Payless.com Affiliate Program Operating Agreement

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Please read this document fully and click on the "I Agree" button, found at the end of this document, before starting application process.

Special Terms and Conditions

Effective Date 1/12/2006.

EASTBOROUGH, INC., PUBLISHER AGREEMENT TERMS AND CONDITIONS

This Agreement, including the description of the Payless Shoesource Publisher Program provided through Commission Junction, Inc. (“Commission Junction”) on the Details Page of Payless (collectively the “Agreement”) is a legally binding agreement between Payless Shoesource Worldwide, Inc., a Kansas corporation, on behalf of itself and its affiliate, Eastborough, Inc.., (collectively, “Payless,” “us” or “we”), and each of its participating Publishers (“you” or “your”). BY REGISTERING FOR AND PARTICIPATING IN THE PAYLESS PUBLISHER PROGRAM (THE “PROGRAM”) THROUGH COMMISSION JUNCTION, YOU ACKNOWLEDGE THAT YOU HAVE READ THE TERMS OF THIS AGREEMENT AND AGREE TO BE BOUND BY THIS AGREEMENT.

We have the right in our sole discretion to accept or reject your application to participate in our Program for any reason. Once you are accepted into the Program, your participation in the Program is governed by the Publisher Service Agreement and this Agreement. Even after you are accepted into the Program, we may terminate this Agreement and your participation in the Program for any reason or no reason upon seven (7) days notice, effective the 8th day. In addition, we may terminate this Agreement and your participation in the Program immediately if we determine that your website breaches any material of the terms of the Publisher Service Agreement or material terms of this Agreement.

I. Your Obligations.

A. Eligibility.
To be eligible to be a Publisher in our Program, you must operate a web site, be a member of the Commission Junction network, be approved by us and your website, affiliated websites and email distribution lists must:

• Be content-based (i.e., not simply a list of links or advertisements or a site based on earning commissions from advertisers);
  
• Be written in English and contain only English language content;
  
• Have a top-level domain name; and
  
• Be fully functional at all levels (i.e. no "under construction" sites or sections)

In addition, your website, affiliated websites and email distribution lists must not: (a) mislead others; (b) operate or utilize a website or e-mail link to websites that contain or promote, any of these types of content: libelous, defamatory, obscene, abusive, profane, violent, bigoted, political, investment money-making opportunities, hate-oriented or other objectionable content, software pirating, warez (i.e., software copied without appropriate authorization), content targeted at children, offering any illegal good or service, spoofing, redirecting, or trafficking from adult-related websites, or link to any web site(s) that does so; (c) engage in the sale or promotion of pornography, tobacco, gambling, or any illegal activity or the disparagement of any individual group on the basis of age, color, national origin, race, religion, gender, sexual orientation or physical or mental handicap or targeted at person's under the age of 18; (d) engage in indiscriminate advertising or the transmission of unsolicited commercial e-mail and/or be hosted outside of the United States; and/or (e) operate or utilize a website that promotes or sells firearms, alcoholic beverages, or tobacco products; (f) offer incentives (e.g., awards of cash, points, prizes, contest entries, etc.) to users to click on advertisements; (g) spawn process pop-ups and exit pop-ups; or (h) have previously been terminated from our Publisher Program. You remain solely responsible for the content of your website. You may not use the name of Payless or Eastborough or refer to us, or place an Advertisement (as defined below) for us in any subscription newsletters without our prior written consent.

B. Advertisements.
You may only use the banner advertisements, button links, text links to the website at www.payless.com (“Website”) or other product and price data and/or other advertisements promoting Payless’ products (“Advertisements”) that are provided to you by us through Commission Junction. You may not modify the Advertisements without our prior written consent. Each link connecting users of your website to the Website shall not alter the look, feel or functionality of the Website.

C. Placement of Advertisements.
You must follow the attached Advertising Guidelines and any subsequent instructions of a similar nature provided by us in placing Advertisements on your website. Except as provided in the Advertising Guidelines and this Agreement, you will have discretion to place Advertisements in areas of your website, and at times and with the frequency, as you deem appropriate.

D. Prohibited Activities.
You shall not undertake or engage in the following practices, and any violation of this Section shall be deemed a material breach of this Agreement: (i) use or otherwise incorporate the words EASTBOROUGH, PAYLESS, PAYLESS SHOESOURCE or variations thereof in the domain name(s), or in the metatags or other hidden text, of your website(s); (ii) modify or alter the Website in any way; (iii) make any representations, either express or implied, or create an appearance that a visitor to your Site is visiting the Website; e.g., "framing" the Website; (iv) use, without our consent, pop-under advertisements to advertise us (i.e., ads that appear under the current browser window; (v) use any mark, name or domain name of any type which is confusingly similar to "EASTBOROUGH”, “PAYLESS”, “PAYLESS SHOESOURCE”, or our other trademarks, or (vi) alter any promotional materials provided to you by us or use other promotional materials or language without first receiving written authorization from us; (vi) send any e-mail referring to Payless, advertising our products or linking to the Website without our prior written approval; or (vii) engage in fraud or other conduct calculated to generate the payment to you of compensation; or (viii) disclose to third parties, as a subset of the users of your website, the identities of users who access the Website from your website; (ix) solicit or target users who access the Website from your website for any promotions or offerings of goods or services that compete with the goods or services that we offer on the basis of such users accessing the Website; provided that the foregoing limitations will not prohibit you from soliciting or targeting a group of all or substantially all users who access your website; or (x) use any Payless Shoesource Worldwide name, mark or brand, such as Payless Shoes, Payless Shoesource, or Payless.com, for the purposes of advanced placement in organic search, such as use in meta data or in any pay-per-click and pay-per-position search engines and advertising sites.

E. Privacy Policy.
You will develop and maintain a privacy policy that complies with applicable law and that accurately describes the information collection and use practices of your website, including but not limited to, the type of information collected, how the information is collected and used, and with whom the information is shared. Your website must have a prominent link to your privacy policy.

F. Public Announcement.
You may not mention Eastborough, Inc., or Payless, Payless Shoesource, or Payless Shoesource Worldwide, Inc., in a press release or other public statement (other than the Advertisements) unless you have received our prior written approval.

G. Software Applications.
You agree not to use or enable in connection with the Website or a Session (as defined below), or with any website or link related thereto, any software applications, BHO's (browser helper objects), downloadable reminder services, or any other software or code that redirects a Visitor to another website or creates or presents pop-up windows or other content to a Visitor for any purpose, including to prompt a Visitor to exit the Website. Any violation of this provision shall be deemed a material breach of this Agreement, and we reserve the right to disallow any compensation to you arising from any such violation.

H. Fraud.
We actively monitor Visitor traffic to the Website for fraudulent activities. If we detect fraud arising from your participation in our Program, we shall have the right in our sole discretion immediately to suspend your participation in our Program pending further investigation.

If we determine that you fraudulently add leads or clicks or inflate leads or clicks by fraudulent generation of Visitor traffic to the Website (such as by pre- population of forms, fake redirects, automated software or mechanisms not approved by us) or generate Visitor Transactions (as defined below) that are not genuine, you will not receive a Payout for such fraudulent and otherwise non-bona fide Transactions and your account will be terminated. We reserve the right to determine fraud in our sole discretion, and you agree to this provision.

II. Our Obligations.

A. Advertisements.
We will use commercially reasonable efforts to present accurate information, but we cannot guarantee the accuracy of prices or availability of products contained in the Advertisements.

B. Product Orders.
We have the right to accept or reject for any reason any order for products at the Website.

C. Pricing and Policies.
Visitors (as defined below) who purchase products or register at the Website will be deemed to be our customers. Accordingly, all of our rules, policies, and operating procedures concerning customer service, delivery schedules, product sales, charges and fees will apply to those customers. We may change our policies and operating procedures at any time. We will be solely responsible for all aspects of processing and fulfillment of product orders, including payment processing, shipping, cancellations, and related customer service. We will use commercially reasonably efforts to present accurate information, but we cannot guarantee the availability, delivery times or price of a particular product or order.

III. Compensation.

We allow Commission Junction publishers participating in our Program to post our advertising. Our Program will specify the amount and terms under which you will receive payment ("Payout”) when the Program's requirements are fulfilled. Payouts are generated from a specified event that we identify in our Program, such as sales, registrations, and retail leads. The definition of the event associated with a Program is set forth below and such definition shall govern this Agreement. If you participate in our Program, you agree to place that Program's advertising creative on your media properties, such as your website, affiliated websites or email distribution lists, in accordance with the terms of the accepted Program. We may change a Program at any time unless otherwise specified upon notice to you. Similarly, we may drop a previously accepted Program at any time unless otherwise specified. Commission Junction is responsible for displaying our Program and tracking the payments owed to you.

A. Non-Sales Event Programs.
If we offer to allow you to participate in a Non-Sales Event Program (which is at our sole discretion), you will be paid a fixed dollar amount of compensation, the amount of which shall be as negotiated between you and us, solely for each “Non-Sales Event” (as defined below) generated from your website from Visitor Transactions arising from Visitor actions in our Program. You understand and agree that, if you participate in a Non-Sales Event Program, you shall not receive any compensation from us, either as a percentage or a fixed dollar amount, arising or resulting from any purchases made at the Website as a result of a Visitor Transaction.

B. Sales Program.
If we offer to allow you to participate in our sales Program (which is at our sole discretion), you will be paid a percentage commission, the amount of which shall be as negotiated between you and us and reflected in writing, of the Net Sales from Visitor Transactions.

C. Certain Definitions.
As used herein:

A “Visitor” means any person, other than you, your employees or agents or any minor, who accesses the Website.

A “Visitor Transaction” means a purchase made at the Website by a Visitor during a Session.

“Net Sales” means the total net retail dollar amount actually received by us from Visitor Transactions for goods that are ordered, paid for, delivered, accepted and not returned, excluding any discounts, returns, chargebacks, bad debts, taxes, shipping and handling charges, and insurance.

Non-Sales Event means an event, other than a Visitor Transaction at the Website, that is described in our Program, and which may include without limitation (a) our receipt of a New Lead through registration by a Visitor at the Website or (b) a Coupon Redemption at the Website.

A “New Lead” means a lead of which we determine, in our sole discretion, that we had no prior knowledge from any source, and for which we receive as a result of a Visitor Transaction full, valid and accurate information with respect to, at minimum, the following: name, complete billing street address in a state, province or country to which we ship goods, personal identification number, and email address.

A “Coupon Redemption” means the valid redemption on the Website, in connection with a Visitor Transaction, of a coupon that we issue.

“Session” means a user session on the Website initiated by a Visitor clicking on a button or link to the Website that is contained in our Advertisements displayed on your website. A Session terminates upon the sooner to occur of: (i) completion by the Visitor of a purchase transaction on the Website; (ii) the Visitor’s access of the Website through another Advertisement displayed on your website (in which case a new Session would be started); or (iii) one (1) day following the date of commencement of the Session.

D. Additional Compensation Terms.
If you participate in a Non-Sales Event Program based on our receipt of New Leads, you acknowledge and agree that we shall have no obligation to make more than one (1) compensation payment for (a) an individual or a household, regardless of the number of New Leads generated by such individual or household, or (b) for New Leads having a common billing address or email address. We shall have no obligation to pay any compensation for New Leads who are minors, who have billing addresses outside the United States to which we do not ship goods, or whom we determine are engaged in fraudulent activity. Commission Junction shall pay you all fees due to you under this Agreement. You agree that when we pay Commission Junction each month the amount of your compensation, and Commission Junction’s transaction fee, that for purposes of this Agreement we have paid you and we shall have no further obligation to you in respect of such amounts, you shall l have no claim against us for payment of such amounts and you shall assume the risk of non-payment thereof by Commission Junction.

IV. Intellectual Property.

A. Non-Exclusive Limited License and Use of Our Logos and Trademarks.
We grant you a non-exclusive, non-transferable, revocable right solely in the United States, and without the right to sublicense, to (i) develop and operate links on your website to the Website solely in accordance with the terms of this Agreement and the Commission Junction Publisher Service Agreement, in order to permit Visitors to access the Website and, (ii) for itself and on behalf of its licensors and vendors, but only to the extent that we can grant such rights, to use, reproduce, transmit, publicly display, and distribute the logos, trade names, trademarks, service marks and similar identifying material and content owned by us, our licensors or vendors that are contained in our Advertisements (collectively “Advertiser Licensed Materials”), solely for the purpose of promoting the Website on your website through our Advertisements and links as authorized under this Agreement. You may not alter, modify or change the Advertiser Licensed Materials in any way, and you are only entitled to use the Advertiser Licensed Materials. No right, property, or interest in any Advertiser Licensed Materials is intended to be given to or acquired by you by the execution of or the performance of this Agreement.

B. Non-Exclusive Limited License and Use of Your Logos and Trademarks.
You grant to us a non-exclusive, non-transferable, revocable right to use and display your logos, trade names, trademarks, service marks and similar identifying material (collectively “Publisher Licensed Materials”), solely for the purposes contemplated under this Agreement, including allowing us to list your name as a publisher in the Program on the Website. We may not alter, modify or change the Publisher Licensed Materials in any way. No right, property, license, or interest in any Publisher Licensed Materials owned by you is intended to be given to or acquired by us by the execution of or the performance of this Agreement.

C. Use of Advertiser Licensed Materials.
You will not use the Advertiser Licensed Materials in any manner that is disparaging or that otherwise portrays us in a negative light. You will not publish or distribute any written material that makes reference to us without first submitting such material to us and receiving our written consent. We reserve all of our rights in the Advertiser Licensed Materials, and all other intellectual property rights. We may revoke your license by giving notice in accordance with the provisions of Commission Junction Publisher Service Agreement.

D. Proprietary Property.
All intellectual or proprietary property and information, supplied or developed by us shall be and remain the sole and exclusive property of us or our licensors or vendors. As between the parties, we and our licensors and vendors shall retain all rights of use, title and interest in and to the Advertisements and the Website, and you shall retain all rights of use, title and interest in and to your website. Upon termination of this Agreement, you shall return to us any and all such property and information furnished to you by us. You acknowledge and agree that, as between you and us, all information regarding purchases made at the Website shall be owned by us, and we shall have no obligation to return any such information to you.

V. Term and Termination.

The term of this Agreement will begin upon acceptance of your Program application (the “Effective Date”) and shall remain effective until terminated by either party upon seven (7) days' prior written notice to the other party, effective the 8th day. We may immediately terminate the Agreement if you violate your obligations under this Agreement or the Commission Junction Publisher Service Agreement.

Within two (2) days of termination of this Agreement, you will stop displaying all of our Advertisements or other references to us.

VI. Representations and Warranties.

You hereby represent and warrant to us that: (i) you are duly organized, validly existing and in good standing, you have duly and validly assented to this Agreement and it constitutes your legal, valid, and binding obligation, enforceable against you in accordance with its terms; (ii) your website complies with your obligations described in Section 2 above, including, but not limited to, your obligations regarding eligibility, advertising, privacy and e-mail; (iii) the assent to the terms of this Agreement, delivery, and performance by you of this Agreement and the consummation by you of the transactions contemplated hereby will not, with or without the giving of notice, the lapse of time, or both, conflict with or violate (a) any provision of law, rule, or regulation to which you are subject, (b) any order, judgment, or decree applicable to you or binding upon your assets or properties, (c) any provision of your by-laws or certificate of incorporation if applicable, or (d) any agreement or other instrument applicable to you or binding upon your assets or properties; (iv) no consent, approval, or authorization of, or exemption by, or filing with, any governmental authority or any third party is required to be obtained or made by you in connection with the execution, delivery, and performance of this Agreement or the taking by you of any other action contemplated hereby; and (v) there is no pending or, to the best of your knowledge, material threatened claim, action, or proceeding against you, or any subsidiary or sub-publisher of yours, with respect to the execution, delivery or consummation of this Agreement, or with respect to your trademarks, and, to the best of your knowledge, there is no basis for any such claim, action, or proceeding.

VII. Disclaimers.

Payless makes no express or implied warranties or representations with respect to the Program, the Website, the Advertiser Licensed Materials or the products and services offered on the Website, including, without limitation, warranties of fitness, merchantability, noninfringement, or any implied warranties arising out of course of performance, dealing, or trade usage. In addition, we make no representation that the operation of the Website will be uninterrupted or error free, and we will not be liable for the consequences of any interruptions or errors. We will not, and are not obligated to, make any representations, warranties, or other statements concerning you, your website, any of your products or services, or your website policies, except as provided in the Advertisements.

VIII. Indemnification.

You agree to indemnify, defend and hold harmless Payless and Eastborough and our respective parents, subsidiaries, affiliates, other publishers, successors and assigns and their respective directors, officers and employees from and against any and all losses, liabilities, damages, actions, claims, expenses, and costs including, without limitation, reasonable attorneys' fees, which result or arise from or related to the development, operation, maintenance, and contents of your website or your negligence or breach of this Agreement.

IX. General Provisions

A. Independent Parties.
Nothing contained herein shall imply any partnership, joint venture or agency relationship among the parties, and no party shall have the power to obligate or bind another party in any manner whatsoever, except to the extent herein provided.

B. Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

C. Confidentiality.
You shall maintain the confidentiality of, and not disclose to any third party, all information provided to you by us, our parents, subsidiaries, affiliates or Commission Junction relating to your role as a publisher, including without limitation, business information, financial data and marketing data including the number of click-throughs from your website to the Website. You shall protect the confidentiality of this information with the same degree of care as you use for your own confidential and proprietary information of a similar nature, but not less than reasonable care. We do not plan to make available to you any personally identifiable information regarding our customers, but in the event that such information is disclosed to you by us, you shall protect and keep such information confidential, and use it solely for the purpose of performing your obligations under the Agreement. You shall destroy such personally identifiable information or return it to us, at our option, within ten (10) days after termination of the Agreement. Without limiting the foregoing, we will not populate or otherwise include any information in the SID (ie., shopper ID) field in the file generated by Commission Junction’s Transaction Tracking Code.

You shall at all times keep proper books and records of account, and shall maintain records and information sufficient to show your compliance with the terms of this Agreement, and you shall retain such books and records for at least one (1) year following the termination date. Upon reasonable request from us, you agree to furnish to us copies of such books and records.

D. Data Ownership.
Y ou hereby grant to us the right to use any information that you furnish to us, which may be through Commission Junction. You expressly authorize Commission Junction to share with us any data you provide to them that is related to your participation in our Program. We shall solely own any data that we provide to you.

E. Entire Agreement; Modification.
This Agreement is the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior such agreements. We may modify any of the terms and conditions contained in this Agreement, at any time in its sole discretion, upon seven (7) days written notice, effective the 8th day. You will be notified of any modification by Commission Junction prior to the effective date of the modification. Modifications may include, but are not limited to changes in the rate of compensation, payment procedures, term, and Program rules. If any modification is unacceptable to you, your sole recourse is to terminate this Agreement. Your continued participation in the Program following notification to you of such modification will constitute binding acceptance of the change.

F. Notices and Approvals.
You shall send any notice or request for approval to us by certified mail addressed to General Counsel, Payless Shoesource Worldwide, Inc., 3231 SE 6th Avenue, Topeka, Kansas 66607.

G. No Exclusivity.
You understand that this Agreement is not exclusive and we may at any time (directly or indirectly) solicit customer referrals from third parties on terms that may differ from those contained in this Agreement or operate Websites that are similar to or compete with your website.

H. Limitation of Liability.
WE AND OUR AFFILIATES SHALL NOT HAVE ANY LIABILITY HEREUNDER FOR ANY INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES INCLUDING, WITHOUT LIMITATION, ANY LOSS OF REVENUE, PROFITS, DATA, OR BUSINESS OPPORTUNITIES ARISING IN CONNECTION WITH THIS AGREEMENT OR THE PROGRAM, WHETHER OR NOT WE KNEW OR SHOULD HAVE KNOWN THAT SUCH DAMAGES MIGHT BE INCURRED. FURTHERMORE, OUR AGGREGATE LIABILITY TO YOU WITH RESPECT TO THIS AGREEMENT AND THE PROGRAM WILL NOT EXCEED THE TOTAL COMPENSATION PAID OR PAYABLE TO YOU DURING THE PRECEDING ONE (1) YEAR PERIOD.

I. Conflicts.
In the event of any direct conflict between the terms of this Agreement and the terms of the Publisher Service Agreement between you and Commission Junction, the terms of the Publisher Service Agreement shall prevail.

J. Governing Law.
Notwithstanding any different choice of law provision contained in the Publisher Service Agreement, the substantive law of the State of Delaware shall in all respects govern this Agreement and the relationship between you and us arising from your participation in our Program.

Advertising Guidelines

The image and text links furnished by us to you, including the EASTBOROUGH, PAYLESS OR PAYLESS SHOESOURCE WORLDWIDE trademarks, service marks and logos (collectively, the "Logos") may only be used pursuant to the guidelines set forth in this document. Any other use is strictly prohibited.

1. The Logos may not be used in any manner that might imply that any goods, services, web sites, publications or other materials that do not originate from US are sponsored, endorsed, licensed by, or affiliated with us.
   
2. The Logos may be displayed solely on your website, and only as a hotlink to the Website (URL http://www.payless.com) and for no other purpose.
   
3. The Logos may not be imitated in any manner.
   
4. The Logos may not be used in a manner that would disparage us or our products or services.
   
5. The Logos must be used as provided by us, with no changes, including but not limited to separating the words, changing the typeface, adding or deleting words, changing colors, adding taglines, changing the line or letter spacing, or changing the aspect ratio. The Logos may not be animated, morphed, or otherwise distorted in perspective or appearance.
   
6. You may use only our approved artwork for the Logos.
   
7. The Logos must only appear in a horizontal position.
   
8. The Logos must stand alone and may not be combined with any other object, including but not limited to other logos, words, graphics, photos, slogans, numbers, design features, or symbols.
   
9. The Logos must not be incorporated or used in any manner as part of another company's name, domain name, product or service name, logo, trade dress, design, slogan, or other trademarks. The Logo must never appear with any other symbol or icon; contained within a box, circle, or other shape; or combined with any other name, logo, or icon to create a co-branded logo.
   
10. The Logos may not be used in any other company name, product name, service name, domain name, web site title, publication title, or the like.