
before or after the date of such waiver.
10.5 Independent Contractors. Each party represents that it is acting on
its own behalf as an independent contractor and is not acting as an agent for or
on behalf of any third party. This Agreement and the relations hereby
established by and between CHR and PEx do not constitute a partnership, joint
venture, franchise, agency or contract of employment. Neither party is granted,
and neither party shall exercise, the right or authority to assume or create any
obligation or responsibility on behalf of or in the name of the other party or
its Affiliates.
10.6 Assignment. Neither party may assign its rights or obligations
hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld; provided that the proposed assignee under
this Section 10.6 agrees in writing to assume all of the obligations of the
assignor party under this Agreement.
10.7 Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
10.8 Notices. Unless otherwise provided herein, any notice, report,
payment or document to be given by one party to the other shall be in writing
and shall be deemed given when delivered personally or mailed by certified or
registered mail, postage prepaid (such mailed notice to be effective on the date
which is three (3) business days after the date of mailing), or sent by
nationally recognized overnight courier (such notice sent by courier to be
effective one business day after it is deposited with such courier), or sent by
telefax (such notice sent by telefax to be effective when sent, if confirmed by
certified or registered mail or overnight courier as aforesaid):
If to PEx:
PaperExchange.com, LLC
545 Boylston Street, 8th Floor
Boston, MA 02116
Attn: Chief Executive Officer
Phone: 617.536.4310
Fax: 617.536.4097
If to CHR:
C.H. Robinson Worldwide, Inc.
8100 Mitchell Road, Suite 200
Eden Prairie, MN 55344-2248
Attn: Corporate Vice President, Transportation
Phone: 612.937.8500
Fax: 612.937.7809
or to such other place as any party may designate as to itself by written notice
to the other party.
10.9 Severability. In the event any provision of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof. The parties agree that they will negotiate in good faith or
will permit a
15
<PAGE>
court or arbitrator to replace any provision hereof so held invalid, illegal or
unenforceable with a valid provision which is as similar as possible in
substance to the invalid, illegal or unenforceable provision.
10.10 Conflict or Inconsistency. In the event of any conflict or
inconsistency between the terms and conditions hereof and any terms or
conditions set forth in any purchase order or other document relating to the
transactions contemplated by this Agreement, the terms and conditions set forth
in this Agreement shall prevail.
10.11 Captions. Captions of the sections and subsections of this Agreement
are for reference purposes only and do not constitute terms or conditions of
this Agreement and shall not limit or affect the meaning or construction of the
terms and conditions hereof.
10.12 Word Meanings. Words such as herein, hereinafter, hereof and
hereunder refer to this Agreement as a whole and not merely to a section or
paragraph in which such words appear, unless the context otherwise requires. The
singular shall include the plural, and each masculine, feminine and neuter
reference shall include and refer also to the others, unless the context
otherwise requires.
10.13 Entire Agreement. The terms and provisions contained in this
Agreement (including the Attachments) constitute the entire understanding of the
parties with respect to the transactions and matters contemplated hereby and
supersede all previous communications, representations, agreements and
understandings relating to the subject matter hereof. No representations,
inducements, promises or agreements, whether oral or otherwise, between the
parties not contained in this Agreement or incorporated by reference in this
Agreement shall be of any force or effect. No agreement or understanding
extending this Agreement or varying its terms (including any inconsistent terms
in any purchase order, acknowledgment or similar form) shall be binding upon
either party unless it is in a writing specifically referring to this Agreement
and signed by the duly authorized representative of the applicable party.
10.14 Rules of Construction. The parties agree that they have participated
equally in the formation of this Agreement and that the language and terms of
this Agreement shall not be construed against either party by reason of the
extent to which such party or its professional advisors participated in the
preparation of this Agreement.
10.15 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart. A facsimile copy of this Agreement, including the signature
pages hereto, shall be deemed an original.
10.16 Force Majeure. Except as otherwise provided in this Agreement, in
the event that a delay or failure of a party to comply with any obligation,
other than a payment obligation, created by this Agreement is caused by a Force
Majeure condition, that obligation shall be suspended during the continuance of
the Force Majeure condition.
10.17 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.
Both parties represent that they have read this Agreement, understand it, and
agree to be bound by the terms and conditions stated herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers, and have duly delivered and
executed this Agreement under seal as of the date first set forth above.
16
<PAGE>
PAPEREXCHANGE.COM, LLC C.H. ROBINSON WORLDWIDE, INC.
By: /s/ Rod A. Parsley By: /s/ James Lanson
------------------ -----------------
Name: Rod A. Parsley Name: James Lanson
--------------- ---------------
Title: Vice President, Title: VP of Transportation
Business Development ---------------------
---------------------
Attachment A: Milestone Schedule
Attachment B: Final Specifications: [to be supplied]
Attachment C: CHR logo; PEx logo[to be supplied]
Attachment D: CHR Services Price List; Form of CHR Services Service Agreement
[to be supplied]
17
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*Attachment A*
<TABLE>
<CAPTION>
*Milestone Schedule*
<S> <C> <C> <C>
*****
</TABLE>
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
18
<PAGE>
Exhibit 10.4
CO-BRANDING AGREEMENT
This Co-Branding Agreement (this "Agreement") dated September 30, 1999 (the
"Effective Date") is entered into between VerticalNet, Inc., a Pennsylvania
corporation having a principal place of business at 700 Dresher Road, Suite 100,
Horsham, Pennsylvania, PA 19044 ("VerticalNet"), and PaperExchange.com, LLC, a
Delaware limited liability company having a principal place of business at 545
Boylston Street, 8th Floor, Boston, MA 02116 ("PaperExchange"). In consideration
of the mutual covenants herein, and intending to be legally bound hereby, the
parties agree as follows:
1. DEFINITIONS
1.1. Affiliate shall mean, when used with reference to a party, any
individual or entity directly or indirectly controlling, controlled by or under
common control with such party. For purposes of this definition, "control" means
the direct or indirect ownership of at least 50% of the outstanding voting
securities of a party, or the right to control the policy decisions of such
party.
1.2. Career Center Net Revenue shall have the meaning ascribed thereto in
Section 7.1.1.
1.3. Co-Branded Career Center shall mean the "Career Center" portion of
Pulp and Paper Online located at:
http://www.pulpandpaperonline.com/Content/CareerCenter/Home/JobScan_Home.asp (or
a successor Site thereto).
1.4. Co-Branded Equipment Listings shall mean the "Auctions" portion of
Pulp and Paper Online located at:
http://www2.pulpandpaperonline.com/content/auctions/home.asp (or a successor
Site thereto).
1.5. Co-Branded Sites shall mean the Co-Branded Career Center and the
Co-Branded Equipment Listings.
1.6. Co-Branded URLs shall mean the mutually agreed-upon URLs which shall
be registered jointly by VerticalNet and PaperExchange and shall route users
through to the Co-Branded Sites.
1.7. Confidential Information shall mean all proprietary and confidential
information of a party, including, without limitation, trade secrets, technical
information, business information, sales information, customer and potential
customer lists and identities, product sales plans, sublicense agreements,
inventions, developments, discoveries, software, know-how, methods, techniques,
formulae, data, processes and other trade secrets and proprietary ideas, whether
or not protectable under patent, trademark, copyright or other areas of law,
that the other party has access to or receives, but does not include information
that (a) is or becomes publicly available through no fault of receiving party;
(b) was already known to the receiving party at the time it was disclosed to the
receiving party, as evidenced by written records of the receiving party; (c) is
independently developed by employees of the receiving party who had no knowledge
of or
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
<PAGE>
access to such information, as evidenced by written records of the receiving
party; or (d) is received from a third party who is under no obligation of
confidentiality to the disclosing party.
1.8. Equipment Listings Net Revenue shall have the meaning ascribed
thereto in Section 7.1.2.
1.9. Initial Term shall mean the Effective Date through the day prior to
the fourth anniversary of the Effective Date, unless earlier terminated pursuant
to Section 8.
1.10. Intellectual Property shall mean any and all trade secrets, patents,
copyrights, trademarks, URLs, trade dress, brand features, know-how and similar
rights of any type under the laws of any applicable governmental authority,
including, without limitation, all applications and registrations relating to
any of the foregoing.
1.11. Intellectual Property Rights shall mean all rights in and to
Intellectual Property.
1.12. Link shall mean a link (including, but not limited to, a hyperlink,
button or banner) that connects two Sites in a manner so that when a user clicks
on the link, the user is transferred directly from one Site to a second Site. A
"Link from Site A to Site B" indicates that Site A is the Site of origin and
Site B is the Site to which the user is linked.
1.13. Net Advertising Revenue shall mean the gross amount billed to an
advertiser for the sale of advertising on the Third Party Advertising Allocation
on the PaperExchange Site, less (a) credits for claims, allowances, retroactive
price reductions or returned goods, and (b) sales, excise, use, value-added and
other similar taxes (excluding income taxes) actually paid, if applicable.
1.14. Packaging Online shall mean the Site located at
www.packagingonline.com (or a successor Site thereto).
1.15. PaperExchange Career Content shall have the meaning ascribed thereto
in Section 2.2.
1.16. PaperExchange Competitor shall mean any exchange, auction or reverse
auction for the sale, purchase and/or exchange of pulp, paper and paper
packaging.
1.17. PaperExchange Equipment Content shall have the meaning ascribed
thereto in Section 2.2.
1.18. PaperExchange Deliverable shall mean any good, service or other item
to be delivered or made available by PaperExchange.
1.19. PaperExchange Home Page shall mean the home page located at the
PaperExchange Site.
1.20. PaperExchange Link shall mean a Link that contains a PaperExchange
Mark and will take users of other Sites to the PaperExchange Home Page.
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<PAGE>
1.21. PaperExchange Mark shall mean any trademark, service mark, trade
name, domain name, design or logo of PaperExchange.
1.22. PaperExchange Revenue shall mean the gross revenue received by
PaperExchange from Transaction Fees less (a) credits for claims, allowances,
retroactive price reductions or returned goods, and (b) sales, excise, use,
value-added and other similar taxes (excluding income taxes) actually paid.
1.23. PaperExchange Site shall mean the Site located at
www.PaperExchange.com (or a successor Site thereto).
1.24. Pulp and Paper Online shall mean the Site located at
www.pulpandpaperonline.com (or a successor Site thereto).
1.25. Pulp and Paper Online Competitor shall mean any online vertical
community portal for professionals in the pulp and paper industry (other than
Pulp and Paper Online and PaperExchange).
1.26. Renewal Term shall have the meaning ascribed thereto in Section 8.1.
1.27. Site shall mean an Internet World Wide Web site.
1.28. Storefront shall mean a Site contained in (and linked to) a
VerticalNet Site that, among other things, provides information regarding an
advertiser and the advertiser's products and/or services, links a visitor to the
advertiser's website, and/or generates sales leads for the advertiser from
interested visitors, but does not include direct e-commerce fulfillment, such as
catalog sales.
1.29. Term shall mean the Initial Term and any Renewal Terms.
1.30. Third Party Advertising Allocation shall have the meaning ascribed
thereto in Section 4.1.
1.31. Transaction Fees shall mean the fees received by PaperExchange from
third parties in consideration for facilitating the purchase and/or sale of pulp
and/or paper through the PaperExchange Site.
1.32. VerticalNet Archived Content shall have the meaning ascribed thereto
in Section 3.2.
1.33. VerticalNet Content shall have the meaning ascribed thereto in
Section 3.1.
1.34. VerticalNet Deliverable shall mean any good, service or other item
to be delivered or made available by VerticalNet.
1.35. VerticalNet Link shall mean a Link that contains a VerticalNet Mark
and will take users of other Sites to a page of Pulp and Paper Online.
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<PAGE>
1.36. VerticalNet Mark shall mean any trademark, service mark, trade name,
domain name, design or logo of VerticalNet.
2. CO-BRANDED CAREER CENTER AND CO-BRANDED EQUIPMENT LISTINGS
2.1. No later than seven days after the Effective Date, VerticalNet shall,
at VerticalNet's sole cost and expense, design, develop and implement the
Co-Branded Sites with the overall "look and feel" agreed upon by VerticalNet and
PaperExchange, as shown in Exhibit A. After the Co-Branded Sites are
implemented, VerticalNet shall notify PaperExchange in writing at least five
days prior to making any material change to a Co-Branded Site, including,
without limitation, a change in the location, sizing or placement of the
PaperExchange Links. If PaperExchange does not notify VerticalNet of its
rejection of such change within five days, PaperExchange shall be deemed to have
approved such change. VerticalNet shall design, host and maintain the Co-Branded
Sites at its sole cost and expense. Within 30 days after the Effective Date,
VerticalNet and PaperExchange shall agree upon the Co-Branded URLs. The parties
shall register the Co-Branded URLs reasonably promptly after the parties have
agreed upon them.
2.2. From time to time, PaperExchange shall provide to VerticalNet, at
PaperExchange's sole cost and expense, relevant content provided to it by third
parties consisting of (a) job listings for inclusion, at VerticalNet's
reasonable business discretion and at VerticalNet's then current listing rate,
in the Co-Branded Career Center or on any other VerticalNet Site except a Site
co-branded with a PaperExchange Competitor (the "PaperExchange Career Content")
and (b) equipment listings for inclusion, at VerticalNet's reasonable business
discretion and at VerticalNet's then current listing rate, in the Co-Branded
Equipment Listings or on any other VerticalNet Site except a Site co-branded
with a PaperExchange Competitor (the "PaperExchange Equipment Content", and
together with the PaperExchange Career Content, the "PaperExchange Content").
PaperExchange shall not provide such PaperExchange Content to VerticalNet until
the third party placing the listing has agreed to VerticalNet's then current
terms and conditions, subject to final approval by VerticalNet. PaperExchange
shall provide the PaperExchange Content in the form of the templates attached
hereto as Exhibits B and C. Any listings placed on the Co-Branded Sites (or
other VerticalNet Site as permitted in this Section 2.2) by a user that entered
the Co-Branded Site or permitted VerticalNet Site, as applicable, from a
PaperExchange Site or from a Link to Pulp and Paper Online jointly placed by
VerticalNet and PaperExchange, or placed solely by PaperExchange, on a third
party's Site shall be treated as "PaperExchange Content" for all purposes of
this Agreement. VerticalNet shall be responsible for, and shall have sole
control of, all credit, billing and collection in connection with the
PaperExchange Content. PaperExchange shall have no authority to make collections
on behalf of VerticalNet.
2.3. PaperExchange hereby grants VerticalNet an exclusive license to use,
modify, enhance, reproduce, display, perform and transmit the PaperExchange
Content, subject to and in accordance with the terms, conditions and provisions
of this Agreement. VerticalNet shall not disclose, transfer or otherwise provide
the PaperExchange Content to any third party, including, but not limited to, any
PaperExchange Competitor, except as otherwise permitted under this Agreement.
4
<PAGE>
2.4. PaperExchange shall, at PaperExchange's sole cost and expense, place
Links on the PaperExchange Home Page labeled "Career Center" and "Equipment
Listings" (or mutually agreeable substitutes for such terms) in a mutually
agreeable location and size that will directly transfer users to the Co-Branded
Sites.
2.5. VerticalNet, in its reasonable business discretion, shall market the
Co-Branded Sites on Pulp and Paper Online, at pulp and paper industry trade
shows, in its print advertisement campaigns and through its sales force. Such
marketing activities shall be at VerticalNet's sole cost and expense.
2.6. PaperExchange, in its reasonable business discretion, shall market
the Co-Branded Sites on the PaperExchange Home Page, at pulp and paper industry
trade shows, in its print advertisement campaigns and through its sales force.
Such marketing activities shall be at PaperExchange's sole cost and expense.
2.7. VerticalNet will provide, install, repair, maintain and pay for the
communications, computer and peripheral equipment, services and facilities
supporting the Co-Branded Sites. VerticalNet shall maintain the Co-Branded Sites
in a high quality and professional manner consistent with its maintenance of
other VerticalNet Sites. VerticalNet and PaperExchange shall be responsible for
the sale of all advertising on the Co-Branded Sites; provided, however, that
neither party shall sell advertising on the Co-Branded Sites to a competitor (as
defined in 1.16 and 1.25) and provided that each party shall submit any proposed
advertising for the Co-Branded Sites to the other party for its prior written
approval, such approval not to be unreasonably withheld, delayed or conditioned.
2.8. VerticalNet shall be solely responsible for the development,
operation and maintenance of Pulp and Paper Online and for all materials that
appear on Pulp and Paper Online, except for the PaperExchange Content.
2.9. PaperExchange shall be solely responsible for the development,
operation and maintenance of the PaperExchange Site and for all materials that
appear on the PaperExchange Site, except for the VerticalNet Content and the
VerticalNet Archived Content.
3. VERTICALNET CONTENT
3.1. VerticalNet shall provide or make available to PaperExchange, for use
in accordance with the provisions of this Agreement, (a) the full text of all
original content (headlines, feature articles, columns and case studies) created
from time to time by the Managing Editor of Pulp and Paper Online, and (b) the
content created from time to time by guest columnists for Pulp and Paper Online,
to the extent such columnists have approved the provision of such content by
VerticalNet to PaperExchange. VerticalNet shall provide such content (the
"VerticalNet Content") to PaperExchange twice per week, in two "batches" of the
VerticalNet Content created or acquired since the last provision of VerticalNet
Content by VerticalNet to PaperExchange.
3.2. VerticalNet hereby grants to PaperExchange a non-exclusive,
non-transferable license to use, reproduce, display and transmit the VerticalNet
Content, solely in connection with the development, maintenance and operation of
the PaperExchange Site, subject to and in accordance with the terms, conditions
and provisions of this Agreement. PaperExchange may
5
<PAGE>
reproduce, display and transmit any VerticalNet Content for up to three weeks on
the PaperExchange Site, and after the expiration of such three week period
PaperExchange shall cease to reproduce, display and transmit such VerticalNet
Content and remove such VerticalNet Content from the PaperExchange Site.
3.3. PaperExchange shall place a VerticalNet Link in a mutually agreeable
location and size on each page of the PaperExchange Site that contains all or a
portion of the VerticalNet Content.
3.4. PaperExchange shall list on a mutually acceptable page of the
PaperExchange Site headlines and abstracts of the VerticalNet Content then
reproduced, displayed and transmitted on the PaperExchange Site. PaperExchange
shall place two VerticalNet Links in mutually agreeable locations and sizes on
such page of the PaperExchange Site, the first of which will take users to the
Buyer's Guide on Pulp and Paper Online, and the second of which will take users
to the Professional e-Bookstore on Pulp and Paper Online. VerticalNet and
PaperExchange shall mutually agree upon the method of implementing such links.
3.5. PaperExchange shall not remove any titles or any trademark, copyright
or patent notices, or any proprietary or restricted rights notices that appear
on the VerticalNet Content and/or the VerticalNet Archived Content. All such
titles and notices must be reproduced on all permitted copies of the VerticalNet
Content and/or the VerticalNet Archived Content.
3.6. During the Term, VerticalNet will not disclose, transfer or otherwise
provide the VerticalNet Content and/or the VerticalNet Archived Content to any
PaperExchange Competitor.
4. ADVERTISING
4.1. Advertisements on the PaperExchange Site.
4.1.1. During the Term, VerticalNet shall have the exclusive
right to arrange for the sale of ***** of the third party advertising
inventory (which shall consist of a minimum of one advertisement per page on
each of the "Co-Branded Equipment," "Co-Branded Careers," "Resources" and
"Home Page" sections or successor, replacement or substitute sections) of the
PaperExchange Site and shall be consistent with the amount of advertising on
other business to business vertical sites on the PaperExchange Site (the
"Third Party Advertising Allocation"). PaperExchange shall retain the right
to place advertisements for its own account on the remaining ***** of the
Third Party Advertising Allocation; provided, however, that if any portion of
such Third Party Advertising Allocation remains unsold 45 days after it
becomes available for advertising, VerticalNet shall have the exclusive right
to arrange for third party advertising on such unsold Third Party Advertising
Allocation.
4.1.2. VerticalNet will use reasonable efforts to sell
advertisements on the PaperExchange Site. The advertising policies (including
rates and procedures) applicable to VerticalNet's sale of advertising for the
PaperExchange Site will be mutually agreed upon by VerticalNet and PaperExchange
(the "PaperExchange Advertising Policies"). Any changes to the agreed upon
PaperExchange Advertising Policies shall be mutually agreed upon by the parties.
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
6
<PAGE>
4.1.3. VerticalNet shall provide notice to the Director of Online
Marketing of PaperExchange of each advertiser that agrees to place an
advertisement on a PaperExchange Site on the terms and conditions contained in
the then current PaperExchange Advertising Policies. PaperExchange shall then
have three business days after receipt of such notice to (a) accept or reject
such advertiser, in its reasonable business discretion, and (b) notify
VerticalNet of its decision. If, at the end of such three-day period,
PaperExchange has not responded to such notice, PaperExchange shall be deemed to
have accepted such advertiser. PaperExchange shall then work with the advertiser
to facilitate the Placement of the advertisement and maintain such advertisement
on the agreed-upon page of the PaperExchange Site. PaperExchange shall have the
right to terminate its agreement with any such advertiser in its reasonable
business discretion. To the extent an advertisement of equivalent size and
location appears on both Pulp and Paper Online and the PaperExchange Site, the
parties shall mutually agree upon the CPM, CPC or other use-based advertising
rates, which rate shall be identical for such advertisements. PaperExchange
shall be responsible for, and shall have sole control of, all credit, billing
and collection with the advertisements on the PaperExchange Site. VerticalNet
shall have no authority to make collections on behalf of PaperExchange.
4.2. Sales Leads. PaperExchange will, in its sole discretion, request that
its Board of Directors and veteran industry sales force use reasonable efforts
to provide pulp and paper industry specific sales strategies and specific sales
leads to VerticalNet. Such strategies and leads shall include segments of the
industry that are currently lacking effective advertising solutions, and how
such industry participants could be marketed to by VerticalNet for the purposes
of this Section 4. VerticalNet may only use the information provided to them
pursuant to this Section 4.2 in connection with its performance under this
Section 4.
4.3. Non-Competition.
4.3.1. During the Term, VerticalNet shall not (a) act as an
advertising agent or representative for any PaperExchange Competitor and (b)
place any advertisements on Pulp and Paper Online from any PaperExchange
Competitor.
4.3.2. During the Term, PaperExchange shall not place any
advertisements on the PaperExchange Site from any Pulp and Paper Online
Competitor.
5. CO-MARKETING ACTIVITIES
5.1. Trade Shows and Conventions.
5.1.1. During the Term, PaperExchange shall use commercially
reasonable efforts to expand its presence at major national and international
pulp and paper industry trade shows and conventions, including booth
exhibitions, attendance by industry veteran sales force from all the major paper
grades and industry panel sponsorships, when available. PaperExchange, in its
reasonable business discretion, shall actively engage in co-branded activities
with VerticalNet at PaperExchange's booth exhibitions and shall maintain an open
invitation policy for VerticalNet to send its own sales force to co-locate,
subject to Section 5.1.3, with PaperExchange at its trade show booths.
5.1.2. VerticalNet, in its reasonable business discretion, shall
offer PaperExchange
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<PAGE>
exhibit booth space at pulp and paper industry trade shows that VerticalNet is
unable to use on the same terms that VerticalNet accepted for such space.
5.1.3. When VerticalNet and PaperExchange are both attending pulp
and paper industry trade shows, VerticalNet and PaperExchange shall work
together to share costs of such trade shows and related material.
5.2. Sales Force Visits. PaperExchange shall use commercially reasonable
efforts to (a) expand its sales force presence on a national and international
basis, in all major paper grades and (b) commit its sales force to promote Pulp
and Paper Online through "on-the-ground" activities including site visits to
mills, converters, printers and brokers.
5.3. Advertising Campaigns.
5.3.1. PaperExchange shall, in its reasonable business discretion,
promote the PaperExchange Site through print medium.
5.3.2. VerticalNet shall, in its reasonable business discretion,
promote Pulp and Paper Online through print medium.
5.3.3. VerticalNet and PaperExchange shall co-promote the
PaperExchange Home Page and Pulp and Paper Online in mutually agreeable
advertising and collateral marketing material. All co-promotion advertising
materials produced by or on behalf of either party (the "Originating Party")
shall be subject to the written approval of the other party (the "Receiving
Party"), which approval shall not to be unreasonably withheld, delayed or
conditioned. The Receiving Party shall notify the Originating Party of its
approval or disapproval of such advertising materials as soon as practicable,
but in any event within five business days after Receiving Party's receipt
thereof. Any failure of the Receiving Party to respond within such five business
day period shall be deemed disapproval of the advertising materials in question.
5.4. Pulp and Paper Online Promotion. PaperExchange shall place the
VerticalNet Links in a mutually agreeable location and size on the PaperExchange
Site as soon as practicable and in no event more than 15 days after the
Effective Date. The VerticalNet Links shall remain on the PaperExchange Site
during the Term.
5.5. PaperExchange Home Page Promotion. VerticalNet shall place the
PaperExchange Links on Pulp and Paper Online in a mutually agreeable location
and size as soon as practicable and in no event more than 15 days after the
Effective Date. The PaperExchange Links shall remain on Pulp and Paper Online
during the Term.
5.6. Newsletter. VerticalNet shall include a PaperExchange Link in a
mutually agreeable location and size in the Pulp and Paper Online weekly online
newsletter sent to VerticalNet's newsletter database.
5.7. Discussion Groups. VerticalNet, in its reasonable business
discretion, shall provide to PaperExchange co-sponsorship opportunities for
discussion groups and USENET forums.
5.8. Non-Competition.
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5.8.1. During the Term and for a period of four years after the
termination of this Agreement, VerticalNet shall not, directly or indirectly, by
itself, through its Affiliates or through any type of joint venture or similar
affiliation with a third party, without prior written approval from
PaperExchange, buy, sell or trade (a) paper pulp products through exchanges,
auctions, or reverse auctions or any other e-commerce medium, (b) paper (other
than finished paper-based products, including, but not limited to, books, stamps
and labels) and copy paper (i) through exchanges, auctions or reverse auctions
or (ii) in quantities greater than one ton through any e-commerce medium, (c)
raw materials used to make paper packaging, including, but not limited to,
linerboard, medium, other containerboard grades and corrugated sheet through
exchanges, auctions, reverse auctions or any other e-commerce medium, or (d)
paper rolls and reels weighing more than 50 pounds used by printers through
exchanges, auctions, reverse auctions or any other e-commerce medium; provided,
however, that this Section 5.8.1 shall not apply to advertisements, Storefronts
or similar features on VerticalNet's Sites.
5.8.2. During the Term, VerticalNet will not, directly or
indirectly, design, host, operate, maintain or otherwise participate in a
co-branded career center or a co-branded equipment listing Site with a
PaperExchange Competitor or license a VerticalNet Link for use or display on any
PaperExchange Competitor's Site.
5.8.3. During the Term, PaperExchange will not, directly or
indirectly, design, host, operate, maintain or otherwise participate in a
co-branded career center or a co-branded equipment listing Site with a Pulp and
Paper Online Competitor or license a PaperExchange Link for use or display on
any Pulp and Paper Online Competitor's Site.
5.9. Exchange.
5.9.1. PaperExchange shall provide to VerticalNet an ID and a
password that will allow VerticalNet to access the "Exchange" portion of the
PaperExchange Site. PaperExchange shall provide reasonable training to
VerticalNet with respect to the creation, operation and marketing of such an
exchange.
5.9.2. PaperExchange will place a VerticalNet Link in a mutually
agreeable location and size on the "Exchange" portion of the PaperExchange Site.
5.10. Allocation of Resources. During the Term, each of PaperExchange and
VerticalNet agrees to dedicate reasonable financial, marketing and staffing
resources in order to actively promote the activities contemplated by this
Agreement and will use reasonable efforts to maintain the strategic alliance
described in this Agreement (and its focus on the pulp, paper and packaging
industry generally) as a high priority.
6. INTELLECTUAL PROPERTY
6.1. Except as set forth in Sections 4.3.1 and 5.8, nothing in this
Agreement shall be construed as preventing VerticalNet from implementing
VerticalNet Links on any other Site.
6.2. Except as set forth in Sections 4.3 or 5.8.3, nothing in this
Agreement shall be construed as preventing PaperExchange from implementing
PaperExchange Links on any other Site.
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6.3. VerticalNet hereby grants to PaperExchange a non-exclusive,
non-transferable, royalty-free, right and license to link to Pulp and Paper
Online through a VerticalNet Link. VerticalNet shall furnish PaperExchange with
a full color representation of each VerticalNet Link at least two days prior to
its scheduled placement on a page of the PaperExchange Site. If VerticalNet
subsequently modifies any VerticalNet Link or the URL associated with such
VerticalNet Link, it shall furnish a representation of same to PaperExchange,
which PaperExchange shall substitute for the prior version within two days after
receipt thereof. VerticalNet shall have final approval over all VerticalNet
Links on the PaperExchange Site.
6.4. PaperExchange hereby grants VerticalNet a non-exclusive,
non-transferable, royalty-free, right and license to link to the PaperExchange
Site through a PaperExchange Link. PaperExchange shall furnish VerticalNet with
a full color representation of each PaperExchange Link at least two days prior
to its scheduled placement on Pulp and Paper Online. If PaperExchange
subsequently modifies any PaperExchange Link or the URL associated with such
PaperExchange Link, it shall furnish a representation of same to VerticalNet,
which VerticalNet shall substitute for the prior version within two days after
receipt thereof. PaperExchange shall have final approval over all PaperExchange
Links on Pulp and Paper Online.
6.5. Except for the express rights granted to PaperExchange under this
Agreement, PaperExchange acknowledges and agrees that the Intellectual Property
of VerticalNet is and shall remain the sole property of VerticalNet and nothing
in this Agreement shall confer in PaperExchange any right of ownership or
license rights in VerticalNet's Intellectual Property. In addition,
PaperExchange shall not now or in the future contest the validity of
VerticalNet's Intellectual Property.
6.6. Except for the express rights granted to VerticalNet under this
Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of
PaperExchange is and shall remain the sole property of PaperExchange and nothing
in this Agreement shall confer in VerticalNet any right of ownership or license
rights in PaperExchange's Intellectual Property. In addition, VerticalNet shall
not now or in the future contest the validity of PaperExchange's Intellectual
Property.
6.7. PaperExchange agrees to use the VerticalNet Marks in accordance with
the terms of this Agreement and with good trademark practices including, but not
limited to, protecting the value of the goodwill residing in such Intellectual
Property.
6.8. VerticalNet agrees to use the PaperExchange Marks in accordance with
the terms of this Agreement and with good trademark practices including, but not
limited to, protecting the value of the goodwill residing in such Intellectual
Property.
6.9. Except as set forth in Sections 4.3 and 5.8, nothing in this
Agreement shall be construed as preventing either party from developing other
co-branded versions of its materials, data, information and content.
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7. COMMERCIAL TERMS
7.1. Co-Branded Sites.
7.1.1. Co-Branded Career Center. VerticalNet will pay PaperExchange
***** of the Career Center Net Revenue. ."Career Center Net Revenue" shall mean
the (a) listing fees related to the Co-Branded Career Center and any other
VerticalNet Site on which the listings are posted, (b) Co-Branded Career Center
e-commerce revenue and (c) other Co-Branded Career Center revenue, in each case
under the preceding clauses (a), (b) and (c), to the extent derived during the
Term from PaperExchange or the PaperExchange Content provided to VerticalNet by
PaperExchange pursuant to this Agreement, or as otherwise mutually agreed upon
by the parties, less (i) credits for claims, allowances, retroactive price
reductions or returned goods, and (ii) sales, excise, use, value-added and other
similar taxes (excluding income taxes) actually paid.
7.1.2. Co-Branded Equipment Listings. VerticalNet will pay
PaperExchange ***** of the Equipment Listings Net Revenue. "Equipment Listings
Net Revenue" shall mean the (a) listing fees related to Co-Branded Equipment
Listings and any other VerticalNet Site on which the listings are posted, (b)
Co-Branded Equipment Listings e-commerce revenue and (c) other Co-Branded
Equipment Listings revenue, in each case under the preceding clauses (a), (b)
and (c), to the extent derived during the Term from PaperExchange or the
PaperExchange Content provided to VerticalNet by PaperExchange pursuant to this
Agreement, or as otherwise mutually agreed upon by the parties, less (i) credits
for claims, allowances, retroactive price reductions or returned goods, and (ii)
sales, excise, use, value-added and other similar taxes (excluding income taxes)
actually paid.
7.1.3. Review of Payments. VerticalNet and PaperExchange will
conduct a good faith review of the payments generated under Sections 7.1.1 and
7.1.2 no later than six months after the Effective Date and may mutually agree,
subject to Section 13.6, to amend Sections 7.1.1 and/or 7.1.2 at that time. If
VerticalNet and PaperExchange are unable to reasonably agree on whether or how
to amend Section 7.1.2, either party shall have the right to immediately
terminate the rights and obligations of the parties under Sections 2 and 7.1.2
with respect to the Co-Branded Equipment Listings and PaperExchange Equipment
Content; provided, however, that all other rights and obligations under this
Agreement (including the rights and obligations of the parties under Sections
4.3 and 5.8) shall continue in full force and effect unless and until terminated
in accordance with Section 8. The parties understand and agree that termination
of the rights and obligations of the parties under Sections 2 and 7.1.2 in
accordance with this Section 7.1.3 shall not permit either party to terminate
this Agreement pursuant to Section 8.2.
7.1.4. Professional e-Bookstore Sales. VerticalNet will pay
PaperExchange ***** of the gross sales of the Professional e-Bookstore on Pulp
and Paper Online that originated from the PaperExchange Site.
7.2. Advertising Revenue.
7.2.1. During the Term, VerticalNet shall not share any revenue
derived from advertisements hosted on Pulp and Paper Online or any other
VerticalNet Site with PaperExchange; provided, however, that if PaperExchange
brings VerticalNet a Qualified Lead
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission
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(as defined below) for a new customer that turns into a sale of advertising
on Pulp and Paper. Online or Packaging Online, including, without limitation,
the Co-Branded Sites, VerticalNet shall pay to PaperExchange a commission of
***** of the Net Advertising Revenue resulting from such sale of advertising,
with the exception that if such advertising is on the Co-branded Career
Center, VerticalNet shall pay PaperExchange a commission of ***** of the Net
Advertising Revenue resulting from such sale of advertising. As used in this
Section 7.2.1, a "Qualified Lead" shall mean a customer referred to
VerticalNet by PaperExchange that is not, at the time of referral, a customer
of VerticalNet, and which customer has agreed to place an advertisement on
Pulp and Paper Online or Packaging Online on the terms and conditions
contained in VerticalNet's then current advertising policies.
7.2.2. PaperExchange shall pay to VerticalNet a commission of
***** of the Net Advertising Revenue received during the Term for
advertisements located on the Third Party Advertising Allocation of the
PaperExchange Site.
7.2.3. If PaperExchange sells advertising to a third party on the
PaperExchange Site independently from VerticalNet, PaperExchange shall pay to
VerticalNet a commission of ***** of the Net Advertising Revenue resulting
from such advertising during the Term; provided, however, that if
PaperExchange previously rejected advertising by such party when proposed by
VerticalNet pursuant to Section 4.1, or terminated without cause a prior
agreement with such third party that had resulted from such a proposal by
VerticalNet, then PaperExchange shall pay ***** of the Net Advertising Revenue
resulting from such advertising during the Term to VerticalNet. PaperExchange
shall provide prompt notice to VerticalNet of each advertiser that has agreed
with PaperExchange to place an advertisement on a page of the PaperExchange
Site.
7.3. Fees. In consideration of VerticalNet's agreement to enter into an
exclusivity and non-competition agreement herein, in conjunction with the other
obligations under this Agreement, PaperExchange shall make the following
payments to VerticalNet upon the earlier of (a) December 31, 1999 and (b) the
receipt by PaperExchange of an aggregate of ***** in additional funding:
7.3.1. a ***** one-time, non-refundable fee in consideration of
the execution of this Agreement;
7.3.2. a ***** one-time, non-refundable fee in consideration of
the design, development and implementation of the Co-Branded Career Center as
described in Section 2; and
7.3.3. ***** in consideration of the design, development and
implementation of the Co-Branded Equipment Listings Site as described in Section
2.
7.4. Revenue Sharing. After PaperExchange has generated PaperExchange
Revenue equal to *****, PaperExchange shall pay an amount equal to ***** of
the PaperExchange Revenue to VerticalNet; provided, however, that if, in any
given calendar year, VerticalNet receives ***** pursuant to this Section 7.4,
the percentage of PaperExchange Revenue that PaperExchange shall pay to
VerticalNet for the remainder of such calendar year shall be reduced to
*****; and provided further, however, that if, in any given calendar year,
VerticalNet receives
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
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***** in the aggregate pursuant to this Section 7.4, the percentage of
PaperExchange Revenue that PaperExchange shall pay to VerticalNet for the
remainder of such calendar year shall be reduced to *****.
7.5. Payment Terms. Each party shall provide the other party with all
amounts due under this Agreement for the prior calendar quarter within 30 days
after the end of each calendar quarter during the Term. Each payment shall be
accompanied by a statement detailing the amount of applicable gross revenue
received, the calculation of the amount due to the other party and the amount of
the payment accompanying such statement. All payments due to either party
hereunder shall be made in immediately available U.S. funds, without set-off or
counterclaim, free and clear of (and without deduction for or grossed up for, as
applicable), any taxes, duties, charges, withholdings, restrictions or
conditions of any nature imposed or levied by any governmental taxing or other
authority.
7.6. Taxes. All payments required under this Agreement are exclusive of
federal, state, local and foreign taxes, duties, tariffs, levies and similar
assessments. When applicable, such taxes shall appear as separate items on a
party's invoice or statement of the other party. Payment of such taxes or
charges shall be the responsibility of the party whose obligation it is under
this Agreement to make the payment in respect of which such taxes are assessed,
excluding any taxes based upon the other party's net income. In lieu thereof, a
party shall provide the other party with a tax or levy exemption certificate
acceptable to the taxing or levying authority.
7.7. Audits. During the 18-month period following the payment by one party
of any amount due under this Agreement to the other party, the party receiving
payment (the "Auditing Party") shall have the right to have an independent third
party (the "Auditor") audit the financial records of the other party (the
"Audited Party") relating to such payment to verify the accuracy of the Audited
Party's financial records in order to verify the amount of the payments owed
and/or paid. The Auditing Party may cause the Auditor to perform such an audit
not more than once in any 12-month period, unless a prior audit within the past
two years revealed that the amount owed by the Audited Party to the Auditing
Party was underpaid in excess of 5% of the amount owed, in which case an audit
may be performed no more frequently than once in any three month period. If the
amount owed by the Audited Party to the Auditing Party was underpaid, the
Audited Party shall pay the additional amount owed and all accrued interest
thereon to the Auditing Party within 15 days of notice of such underpayment to
the Audited Party. If the amount owed by' the Audited Party to the Auditing
Party was underpaid in excess of 10% of the amount owed, the fees of such audit
shall also be paid to the Auditing Party within 15 days of notice of such to the
Audited Party. If the amount owed by the Audited Party to the Auditing Party was
overpaid, the Auditing Party shall return the excess amount paid to the Auditing
Party within 15 days of notice of such underpayment to the Auditing Party. The
Auditing Party shall give reasonable advance written notice to the Audited
Party, and each audit shall be conducted during normal business hours and in a
manner that does not cause unreasonable disruption to the conduct of business by
the Audited Party.
7.8. Interest. All payments not paid by the date such payments are due
shall bear interest from the due date to the date payments are actually paid at
the rate of the lower of (a) 1% per month or (b) the maximum rate permitted by
law.
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
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8. TERM AND TERMINATION
8.1. Automatic Renewal. This Agreement will automatically renew at the end
of the Initial Term or a subsequent renewal term on a year to year basis (each,
a "Renewal Term"), unless either party notifies the other at least 30 days prior
to the end of the Initial Term or then current Renewal Term, as applicable, of
its intention not to renew this Agreement.
8.2. Termination for Cause. Either party may terminate this Agreement
immediately upon written notice to the other party in the event any material
breach of a material term of this Agreement by such other party that remains
uncured 30 days in the case of a breach of a payment obligation, or 45 days for
all other breaches, after notice of such breach was received by such other
party; provided, however that if such breach is not reasonably capable of cure
within the applicable cure period, the breaching party shall have an additional
180 days to cure such breach so long as the cure is commenced within the
applicable cure period and thereafter is diligently prosecuted to completion as
soon as possible.
8.3. Upon Termination. Upon termination of this Agreement, (a) each
party's liability for any charges, payments or expenses due to the other party
that accrued prior to the date of termination shall not be extinguished by
termination, and such amounts (if not otherwise due on an earlier date) shall be
immediately due and payable on the termination date; (b) VerticalNet shall be
responsible for all charges, payments or expenses incurred by it in connection
with the removal of the PaperExchange Links from Co-Branded Sites and the
modification of the Co-Branded Sites, including, but not limited to, the removal
of PaperExchange Content; (c) PaperExchange shall be responsible for all
charges, payments or expenses incurred by it in connection with the removal of
the VerticalNet Links, VerticalNet Content and VerticalNet Archived Content from
the PaperExchange Site; (d) all rights of PaperExchange to use, display,
reproduce or publish the VerticalNet Marks shall immediately cease. (e) all
rights of PaperExchange to use, reproduce, display and transmit the VerticalNet
Content and VerticalNet Archived Content shall immediately cease and
PaperExchange shall destroy all copies of such content, (f) all rights of
VerticalNet to use, display, reproduce or publish the PaperExchange Marks shall
immediately cease, (g) all rights of VerticalNet to use, create derivative works
of, reproduce, display, perform and transmit the PaperExchange Content shall
immediately cease and VerticalNet shall, at PaperExchange's cost, return one
copy of the PaperExchange Content displayed on the Co-Branded Sites to
PaperExchange in electronic format and destroy all other copies of such content,
(h) all rights of VerticalNet to arrange for the sale of advertising on the
Third Party Advertising Allocation on the PaperExchange Site shall immediately
cease, (i) VerticalNet shall retain ownership of the URLs at which the
Co-Branded Sites are located, (I) the Co-Branded URLs shall be owned by the
party that offers to pay the highest amount to the other for the ownership of
such URLs upon payment of such amount to the other party (k) if the agreement is
terminated during the Initial Term by VerticalNet pursuant to Section 8.2, (x)
VerticalNet shall be released from its obligations under Section 5.8.1 and (y)
PaperExchange's obligations under Sections 7.2 and 7.4 shall be extended for one
year after the date of such termination, and (I) if the agreement is terminated
during the Initial Term by PaperExchange pursuant to Section 8.2, VerticalNet
shall pay to PaperExchange, as liquidated damages, an amount equal to the
product determined by multiplying (1) a fraction, the numerator of which shall
be the number of days between the effective date of termination and the
scheduled expiration date of the Initial Term, and the denominator of which
shall be the number of days
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between the Effective Date and the scheduled expiration date of the Initial
Term, by (2) *****
9. DISPUTE RESOLUTION
9.1. Negotiation and Escalation. If any controversy or claim arises
relating to this Agreement, the parties will attempt in good faith to negotiate
a solution to their differences, including progressively escalating any
controversy or claim through senior levels of management. If negotiation does
not result in a resolution within 30 days of when one party first notifies the
other of the controversy or claim, either party may resort to arbitration under
Section 9.2.
9.2. Arbitration. Any controversy or claim between the parties concerning
any breach or alleged breach of this Agreement or performance or nonperformance
of any obligation under this Agreement which cannot be resolved by negotiation
will be resolved by binding arbitration under this Section 9.2 and the
then-current Commercial Rules and supervision of the American Arbitration
Association (the "AAA"). If any part of this Section 9.2 is held to be
unenforceable, it will be severed and will not affect either the duty to
arbitrate or any other part of this Section 9.2. The arbitration will be held in
New York, New York, before a sole disinterested arbitrator who is knowledgeable
in business information and the Internet and experienced in handling commercial
disputes. The arbitrator shall be appointed jointly by the parties hereto within
30 days following the date on which the arbitration is instituted. If the
parties are unable to agree upon the arbitrator within such 30-day period, the
AAA shall be instructed to select such arbitrator within 15 days thereafter. The
arbitrator's award will be final and binding and may be entered in any court
having jurisdiction. The arbitrator will not have the power to award punitive or
exemplary damages, or any damages excluded by, or in excess of, any damage
limitations expressed in this Agreement. Issues of arbitrability will be
determined in accordance solely with the federal substantive and procedural laws
relating to arbitration; in all other respects, the arbitrator will be obligated
to apply and follow the substantive law of the Commonwealth of Pennsylvania.
9.3. Equitable Relief. Notwithstanding anything to the contrary in this
Agreement, in the event of an alleged violation of Article 10 of this Agreement
by either party, the party alleging such a violation may seek temporary
injunctive or other appropriate equitable relief from any court of competent
jurisdiction pending appointment of an arbitrator. The party requesting such
relief shall simultaneously file a demand for arbitration of the dispute, and
shall request that the American Arbitration Association proceed under its rules
for an expedited hearing.
9.4. Costs. Unless the arbitrator, if any, determines otherwise, each
party will bear its own attorneys' fees and other costs associated with the
negotiation and arbitration provided for by this Article 9, except that costs
and expenses of the arbitrators shall be shared equally. If court proceedings to
stay litigation or compel arbitration are necessary, the party who
unsuccessfully opposes such proceedings will pay all associated costs, expenses
and attorneys' fees that are reasonably incurred by the other party.
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
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9.5. Two Year Limitation. Except for claims under Sections 12.4 and 12.5
hereof, neither party may bring a claim or action regardless of form, arising
out of or related to this Agreement, including any claim of fraud or
misrepresentation, more than two years after the cause of action accrues or
becomes known, whichever is later.
9.6. Confidentiality. In order to facilitate the resolution of
controversies or claims between the parties with respect to each party hereto,
such controversies or claims, including details regarding negotiations,
arbitration and settlement terms, shall be treated as Confidential Information
of the other party hereto in accordance with Article 10.
9.7. Remedial Measures. In the event of (a) any material remediable breach
of this Agreement by the other party which remains uncured 30 days after notice
of such breach (other than a breach of a payment obligation) was received by the
other party or (b) any material breach which cannot be cured, the non-breaching
party may take reasonable remediable measures at the cost of the breaching party
without prejudice and in addition to any other rights arising from such breach.
In addition, the non-breaching party shall take reasonable steps to mitigate
damages arising out of such breach.
10. CONFIDENTIALITY
10.1. Confidentiality Obligations. Except as permitted elsewhere under
this Agreement, each party agrees to take Reasonable Steps (as defined below)
(a) to receive and maintain the Confidential Information of the other party in
confidence, (b) not to disclose such Confidential Information to any third
parties and (c) to promptly notify the disclosing party upon learning of any
law, rule, regulation or court order that purports to compel disclosure of any
Confidential Information of the disclosing party and to reasonably cooperate
with the disclosing party in the exercise of the disclosing party's right to
protect the confidentiality of such Confidential Information. Neither party
hereto shall use all or any part of the Confidential Information of the other
party for any purpose other than to perform its obligations under this
Agreement. The parties will take Reasonable Steps (as defined below) to ensure
that their employees, representatives and agents comply with this provision. As
used herein, "Reasonable Steps" means at least the same degree of care that the
receiving party uses to protect its own Confidential Information, and, in no
event, no less than reasonable care.
10.2. Exclusions. Nothing contained herein shall prevent a party from
disclosing Confidential Information pursuant to any applicable law, rule,
regulation or court order; provided, however, that such party complies with the
notice provisions of Section 10.1(c) to the extent permissible under applicable
laws, rules, regulations or court orders. Such disclosure shall not alter the
status of such information hereunder for all other purposes as Confidential
Information.
10.3. Termination. Subject to Section 13.10, upon termination of this
Agreement, all Confidential Information shall be returned to the disclosing
party or destroyed unless otherwise specified or permitted elsewhere under this
Agreement. The confidentiality obligations contained in this Article 10 shall
survive termination of this Agreement for a period of three years.
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10.4. Injunction. Each party acknowledges and agrees that the provisions
of this Article 10 are reasonable and necessary to protect the other party's
interests in its Confidential Information, that any breach of the provisions of
this Article 10 may result in irreparable harm to such other party, and that the
remedy at law for such breach may be inadequate. Accordingly, in the event of
any breach or threatened breach of the provisions of this Article 10 by a party
hereto, the other party, in addition to any other relief available to it at law,
in equity or otherwise, shall be entitled to seek temporary and permanent
injunctive relief restraining the breaching party from engaging in and/or
continuing any conduct that would constitute a breach of this Article 10,
without the necessity of proving actual damages or posting a bond or other
security.
10.5. Publicity. Except as may be required by applicable laws, rules or
regulations (including those arising under any securities laws), neither party
will originate any publicity, news release or other public announcement, written
or oral, whether to the public press or otherwise, concerning the relationship
between the parties or the transactions described in this Agreement without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. In the event disclosure is required by
applicable law, rules or regulations, then the party required to so disclose
such information shall, to the extent possible, provide to the other party for
its approval (such approval not to be unreasonably withheld) a written copy of
such public announcement at least five business days prior to disclosure.
Notwithstanding the foregoing, either party shall have the right to make a press
release with respect to its entering into this Agreement; provided that such
party provides to the other party a copy of the proposed press release no less
than five business days prior to its proposed release and that the contents of
such press release shall be subject to the other party's consent, which consent
shall not be unreasonably delayed or withheld.
11. REPRESENTATIONS AND WARRANTIES. Each party hereby represents, covenants and
warrants to the other party that:
11.1. It has the corporate power to enter into this Agreement and to grant
the rights and licenses granted herein and otherwise perform this Agreement;
11.2. It is not a party to any agreement or understanding and knows of no
law or regulation that would prohibit it from entering into and performing this
Agreement or that would conflict with this Agreement; and
11.3. When executed and delivered by it, this Agreement will constitute a
legal, valid and binding obligation of it, enforceable against it in accordance
with this Agreement's terms.
12. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION.
12.1. Disclaimer of Warranties. EXCEPT AS EXPRESSELY SET FORTH IN THIS
AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, WITH RESPECT TO ANY AND ALL VERTICALNET DELIVERABLES, INCLUDING BUT
NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT.
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12.2. Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, PAPEREXCHANGE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, WITH RESPECT TO ANY AND ALL PAPEREXCHANGE DELIVERABLES, INCLUDING BUT
NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT.
12.3. Limitation of Liability. EXCEPT IN CONNECTION WITH A BREACH BY
EITHER PARTY OF ARTICLE 10, THE INDEMNIFICATION OBLIGATIONS OF PAPEREXCHANGE
UNDER SECTIONS 12.4(c) AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER
SECTION 12.5(c), NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS
AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 10, THE
INDEMNIFICATION OBLIGATIONS OF PAPEREXCHANGE UNDER SECTION 12.4(c) AND THE
INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 12.5(c), EACH PARTY'S
LIABILITY FOR DAMAGES HEREUNDER SHALL NOT EXCEED $1,000,000.
12.4. Indemnification by PaperExchange. PaperExchange shall indemnify and
hold harmless VerticalNet and its officers, directors, employees and agents from
and against any and all losses, claims, damages, liabilities, obligations,
penalties, judgments, awards, costs, expenses and disbursements, including
without limitation, the costs, expenses and disbursements, as and when incurred,
of investigating, preparing or defending any action, suit, proceeding or
investigation asserted by a third party, caused by, relating to, based upon,
arising out of or in connection with (a) any breach by PaperExchange of the
representations, warranties or agreements made by it under this Agreement, (b)
negligence, recklessness or intentional misconduct on the part of PaperExchange
or its officers, directors, employees, agents or consultants, (c) any claim that
the PaperExchange Content infringes or misappropriates any Intellectual Property
Rights or any other right of any third party or (d) the promotion, advertisement
or marketing of the VerticalNet Content or VerticalNet Archived Content by or on
behalf of PaperExchange.
12.5. Indemnification by VerticalNet. VerticalNet shall indemnify and hold
harmless PaperExchange and its officers, directors, employees and agents from
and against any and all losses, claims, damages, liabilities, obligations,
penalties, judgments, awards, costs, expenses and disbursements, including
without limitation, the costs, expenses and disbursements, as and when incurred,
of investigating, preparing or defending any action, suit, proceeding or
investigation asserted by a third party, caused by, relating to, based upon,
arising out of or in connection with (a) any breach by VerticalNet of the
representations, warranties or agreements made by it under this Agreement, (b)
negligence, recklessness or intentional misconduct on the part of VerticalNet or
its officers, directors, employees, agents or consultants, (c) any claim that
the VerticalNet Content infringes or misappropriates any Intellectual Property
Rights or any other right of any third party; or (d) the promotion,
advertisement or marketing of the PaperExchange Content by or on behalf of
VerticalNet.
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12.6. Each person seeking to be reimbursed, indemnified, defended and/or
held harmless under Sections 12.4 or 12.5 (each, an "Indemnitee") shall (a)
provide the party obliged to indemnify such Indemnitee with prompt written
notice of any claim, suit, demand or other action for which such Indemnitee
seeks to be reimbursed, indemnified, defended or held harmless (each, a
"Claim"), which notice shall include a reasonable identification of the alleged
facts giving rise to such Claim; (b) grant such party reasonable authority and
control over the defense and settlement of any such Claim; and (c) reasonably
cooperate with such party and its agents in defense of any such Claim. Each
Indemnitee shall have the right to participate in the defense of any Claim for
which such Indemnitee seeks to be reimbursed, indemnified, defended or held
harmless, by using attorneys of such Indemnitee's choice, at such Indemnitee's
expense. Any settlement of a Claim for which any Indemnitee seeks to be
reimbursed, indemnified, defended or held harmless under this Article shall be
subject to the prior written approval of such Indemnitee, such approval not to
be unreasonably withheld, conditioned or delayed.
12.7. Essential Part of Bargain. The parties acknowledge that the
disclaimers and limitations set forth in this Article 12 are an essential
element of this Agreement between the parties and that the parties would not
have entered into this Agreement without such disclaimers and limitations.
13. MISCELLANEOUS
13.1. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Pennsylvania without regard to its
conflicts of law provisions. Subject to the provisions of Section 9, both
parties consent and submit to the exclusive personal jurisdiction of the United
States and the state courts of the Commonwealth of Pennsylvania in and for
Horsham, PA.
13.2. No Assignment. Except as otherwise set forth herein, neither party
shall transfer, assign or cede any rights or delegate any obligations hereunder,
in whole or in part, whether voluntarily or by operation of law, without the
prior written consent of the other party, which consent may be withheld at the
other party's reasonable business discretion; provided, however, that either
party may transfer this Agreement without prior written consent of the other
party to an Affiliate or in connection with a merger or sale of all or
substantially all of the stock or assets of such party.
13.3. Good Faith. The parties undertake to display to each other the
utmost good faith, consistent with their respective rights and obligations set
forth in this Agreement.
13.4. Independent Contractors. In connection with this Agreement, each
party is an independent contractor. This Agreement does not, and shall not be
construed to, create an employer-employee, agency, joint venture or partnership
relationship between the parties. Neither party shall have any authority to act
for or to bind the other party in any way, to alter any of the terms or
conditions of any of the other party's standard forms of invoices, sales
agreements, warranties or otherwise, or to warrant or to execute agreements on
behalf of the other or to represent that it is in any way responsible for the
acts, debts, liabilities or omissions of the other party.
19
<PAGE>
13.5. Notices. All notices, reports, payments and other communications
required or permitted to be given under this Agreement (each, a "Notice") shall
be in writing and shall be given either by personal delivery against a signed
receipt, by express delivery using a nationally recognized overnight courier, or
by facsimile. All Notices shall be properly addressed as follows, or to such
other addresses as may be specified in a Notice given hereunder:
If to VerticalNet: with a copy to:
Attn: General Counsel Michael J. Hagan
VerticalNet, Inc. VerticalNet, Inc.
700 Dresher Road, Suite 100 700 Dresher Road, Suite 100
Horsham, Pennsylvania 19044 Horsham, Pennsylvania 19044
Fax No.: (215) 443-3336 Fax No.: (215) 443-3336
If to PaperExchange: with a copy to:
Attn: Chief Executive Officer Attn: Jonathan K. Bernstein
PaperExchange.com, LLC Bingham Dana LLP
545 Boylston Street, 8th Floor 150 Federal Street
Boston, MA 02116 Boston, MA 02110
Fax No.: (617) 536-4097 Fax No.: (617) 951-8736
A Notice shall be deemed to be effective upon personal delivery or, if sent via
overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed
effective on the same day (or if such day is not a business day, then on the
next succeeding business day) if such facsimile is sent before 3:00 p.m.
Philadelphia time and on the next day (or if such day is not a business day,
then on the next succeeding business day) if such Notice is sent after 3:00 p.m.
Philadelphia time.
13.6. Amendment or Modification. No subsequent amendment, modification or
waiver of any of the provisions of this Agreement shall be effective unless in
writing and signed by the parties.
13.7. Entire Agreement. This Agreement sets out the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements, proposals, arrangements and communications,
whether oral or written, with respect to the subject matter hereof, including,
but not limited to, the letter of intent between the parties dated July 23,
1999.
13.8. Severability. If any provision of this Agreement is held by a
tribunal of competent jurisdiction to be illegal, invalid, or otherwise
unenforceable in any jurisdiction, then to the fullest extent permitted by law
(a) the same shall not effect the other terms or provisions of this Agreement,
(b) such term or provision shall be deemed modified to the extent necessary in
the tribunal's opinion to render such term or provision enforceable, and the
rights and obligations of the parties shall be construed and enforced
accordingly, preserving to the fullest extent the intent and agreements of the
parties set forth herein and (c) such finding of invalidity, illegality or
20
<PAGE>
unenforceability shall not affect the validity, legality or enforceability of
such term or provision in any other jurisdiction.
13.9. No Waiver. Failure to enforce any term of this Agreement is not a
waiver of future enforcement of that or any other term. No term or provision of
this Agreement will be deemed waived and no breach excused unless such waiver or
excuse is in writing and signed by the party against whom enforcement of such
waiver or excuse is sought.
13.10. Survival. Sections 5.8.1 (subject to Section 8.3(k)), 6.1-6.2, 6.5,
6.6, 6.9, 7.5-7.8, 8, 9, 10, 11, 12 and 13, any payment obligations of the
parties hereunder accruing prior to the date of termination; and any other
provision herein expressly surviving termination or necessary to interpret the
rights and obligations of the parties in connection with the termination of the
term of this Agreement will survive the termination or expiration of this
Agreement.
13.11. No Third Party Beneficiaries. Nothing in this Agreement is intended
to confer benefits, rights or remedies unto any person or entity other than the
parties and their permitted successors and assigns.
13.12. Waiver of Jury Trial. Each party hereby irrevocably waives all
rights a party may have to a trial by jury in any legal action or proceeding
arising out of or in connection with this Agreement or the transactions
contemplated hereby.
13.13. Titles. The headings appearing at the beginning of the Sections
contained in this Agreement have been inserted for identification and reference
purposes only and shall not be used to determine the construction or
interpretation of this Agreement. The nomenclature of the defined terms in this
Agreement shall only be used for the construction of this Agreement, and are not
to be used for any other purpose, including, but not limited to, interpretation
for accounting purposes.
13.14. Force Majeure. Neither party shall be held to be in breach of this
Agreement by reason of a force majeure event, including, but not limited to, act
of God, delay in transportation, fire, flood, earthquake, storm, war, act of a
public enemy, civil commotion or any law, rule, regulation, order or other
action by any public authority or any other matter reasonably beyond a party's
control. To the extent failure to perform is caused by such a force majeure
event, such party shall be excused from performance hereunder so long as such
event continues to prevent such performance, and provided the non-performing
party takes all reasonable steps to resume full performance.
13.15. Compliance with Laws. Each party shall comply with all prevailing
laws, rules and regulations and obtain all necessary approvals, consents and
permits required by the applicable agencies of the government of the
jurisdictions that apply to its activities or obligations under this Agreement.
13.16. Execution in Counterparts, Facsimiles. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same instrument. This
Agreement shall become binding when any one or more counterparts hereof,
individually or taken together, bear the signatures of both parties
21
<PAGE>
hereto. For the purposes hereof, a facsimile copy of this Agreement, including
the signature pages hereto, shall be deemed an original.
[The remainder of this page is intentionally left blank.]
22
<PAGE>
IN WITNESS WHEREOF, the parties to the Agreement by their duly authorized
representative have executed this Agreement as of the date first written above.
VERTICALNET, INC. PAPEREXCHANGE.COM, LLC
By: /s/ [ILLEGIBLE] By: /s/ Jason Weiss
--------------------------------- --------------------------------
Title: BVI Title: CEO
------------------------------ -----------------------------
VERTICALNET, INC. PAPEREXCHANGE.COM, LLC
By: /s/ [ILLEGIBLE] By: /s/ Rod A. Parsley
--------------------------------- --------------------------------
Title: V.P. E-Commerce Products Group Title: Vice President Business Devel
------------------------------ -----------------------------
<PAGE>
Exhibit A
Auction Home Page 1 of 2
[GRAPHIC OMITTED]
pulp and paper online PaperExchange.com
[GRAPHIC OMITTED]
REGISTER
Free Gift...
to first time Buyers and Sellers on Online Auction
Search: Buyer's Guide by Product/Service [GRAPHIC OMITTED] Go!
Home | Products | Careers | Marketplace | News/Analysis | Community | Resources
| About Us | Related Sites
Auctions
Home
Registration
How to Start
Buying
My Auction Watch
Buyer's Toolkit
Buyer's Help
Additional Industries
Selling
Seller's Toolkit
Seller's Help
Books, Software,
Videos
Shopping
Also On This Site
Online Homepage
Product Center
Career Center
News & Analysis
Community
Resources
Site Information
Related Sites
- --------------------------------------------------------------------------------
Click Here
Highlights, Products
& More
- --------------------------------------------------------------------------------
powdex
Incorporating InterFlow Expo
Oct. 27-28, 1999 Atlanta, GA
Cobb Galleria Centre
- --------------------------------------------------------------------------------
LAB BLAST '99
Lab equipment at
Rock Bottom Prices
CLICK HERE
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Online Auctions
Purchase and Liquidate New and Used Products
Find An Item
Select a category below, or use Advanced Search.
|X| Auctions |_| Fixed Price
Analytical Instrumentation
View Items
Welcome
Pulp & Paper Online and PaperExchange.com have partnered to become the leading
e-commerce solution for buying and selling new, surplus and used paper products
and equipment.
Sell an Item: Register Now as an Online Auctions seller and Sell an Item here.
Find an Item: Begin using the auction by selecting a category from the box above
or choose a Featured or New Item below. Or click here for an Advanced search
Customized Auction features
Buyers Area Sellers Area
Choose One ... Go! Choose One ... Go!
*Hot items are from all industries *Hot items are from all industries
First Time Users: Personalize your Online Auction experience and learn about our
Customized Auction Features.
Featured Item
Dynasty Tool Kit No. 9422
Item #: 500607
[GRAPHIC OMITTED]
Dynasty Tool Kit No. 9422. 120 tools. For the customer service engineer who
carries a full array of tools and spare parts during extended air travel. Molded
of tough linear polyethylene. Ribs for extra strength and rigidity. Rugged
aluminum valance. M
Price: $348
Auction Period: 5/11/99 - 6/10/99
Techne Thermal Cycler 0.5ML 117V
Item #: 500863
[GRAPHIC OMITTED]
Techne Gene E Thermal Cycler (for 0.5 mL tubes). Suitable for DNA sequencing,
gene manipulation, DNA hybridization, and other techniques. Uses a refrigerated
coolant for maximal cooling efficiency (cooling rates up to 2.7(degrees)C per
sec.). Operates from 10
Price: $1,000
Auction Period: 5/7/99 - 6/6/99
Dynasty Tool Kit No. 9422
Item #: 500607
[GRAPHIC OMITTED]
Dynasty Tool Kit No. 9422. 120 tools. For the customer service engineer
<PAGE>
Exhibit A(2)
Auction Home Page 2 of 2
[GRAPHIC OMITTED]
engineer who carries a full array of tools and spare parts during extended air
travel. Molded of tough linear polyethylene. Ribs for extra strength and
rigidity. Rugged aluminum valance. M
Price: $348
Auction Period: 5/11/99 - 6/10/99
Leader LFC-944B Level Meter
Item #: 500608
[GRAPHIC OMITTED]
Leader LFC-944B Level Meter is a portable battery-operated field level meter
designed for testing and measuring the performance of CATV and MATV systems. It
provides for measuring levels of -40 to +60 dBmv on VHF channels and -30 to +40
dBmv on UHF c
Price: $220
Auction Period: 5/11/99 - 6/10/99
Find An Item
Select a category below, or use Advanced Search.
|X| Auctions |_| Fixed Price
Analytical Instrumentation
View Items
Send This Page To A Friend
Share The Knowledge
See something for a friend or associate? You can forward this page by just
Clicking Here!
Home | Help | Feedback | Advertising Info
VerticalNet | Disclaimer | TechSupport www.wateronline.com
<PAGE>
Exhibit A(3)
Online Jobscan Page 1 of 2
[GRAPHIC OMITTED]
pulp and paper online PaperExchange.com
[GRAPHIC OMITTED]
shop & compare
For the Best Prices on the Web
Search: Buyer's Guide by Product/Service [GRAPHIC OMITTED] Go!
Home | Products | Careers | Marketplace | News/Analysis | Community | Resources
| About Us | Related Sites
Career Center [GRAPHIC OMITTED] Online Jobscan
Online Jobscan
Job Search
Post Resume
Update Resume
New Jobs Area
Employer Spotlight
Career Resources
Salary Survey
Recruiter Center
Also On This Site
Product Center
Career Center
News & Analysis
Community
Resources
Site Information
Related Sites
- --------------------------------------------------------------------------------
Click Here
Highlights, Products
& More
- --------------------------------------------------------------------------------
powdex
Incorporating InterFlow Expo
Oct. 27-28, 1999 Atlanta, GA
Cobb Galleria Centre
- --------------------------------------------------------------------------------
LAB BLAST '99
Lab equipment at
Rock Bottom Prices
CLICK HERE
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Online Jobscan
[GRAPHIC OMITTED]
Online JobCenter
Job Search
Post/Update Resumes
Employer Spotlights
Use this page to search for job openings, and view the most recent Open House
announcements from businesses within the industry
Job Search
Pulp & Paper Online and PaperExchange.com have combined resources to provide you
with the most comprehensive source for careers in the pulp and paper industry.
Search for a position by making selections from the below drop down menus. The
more selections you make the more fined tuned the results. For the broadest
results, use the menu defaults.
Multiple categories can be chosen within menus by holding down the "Shift" key
when making selections.
Select Keywords
Separate keywords using AND, OR, or 'a phrase in quotes'
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Type Company Name
(Full or Partial)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
|_| Full Time |_| Part Time
|_| Contract |_| Permanent
Location
Choose the State, Region or Country to include in your search
State Region
All All
Alabama Alaska/Hawaii
Alaska Mid-Atlantic - U.S.
Arizona North Central - U.S.
Country
United States
Antigua and Arbuda
Antarctica
Argentina
Position
All Job Types
Aerospace Engineer
Biological Scientist
Biologist
Jobscan Sponsors
- --------------------------------------------------------------------------------
Click Here
Highlights, Products
& More
- --------------------------------------------------------------------------------
powdex
Incorporating InterFlow Expo
Oct. 27-28, 1999 Atlanta, GA
Cobb Galleria Centre
- --------------------------------------------------------------------------------
LAB BLAST '99
Lab equipment at
Rock Bottom Prices
CLICK HERE
- --------------------------------------------------------------------------------
Durlano Pumps embrace new valve technology for greater efficiency...
CHEMPRO introduces new treatment for water purification...
<PAGE>
Exhibit A(4)
Online Jobscan Page 2 of 2
Duties
All Job Functions
Academia
Choose One
Consulting
Scan Jobs Reset
Open House Announcements
Virtual Company Tours
In an effort to better inform the job seeker and satisfy the needs for industry
recruiting of premium positions, Water Online provides Online Open House. These
pages represent a virtual open house for each of the participating companies
that are actively seeking new recruites. Below is a list of the most recent Open
House pages.
- - Chromatography Ltd. Santa Monica CA
- - Mass Spectral Interpretator Austin TX
- - Contemporary Wastewater and Design Phoenix AZ
- - Mass Spectral Incorporated Chicago IL
- - Activated Carbon Inc. Bethesda MD
More...
Send This Page To A Friend
Share The Knowledge
See something for a friend or associate? You can forward this page by just
Clicking Here!
Home | Help | Feedback | Advertising Info
VerticalNet | Disclaimer | TechSupport www.wateronline.com
<PAGE>
Exhibit B
CAREER CENTER REQUEST FORM
Please take the time to fill out this form so that we may collect the
information needed to process your Career Center Request. Please note that text
of any length may be typed or pasted into the fields below.
Billing Information (Will not be displayed online unless it is the same as
Employer Information, below.)
Company Name:
Address:
Address 2:
City:
State:
Zip:
Country:
Foreign Address:
Phone: Extension:
Fax:
e-mail:
Website Address (URL):
Contact Name:
Employer Information (Please enter all information as it should appear online.)
|_| Check here if same as above.
Company Name:
Address:
Address 2:
City:
State:
Zip:
<PAGE>
Country:
Foreign Address:
Phone: Extension:
Fax:
e-mail:
Division Name:
Number of Employees:
Company Job Website (URL):
Contact Person / Department:
Job Code/Requisition Number:
How do you wish to be contacted?
|_| e-mail |_| Fax |_| Phone |_| Regular Mail
Job Information (Please enter all information as it should appear online.)
Job Title:
Job Location:
City: State:
or
US Region: Select Region
Country:
Type of Position: Full Time Permanent
Required Skills:
Brief Job Description:
Salary Range:
Additional Compensation:
Full Job Description:
<PAGE>
Exhibit C
A Microsoft Excel Spreadsheet containing the following columns:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Name* Category* Mfg/Brand Model # Original Item Price Height Weight
- -----------------------------------------------------------------------------------------------
NAME CATG FLDA FLDB FLDC FLDD FLDE
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Starting Bid* Reserve Price Bid Increments Start date/time Duration* Item #
- -----------------------------------------------------------------------------------------------
MINB RSRV INCR STRT DAYE FLD1
- -----------------------------------------------------------------------------------------------
default is $5.00 default is today default is 7
--------------------------------------------------
</TABLE>
- --------------------------------------------------------------------
Approx. Age SKU Description Seller ID# Image Location
- --------------------------------------------------------------------
FLD2 FLDF DESC SELL IMAG
- --------------------------------------------------------------------
- ---------------------------------------------
Sales
Location** Person** Capacity**
- ---------------------------------------------
To Be To Be To Be
Determined Determined Determined
- ---------------------------------------------
<PAGE>
This page describes each of the fields used in the Excel spreadsheet for bulk
uploads. Please put details in the spreadsheet named Bulk Upload Spreadsheet. It
is very important that you do not change the field names or their order on the
spreadsheet.
- --------------------------------------------------------------------------------
Name* The title by which you want the item called. i.e.
Sartorius Microbalance. This field is 60 characters long
but more details will fit in the description section. The
name needs to be descriptive and distinct. There cannot be
two items with the same name. Add a delineating feature
such as model number or size to the name.
- --------------------------------------------------------------------------------
Category* This field requires a number not word. See the enclosed
list. If you do not find a category that fits your
product, please contact us. We can add categories.
- --------------------------------------------------------------------------------
Mfg/Brand Manufacturer or brand name
- --------------------------------------------------------------------------------
Model # Model number
- --------------------------------------------------------------------------------
Original Item If known, this can be an incentive to buyers who then see
price your lower price.
- --------------------------------------------------------------------------------
Height Include feet or inches.
- --------------------------------------------------------------------------------
Weight Include pounds or ounces.
- --------------------------------------------------------------------------------
Quantity* This field requires only a number not each, case, etc.
- --------------------------------------------------------------------------------
Starting Bid* This is the amount at which the bidding will start. It
should be lower than your reserve price, if you set one.
Please use whole dollars.
- --------------------------------------------------------------------------------
Reserve Price This is the amount you wish to receive for your product.
If you set a reserve price, your item cannot be sold for
less than the reserve. Please use whole dollars.
- --------------------------------------------------------------------------------
Bid Increments* $5 is the default, but feel free to change this to reflect
your product's price using whole dollars.
- --------------------------------------------------------------------------------
Start date/time* This field must be filled out like the following example:
04/08/99 15:00 (MM/DD/YY 24:mm) A start time must be
included.
- --------------------------------------------------------------------------------
Duration* The default for this field is 7 days. The options are 1,
3, 5, 7, 21, and 30.
- --------------------------------------------------------------------------------
Item # Catalog number if the product came from a manufacturer's
or distributor's catalog
- --------------------------------------------------------------------------------
Approx. Age New, used, demo, reconditioned
- --------------------------------------------------------------------------------
SKU Each, box, case
- --------------------------------------------------------------------------------
Description This field is only 1250 characters long. Use basic writing
format here. Complete sentences are desired rather than a
list of features. If you copy and paste from an outside
source, please check to see that there are no tabs or
returns in the paragraph.
- --------------------------------------------------------------------------------
Seller ID#* This is your six-digit ID number you received when you
registered.
- --------------------------------------------------------------------------------
Image location A picture of your item is very helpful in selling your
item and will greatly enhance its listing appearance. The
picture needs to be in JPEG or GIF format. You can send
these on a separate disk or email if desired. Please
enclose a list delineating which picture goes with which
item.
- --------------------------------------------------------------------------------
Location Where the equipment is currently located/resides.
- --------------------------------------------------------------------------------
Sales Person For PaperExchange.com internal tracking.
- --------------------------------------------------------------------------------
Capacity Specific information about the equipment i.e. "x"
gallons/hr, "y" sheets/minute, etc.
- --------------------------------------------------------------------------------
* indicates required fields
** indicates fields with fieldnames to be determined and
whose position within the columns is to be determined
<PAGE>
Exhibit 10.5
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (the "Agreement") made and entered into as of
February 29, 2000, by and between Asia Pulp & Paper Company Ltd., a Singapore
corporation ("APP"), and PaperExchange.com, Inc., a Delaware corporation
("PaperExchange").
WHEREAS, APP manufactures and markets certain paper products (the "APP
Products") world-wide and purchases paper pulp in the manufacture of the APP
Products;
WHEREAS, PaperExchange provides a real-time on-line trading exchange (the
"Exchange") for paper and other products to registered users of PaperExchange
services (the "Members");
WHEREAS, APP is a Member of PaperExchange pursuant to the terms of the
Membership Agreement dated as of __________ (the "Membership Agreement"); and
WHEREAS, Paper Exchange and APP desire that, among other things, APP
commit to list on the Exchange certain quantities of APP Products for sale in
Credit-Approved Transactions, as such term is defined in the Membership
Agreement, and to list a portion of its pulp paper requirements on the Exchange;
NOW THEREFORE, the parties, in consideration of the undertakings and
commitments set forth herein, agree as follows:
1. Defined Terms. All capitalized terms not otherwise defined herein shall
have the meaning set forth in the Membership Agreement.
2. Listings. (a) APP agrees to use reasonable commercial efforts to list
on the Exchange for sale pursuant to Credit--Approved Transactions a minimum of
***** metric tons of APP Products per month, subject to availability of the APP
Products. PaperExchange agrees to accept the foregoing listings. (b) APP agrees
to list a portion of its pulp purchase requirements on the Exchange
3. Further Use of the Exchange. APP agrees to make a good faith evaluation
of the expansion of its use of the Exchange for additional sales of APP
Products, including without limitation, transitioning some portion of APP's
existing customers to the site and using the site to facilitate future sales of
APP Products to APP's existing customer base.
4. Terms of Sale. The terms of sale for the APP Products listed on the
Exchange shall be governed by the Credit-Approved Transactions Agreement and the
Credit-Approved Purchase Terms for Credit-Approved Transactions in effect as of
the sale. APP understands that in the case of all Credit-Approved Transactions,
all sales shall be to PaperExchange and that PaperExchange shall resell the APP
Products to Buyers in accordance with the Credit-Approved Buyer Terms for
Credit-Approved Transactions in effect as of the sale date.
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
<PAGE>
5. Term and Termination. Unless earlier terminated as hereinafter
provided, the term of this Agreement shall be for period of one (1) year from
the date hereof. APP and PaperExchange acknowledge that either party may
terminate this Agreement at any time without cause, upon no less than thirty
(30) days' prior written notice to the other party. If PaperExchange (a) without
APP's consent makes material modifications to the Membership Agreement or the
Credit-Approved Transaction Agreement or any other of the Credit Approved
Transaction documents which, in APP's reasonable discretion, have a potential
adverse economic impact on APP, or (b) materially breaches any of the economic
terms of an Credit Approved Transaction Agreement or any other of the Credit
Approved Transaction documents, then APP may, in its sole discretion,
immediately terminate this Agreement and/or its Membership in the Exchange.
6. Goals. Notwithstanding any other provision of this Agreement, the
parties acknowledge that Paragraph 2 is intended to establish a minimum listing
goal for APP. APP and PaperExchange shall work together to cause APP to reach
the goal, however APP shall not be responsible to PaperExchange if it is unable,
for any reason, to meet the listing goal.
7. General Provisions.
7.1 APP and PaperExchange are independent contractors. Nothing in
this Agreement is intended to or will constitute either party as an agent, legal
representative, joint venturer or partner of the other for any purpose.
7.2 A waiver of a breach of any term of this Agreement will not be
construed as a waiver of any succeeding breach of that term or as a waiver of
the term itself. A party's performance after the other's breach will not be
construed as a waiver of that breach.
7.3 All notices required or permitted under this Agreement and all
requests for approvals, consents, and waivers must be in writing and must be
delivered to the parties at their respective addresses by a method providing for
proof of delivery. Any notice or request will be deemed to have been given on
the date of receipt.
If to PaperExchange: If to APP:
PaperExchange.com, Inc. Asia Pulp & Paper Company Ltd.
545 Boylston Street, 8th Floor 118 Pioneer Road
Boston, MA 02116 Singapore 639498
Attention: President and CEO Attention: A. Nilo
Telecopier No.: (617) 536-1573 Telecopier No.: (65) 477-6116
<PAGE>
with copies to: with copies to:
Bingham Dana LLP Pillsbury Madison & Sutro LLP
150 Federal Street 725 S. Figueroa Street, Suite 1200
Boston, MA 02110 Los Angeles, CA 90017
Attention: Jonathan K. Bernstein, Esq. Attention: Dana P. Newman, Esq.
Telecopier No.: (617) 951-8736 Telecopier No.: (213) 629-1033
7.4 Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other, except that APP may
assign this Agreement to its parent company, to any of the companies owned or
controlled by its parent, or to any of its subsidiaries. The Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.
7.5 Except as this Agreement or the Membership Agreement otherwise
provides, no amendment to this Agreement or the Membership Agreement will be
binding unless agreed to in writing and executed by the parties, and no
approval, consent, or waiver will be enforceable unless the granting party signs
it.
7.6 Each term of this Agreement is severable. If a court, agency, or
arbitrator having jurisdiction determines that any term is invalid or
unenforceable under applicable law, that determination will not affect the other
terms of this Agreement, as the case may be, which other terms will continue to
be enforced as if the invalid or unenforceable terms were omitted.
7.7 Any advertising, publicity, release, or other disclosure of
information concerning this Agreement must be approved in writing by both
parties, which approval shall not be unreasonably withheld or delayed, except to
the extent disclosure is legally required.
7.8 This Agreement, in conjunction with the Membership Agreement,
and the Credit-Approved Transaction Agreement, states the complete agreement
between the parties concerning the subject matter hereof, and supersedes earlier
oral and written communications between the parties concerning the subject
matter hereof.
7.9 The validity and construction of this Agreement shall be
governed by and construed in accordance with the internal laws (and not the
choice-of-law rules) of the State of New York.
7.10 This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.11 The parties agree that any dispute relating to this Agreement
shall be subject to arbitration under the commercial rules of the American
Arbitration Association.
[signature page to follow]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
PaperExchange.com, Inc.,
a Delaware corporation
By: /s/ Kent A. Dolby
---------------------------
Name: PRESIDENT & CEO
Title: KENT A. DOLBY
ASIA PULP & PAPER COMPANY LTD.,
a Singapore corporation
By:
---------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
PaperExchange.com, Inc.,
a Delaware corporation
By:
---------------------------
Name:
Title:
ASIA PULP & PAPER COMPANY LTD.,
a Singapore corporation
By: /s/ Ted C. Lin
---------------------------
Name: Ted C. Lin
Title: Attorney in Fact
<PAGE>
Exhibit 10.6
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), AND NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT CAN BE SOLD NOR SUCH SHARES OF COMMON
STOCK TRANSFERRED UNLESS THE REGISTRATION PROVISIONS OF THE SAID ACT HAVE BEEN
COMPLIED WITH OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY,
BOTH AS TO THE IDENTITY OF THE COUNSEL AND AS TO THE FORM AND SUBSTANCE OF THE
OPINION, COMPLIANCE WITH SUCH PROVISIONS IS NOT REQUIRED.
Date: March 7, 2000 Warrant to Purchase
Shares of Common Stock
PAPEREXCHANGE.COM, INC.
PARTICIPATION WARRANT
No. 1
THIS CERTIFIES that Staples, Inc., a Delaware corporation (the "Holder"),
is entitled, at any time during the Warrant Exercise Period (as hereinafter
defined), to subscribe for and purchase from PAPEREXCHANGE.COM, INC., a Delaware
corporation (including any entity which shall succeed to or assume the
obligations of PaperExchange.com, Inc. hereunder, the "Company"), with a
principal office at 545 Boylston Street, 8th Floor, Boston, Massachusetts 02116,
up to the Applicable Number, as adjusted from time to time, of the Shares (as
defined in Section 1 hereof) at an initial purchase price per Share of
$11.557373 (such price per Share as adjusted from time to time as provided
herein is referred to herein as the "Exercise Price"). The number of such Shares
and the Exercise Price are subject to adjustment as provided herein. This
Warrant is fully vested on the Issue Date.
This Warrant is subject to the following terms and conditions:
Section 1. Definitions. As used herein the following terms, unless the
context otherwise requires, have the following respective meanings:
Applicable Number shall mean Five Hundred Nineteen Thousand One Hundred
Forty-nine (519,149) Shares (as adjusted pursuant to the terms hereof).
Company shall have the meaning set forth in the first paragraph of this
Warrant.
Common Stock shall mean (i) the Company's Common Stock, $0.001 par value
per share, (ii) any other capital stock of any class or classes (however
designated) of the Company, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and (iii) any other
securities into which or for which any of the securities described in clauses
(i) or (ii) above have been
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
<PAGE>
-2-
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
Cut Sheet Paper shall have the meaning set forth in Section 2.2 hereof.
Early Expiration Date shall have the meaning set forth in Section 2.2
hereof.
Exercise Price shall have the meaning set forth in the first paragraph of
this Warrant.
Fair Market Value shall mean (i) prior to a Qualified Public Offering, the
Non-Public Company Fair Market Value, and (ii) after a Qualified Public
Offering, the average, for the period of ten (10) Business Days prior to the
date of exercise, of the closing prices (if listed on a stock exchange or quoted
on the NASDAQ National Market System or any successor thereto), or the average
of the closing bid and asked prices (if quoted on NASDAQ or otherwise publicly
traded) of the Shares.
Holder shall have the meaning set forth in the first paragraph of this
Warrant.
Issue Date shall mean March 7, 2000.
Measuring Period shall have the meaning set forth in Section 2.2.
Non-Public Company Fair Market Value shall mean, with respect to Shares or
Other Securities, the fair market value of such Shares or Other Securities as
determined in good faith by the Company's Board of Directors. The Non-Public
Company Fair Market Value shall in all cases be calculated by determining the
Non-Public Company Fair Market Value of the entire stock and other securities of
the Company or of the issuer of any Other Securities taken as a whole, without
premium for control or discounts for minority interests or restrictions on
transfer and taking into consideration any plans or proposals for any mergers,
sales of assets, acquisitions or substantial sales of stock or other securities
of the Company by the Company or its stockholders relating to the Company or by
any such other issuer.
Other Securities refers to any stock (other than Common Stock) and other
securities of the Company or any other entity (corporate or otherwise) (i) which
the holder of this Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of this Warrant, in lieu of or in addition to
Common Stock, or (ii) which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities, in
each case pursuant to Section 6 or 7 hereof.
Person shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
Purchases shall mean when the Holder takes title to Cut Sheet Paper from
the Company (in its capacity as principal and not as agent for seller) by means
of a transaction on the Company's Internet web site.
Qualified Public Offering shall mean an offering to the public of
securities of the Company in a firm commitment underwriting providing for gross
proceeds to the Company of at least $100,000,000.00.
<PAGE>
-3-
Shares shall mean shares of Common Stock.
Stockholders' Agreement shall mean the Company's Stockholders' Agreement,
dated as of February 28, 2000, as in effect on the date hereof and thereafter as
amended or restated in compliance with its terms.
Total Exercise Price shall mean the price obtained by multiplying (a)
$11.557373 and (b) the total number of Shares issuable, as of the Issue Date,
upon exercise of this Warrant.
Warrant Exercise Period shall mean the period beginning on March 7, 2015
and ending on the Warrant Expiration Date; provided that if the Holder earns the
right to exercise all or a portion of this Warrant early pursuant to Section
2.2, with respect to that portion of the Warrant subject to such early exercise
right, the "Warrant Exercise Period" shall mean the period beginning on the
first day after the end of the Measuring Period for which such right was earned
and shall end on the Early Expiration Date.
Warrant Expiration Date shall have the meaning set forth in Section 2.3
hereof.
Warrant Shares shall mean: (i) the Shares as they are provided for as at
the date of this Warrant and issuable upon the exercise or conversion of this
Warrant or any warrants delivered in substitution or exchange therefor; and (ii)
shall include any Other Securities which may become and be issuable upon such
exercise or conversion.
Section 2. Exercise of Warrant.
2.1. Exercise.
(a) This Warrant may be exercised by the Holder during the Warrant
Exercise Period at any time or from time to time, in whole or in part, by
surrender of this Warrant, with the form of subscription attached as Exhibit A
hereto duly executed by the Holder, to the Company at its principal office,
accompanied by payment in cash by certified or official bank check payable to
the order of the Company or by wire transfer to its account, in the amount
obtained by multiplying the number of Shares for which this Warrant is then
being exercised by the Exercise Price then in effect.
(b) In the event the Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the Holder a
new Warrant or Warrants of like tenor, in the name of the Holder or as the
Holder (upon payment by the Holder of any applicable transfer taxes) may
request, calling in the aggregate on the face or faces thereof for the number of
Shares equal (without giving effect to any adjustment therein) to the number of
such Shares called for on the face of this Warrant minus the number of such
Shares (without giving effect to any adjustment therein) for which this Warrant
shall have been exercised.
2.2. Early Exercise Rights. For each measuring period set forth on
Schedule 1 attached hereto (each a "Measuring Period"), the Holder will earn the
right to exercise this Warrant for a number of Shares equal to the product of
(i) 3.95 multiplied by (ii) the number of whole tons of cut sheet paper and
paper stock for the Holder's advertising and catalogues ("Cut Sheet Paper") that
the Holder Purchases through the Company's web site exchange during such
<PAGE>
-4-
Measuring Period up to the maximum number of whole tons of Cut Sheet Paper set
forth on Schedule 1 for such Measuring Period, subject to adjustment as provided
in Sections 6 and 7. The rights earned in this Section 2.2 may be exercised
during the Warrant Exercise Period for such rights; provided that any right to
exercise this Warrant earned pursuant to this Section 2.2 shall terminate on the
fifth anniversary of the last day of the Measuring Period for which such right
was earned (the "Early Expiration Date") unless exercised in full prior thereto.
2.3. Expiration. This Warrant shall terminate upon the earlier to occur of
(i) exercise in full, (ii) the Early Expiration Date with respect to, but only
with respect to, any Shares for which the right to early exercise was earned
pursuant to Section 2.2 and (iii) April 7, 2015 (the "Warrant Expiration Date").
Section 3. Registration Rights. The Holder understands that (i) this
Warrant and the Shares issuable upon exercise of this Warrant have not been
registered under the 1933 Act by reason of their issuance in a transaction
exempt from the registration requirements of the 1933 Act, (ii) this Warrant and
the Shares issuable upon exercise of this Warrant must be held indefinitely
unless a subsequent disposition thereof is registered under the 1933 Act and
applicable state securities laws or is exempt from such registration (and, upon
request, evidence satisfactory to the Company is provided by the Holder of the
availability of such exemptions, including, upon request, the delivery to the
Company of opinions of counsel to the Holder, which opinions of counsel are
satisfactory to the Company), and (iii) this Warrant and the Shares issuable
upon exercise of this Warrant may bear a legend to such effect.
Section 4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise or conversion
of this Warrant or any portion thereof. With respect to any fraction of a share
called for upon the exercise or conversion of this Warrant or any portion
thereof, an amount equal to such fraction multiplied by the then current Fair
Market Value of a Warrant Share shall be paid to the Holder in cash by the
Company.
Section 5. Charges, Taxes and Expenses. Issuance of Warrant Shares upon
the exercise or conversion of this Warrant or any portion thereof shall be made
without charge to the Holder for any issue or transfer taxes or any other
incidental expenses in respect of the issuance of such Warrant Shares, all of
which taxes and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder; provided, however, that any income
taxes or capital gains taxes or similar taxes shall be payable by the Holder.
Section 6. Adjustment for Reorganization, Consolidation, Merger, Etc.
6.1. Certain Adjustments. With respect to, but only with respect to,
any Shares for which the right to early exercise was earned pursuant to
Section 2.2, in case at any time or from time to time during the period
commencing on the Issue Date and ending on the Early Expiration Date for
such Shares (the "Adjustment Period"), the Company shall (a) effect a
capital reorganization, reclassification or recapitalization, (b)
consolidate with or merge into any other entity, or (c) transfer all or
substantially all of its properties or assets to any other entity under
any plan or arrangement contemplating the dissolution of the Company, then
in each such case, the Holder, on the exercise hereof as provided in
Section 2 hereof at any time after the consummation of such
reorganization, reclassification, recapitalization, consolidation or
merger or the effective date of such dissolution, as the case may be,
shall receive, in lieu of the Shares (or Other Securities) issuable on
such exercise prior to such consummation or effective date, the
<PAGE>
-5-
Shares and Other Securities and property (including cash) to which the
Holder would have been entitled upon such consummation or in connection
with such dissolution, as the case may be, if the Holder had so exercised
this Warrant immediately prior thereto, all subject to further adjustment
thereafter as provided in Section 7 hereof.
6.2. Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) during the
Adjustment Period and referred to in this Section 6, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable
to the Shares and Other Securities and property receivable on the exercise
of this Warrant after the consummation of such reorganization,
reclassification, recapitalization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may
be, and shall be binding upon the issuer of any such Shares or Other
Securities, including, in the case of any such transfer, the Person
acquiring all or substantially all of the properties or assets of the
Company, whether or not such Person shall have expressly assumed the terms
of this Warrant as provided in Section 8 hereof.
Section 7. Adjustment of Exercise Price and Number of Shares. The Exercise
Price and number of Shares issuable upon exercise or conversion hereof shall be
subject to adjustment from time to time at any time after the Issue Date as
follows:
7.1. Adjustments for Distributions of Shares or Other Securities,
Splits and Combinations. With respect to, but only with respect to, any
Shares for which the right to early exercise was earned pursuant to
Section 2.2, in case at any time or from time to time during the
Adjustment Period, the Company shall (a) issue any Shares or Other
Securities as a dividend or distribution, or (b) issue any Shares or Other
Securities in subdivision of outstanding Shares or Other Securities by
reclassification or otherwise, then the then current number and type of
Warrant Shares issuable upon exercise or conversion hereof shall be
adjusted to a number and type equal to the number and type of Warrant
Shares issuable upon exercise immediately prior to such event plus the
number and type of Warrant Shares the Holder would have received had the
Holder exercised this Warrant immediately prior to such event and received
the number and type of Shares issued in connection with such event and the
Exercise Price shall be adjusted to an amount equal to the Total Exercise
Price (or, if this Warrant has previously been exercised in part, the
remaining unpaid portion of the Total Exercise Price) divided by the total
number of Warrant Shares issuable upon exercise of this Warrant after
giving effect to this adjustment. In case at any time or from time to time
the Company shall combine outstanding Shares or Other Securities by
reclassification or otherwise, then the then current number and type of
Warrant Shares issuable upon exercise or conversion hereof shall be
adjusted to a number and type equal to the number and type of Warrant
Shares the Holder would have received had the Holder exercised this
Warrant immediately prior to such event and received the number and type
of Shares issued in connection with such event and the Exercise Price
shall be adjusted to an amount equal to the Total Exercise Price (or, if
this Warrant has previously been exercised in part, the remaining unpaid
portion of the Total Exercise Price) divided by the total number of
Warrant Shares issuable upon exercise of this Warrant after giving effect
to this adjustment.
7.2. Record of Holders. In case the Company shall take a record of
the holders of its Shares for the purpose of entitling them (a) to receive
a dividend or other distribution payable in Shares or Other Securities, or
(b) to subscribe for or purchase Shares or Other Securities, then such
record date shall be deemed to be the date of the issue or sale of the
Shares or Other Securities deemed to have been issued or sold upon the
declaration of such
<PAGE>
-6-
dividend or the making of such other distribution or the date of the issue
of such right of subscription or purchase, as the case may be.
Section 8. No Dilution. The Company will not, by amendment of its
Certificate of Incorporation, or through any reorganization, transfer of assets,
consolidation, merger or dissolution, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant. Without limiting the generality
of the foregoing, the Company (a) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and non-assessable Shares on the exercise of the Warrant from time to time,
and (b) will not transfer all or substantially all of its properties and assets
to any other entity, or consolidate with or merge into any other entity or
permit any such entity to consolidate with or merge into the Company, unless
such other entity shall expressly assume in writing and will be bound by all the
terms of this Warrant.
Section 9. Accountants' Certificate as to Adjustments. In the case of each
event that may require any adjustment or readjustment in the Warrant Shares
issuable on the exercise of this Warrant, the Company at its expense will
promptly prepare a certificate setting forth such adjustment or readjustment, or
stating the reasons why no adjustment or readjustment is being made, and
showing, in detail, the facts upon which any such adjustment or readjustment is
based, including a statement of (a) the number of shares of each class of the
Company's Common Stock then outstanding on a fully diluted basis, and (b) the
number of shares of each class of Warrant Shares to be received upon exercise of
this Warrant, in effect immediately prior to such adjustment or readjustment and
as adjusted and readjusted (if required by Section 6 or Section 7) on account
thereof. The Company will forthwith mail a copy of each such certificate to each
holder of a Warrant, and will, on the written request at any time of any holder
of a Warrant, furnish to such holder a like certificate setting forth the
calculations used to determine such adjustment or readjustment. At its option,
the holder of a Warrant may confirm the adjustment noted on the certificate by
causing such adjustment to be computed by an independent certified public
accountant at the expense of the Company.
Section 10. Notices of Record Date. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right
to subscribe for, purchase or otherwise acquire any shares of stock or
other securities of any class or property, or to receive any other right;
or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or any consolidation
or merger of the Company with or into any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, in each such event occurring during the Adjustment Period, the Company
will mail or cause to be mailed to the Holder, no later than three days prior to
such event, a notice specifying (a) the date on which any such record is to be
taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, and (b) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution,
<PAGE>
-7-
liquidation or winding-up is anticipated to take place, and the time, if any is
to be fixed, as of which the holders of record of Shares (or Other Securities)
shall be entitled to exchange their Shares (or Other Securities) for securities
or other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up.
Section 11. Reservation of Shares Issuable on Exercise of Warrant.
Sufficient shares of authorized but unissued Common Stock of the Company have
been reserved by appropriate action in connection with the prospective exercise
of the Warrant. The Company represents and warrants that the issuance of the
Warrant or the Warrant Shares will not require any further action by the
stockholders of the Company, will not be subject to pre-emptive rights in any
present or future stockholders of the Company and will not conflict with any
provision of any agreement to which the Company is a party or by which it is
bound, and such Shares, when issued upon exercise of the Warrant in accordance
with their terms or upon such conversion, will be duly authorized, fully paid
and non-assessable and will be free and clear of any liens or encumbrances;
provided, however, that the Shares shall be subject to restrictions on transfer
under state and/or federal securities laws and pursuant to the terms of the
Stockholders' Agreement.
Section 12. No Rights or Responsibilities as Stockholder. This Warrant
neither entitles the Holder to any rights, nor subjects the Holder to any
responsibilities, as a stockholder of the Company.
Section 13. Exchange. This Warrant is exchangeable, upon the surrender
hereof by the registered holder at the principal office of the Company, for new
warrants of like tenor and date representing in the aggregate the right to
purchase the number of Warrant Shares purchasable hereunder, each of such new
warrants to represent the right to purchase such number of Warrant Shares as
shall be designated by said registered holder at the time of such surrender.
Section 14. Loss, Theft, Destruction or Mutilation of Warrant. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which may
be the unsecured agreement of the Holder to indemnify the Company for any loss
on account thereof), and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will make and deliver a new warrant of like
tenor and date, in lieu of this Warrant.
Section 15. Remedies. The Company stipulates that the remedies at law of
the Holder in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
Section 16. Transfer of Warrant. Neither this Warrant nor the rights
hereunder are transferable by the Holder; provided that the Holder may transfer
this Warrant to a direct or indirect subsidiary owned 80% or more (with respect
to both voting and economic interests) by the Holder.
<PAGE>
-8-
Section 17. Amendments and Waivers. Any term of this Warrant may be
amended only with the written consent of the Company and the Holder. Any
amendment or waiver effected in accordance with this Section 17 shall be binding
upon the Company and the Holder.
Section 18. Communications and Notices. All communications and notices
hereunder must be in writing, either delivered in hand or sent by first-class
mail, postage prepaid, or sent by telecopier, and, if to the Company, shall be
addressed to it at the address set forth on the first page hereof, or at such
other address as the Company may hereafter designate in writing by notice to the
registered Holder, and, if to such registered Holder, addressed to such Holder
at the address of such Holder as shown on the books of the Company.
Section 19. Sundays, Holidays, etc. If the last or appointed day for the
taking of any action required or the expiration of any right granted herein
shall be a Sunday or a Saturday or shall be a legal holiday or a day on which
banking institutions in Boston, Massachusetts are authorized or required by law
to remain closed, then such action may be taken or right may be exercised on the
next succeeding day which is not a Sunday, a Saturday or a legal holiday and not
a day on which banking institutions in Boston, Massachusetts are authorized or
required by law to remain closed.
Section 20. Miscellaneous.
(a) THIS WARRANT SHALL BE BINDING UPON THE COMPANY'S SUCCESSORS AND
ASSIGNS. THIS WARRANT SHALL CONSTITUTE A CONTRACT UNDER SEAL AND, FOR ALL
PURPOSES, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
(b) For all purposes of this Warrant, the Holder shall be bound by all of
the terms and conditions contained in, and entitled to all of the benefits of,
this Warrant.
IN WITNESS WHEREOF, PAPEREXCHANGE.COM, INC. has caused this PARTICIPATION
WARRANT to be signed in its corporate name and its corporate seal to be
impressed hereon by its duly authorized officers.
The Company:
Dated as of: PAPEREXCHANGE.COM, INC.
March 7, 2000
By: /s/ Duane DeSisto
----------------------------------
Name: Duane DeSisto
--------------------------------
Title: Chief Financial Officer
-------------------------------
Attest:
- -------------------------
<PAGE>
-9-
Schedule 1
MEASURING PERIODS AND TONNAGE
- --------------------------------------------------------------------------------
Maximum Whole
Tons of
Measuring Period Cut Sheet Paper
- --------------------------------------------------------------------------------
April 1, 2000 through June 30, 2000 *****
- --------------------------------------------------------------------------------
July 1, 2000 through September 30, 2000 *****
- --------------------------------------------------------------------------------
October 1, 2000 through December 31, 2000 *****
- --------------------------------------------------------------------------------
January 1, 2001 through March 31, 2001 *****
- --------------------------------------------------------------------------------
April 1, 2001 through June 30, 2001 *****
- --------------------------------------------------------------------------------
July 1, 2001 through September 30, 2001 *****
- --------------------------------------------------------------------------------
October 1, 2001 through December 31, 2001 *****
- --------------------------------------------------------------------------------
January 1, 2002 through March 31, 2002 *****
- --------------------------------------------------------------------------------
TOTAL: *****
- --------------------------------------------------------------------------------
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
<PAGE>
-10-
Exhibit A
FORM OF SUBSCRIPTION
(To be signed only on exercise of Participation Warrant)
TO: PAPEREXHANGE.COM, INC.
The undersigned, the registered Holder of the within Participation Warrant
of PaperExhange.com, Inc., hereby irrevocably elects to exercise this
Participation Warrant for, and to purchase thereunder, _____* Shares of
PaperExchange.com, Inc. and the undersigned herewith makes payment of $_______
therefor.
Dated:
------------------ ----------------------------------------
(Signature must conform in all
respects to name of registered
holder as specified on the face
of the Warrant)
------------------------------
(Address)
Signed in the presence of:
- --------------------------
- ----------
*Insert here the number of shares (all or part of the number of shares
called for in the Participation Warrant) as to which the Participation Warrant
is being exercised without making any adjustment for any other stock or other
securities or property or cash which, pursuant to the adjustment provisions of
the Participation Warrant, may be deliverable on exercise.
<PAGE>
Exhibit 10.15(b)
PAPEREXCHANGE.COM, INC.
2000 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
OPTION NO: _____
THIS AGREEMENT dated as of _________________ ___, 2000, between
PaperExchange.com, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), and the individual identified below, residing at the
address there set out (the "Optionee").
1. Grant of Option. Pursuant and subject to the Company's 2000 Equity
Incentive Plan as attached hereto (the "Plan"), the Company grants to the
Optionee an option (the "Option") to purchase from the Company all or any part
of a total of ________________ shares (the "Optioned Shares") of the common
stock, par value $.001 per share, in the Company (the "Stock"), at a price, of
$ ______________ per share. This Option is granted(1) as of _______________ ___,
20__ (the "Grant Date").
2. Character of Option. This Option ____________ (2) to be treated as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
3. Duration of Option. This Option shall expire at 5:00 p.m. on the
earlier of
(a) the seventh(3) anniversary of the Grant Date, and
(b) the applicable date below, determined based on the circumstances
in which the Optionee's employment or other association with the Company and its
Affiliates ends (the Optionee's "Termination of Service"):
(i) the date of the Optionee's Termination of Service, if by
the Company or an Affiliate for cause;
(ii) the first anniversary of the Optionee's Termination of
Service, if on account of death or, with the consent of the Company,
- ----------
(1) Replacement options will substitute the word "issued" for the word
"granted" and include the following text: "in full substitution of an option
(the "Replaced Option") previously granted by PaperExchange.com, LLC, the
Company's predecessor, under the PaperExchange.com, LLC 1998 Equity Option
Plan (the "Prior Plan"),". The term "Grant Date" is used to establish the
initial exercise dates, and accordingly for replacement options the date
entered should be the Grant Date of the replaced option.
(2) Insert "is" or "is not". All replacement options will be "is not".
(3) Replacement options will expire on the fifth anniversary, rather than
seventh anniversary, to avoid any extension of the options they are intended to
replace. Such an extension may have adverse accounting effects.
<PAGE>
-2-
permanent and total disability (within the meaning of Section 22(e)(3) of
the Code); and
(iii) the 90th day after the Optionee's Termination of
Service, in any other circumstances.
4. Exercise of Option. Until its expiration and subject to the remainder
of this Section, this Option may be exercised, in the manner specified in
Section 7.1(f) of the Plan, in those installments of Optioned Shares identified
in the table below, in full or in part, from and after the initial exercise date
set opposite each such installment:
Number of
Shares in Installment Initial Exercise Date
--------------------- ---------------------
One-quarter of the First anniversary of Grant Date
Optioned Shares
1/36th of the remaining Cumulatively, on the first day of each
three-quarters of the month to begin after the first anniversary
Optioned Shares of the Grant Date
In the event of the Optionee's Termination of Service by the Company or an
Affiliate other than for cause within twelve (12) months after a change in
control, on such Termination and for the period thereafter the Option remains
exercisable, the Option shall be exercisable to the same extent as it would have
been exercisable had the Optionee remained employed by the Company and its
Affiliates until the first anniversary of the Optionee's Termination of Service
(that is, one additional year's vesting shall be allowed). For this purpose
"change of control" means any transaction, or the initial transaction in a
series of related transactions, occuring after the date hereof if immediately
after such transaction or series more than 50% of the Company's equity
securities have ceased to be owned, directly or indirectly, by persons which
beneficially owned the Company's equity securities, directly or indirectly,
immediately prior to such transaction or series.
Notwithstanding anything contained herein to the contrary, if this
Option does not otherwise terminate immediately upon the Optionee's Termination
of Service, after such Termination of Service this Option shall, until its
expiration, be exercisable only to the extent exercisable immediately prior to
such Termination. Futhermore, this Option shall in no event be exercisable for a
fractional share, with an fractional share being carried forward to future
installments until a whole share results. Finally, this Option may not be
exercised to any extent unless and until the Optionee has become a party to, and
then only while the Optionee remains bound by the provisions of, the
Stockholders' Agreement.
5. Transfer of Options. This Option may not be transferred except by will
or the laws of descent and distribution, and, during the lifetime of the
Optionee, may be exercised only by the Optionee.
<PAGE>
-3-
6. Incorporation of Plan Terms. This Option is granted subject to all of
the applicable terms and provisions of the Plan, including but not limited to
the limitations on the Company's obligation to deliver Optioned Shares upon
exercise set forth in Section 9 (Settlement of Awards).
7.(4) Relationship to Replaced Option; Optionee's Acknowledgement. The
Prior Plan provided that the Optionee would be entitled to exercise the Replaced
Option in full if the conversion of the Company from a limited liability company
into a corporation constituted a reorganization and the Company did not offer
the Optionee an option which substantially preserves the rights and benefits of
the Replaced Option. The Optionee acknowledges and agrees this Option does
substantially preserve the rights and benefits of the Replaced Option. The
Optionee accepts this Option in complete substitution and replacement for the
Replaced Option and all of his or her rights under the Replaced Option and the
Prior Plan, and further agrees upon request of the Company to surrender all
copies of the Replaced Option.
8. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
the conflict of laws principles thereof and shall be binding upon and inure to
the benefit of any successor or assign of the Company and any executor,
administrator, trustee, guardian, or other legal representative of the Optionee.
This Agreement may be executed in two or more counterparts, each of which shall
be an original, but all of which together shall constitute one and the same
instrument. Capitalized terms used but not defined herein shall have the meaning
assigned under the Plan.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
- ----------
(4) Included only in replacement options.
<PAGE>
-4-
IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.
PAPEREXCHANGE.COM, INC.
By: ___________________________ ___________________________________________
Title:___________________________ Signature of Optionee
___________________________________________
Name of Optionee
Optionee's Address:
___________________________________________
___________________________________________
___________________________________________
Telecopier:________________________________
<PAGE>
Exhibit 10.18(b)
SUBLEASE AGREEMENT
AGREEMENT made this 30th day of June, 1998, by and between ICO, LLC, a
Massachusetts limited liability company, with offices c/o Arthur Ivey at
Heritage on the Common, 300 Boylston Street, Unit 507, Boston, MA 02116
(hereinafter called "Sublessor"), and Keith Rodney Company, Inc. a Massachusetts
corporation with offices at 545 Boylston Street, Boston, MA 02216 (hereinafter
called "Sublessee").
WITNESSETH:
WHEREAS, by Agreement of Lease dated as of Oct 9, 1996, by and between Net
Realty Holding Trust, as landlord (hereinafter called the "Landlord of the
Underlying Lease") and Sublessor as tenant, (hereinafter called the "Underlying
Lease"), a copy of which is annexed hereto, made a part hereof and marked
Exhibit "A", the said landlord did lease to the said tenant certain premises
located on the 8th floor of the building known as and numbered 545 Boylston
Street in the City of Boston, County of Suffolk, and Commonwealth of
Massachusetts, as more particularly described in the Underlying Lease (referred
to in the underlying Lease as the "Premises"), and
WHEREAS, Sublessor desires to sublease the Demised Premises (hereinafter
called the "Subleased Premises") to the Sublessee and the Sublessee is willing
to sublet the Subleased Premises from Sublessor on the conditions hereinafter
set forth,
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed by and between the parties hereto as
follows:
ARTICLE I
Subleased Premises
Sublessor hereby subleases unto Sublessee, and Sublessee hereby takes and
hires from Sublessor, subject to the terms, conditions and provisions hereof,
the Subleased Premises which constitute all of the Premises described in said
Underlying Lease, together with any rights appurtenant to said Subleased
Premises granted to Sublessor in the Underlying Lease. Sublessee shall have all
the rights, privileges and benefits of the "Tenant" of such Underlying Lease
pertaining to the Subleased Premises except as herein specifically limited or
denied, and the same are hereby granted and conveyed to Sublessee from Sublessor
for the full term hereof.
ARTICLE II
Term
The term of this Sublease shall be for a period of three (3) years and
eight (8) months commencing on July 1, 1998, and terminating on February 28,
2002 (the "Term").
<PAGE>
ARTICLE III
Rent, Taxes and Assessments
Sublessee covenants and agrees to pay the following to Sublessor, at such
place or places as Sublessor may by notice in writing to Sublessee from time to
time direct, at the following rates and times:
(a) Annual Rent. Annual rent at the rate of one hundred twenty-six
thousand, one hundred thirty-nine ($126,139.00) Dollars payable each month in
equal installments of ten thousand, five hundred eleven and 58/100 ($10,511.58)
Dollars in advance, on the first day of each and every calendar month,
commencing on July 1, 1998 and prorated for the fraction of any month, without
offset, deduction, notice or demand.
(b) Additional Rent. Sublessee shall pay to Sublessor, as additional rent,
all real estate taxes which Sublessor may be obligated to pay pursuant to the
terms of Article 7 of the Underlying Lease, any increases in Operating Expenses
which Sublessor may be obligated to pay pursuant to the terms of Article 8 of
the Underlying Lease, and any other charges which Sublessor may be obligated to
pay pursuant to the Underlying Lease during the term of this Sublease. The
amounts due hereunder pursuant to the aforesaid provisions of the Underlying
Lease shall be payable to Sublessor no less than ten (10) days prior to the date
that Sublessor may be obligated to pay same pursuant to the terms of said
Underlying Lease.
(c) All rental and additional rental shall be paid to Sublessor at the
address set forth above, or such other address as Sublessor may designate in
writing.
ARTICLE IV
Use
Sublessee shall have the right to use the Subleased Premises for the use
permitted by Article 9 of the Underlying Lease and for no other purpose.
ARTICLE V
Condition of the Premises
Sublessee accepts the Subleased Premises in "as-is" condition.
Sublessor shall deliver possession of the Subleased Premises to Sublessee
on July 1, 1998, subject to delays beyond Sublessor's reasonable control, but in
no event prior to the execution of this Sublease and the delivery of the rental
required hereunder.
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<PAGE>
ARTICLE VI
Assignment and Subletting
Sublessee shall not have the right to assign Sublessee's interest in the
Sublease or sublease the Subleased Premises in whole or in part during the term
hereof, by operation of law or otherwise.
ARTICLE VII
Subordination of Sublease
It is understood that the Sublessor is not the fee owner of the Subleased
Premises, but has acquired its interest therein solely through the Underlying
Lease. This Sublease is subject to the provisions of the Underlying Lease and
subordinate thereto. In the event that the Underlying Lease shall be cancelled
or terminated, the term of this Sublease shall automatically terminate as of the
date of such cancellation or termination of the Underlying Lease and the
Sublessor shall not be liable in any way or to any extent to the Sublessee for
such termination or cancellation or for any damages or losses incurred or
claimed to be incurred by Sublessee as a result thereof.
ARTICLE VIII
Incorporation of Underlying Lease
(a) Except as otherwise herein provided, this Sublease is subject to all
of the terms, covenants and conditions of the Underlying Lease and said terms,
covenants and conditions are incorporated herein by reference and made a part of
this Sublease as if fully set forth herein except as otherwise stated in Article
VIII, Paragraph (b) below. The words "Landlord" and "Tenant", as utilized in the
provisions of the Underlying Lease incorporated herein shall be deemed to refer
for the purposes of this Sublease, to Sublessor and Sublessee respectively and
the words "this lease" shall mean this Sublease. With respect to the Subleased
Premises, and only as between Sublessor and Sublessee, Sublessor shall have the
rights and obligations of the Landlord of the Underlying Lease as set forth in
the Underlying Lease, and Sublessee shall have the rights and obligations of the
tenant of the Underlying Lease as set forth in the Underlying Lease, except
where such rights and obligations are deleted, modified or altered herein.
(b) If any of the provisions of this Sublease are at variance or in
conflict with the provisions of the Underlying Lease due to a deletion,
modification or alteration of such provisions herein, the provisions of this
Sublease shall govern and control.
(c) Sublessee covenants that it will not commit, or suffer to be
committed, any act or act of omission in violation of the terms and provisions
of the Underlying Lease so as to render the Sublessor in default in any of the
terms, covenants and conditions of the Underlying Lease.
(d) In the event of any default by the Landlord of the Underlying Lease
under the terms thereof, Sublessee shall give the Sublessor and the Landlord of
the Underlying Lease written notice thereof. Sublessor shall not be responsible
or liable for the failure by the Landlord of the Underlying Lease to furnish to
Sublessee any service or facility required under the Underlying Lease to be
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<PAGE>
furnished or provided and Sublessor will use its best efforts to compel the
Landlord of the Underlying Lease to cure any such default pursuant to the terms
of the Underlying Lease.
ARTICLE IX
Default
(a) In the event that Sublessee shall default in the payment of annual
rent herein reserved and/or any additional rental when due, Sublessor shall
notify Sublessee in writing of such default, and Sublessee shall have five (5)
days from the date of such notice to cure such default.
(b) In the event that Sublessee shall default in the performance of any
obligations hereunder when due, except the payment of annual rent and/or
additional rent herein reserved, Sublessor shall notify Sublessee in writing of
such default, and Sublessee shall have twenty (20) days from the date of such
notice to cure such default.
(c) Except in the event of a default, as provided in Subparagraphs (a) and
(b) set forth above:
(i) Whenever a time period is specified in the Underlying Lease
within which the tenant therein must give notice or make a demand
following an event, or within which said tenant must respond to any
notice, request or demand previously given or made by the landlord, or
comply with any obligation thereunder on such tenant's part, such time
period is hereby changed (for purposes of this Sublease only) by
subtracting ten (10) days therefrom; and
(ii) whenever a time period is specified in the Underlying Lease
within which the landlord must give notice or make a demand following an
event or within which the landlord must respond to any notice, request or
demand previously given or made by the tenant thereunder, or comply with
any obligation thereunder on landlord's part, such time period is hereby
changed (for purposes of this Sublease only) by adding ten (10) days
thereto.
It is the intent of this section to provide Sublessor with time within which to
transmit to the Landlord of the Underlying Lease any notices or demands received
by Sublessor from Sublessee, and to transmit to Sublessee any notices or demands
received by Sublessor from the Landlord of the Underlying Lease.
ARTICLE X
General Provisions
(a) Any insurance required to be carried by Sublessee pursuant to the
provisions of the Underlying Lease as incorporated herein shall name the
Landlord of the Underlying Lease as well as Sublessor, as additional insured
parties and, if requested, any mortgagee of the Underlying Landlord.
(b) The purpose and intent of this Sublease is that the rental provided
for in Article III hereof shall be absolutely net to the Sublessor except as
expressly provided to the contrary herein. In this connection, Sublessor shall
not have any obligation to construct, maintain, alter or repair the
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<PAGE>
Subleased Premises or any facilities or improvements thereon or appurtenant
thereto or be obligated to provide Sublessee with any service or facility, but
shall be obligated only to use its best efforts to compel the Landlord of the
Underlying Lease to perform such duties if said Landlord has covenanted to do so
under the terms of the Underlying Lease.
(c) Sublessee shall, upon the request of Sublessor, subordinate this
Sublease to the lien of any present or future mortgage upon the Demised Premises
and/or the Subleased Premises irrespective of the time of execution or recording
of any such mortgage.
(d) Sublessee shall not have any of the tenant's rights specified in the
provisions of Article 3 (Renewal Option), Article 11 (Preparation of the
Premises), Article 41 (Broker) or Article 44 (Lease Contingency) of the
Underlying Lease.
(e) Any rights by the tenant to terminate the Underlying Lease provided
therein shall be exercised only by Sublessor when, in its sole opinion, those
conditions precedent required for a termination by tenant under the terms and
conditions of the Underlying Lease have occurred.
(f) Sublessee shall pay for all utilities provided to the Subleased
Premises including without limitation, gas, water, electricity, sewerage and
telephones. Payments for such charges shall be made as provided in the
Underlying Lease.
ARTICLE XI
Notices
All notices or communications authorized or required hereunder shall be in
writing and shall be given by mailing the same by certified or registered mail,
return receipt requested, postage prepaid, and any such notice or communication
shall be deemed to have been given when received by the party to whom such
notice or communication shall be addressed. If intended for Sublessor, same
shall be mailed c/o Arthur Ivey to Heritage on the Common, 300 Boylston Street,
Unit 507, Boston, MA 02116 and a copy to Posterrnak, Blankstein & Lund, L.L.P.,
100 Charles River Plaza, Boston, MA 02114, Attn: Robert M. Schlein, Esquire, or
at such other address as Sublessor may hereafter designate by notice to
Sublessee: and if intended for Sublessee, the same shall be mailed to Sublessee
at 545 Boylston Street, Boston, MA 02116, or at such other address as Sublessee
may designate by notice to Sublessor.
ARTICLE XII
Merger, Disclaimers
All understandings and agreements heretofore had between the parties
hereto are merged in this Sublease, which alone fully and completely express
this Sublease, Sublessee has not relied upon or been induced by any statements
or representations, other than those expressly set forth in this Sublease, of
any person in respect of the title to or the physical condition of the Subleased
Premises, or any other matter affecting the Subleased Premises or this
transaction which might be pertinent in considering the execution of this
Sublease. Sublessee expressly acknowledges that no such representations not
embodied herein have been made.
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<PAGE>
ARTICLE XIII
Entire Agreement and Benefits
This agreement contains the entire understanding between parties. No
waiver, change, modification or discharge of any of the provisions of this
Sublease shall be valid unless effected by an agreement in writing signed by
both parties hereto. The waiver of any of the provisions of this Sublease shall
not be deemed to be a waiver of any subsequent breach or default of the
provisions hereof. This Sublease shall be binding upon and inure to the benefit
of Sublessor and Sublessee and their respective successors and assigns.
ARTICLE XIV
Severability
The illegality or invalidity of any provision of this Sublease, by reason
of any rule of law or public policy, shall not affect this Sublease or any other
provisions hereof, but this Sublease shall, nevertheless, remain in full force
and effect and shall be construed in all respects as if such invalid provision
were omitted.
ARTICLE XV
Construction
This Sublease and the performance thereof shall be construed, regulated
and governed by the laws of the Commonwealth of Massachusetts, where it has been
made and entered into. The section headings have been inserted for convenience
only and shall not enter into the interpretation or construction of this
Sublease.
[Signature on following page.]
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<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the date and year first above written.
(Sublessor)
ICO, LLC
By
--------------------------------------
Arthur J. Ivey, Managing Member
hereunto duly authorized
(Sublessee)
KEITH RODNEY COMPANY, INC.
By /s/ Keith Rodney
-------------------------------------
Keith Rodney, its President
hereunto duly authorized
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<PAGE>
Exhibit 10.18(c)
ASSIGNMENT OF SUBLEASE
This Assignment of Sublease made this 19th day of March, 1999, by and
between Keith Rodney Company, Inc., a Massachusetts corporation ("Assignor")
and PaperExchange.com, a Delaware limited liability company ("Assignee"),
W I T N E S S E T H
WHEREAS, by agreement of lease (the "Underlying Lease") Net Realty
Holding Trust did lease to ICO, LLC ("Sublandlord"), the premises located on
the 8th floor of the building known as and numbered 545 Boylston Street in
the City of Boston, County of Suffolk, and Commonwealth of Massachusetts, as
more particularly described therein; and
WHEREAS, said Sublandlord, sublet the premises demised under the Lease
to Assignor pursuant to a Sublease Agreement dated June 29, 1998, a true copy
of which is annexed hereto to Exhibit A and Assignor and Sublandlord have
amended said Sublease Agreement by a First Amendment of Sublease of even date
and delivery herewith (as so amended, the "Sublease"); and
WHEREAS, Assignor desires to assign the Sublease to Assignee on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed by and between the parties as
follows:
1. POSSESSION DATE. This Agreement shall be effective on the day that
possession of the premises described under the Sublease is delivered to
Assignee.
2. ASSIGNMENT BY ASSIGNOR. Effective on the Possession Date, Assignor
hereby assigns, conveys, transfers, sets over and delivers to Assignee all of
Assignor's right, title and interest in and to the Sublease. Assignor agrees
to indemnify and hold harmless Assignee from and against any liability, loss
or damage that it might incur on account of any claims or demands that may be
asserted against Assignee by reason of any alleged obligation or undertaking
on Assignor's part to be performed or discharged under the Lease prior to the
Possession Date. If Assignee incurs any such liability, loss or damage in the
defense of any such claims or demands, Assignor shall promptly, on demand,
reimburse Assignee for the amount thereof, including costs, expenses and
reasonable attorneys' fees.
3. ACCEPTANCE OF ASSIGNMENT. As of the Possession Date, Assignee hereby
accepts the foregoing Assignment of the Sublease and agrees to perform and
observe all
<PAGE>
such covenants, obligations, duties and conditions therein contained that are
on Assignor's part to be performed arising after the Possession Date.
Assignee shall indemnify and hold harmless (i) Assignor, and (ii) in
consideration of their consent to the foregoing Assignment, (x) Keith Rodney,
the guarantor of Assignor's obligations under the Sublease, (y) Sublandlord,
and (z) Arthur Ivey, the guarantor of Sublandlord's obligations under the
Underlying Lease, from and against any liability, loss or damage that any of
the indemnified parties might incur under the Underlying Lease or the
Sublease or their respective guarantees for any claims or demands that may
be asserted against Assignor, said Sublandlord, said Keith Rodney or said
Arthur Ivey, or any of them, by reason of any alleged obligation on
Assignee's part to be performed or discharged under the Sublease after the
Possession Date. If any of the indemnified parties incurs any such liability,
loss or damage in the defense of any such claims or demands, Assignee shall
promptly upon demand reimburse the indemnified party for the amount thereof,
including costs, expenses and reasonable attorneys' fees.
4. LIABILITY OF ASSIGNOR. Assignor acknowledges to Sublandlord that
nothing contained in this Agreement is intended to waive or release the
obligation of Assignor as Subtenant under the Sublease, which liability
Assignor hereby ratifies and confirms.
5. RENTAL DEPOSIT. Contemporaneously with the execution of this
Agreement, Assignee has deposited with Assignor $34,586.52, a sum equal to
Annual Rent for a period of three (3) months. Assignor is authorized to
utilize such funds to pay any sums due under the Sublease if Assignee fails
to pay any sum due under the Sublease when due. If Assignor has not paid any
funds as provided herein, the funds deposited shall be applied to Annual Rent
for the last three (3) months of the term of the Sublease. If a portion of
the funds has been utilized as provided herein, the remaining funds, if any,
shall be repaid to Assignee at the expiration of the term.
6. MISCELLANEOUS. This Assignment constitutes the entire agreement
among the parties, and may not be altered, amended or revoked except by a
writing signed by the party against whom the same is sought to be enforced,
and shall be binding upon the successors and assigns of the parties hereto.
If any clause or provision hereof is deemed to be invalid, the balance of
this Agreement shall remain in force and shall be enforceable according to
its terms.
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<PAGE>
This Assignment of Sublease is executed as a sealed instrument as of the
date set forth above.
ASSIGNOR:
KEITH RODNEY COMPANY, INC.
By: /s/ Keith Rodney
-------------------------------
Name: Keith Rodney
-------------------------------
Title: President
-------------------------------
PAPEREXCHANGE.COM
By: /s/ Rod A. Parsley
-------------------------------
Name: Rod A. Parsley
-------------------------------
Title: Chief Financial Officer
-------------------------------
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<PAGE>
CONSENT OF GUARANTOR
The undersigned Guarantor of Assignor's obligations under the Sublease,
hereby consents to the foregoing Assignment of Sublease, and agrees that the
Guaranty of the undersigned with respect to the Sublease remains in full
force and effect.
Executed under seal this __ day of March, 1999.
GUARANTOR:
/s/ Keith Rodney
-------------------------------------
CONSENT OF SUBLANDLORD
The undersigned Sublandlord hereby consents to the foregoing Assignment
of sublease.
SUBLANDLORD:
ICO, LLC
By: /s/ Arthur J. Ivey
-------------------------------
Name: Arthur J. Ivey
-------------------------------
Title: President
-------------------------------
CONSENT OF LANDLORD
The undersigned, as Landlord under the Underlying Lease, hereby consents
to the foregoing Assignment of Sublease.
Executed under seal this __ day of March, 1999.
LANDLORD:
NET REALTY HOLDING TRUST
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
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<PAGE>
Exhibit 10.21
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT dated as of February 28, 2000 (the
"Agreement") is among (a) PaperExchange.com, Inc., a Delaware corporation (the
"Corporation"), (b) Hilton Plein, Terrapin Holdings LLC, Kraft Group LLC, PE.com
Holdings LLC, Steven Kaplan, Roger Stone, Roger Stone, as Voting Trustee for
each of Matthew and Karen Kaplan, Lauren G. Stone and Jennifer Stone, Matthew
Kaplan, as Voting Trustee for each of Matthew and Karen Kaplan, Lauren G. Stone
and Jennifer Stone, Kent A. Dolby, Madison Dearborn Capital Partners III, L.P.,
Madison Dearborn Special Equity III, L.P., Special Advisors Fund I, LLC, DBV
Investments, L.P., DSCKW Irrevocable Trust and International Paper Company, and
(c) each other Person who becomes a party to this Agreement (collectively, with
the parties listed in clause (b), the "Stockholders") by executing an Instrument
of Accession in the form attached hereto as Schedule 1 (an "Instrument of
Accession").
WHEREAS, the holders of all of the shares of the Corporation's capital
stock, which shareholdings as of the date of this Agreement and other options
and warrants of the Stockholders are set forth on Schedule 2 attached hereto,
wish to set forth their relative rights with regard to the transfer of the
Corporation's securities and certain other matters concerning the Corporation's
capital stock and to set forth their agreement as to the voting of such
securities;
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
ss.1. DEFINITIONS. For all purposes of this Agreement, the following terms
shall have the meanings set forth below:
Affiliate. Affiliate shall mean any Person, directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common
control with another specified Person. The term "control," as used in the
immediately preceding sentence, shall mean with respect to a corporation or
limited liability company the right to exercise, directly or indirectly, more
than fifty percent (50%) of the voting rights attributable to the controlled
corporation or limited liability company, and, with respect to any individual,
partnership, trust, other entity or association, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled entity.
Accepting Offerees. See Section 2.6E.
Board of Directors. Board of Directors shall mean the Board of Directors
of the Corporation.
<PAGE>
-2-
Common Stock. Common Stock shall mean the Corporation's common stock, par
value $.001 per share.
Corporation. See preamble.
Drag-Along Notice. See Section 2.7.
Drag-Along Rights. See Section 2.7.
Family. See Section 2.2.
Kraft. Kraft shall mean Kraft Group LLC, a Delaware limited liability
company.
ICG. ICG shall mean Internet Capital Group, Inc., a Delaware corporation.
Initial Public Offering. See Section 3.6.
Instrument of Accession. See preamble.
Offer Notice. See Section 2.6B.
Offer Period. See Section 2.6D.
Offer Price. See Section 2.6A.
Offered Securities. See Section 2.6.
Offerees. See Section 2.6B.
PEH. PEH shall mean PE.com Holdings, LLC, a Delaware limited liability
company.
Permitted Transfer. See Section 2.2.
Person. Person shall mean an individual, partnership, corporation, limited
liability company, association, trust, joint venture, unincorporated
organization, or any government, governmental department or agency or political
subdivision thereof.
Proxy. See Section 3.1.
Purchase Offer. See Section 2.6A.
Purchaser. See Section 2.6A.
Right of First Refusal Offer. See Section 2.6B.
<PAGE>
-3-
Securities. Securities shall mean all outstanding shares of the
Corporation's capital stock, including the Common Stock, whether owned on the
date hereof or hereafter acquired, including upon exercise of any options,
warrants or rights or upon conversion of Securities or otherwise.
Seller. See Section 2.6.
Stockholders. See preamble.
Tag-Along Offer. See Section 2.6E.
Transfers. See Section 2.1.
ss.2. TRANSFER AND ASSIGNMENT OF SECURITIES.
2.1 General. A Stockholder shall be entitled to transfer, assign, convey,
sell, encumber or in any way alienate all or any portion of its Securities
(collectively, "Transfer") only as provided in this Section 2. After the
consummation of any Transfer of all or any portion of its Securities, the
Securities so transferred shall continue to be subject to the terms and
provisions of this Agreement and any further Transfers shall be required to
comply with all the terms and provisions of this Agreement.
2.2 Permitted Transfers. A Stockholder shall be entitled to engage in the
following Transfers, each of which may be undertaken and consummated without
compliance with the restrictions set forth in Section 2.6: (i) Transfers to a
Stockholder's Family (as defined in this Section 2.2 below), including without
limitation, Transfers to Family for estate planning purposes; (ii) Transfers by
Kraft or any Affiliate of Kraft; (iii) Transfers by ICG to the extent required
to perfect security interests of its institutional lenders under credit
agreements, if ICG becomes a Stockholder; (iv) Transfers by PEH to ICG; and (v)
Transfers to Affiliates (each a "Permitted Transfer" and collectively the
"Permitted Transfers"). With respect to any Permitted Transfer by Kraft or any
Affiliate of Kraft, solely pursuant to clause (ii) of this Section 2.2, Kraft or
any Affiliate of Kraft shall be subject to the provisions of Section 2.6C if the
Securities to be transferred, individually or collectively in a single Transfer
or series of related Transfers, constitute 5% or more of the Securities on a
fully diluted basis. "Family" shall include only such transferor's spouse,
ancestors and lineal discendants (including adoptive individuals as lineal
descendents) and trusts for any such Person's or Persons' exclusive benefit.
2.3 Restrictions on Transfer of Securities. In addition to other
restrictions set forth in this Agreement, no Stockholder shall Transfer all or
any portion of its Securities without compliance with all federal and state
securities law.
<PAGE>
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2.4 Conditions to Transfer. No Transfer shall be permitted hereunder
unless (i) the transferee, including, but not limited to, ICG upon the
completion of a Transfer from PEH pursuant to Section 2.2(iv), shall become a
party to this Agreement by executing and delivering to the Corporation an
Instrument of Accession, which executed Instrument of Accession shall thereupon
become a part of this Agreement, (ii) the requirements of Section 2.3 relating
to securities requirements hereof are met, and (iii) the transferee pays any
reasonable expenses in connection with its becoming a new Stockholder. A
Transfer to a new Stockholder shall not result in the release of the Stockholder
who assigned the Securities from any liability that such Stockholder may have to
the Corporation.
2.5 Rights of Legal Representatives. If a Stockholder who is an individual
dies or is adjudged by a court of competent jurisdiction to be incompetent to
manage the Stockholder's person or property, the Stockholder's executor,
administrator, guardian, conservator, or other legal representative may exercise
all of the Stockholder's rights for the purpose of settling the Stockholder's
estate or administering the Stockholder's property. If a Stockholder is a
corporation, trust, or other entity and is dissolved or terminated, the powers
of that Stockholder may be exercised by its legal representative or successor.
2.6 Additional Rights of Purchase and Sale. In addition to the other
limitations and restrictions set forth in this Section 2, no Stockholder shall
Transfer all or any portion of his Securities (the "Offered Securities") unless
such Stockholder (the "Seller") first complies with the provisions of this
Section 2.6. This Section 2.6 shall not apply to a Permitted Transfer.
A. Limitation on Transfers. No Transfer may be made under this
Section 2.6 unless the Seller has received a bona fide written offer (the
"Purchase Offer") from a Person (the "Purchaser") to purchase the Offered
Securities for a purchase price (the "Offer Price") denominated and payable in
United States dollars at closing or according to specified terms, with or
without interest, which offer shall be in writing signed by the Purchaser and
shall be irrevocable for a period ending no sooner than the day following the
end of the Offer Period (as hereinafter defined).
B. Offer Notice. Prior to making any Transfer that is subject to the
terms of this Section 2.6, the Seller shall give to the Corporation and each
other Stockholder written notice (the "Offer Notice") which shall include a copy
of the Purchase Offer and an offer (the "Right of First Refusal Offer") to sell
the Offered Securities to the other Stockholders (the "Offerees") for the Offer
Price, payable according to the same terms as (or more favorable terms than)
those contained in the Purchase Offer, provided that the Right of First Refusal
Offer shall be made without regard to the requirement of any earnest money or
similar deposit required of the Purchaser prior to closing, and without regard
to any security (other than the
<PAGE>
-5-
Offered Securities) to be provided by the Purchaser for any deferred portion of
the Offer Price.
C. Tag-Along Offer. If the Offered Securities (which in the case of
Kraft or an Affiliate of Kraft, includes a Permitted Transfer under Section
2.2(ii)) constitute 5% or more of the Securities on a fully diluted basis, the
Offer Notice shall include an offer (the "Tag-Along Offer") to the Offerees to
participate in the proposed sale to the Purchaser as to a portion of the
Offerees' Securities. Each Offeree shall have the right to sell a portion of his
Securities pursuant to the terms of the Purchase Offer, such portion to be
determined by multiplying the number of Offered Securities by a fraction, the
numerator of which is the number of Securities then owned by the Offeree, and
the denominator of which is the number of Securities owned by all Stockholders.
To the extent an Offeree exercises his right to participate in the proposed sale
to the Purchaser, the Securities that may be sold by the Seller shall be reduced
proportionately.
D. Offer Period. The Right of First Refusal Offer and the Tag-Along
Offer shall be irrevocable for a period (the "Offer Period") ending at 11:59
P.M., local time at the Corporation's principal office, on the 20th day
following the day of the Offer Notice.
E. Acceptance of Offer. At any time during the first 15 days of the
Offer Period, any Offeree may accept: (i) the Right of First Refusal Offer as to
all or any percentage of that portion of the Offered Securities that corresponds
to the ratio of his Securities to the total Securities held by all Offerees, or
(ii) the Tag-Along Offer in an amount not to exceed the maximum number of
Securities with respect to which the Offeree may participate as set forth in
Section 2.6C, in each case by giving written notice of such acceptance to the
Seller and the Board of Directors.
At any time after the 15th day of the Offer Period, but within the
20 day period set forth in Section 2.6D, Offerees who had previously accepted
the Right of First Refusal Offer pursuant to the previous sentence ("Accepting
Offerees") may accept the Right of First Refusal Offer as to any portion of the
Offered Securities that has not been previously accepted by giving written
notice of such acceptance to the Seller and the Board of Directors. In the event
Accepting Offerees so accept the Right of First Refusal Offer with respect to
more than the balance of the Offered Securities, then the balance of the Offered
Securities shall be allocated among such Accepting Offerees in proportion to
their number of Securities. In the event that Offerees, in the aggregate, accept
the Right of First Refusal Offer with respect to all of the Offered Securities,
the Right of First Refusal Offer shall be deemed to be accepted. If Offerees do
not accept the Right of First Refusal Offer as to all of the Offered Securities
during the Offer Period, the Right of First Refusal Offer shall be deemed to be
rejected in its entirety.
<PAGE>
-6-
If the Right of First Refusal Offer is deemed to be rejected in its
entirety pursuant to the preceding paragraph, the Offerees nevertheless may
participate in the sale to the Purchaser pursuant to their exercise of the
Tag-Along Offer as set forth above, and the Offerees who accepted the Tag-Along
Offer shall be treated as Accepting Offerees for purposes of this Section 2.6.
If the Right of First Refusal Offer is accepted with respect to all of the
Offered Securities, those Stockholders exercising the Right of First Refusal
Offer shall purchase the Offered Securities as provided in this Section 2.6, and
the Tag-Along Offer shall become null and void.
F. Closing of Purchase Pursuant to Right of First Refusal Offer or
Tag-Along Offer. In the event that the Right of First Refusal Offer is accepted,
the closing of the sale of the Offered Securities shall take place within 30
days after the Right of First Refusal Offer is accepted or, if later, the date
of closing set forth in the Purchase Offer. The Seller and all Accepting
Offerees shall execute such documents and instruments as may be necessary or
appropriate to effect the sale of the Offered Securities pursuant to the terms
of the Right of First Refusal Offer or the Tag-Along Offer and this Section 2.6.
G. Sale Pursuant to Purchase Offer If Right of First Refusal Offer
is Rejected. If the Right of First Refusal Offer is not accepted in the manner
set forth in this Section 2.6, the Seller and any Accepting Offerees who
accepted the Tag-Along Offer may sell to the Purchaser an aggregate number of
Securities not to exceed the Securities representing the Offered Securities at
any time within 60 days after the last day of the Offer Period, provided that
such sale shall be made on terms no more favorable to the Purchaser than the
terms contained in the Purchase Offer and provided further that such sale
complies with other terms, conditions and restrictions of this Agreement that
are applicable to Transfers of Securities. In the event that the Offered
Securities are not sold in accordance with the terms of the preceding sentence,
the Offered Securities shall again become subject to all of the conditions and
restrictions of this Section 2.6.
2.7 Drag-Along Rights. If Kraft proposes to enter into a transaction or
series of related transactions as a result of which all Securities of Kraft and
its Affiliates will be transferred to one or more third parties (other than
persons who are then Stockholders or Affiliates of Stockholders), Kraft shall
have the right to drag-along with Kraft and its Affiliates all of the Securities
then outstanding on the same terms, for the same form of consideration and for
the same price per share as Kraft and its Affiliates are to receive for the
Securities owned by them. This right to cause the sale of Securities of other
Stockholders as set forth in this Section 2.7 shall be referred to as
"Drag-Along Rights". Kraft shall exercise its Drag-Along Rights under this
Section 2.7 by delivering a notice (the "Drag-Along Notice") to all Stockholders
no later than 30 days prior to the date the proposed transaction is
<PAGE>
-7-
contemplated to close. The Drag-Along Notice shall include the following
statements or information: (i) Kraft's bonafide intention to sell or transfer
its Securities; (ii) the number of Securities to be sold or transferred; (iii)
the price and salient terms of such sale or transfer; (iv) the name of the
proposed transferee; and (v) a copy of all transaction documents in
substantially final form; provided, however, that such transaction documents
need only be delivered within five business days of the date the proposed
transaction is contemplated to close. For purposes of this Section, if such
Drag-Along Notice is served personally or by facsimile transmission, delivery
shall be conclusively deemed made at the time of such personal service or at the
time the notice is transmitted. If such Drag-Along Notice is given via
registered mail, return receipt request, delivery shall be conclusively deemed
given five (5) business days after the deposit thereof in the United States
mail. If such Drag-Along Notice is given by overnight mail, delivery shall be
conclusively deemed made on the next business day after mailing. If a Drag-Along
Notice is given, but the transaction is not consummated within 90 days of the
date of such notice, such notice will no longer be valid and a new Drag-Along
Notice shall be required. If a transaction which is subject to Krafts'
Drag-Along Rights is pending, a majority of the members of the Board of
Directors may designate one or more representatives to act as attorney-in-fact
for each Stockholder who is subject to the Drag-Along Rights, as set forth in
Section 5, and each such representative shall have the power-of-attorney (such
power to be irrevocable and coupled with an interest) to execute such documents
and take such actions as such representative may deem necessary or advisable in
order to affect the Drag-Along Rights granted under this Section 2.7.
2.8 Transfers of Securities in Breach of this Agreement. In the event of
any Transfer of Securities in breach of this Agreement, commencing immediately
upon the date of such attempted Transfer (i) such Transfer shall be void and of
no effect; (ii) no dividend of any kind or any distribution pursuant to any
liquidation, redemption or otherwise shall be paid by the Corporation to the
purported transferee in respect of such Securities (all such rights to payment
by the transferring Stockholder and/or the purported transferee being deemed
waived); (iii) the voting rights of such Securities, if any, shall terminate;
and (iv) neither the transferring Stockholder nor the purported transferee shall
be entitled to exercise any rights with respect to such Securities until such
Transfer in breach of this Agreement has been rescinded.
ss.3. PROXY AND VOTING AGREEMENT.
3.1 Proxy; Voting Agreement. (a) Each Stockholder, except Kraft, hereby
grants to the Board of Directors (the "Proxy") an irrevocable proxy coupled with
an interest, with full power of substitution, to vote all Securities held by
such Stockholder with respect to any matter on which the Stockholder has the
right to
<PAGE>
-8-
vote or give its consent, approval or authorization or to call a meeting under
the Delaware General Corporation Law, the Certificate of Incorporation or
By-laws of the Corporation or this Agreement, except under Section 14 of this
Agreement, with all powers that the Stockholder would possess if personally so
voting, consenting, approving or authorizing and as the Proxy so chooses. This
proxy will survive a Stockholder's death, incapacity or dissolution. This proxy
shall expire on the earlier of (i) February 1, 2015 and (ii) the termination of
this Agreement pursuant to Section 15. Each Stockholder acknowledges and agrees
that this proxy is coupled with an interest sufficient in law to support an
irrevocable power. Only a majority vote of the Board of Directors shall be
necessary to take action as the Proxy.
(b) Further, the Stockholders, except for Kraft, agree that they will not
take any action as stockholders of the Corporation, except for Transfers
pursuant to the terms of this Agreement, unless such action is first approved by
the Board of Directors.
3.2 All Securities. For the avoidance of doubt, the provisions of this
Agreement shall apply to any and all Securities owned by the Stockholders on the
date hereof and hereafter acquired.
3.3 New Stockholders. Also for the avoidance of doubt, in the event that a
Person becomes a party to this Agreement after the date hereof, by executing and
delivering an Instrument of Accession, such Person shall be deemed to have
appointed the Proxy as its proxy for purposes of Section 3.1.
3.4 Board of Directors. (a) Notwithstanding anything herein or in the
Certificate of Incorporation or By-Laws of the Corporation to the contrary but
subject to amendment pursuant to Section 14, the Corporation and the
Stockholders agree that with respect to any and all elections of directors of
the Corporation (whether at a meeting or by written consent in lieu of a
meeting), all Securities owned by the Stockholders shall be voted by the Proxy
so as to fix the number of directors of the Corporation at eight (8), and to
nominate and elect such eight (8) directors of the Corporation as follows:
(i) Six (6) individuals designated by Kraft so long as Kraft is a
stockholder of the Corporation; and
(ii) Two (2) individuals designated by PEH so long as PEH is a
stockholder of the Corporation or by ICG if ICG becomes a Stockholder
pursuant to Section 2.2(iv) so long as ICG is a stockholder of the
Corporation.
(b) If any vacancy shall occur in the Board of Directors of the
Corporation as a result of death, disability, resignation or any other
termination of a director, the replacement for such vacating director shall be
designated by the
<PAGE>
-9-
Person or Persons who, pursuant to Section 3.4(a) above, originally designated
such vacating director. Each Person or Persons entitled to designate a director
or a replacement for a director pursuant to this Section 3.4 shall also be
entitled to designate the removal of such director with or without cause at any
time, and from time to time, in its sole discretion. Each Stockholder agrees
that the Proxy shall vote all Securities owned by such Stockholder in order to
comply with this Section 3.4.
3.5 Proxy's Indemnity.
(a) The Proxy shall serve without compensation and shall have the
right to incur and pay and the Corporation, at the Proxy's request, agrees to
advance such reasonable expenses and charges, and to employ and pay and the
Corporation, at the Proxy's request, agrees to advance payment of such agents,
attorneys, and counsel as it may deem necessary and proper for carrying out this
Agreement. Any such expenses and charges incurred by and due to the Proxy shall
be paid by the Corporation.
(b) The Proxy assumes no liability as a Stockholder, its interest
hereunder being that of a proxy only. In voting the Securities (which it may do
either in person or by proxy as aforesaid), the Proxy will vote and act in all
matters in accordance with its good faith judgment and the terms of this
Agreement; but it assumes no responsibility or liability in respect of any
action taken by it or in pursuance of its vote so cast, and the Proxy shall not
incur any responsibility or liability by reason of any error of fact or law,
mistake of judgment, or of any matter or thing done or suffered or omitted to be
done under this Agreement, except for its own individual willful misconduct.
(c) The Proxy shall not be answerable for the default or misconduct
of any agent or attorney appointed by it in pursuance hereof if such agent or
attorney shall have been selected with reasonable care.
(d) The Corporation hereby agrees that it will at all times protect,
indemnify and save harmless the Proxy from any loss, cost or expense of any kind
or character whatsoever incurred in connection with the proxies granted pursuant
to Section 3.1 except those, if any, arising from the willful misconduct of the
Proxy, and will at all times itself undertake, assume full responsibility for,
pay and advance all costs and expenses of any suit or litigation of any
character, including any proceedings before any governmental agency, with
respect to the Securities or this Agreement and, if the Proxy shall be made a
party thereto, the Corporation will pay and advance all costs and expenses,
including counsel fees, to which the Proxy may be subject by reason thereof.
<PAGE>
-10-
(e) Notwithstanding any other provision hereof, the provisions of
this Section 3.5 shall survive the termination of this Agreement.
3.6 Classes of Directors. The Corporation and the Stockholders acknowledge
and agree that in connection with a proposed underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of shares of Common Stock
("Initial Public Offering"), the Certificate of Incorporation and/or By-laws of
the Corporation may be amended to permit classes of directors with staggered
terms and the Proxy grants the Board of Directors the right to vote all
Securities held by the Stockholders (other than Kraft) in favor of such an
amendment.
ss.4. PREEMPTIVE RIGHTS. With the exception of (a) shares of Common Stock
issued to employees of the Corporation pursuant to an employee option plan or
other employee benefit plan approved by the Board of Directors, (b) shares of
Common Stock issued upon exercise of the warrants and options set forth on
Schedule 2 attached hereto, and (c) up to 450,000 shares of Common Stock issued
upon exercise of additional options issued to Kraft and/or other any persons or
entities designated by Kraft, in conjunction with any proposed issuance of
additional Securities to any party, each Stockholder shall have the pro rata
right to acquire a pro rata number of additional Securities so that such
Stockholder's proportional interest in the Corporation (without giving effect to
any outstanding options or warrants or other rights to purchase) will not be
diluted; provided that this preemptive right shall not apply to the extent that
a Stockholder holds shares of Common Stock issued to employees of the
Corporation pursuant to (or resulting from the exercise of any option granted
under) an employee option plan or other employee benefit plan approved by the
Board of Directors, including any such plan that replaced any similar plan of
PaperExchange.com, LLC, the Delaware limited liability company from which the
Corporation was converted. (For the avoidance of doubt, the option for 1,767,020
shares of Common Stock issued to Kent A. Dolby on December 20, 1999 was not
issued pursuant to an employee option plan or other employee benefit plan
approved by the Board of Directors.) Any exercise of preemptive rights pursuant
to this Section 4 must be made within 10 days of receiving written notice of the
proposed issuance of additional Securities. The Stockholders understand and
agree that if a Stockholder does not exercise the preemptive rights set forth in
this Section 4 in conjunction with any issuance of additional Securities, such
Stockholder's ownership interest and voting rights will be diluted.
ss.5. SPECIAL POWER OF ATTORNEY.
A. Attorney in Fact. Each Stockholder hereby grants to the Board of
Directors of the Corporation a special power of attorney irrevocably making,
constituting and appointing the Board of Directors as the Stockholder's attorney
in
<PAGE>
-11-
fact, with all power and authority to act in the Stockholder's name and on the
Stockholder's behalf and to execute, acknowledge and deliver and swear to in the
execution, acknowledgement, delivery and filing of assignments of Securities or
any other instrument or document that may be reasonably required by the Board of
Directors to effect a transfer whenever a Stockholder is legally obligated to
transfer such Stockholder's Securities under Section 2 of this Agreement but is
unable or unwilling to execute, acknowledge, deliver or swear to an assignment
of Securities necessary to effect such a transfer.
B Irrevocable Power. The special power granted in Section 5A: (I) is
irrevocable; and (ii) shall survive a Stockholder's death, incapacity or
dissolution.
C. Signatures. The Board of Directors may exercise the special power of
attorney granted in Section 5A by an original or facsimile signature of one or
more members of the Board of Directors of the Corporation.
ss.6. ADDITIONAL LEGENDS. So long as any Securities are subject to the
provisions hereof, all certificates or instruments representing Securities will
have imprinted on them the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
TRANSFER, SALE OR OTHER DISPOSITION OF THESE SHARES MAY BE MADE
UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THESE SHARES HAS
BECOME EFFECTIVE UNDER SAID ACT, OR THE CORPORATION HAS BEEN
FURNISHED WITH AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION
THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A CERTAIN STOCKHOLDERS' AGREEMENT, DATED AS OF FEBRUARY 28,
2000, AMONG THE CORPORATION AND ITS STOCKHOLDERS. THE STOCKHOLDERS'
AGREEMENT CONTAINS CERTAIN RESTRICTIVE PROVISIONS RELATING TO THE
VOTING AND TRANSFER OF SHARES OF THE STOCK REPRESENTED HEREBY,
INCLUDING AN IRREVOCABLE PROXY. A COPY OF THE STOCKHOLDERS'
AGREEMENT IS ON FILE AT THE CORPORATION'S PRINCIPAL OFFICES. UPON
WRITTEN REQUEST TO THE CORPORATION'S SECRETARY, A COPY OF THE
STOCKHOLDERS' AGREEMENT WILL BE PROVIDED
<PAGE>
-12-
WITHOUT CHARGE TO APPROPRIATELY INTERESTED PERSONS."
ss.7. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
ss.8. ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and thereof and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
ss.9. SUCCESSORS AND ASSIGNS. This Agreement will bind and inure to the
benefit of and be enforceable by the Corporation and the Stockholders and their
respective successors and assigns.
ss.10. NEW STOCKHOLDERS. Except for issuance of Securities to any Person
who is a Stockholder prior to giving effect to such issuance, the Corporation
will not issue any shares of capital stock or any rights to purchase the same or
enter into any commitment, conditional or otherwise, to do so unless the holder
or transferee of such stock or commitment shall have first executed an
Instrument of Accession.
ss.11. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
ss.12. REMEDIES. The Stockholders will be entitled to enforce their rights
under this Agreement specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights existing in their favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any breach
of the provisions of this Agreement and that any Stockholder may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement. In the event of any dispute
involving the terms of this Agreement, the prevailing party shall be entitled to
collect reasonable fees and
<PAGE>
-13-
expenses incurred by the prevailing party in connection with such dispute from
the other parties to such dispute.
ss.13. NOTICES. Any notice provided for in this Agreement will be in
writing and will be deemed properly delivered if either personally delivered or
sent by telecopier, overnight courier or mailed certified or registered mail,
return receipt requested, postage prepaid to the recipient (a) if to any
Stockholder, at the address listed for such Stockholder in the stock records of
the Corporation, and (b) if to the Corporation, to PaperExchange.com, Inc., 545
Boylston Street, 8th Floor, Boston, Massachusetts 02116, Attention: President.
Any such notice shall be effective (i) if delivered personally or by telecopier,
when received, (ii) if sent by overnight courier, when receipted for, and (iii)
if mailed, five days after being mailed as described above. The Corporation
agrees to make available to each Stockholder upon request an address list of all
Stockholders to ensure correct delivery of all notices hereunder.
ss.14. AMENDMENT AND WAIVER. No modification, amendment or waiver of any
provision of this Agreement will be effective against either of the Corporation
or the Stockholders unless such modification, amendment or waiver is approved in
writing by Stockholders owning 51% or more of the Securities; provided that the
approval of Kraft and PEH (so long as PEH is a stockholder of the Corporation or
ICG, if ICG becomes a Stockholder pursuant to Section 2.2(iv), so long as ICG is
a stockholder of the Corporation) or, if PEH, subject to the immediately
preceding parenthetical, does not so approve, the approval of Stockholders
owning 80% or more of the Securities, shall be required in connection with any
modification, amendment or waiver to Sections 2.2, 2.6, 3.4, 4 or 14 or any
modification, amendment or waiver to Section 2.7 that would make the drag-along
rights described therein applicable to transfers to persons who are then
Stockholders or Affiliates of Stockholders; provided further that any
modification, amendment or waiver shall require the approval of Kraft so long as
Kraft is a stockholder of the Corporation. The failure of any party to enforce
any of the provisions of this Agreement will in no way be construed as a waiver
of such provisions and will not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
ss.15. TERMINATION. This Agreement will terminate upon the completion of
any voluntary or involuntary liquidation or dissolution of the Corporation or
upon an Initial Public Offering.
ss.16. LOCKUP AGREEMENT. Each Stockholder, if requested by the Corporation
or an underwriter of any Securities, shall agree not to sell or otherwise
transfer or dispose of any Securities held by such Stockholder for a specified
period of time (not to exceed 180 days unless otherwise agreed to) following the
effective date of a registration statement. Such agreement shall be in writing
in a form
<PAGE>
-14-
reasonably satisfactory to the Corporation and such underwriter. Such agreement
shall be applicable only to the registration statement of the Corporation that
covers Securities to be sold on its behalf to the public in the initial
underwritten public offering.
ss.17. GOVERNING LAW. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE
VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION OF ITS TERMS, AND THE
INTERPRETATION OF THE RIGHTS AND DUTIES OF THE BOARD OF DIRECTORS AND THE
STOCKHOLDERS.
ss.18. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
<PAGE>
-15-
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders'
Agreement on the day and year first above written.
PAPEREXCHANGE.COM, INC.
By: /s/ Kent A. Dolby
----------------------------------------
Kent A. Dolby
President
STOCKHOLDERS:
/s/ Hilton Plein
----------------------------------
HILTON PLEIN
TERRAPIN HOLDINGS LLC
By: /s/ Jason Weiss
----------------------------------------
Name: Jason Weiss
Title: Manager
KRAFT GROUP LLC,
By: Kraft Family Inc., Its Managing Member
By: /s/ Robert K. Kraft
----------------------------------------
Robert K. Kraft
President
<PAGE>
-16-
PE.COM HOLDINGS LLC
By: /s/ Gregory W. Haskell
----------------------------------------
Name: Gregory W. Haskell
Title: Director
/s/ Steven Kaplan
----------------------------------
Steven Kaplan
/s/ Roger Stone
----------------------------------
Roger Stone
/s/ Roger Stone
----------------------------------
Roger Stone, as Voting Trustee for each
of Matthew and Karen Kaplan, Lauren G.
Stone and Jennifer Stone
/s/ Matthew Kaplan
----------------------------------
Matthew Kaplan, as Voting Trustee for
each of Matthew and Karen Kaplan, Lauren
G. Stone and Jennifer Stone
/s/ Kent A. Dolby
----------------------------------
Kent A. Dolby
<PAGE>
-17-
MADISON DEARBORN CAPITAL
PARTNERS III, L.P.,
By: Madison Dearborn Partners III, L.P.,
its general partner
By: Madison Dearborn Partners, LLC, its
general partner
By: /s/ Samuel M. Mencoff
--------------------------------
Samuel M. Mencoff
Managing Director
MADISON DEARBORN SPECIAL
EQUITY III, L.P.,
By: Madison Dearborn Partners III, L.P.,
its sole general partner
By: Madison Dearborn Partners, LLC, its
sole general partner
By: /s/ Samuel M. Mencoff
--------------------------------
Samuel M. Mencoff
Managing Director
SPECIAL ADVISORS FUND I, LLC,
By: Madison Dearborn Partners, LLC,
its manager
By: /s/ Samuel M. Mencoff
------------------------------------
Samuel M. Mencoff
Managing Director
<PAGE>
-18-
DBV INVESTMENTS, L.P.,
By: DRT Capital, L.L.C.,
its general partner
By: /s/ John Phelan
------------------------------------
Name: John Phelan
----------------------------------
Title: Manager
---------------------------------
DSCKW IRREVOCABLE TRUST
By: /s/ A. Parafestas
----------------------------------------
Anastasios Parafestas, Trustee
INTERNATIONAL PAPER COMPANY
By: /s/ C. Cato Early
------------------------------------
Name: C. Cato Early
----------------------------------
Title: Vice President
---------------------------------
<PAGE>
Schedule 1
Instrument of Accession
The undersigned, ____________________, in order to become the owner or
holder of ________ shares of Common Stock, $.001 par value per share (the
"Shares"), of PaperExchange.com, Inc., a Delaware corporation, hereby agrees to
become a Stockholder party to that certain Stockholders' Agreement, dated as of
February __, 2000 (the "Stockholders' Agreement"), a copy of which is attached
hereto. The undersigned acknowledges that the Shares constitute shares of
"Securities" and the undersigned shall be a "Stockholder" under and as defined
in the Stockholders' Agreement. This Instrument of Accession shall become a part
of such Stockholders' Agreement.
Executed as of the date set forth below under the laws of the State of
Delaware.
Signature:
-----------------------------
Address:
-------------------------------
-------------------------------
-------------------------------
Date:
----------------------------------
Accepted:
PAPEREXCHANGE.COM, INC.
By:
----------------------
Date:
--------------------
<PAGE>
PAPEREXCHANGE.COM, LLC
PROMISSORY NOTE
$ October 15, 1999
------------- Boston, Massachusetts
For value received, PAPEREXCHANGE.COM, LLC, a Delaware limited liability
company (the "Company"), promises to pay to the order of _________ (including
any permitted transferee hereunder, the "Holder"), the principal sum of ______
Dollars ($_______) on October 15, 2004. Interest shall accrue from the date of
this Note on the unpaid principal amount at an annual rate equal to the
announced base rate of BankBoston, N.A. (or any successor thereto) (the "Base
Rate") plus four percent (4%). Such interest rate shall change when and as the
Base Rate changes. This Note is being issued in connection and simultaneously
with a certain warrant to purchase Membership Interests of the Company issued to
the Holder as of the date hereof. This Note is one of nine promissory notes
being issued on the date hereof in the aggregate amount of $10,000,000 (the
"Notes"). This Note is subject to the following terms and conditions.
1. Advances, Interest and Maturity.
(a) On the date hereof, Holder is lending $_________ to the Company.
(b) Interest shall be payable quarterly in arrears on each of March
31, June 30, September 30 and December 31 of each year commencing on December
31, 1999.
(c) Unpaid principal and interest under this Note shall be due and
payable upon the earlier of (a) October 15, 2004, and (b) the date of an
Acceleration pursuant to Section 3 hereof.
2. Payment. All payments shall be made in lawful money of the United
States of America at such place in the United States as the Holder hereof may
from time to time designate in writing to the Company. The Company shall have
the right to prepay, in whole or in part, the unpaid principal amount of this
Note on ten (10) business days' prior written notice to the Holder. Any
prepayment of the principal amount of this Note shall be made without premium or
prepayment penalty, provided that the Company shall pay all accrued interest to
the date of prepayment on the principal amount prepaid.
3. Acceleration Events. Each of the following events or circumstances
shall constitute an "Acceleration Event":
<PAGE>
2
(a) the Company shall fail to pay any amount of principal or
interest within five (5) days of the date on which such amount is due and
payable hereunder, or
(b) any sale or transfer, in a single transaction or a series of
related transactions, of all or substantially all of the Company's assets, or
any merger, consolidation or reorganization resulting in a change of control of
the Company, or the dissolution of the Company, or the sale, in a single
transaction or a series of related transactions, of a majority of the Company's
Membership Interests (whether newly issued, previously issued, or any
combination thereof);
(c) the Company shall fail to perform any of its other obligations
or agreements set forth herein, and such failure shall continue for a period of
ten (10) days after notice of such failure is given by the Holder to the
Company;
(d) the Company shall make an assignment for the benefit of
creditors, or admit in writing its inability to pay or generally fail to pay its
debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of the
Company or of any substantial part of its assets or shall commence any case or
other proceeding relating to its assets under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, or shall take any action to authorize or in
furtherance of any of the foregoing; or any such petition or application shall
be filed or any such case or other proceeding shall be commenced against the
Company, and the same shall not have been dismissed within 60 days of the filing
or commencement thereof or the Company shall indicate its approval thereof,
consent thereto or acquiescence therein; or a decree or order shall be entered
appointing any such trustee, custodian, liquidator or receiver or adjudicating
the Company bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief shall be entered in respect of
the Company in an involuntary case under any such bankruptcy or insolvency laws;
and
(e) the Company shall, in one transaction or a series of related
transactions, issue any debt and/or equity or incur any debt for money borrowed,
including, but not limited to, the issuance of any notes, shares, interests,
Membership Interests, participations, rights or other equivalents (howsoever
designated) of the Company, of which the gross proceeds to the Company with
respect to such issuance or loan exceed $30,000,000.00.
If an Acceleration Event pursuant to Sections 3(a), 3(b), 3(c) or 3(e)
hereof shall occur, and only if the Majority Holders declare the entire unpaid
principal of the Majority Holders' respective Notes and all interest payable on
or in respect of the Majority Holders' respective Notes and the obligations
evidenced thereby due and payable, the Holder at its option at any time
thereafter during the continuance of
<PAGE>
3
such Acceleration Event may declare the entire and unpaid principal of this Note
and all interest payable on or in respect of this Note and the obligations
evidenced hereby due and payable, and the same shall thereupon forthwith become
and be due and payable to the Holder (an "Acceleration") without presentment,
demand, protest, notice of protest or any other formalities of any kind, all of
which are hereby expressly and irrevocably waived by the Company.
Notwithstanding anything contained herein, if the Company shall fail to
make three (3) regularly-scheduled consecutive interest payments pursuant to
Section 3(a) hereof, and if the holders of at least twenty-five percent (25%) of
the aggregate principal then outstanding under the Notes ("Twenty-Five Percent
Holders") declare the entire unpaid principal of the Notes and all interest
payable on or in respect of the Notes and the obligations evidenced thereby due
and payable, the Holder at its option at any time thereafter during the
continuance of such Acceleration Event may declare the entire and unpaid
principal of this Note and all interest payable on or in respect of this Note
and the obligations evidenced hereby due and payable, and the same shall
thereupon forthwith become and be due and payable to the Holder without
presentment, demand, protest, notice of protest or any other formalities of any
kind, all of which are hereby expressly and irrevocably waived by the Company.
In the event of an Acceleration Event under Section 3(d) hereof, the
entire unpaid principal of this Note and all interest payable on or in respect
of this Note and the obligations evidenced hereby due and payable shall become
and be immediately due and payable, and an Acceleration shall be deemed for all
purposes hereof to have occurred, automatically and without any requirement of
notice from the Holder.
4. Definitions. As used herein, the following terms, unless the context
otherwise requires, have the following respective meanings:
Acceleration shall have the meaning set forth in the third to the last
paragraph of Section 3 hereof.
Acceleration Event shall have the meaning set forth in the first paragraph
of Section 3 hereof.
Base Rate shall have the meaning set forth in the first paragraph of this
Note.
Company shall have the meaning set forth in the first paragraph of this
Note.
Final Maturity Date shall mean October 15, 2004.
Holder shall have the meaning set forth in the first paragraph of this
Note.
<PAGE>
4
Majority Holders shall mean the holders of a majority of the aggregate
principal then outstanding under the Notes.
Membership Interests shall mean the Membership Interests of the Company
and such other classes of units of the Company as may hereafter succeed to any
of the rights of the Membership Interests.
Notes shall have the meaning set forth in the first paragraph of this
Note.
Operating Agreement shall mean the Company's Amended and Restated
Operating Agreement, dated as of June 1, 1999.
Twenty-Five Percent Holders shall have the meaning set forth in the
penultimate paragraph of Section 3 hereof.
5. Capitalization Table. The Company represents that the capitalization
table attached hereto as Exhibit A is true and correct as of the date hereof.
6. Transfer; Successors and Assigns. The terms and conditions of this Note
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Notwithstanding the foregoing, the Holder may not
assign, pledge, or otherwise transfer this Note without the prior written
consent of the Company and the Majority Holders. Notwithstanding anything
contained in the preceding sentence, and except with respect to transfers to
Affiliates (as such term is defined in the Operating Agreement) this Note is
transferable only to the extent, and only as to the pro rata portion, that the
warrant issued to the Holder simultaneously herewith is transferred.
7. Governing Law. This Note and all acts and transactions pursuant hereto
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to its principles of conflicts of law.
8. Notices. Any notice required or permitted by this Note shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally
or by a nationally-recognized delivery service (such as Federal Express or UPS),
or ninety-six (96) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed to the party to be notified.
Notices to the Holder shall be sent to the address of the Holder on the books of
the Company or to such other address as may be designated by the Holder by
notice given to the Company in accordance with this paragraph, and notices to
the Company shall be sent to its address at 545 Boylston Street, 8th floor,
Boston, Massachusetts 02116, or to such other address as may be designated by
the Company by notice given to the Holder in accordance with this Section 8.
<PAGE>
5
9. Amendments and Waivers. Any term of this Note may be amended only with
the written consent of the Company and the Majority Holders; provided, however,
that an amendment which (i) reduces the aggregate amount of principal due under
this Note, (ii) reduces the rate of interest due under this Note, or (iii)
extends the Final Maturity Date shall require the written consent of the Holder
hereof. Any amendment or waiver effected in accordance with this Section 9 shall
be binding upon the Company, the Holder and each transferee of the Note. The
Company expressly waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note.
10. Members and Directors Not Liable. In no event shall any Member or
Director (each as defined in the Operating Agreement) of the Company be liable
for any amounts due or payable pursuant to this Note.
11. Waiver of Jury Trial. The Company and the Holder hereby waive their
right to a jury trial with respect to any action or claim arising out of any
dispute in connection with this Note, any rights or obligations hereunder or the
performance of any of such rights or obligations.
12. Action to Collect on Note. If any action is instituted to collect on
this Note, the Company promises to pay all costs and expenses, including
reasonable attorney's fees, incurred by the Holder in connection with such
action and the collection of this Note.
<PAGE>
This Note shall be deemed to take effect as a sealed instrument under the
laws of The Commonwealth of Massachusetts.
COMPANY:
PAPEREXCHANGE.COM, LLC
By:
----------------------------------
Its:
<PAGE>
Exhibit 10.23
AMENDMENT TO EMPLOYMENT AGREEMENT
HILTON PLEIN
This Amendment to Employment Agreement (the "Amendment") is made to be
effective as of May 12, 1999 (the "Effective Date") by and between
PAPEREXCHANGE.COM, LLC, a Delaware limited liability company (the "Company"),
and Hilton Plein ("Employee").
RECITALS
1. Employee and the Company previously entered into that certain Employment
Agreement effective as of April 9, 1998 (the "Agreement").
2. Since entering into the Agreement, the circumstances pertaining to
Employee's provision of services to the Company has changed such that the
Company and Employee believe it to be in the best interest of both parties
to amend the Agreement.
OPERATIVE PROVISIONS
In consideration of the above recitals, which are incorporated into and
are material part of the operative provisions of this Amendment, and of the
promises, covenants and conditions stated herein, Company and Employee agree to
amend the Agreement as follows:
1.
<PAGE>
A. Section 1 and subsection 1.1 of the Agreement shall be deleted and
shall hereafter read as follows:
"1. TITLE; POSITION AND RESPONSIBILITIES
1.1 During the period of Employee's employment hereunder, Employee's title
shall be one mutually acceptable to Employee and the Company's Chief Technology
Officer. Employee shall render administrative and management services to the
Company as delegated by the Company's Management board or the Company's Chief
Technology Officer. Employee shall report directly to the Company's Chief
Technology Officer."
B. A new subsection 1.2 shall be added to the Agreement, and shall read as
follows:
"1.2 Nothing contained herein shall be construed to require Employee to
relocate."
C. Subsection 2.1 of the Agreement shall be deleted and hereafter shall
read as follows:
"2.1 The period of Employee's employment under this Agreement shall be
deemed to have commenced on May 12, 1999 and shall continue for a period of five
(5) full years thereafter. At the end of the five (5) year period, this
Agreement shall be automatically renewed for consecutive one-year renewal terms
unless the Company provides written notice of non-renewal at least ninety (90)
days prior to the end of the initial five (5) year period; or, if renewed for
one or more one-year renewal periods, written notice of non-renewal must be
given by Employee or the Company not less than thirty (30) days prior to the end
of the then current renewal period."
D. The title to Section 3 of the Agreement shall be amended to read as
follows:
2.
<PAGE>
"3. COMPENSATION, REIMBURSEMENT, BENEFITS; MISCELLANEOUS"
E. Subsection 3.1 of the Agreement shall be deleted and hereafter shall
read as follows:
"3.1 The compensation specified under this Agreement shall constitute the
salary and benefits paid for Employee's performance of the duties described in
Article 1. The Company shall pay Employee as compensation a salary of not less
than $120,000 per year ("Base Salary"). The Base Salary shall be payable in
accordance with Company's payroll practices. During the period of this
Agreement, Employee's Base Salary shall be reviewed for the determination of
whether any merit increases are warranted. No downward adjustment shall be made
in the Base Salary without Employee's written approval, which approval may be
withheld by Employee in his sole and absolute discretion. In addition to the
annual merit review, at the end of every twelve month period from the date
hereof, Employee's Base Salary shall be adjusted based on the inflation rate for
information technology professionals, as determined by a reasonable third party
source such as Information Week. Following any adjustment of the Base Salary
pursuant to this Section 3.1, the adjusted Base Salary thereafter shall become
the "Base Salary" for purposes of this Agreement."
F (I). Subsection 3.2 of the Agreement shall be deleted and thereafter
shall read as follows:
"3.2 Employee shall be entitled to participate in any staff-wide bonus
program, if any, offered by the Company."
F (II). The first sentence of Section 3.3 is modified to read as follows
"The Company shall also provide Employee, at no cost to Employee, with a health
insurance policy pursuant to
3.
<PAGE>
the Company's group health insurance policy or policies as in effect from time
to time and made available to senior executives of the Company.
G. Subsection 3.4 of the Agreement shall be deleted and thereafter shall
read as follows:
"3.4 Employee shall be entitled to a one-time cash bonus in the amount of
$5,000, which shall be payable on the last business day of December 1999."
H. Subsection 3.8 of the Agreement shall be deleted and thereafter shall
read as follows:
"3.8 The Company shall grant Employee three (3) weeks of fully compensated
vacation per annum under this Agreement."
I. A new subsection 3.9 shall be added to the Agreement and shall read as
follows:
"3.9 If a new position is created within the Company, the Company agrees
to give Employee a good-faith assessment review for that position, if Employee
so requests an opportunity to fill that position. Thereafter, if Employee
assumes such new position and the Company, in good-faith, determines that such
new position warrants a higher salary, the Company will immediately adjust
Employee's Base Salary accordingly."
J. A new Subsection 3.10 shall be added to the Agreement and shall read as
follows:
"3.10 The Company will appoint Employee as a member of its Advisory Board
once the Company establishes the Advisory Board; provided, however, that
Employee understands and agrees that he will not be entitled to any compensation
for service on the Advisory Board."
4.
<PAGE>
K. A new Subsection 3.11 shall be added to the Agreement and shall read as
follows:
"3.11 The Company agrees that in any and all of its communications to
third parties, it will refer to Employee as a founder of the Company."
L. All other provisions of the Agreement not deleted or amended hereby
shall remain in full force and effect through the term of the Agreement, as such
term has been modified by this Amendment.
Company and Employee have executed this Amendment to be effective on
and as of the Effective Date given hereinabove.
"EMPLOYEE"
By: /s/ Hilton Plein
--------------------------------------
Hilton Plein
"COMPANY"
PAPEREXCHANGE.COM, LLC
By: /s/ Jason Weiss
--------------------------------------
Name:
-----------------------------
Title:
----------------------------
5.
<PAGE>
I, Hilton Plein do hereby consent to have the closing of the Purchase Agreement
moved from May 12, 1999 to May 14, 1999 if the documents are signed today May
12, 1999.
/s/ Hilton Plein
- ---------------------------
Hilton Plein
Date: May 12, 1999
---------------------
<PAGE>
IN WITNESS WHEREOF, the parties of this Agreement have duly executed this
Agreement or have caused this Agreement to be duly executed on the day and year
first above written.
HILTON PLEIN
/s/ Hilton Plein
----------------------------------
Hilton Plein
KRAFT GROUP, LLC
By /s/ Robert Kraft
-------------------------------
Name:
--------------------------
Title:
-------------------------
PAPEREXCHANGE.COM, LLC
By /s/ Jason Weiss
-------------------------------
Name: Jason Weiss
--------------------------
Title: CEO
-------------------------
TERRAPIN PARTNERS, LLC
By /s/ Jason Weiss
-------------------------------
Name: Jason Weiss
--------------------------
Title: Managing Partner
-------------------------
6.
<PAGE>
RESIGNATION FROM MANAGEMENT BOARD
I Hilton Plein hereby resign my seat on the Management Board of
PaperExchange.com, LLC.
Executed at Chicago IL on May 12th, 1999
/s/ Hilton Plein
- ----------------------------------
HILTON PLEIN
<PAGE>
Exhibit 10.24
LISTING AGREEMENT
THIS LISTING AGREEMENT (this "Agreement") is made and entered into as of
March 7, 2000, by and between Staples, Inc., a Delaware corporation ("Staples"),
and PaperExchange.com, Inc., a Delaware corporation ("PaperExchange").
WHEREAS, Staples owns and operates a nationwide chain of retail stores
that sell office supplies, including cut sheet paper (such cut sheet paper along
with Staples' paper stock for advertising and catalogues being referred to
herein, collectively, "Cut Sheet Paper");
WHEREAS, PaperExchange provides a real-time on-line trading exchange (the
"Exchange") for paper and other products to registered users of PaperExchange
services (the "Members");
WHEREAS, Staples is a Member of PaperExchange pursuant to the terms of the
Membership Agreement dated as of _________(the "Membership Agreement"); and
WHEREAS, Paper Exchange and Staples desire that, among other things,
Staples commit to list on the Exchange a majority of its requirements for Cut
Sheet Paper and at a minimum, Staples agree that it will list for Purchase (as
defined in Section 1 below) and Purchase on the Exchange its requirements for at
least ***** tons of Cut Sheet Paper during the next two years, subject to the
terms and conditions of this Agreement;
NOW THEREFORE, the parties, in consideration of the undertakings and
commitments set forth herein, agree as follows:
1. Listings. Staples (a) agrees to use its commercially reasonable
efforts to list on the Exchange for Purchase a majority of its requirements
for Cut Sheet Paper and (b) agrees that it will list and Purchase on the
Exchange at least in the aggregate ***** tons of Cut Sheet Paper during the
next two years commencing on the date of this Agreement and in the minimum
amount (each a "Minimum Quarterly Amount") during each quarter set forth on
Schedule 1 attached hereto (each such quarter being referred to as a
"Measuring Quarter") ; provided that Staples shall not be liable hereunder
for its failure to Purchase in any Measuring Quarter the corresponding
Minimum Quarterly Amount if such failure arises solely as a consequence of
the unavailability on the Exchange during such Measuring Quarter of Cut Sheet
Paper that is (i) at least of substantially similar quality as the Cut Sheet
Paper that Staples has historically purchased in the ordinary course of its
business for similar purposes, either on the Exchange or elsewhere, prior to
the date of this Agreement, (ii) for sale at then market or below market
prices (in each case after taking into account all available discounts,
rebates, marketing subsidies, freight savings and other vendor concessions)
and (iii) offered for sale on terms which reasonably meet the logistical
requirements of Staples (such as delivery, packaging, including packaging
artwork and pricing codes, and other reasonable logistical requirements of
Staples). PaperExchange agrees to accept the foregoing listings; provided
that in no event shall PaperExchange be liable to Staples in the event that
Staples' requirements for Cut Sheet Paper are not met through the Exchange.
For the avoidance of doubt, Staples and PaperExchange agree that if there is
a default in the delivery of Cut Sheet Paper (which otherwise meets the
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
1
<PAGE>
specifications set forth in clauses (i), (ii) and (iiii) above) after Staples
has contracted for the Purchase thereof on the Exchange, such Cut Sheet Paper
(which was contracted for but not delivered) shall be deemed to have been
"unavailable" on the Exchange for purposes of the proviso of the immediately
preceding sentence. For purposes of this Agreement, the term "Purchase" shall
mean when Staples takes title to Cut Sheet Paper from PaperExchange (in its
capacity as a principal and not as agent for a seller) by means of a transaction
on the Exchange.
2. Term and Termination. The term of this Agreement shall be for a period
commencing on the date of this Agreement through (and including) March 31, 2002
(the "Initial Term") and shall automatically renew for one-year terms thereafter
unless at any time after the Initial Term, either party terminates this
Agreement upon no less than thirty (30) days' prior written notice to the other
party.
3. General Provisions.
3.1 Staples and PaperExchange are independent contractors. Nothing
in this Agreement is intended to or will constitute either party as an agent,
legal representative, joint venturer or partner of the other for any purpose.
3.2 A waiver of a breach of any term of this Agreement will not be
construed as a waiver of any succeeding breach of that term or as a waiver of
the term itself. A party's performance after the other's breach will not be
construed as a waiver of that breach.
3.3 All notices required or permitted under this Agreement and all
requests for approvals, consents, and waivers must be in writing and must be
delivered to the parties at their respective addresses by a method providing for
proof of delivery. Any notice or request will be deemed to have been given on
the date of receipt.
If to PaperExchange: If to Staples:
PaperExchange.com, Inc. Staples, Inc.
545 Boylston Street, 8th Floor Five Hundred Staples Drive
Boston, MA 02116 Framingham, MA 01702
Attention: President and CEO Attention: Richard R. Gentry,
Telecopier No.: (617) 536-1573 Executive Vice President,
Merchandising
Telecopier No.: (508) 253-8894
2
<PAGE>
with copies to: with copies to:
Bingham Dana LLP Staples, Inc.
150 Federal Street Five Hundred Staples Drive
Boston, MA 02110 Framingham, MA 01702
Attention: Jonathan K. Bernstein, Attention: Jack A. Van Woerkom, Esq.
Esq. Telecopier No.: (508) 253-7805
Telecopier No.: (617) 951-8736
3.4 Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other. The Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.
3.5 Except as this Agreement otherwise provides, no amendment to
this Agreement will be binding unless agreed to in writing and executed by the
parties, and no approval, consent, or waiver will be enforceable unless the
granting party signs it.
3.6 Each term of this Agreement is severable. If a court, agency, or
arbitrator having jurisdiction determines that any term is invalid or
unenforceable under applicable law, that determination will not affect the other
terms of this Agreement, as the case may be, which other terms will continue to
be enforced as if the invalid or unenforceable terms were omitted.
3.7 Any advertising, publicity, release, or other disclosure of
information concerning this Agreement must be approved in writing by both
parties (which approval will not be unreasonably withheld), except to the extent
disclosure is legally required.
3.8 This Agreement, in conjunction with the Membership Agreement,
states the complete agreement between the parties concerning the subject matter
hereof, and supersedes earlier oral and written communications between the
parties concerning the subject matter hereof.
3.9 This Agreement shall constitute a contract under seal. The
validity and construction of this Agreement shall be governed by and construed
in accordance with the internal laws (and not the choice-of-law rules) of The
Commonwealth of Massachusetts.
3.10 This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[signature page to follow]
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
PaperExchange.com, Inc.,
a Delaware corporation
By: /s/ Duane DeSisto
------------------------------------
Name: Duane DeSisto
----------------------------------
Title: Secretary & Treasurer
---------------------------------
Staples, Inc.,
a Delaware corporation
By: /s/ Thomas G. Stemberg
------------------------------------
Name: Thomas G. Stemberg
----------------------------------
Title: Chairman of the Board
---------------------------------
and CEO
---------------------------------
4
<PAGE>
Schedule 1
MEASURING PERIODS AND TONNAGE
- --------------------------------------------------------------------------------
Minimum Whole
Tons of
Measuring Quarter Cut Sheet Paper
- --------------------------------------------------------------------------------
April 1, 2000 through June 30, 2000 *****
- --------------------------------------------------------------------------------
July 1, 2000 through September 30, 2000 *****
- --------------------------------------------------------------------------------
October 1, 2000 through December 31, 2000 *****
- --------------------------------------------------------------------------------
January 1, 2001 through March 31, 2001 *****
- --------------------------------------------------------------------------------
April 1, 2001 through June 30, 2001 *****
- --------------------------------------------------------------------------------
July 1, 2001 through September 30, 2001 *****
- --------------------------------------------------------------------------------
October 1, 2001 through December 31, 2001 *****
- --------------------------------------------------------------------------------
January 1, 2002 through March 31, 2002 *****
- --------------------------------------------------------------------------------
TOTAL: *****
- --------------------------------------------------------------------------------
* Confidential Treatment Requested: material has been omitted and filed
separately with the Commission.
5
<PAGE>
Exhibit 21
List of Subsidiaries
<TABLE>
<CAPTION>
Name of Subsidiary Jurisdiction of Incorporation
- ------------------ -----------------------------
<S> <C>
PaperExchange.com Ltd. England and Wales
</TABLE>
