FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _ to _
Commission File Number 0-23901
CYBERSHOP INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3979226
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
130 Madison Avenue New York, New York 10016
- -------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 532-3553
----------------
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes |_| No |X|
The number of shares of the Registrant's common stock, par value $.001 per
share, outstanding on May 5, 1998 was 7,220,000 shares.
<PAGE>
CYBERSHOP INTERNATIONAL, INC.
INDEX TO FORM 10-Q
Page
PART I. FINANCIAL INFORMATION Number
------
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1998
(unaudited) and December 31, 1997 2
Consolidated Statements of Operations for the Three
Months ended March 31, 1998 and 1997 (unaudited) 3
Consolidated Statements of Cash Flows for the Three
Months ended March 31, 1998 and 1997 (unaudited) 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 8
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
1
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PART I. FINANCIAL INFORMATION
Item 1. - Financial Statements
CYBERSHOP INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 18,687,000 $ 787,000
Accounts receivable, net 27,000 66,000
Inventories 30,000 31,000
Prepaid expenses and other 64,000 --
------------ ------------
Total current assets 18,808,000 884,000
Property and equipment, net 184,000 132,000
Other assets 6,000 211,000
------------ ------------
Total assets $ 18,998,000 $ 1,227,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 675,000 $ 740,000
Accrued liabilities 159,000 324,000
Deferred revenues 80,000 135,000
Current portion of capital lease obligations -- 13,000
------------ ------------
Total current liabilities 914,000 1,212,000
Deferred Rent 7,000 5,000
Capital lease obligations -- 15,000
------------ ------------
Total liabilities 921,000 1,232,000
------------ ------------
Stockholders' equity (deficit):
Members capital interest -- 3,139,000
Preferred stock, $.001 par value, 5,000,000 shares
authorized; none issued and outstanding -- --
Common stock, $.001 par value, 25,000,000 shares
authorized; 7,220,000 shares issued and
outstanding on March 31, 1998 7,000 --
Additional paid-in capital 18,215,000 --
Accumulated deficit (145,000) (3,144,000)
------------ ------------
Total stockholders' equity (deficit) 18,077,000 (5,000)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 18,998,000 $ 1,227,000
============ ============
</TABLE>
The accompanying notes to the unaudited consolidated financial
statements are an integral part of these consolidated statements.
2
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CYBERSHOP INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
1998 1997
----------- -----------
Revenues:
Product sales $ 390,000 $ 135,000
Set up fees 32,000 62,000
----------- -----------
Total revenues 422,000 197,000
Cost of revenues 292,000 100,000
----------- -----------
Gross profit 130,000 97,000
Operating expenses 909,000 439,000
----------- -----------
Loss from operations (779,000) (342,000)
Other, net 4,000 5,000
----------- -----------
Net loss $ (775,000) $ (337,000)
=========== ===========
Net loss per share, basic and diluted $ (0.19) $ (0.10)
=========== ===========
Weighted average common shares
outstanding, basic and diluted 4,178,889 3,483,494
The accompanying notes to the unaudited consolidated financial
statements are an integral part of these consolidated statements.
3
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CYBERSHOP INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31,
1998 1997
------------ ------------
Cash flows from operating activities:
Net loss $ (775,000) $ (337,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 30,000 25,000
Increase (decrease) in cash from changes in:
Accounts receivable, net 39,000 (3,000)
Inventories 1,000 --
Prepaid expenses and other (64,000) --
Other assets 205,000 --
Accounts payable (65,000) 39,000
Accrued liabilities (165,000) (80,000)
Deferred revenues (55,000) (33,000)
Deferred rent 2,000 1,000
------------ ------------
Net cash used in operating activities (847,000) (388,000)
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (82,000) (11,000)
------------ ------------
Cash flows from financing activities:
Net proceeds from sale of common stock 18,857,000 --
Proceeds of short-term loan 500,000 --
Repayment of short-term loan (500,000) --
Payments of capital lease obligations (28,000) --
------------ ------------
Net cash provided by financing activities 18,829,000 --
------------ ------------
Net increase (decrease) in cash 17,900,000 (399,000)
Cash and cash equivalents, beginning of period 787,000 510,000
------------ ------------
Cash and cash equivalents, end of period $ 18,687,000 $ 111,000
============ ============
The accompanying notes to the unaudited consolidated financial
statements are an integral part of these consolidated statements.
4
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CYBERSHOP INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Description of the Business and Basis of Presentation.
CyberShop International, Inc. and subsidiary (the "Company") is an online
retailer that offers brand name products from manufacturers to customers on the
Company's website on the World Wide Web at cybershop.com and from its store that
resides on America Online ("AOL").
On March 18, 1998, the members of CyberShop L.L.C. contributed all of
their members capital interests in exchange for 4,000,000 shares of common stock
of CyberShop International, Inc. Both entities were under common control, which
resulted in the transaction being accounted for comparable to a pooling of
interests. This contribution resulted in a transfer of the balances of members
capital interests and accumulated deficit to common stock and additional paid in
capital at the time of the contribution.
The information presented for March 31, 1998 and 1997, and for the
three-month periods then ended, is unaudited, but, in the opinion of the
management of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring
adjustments) which the Company considers necessary for the fair presentation of
the Company's financial position as of March 31, 1998, the results of its
operations for the three-month periods ended March 31, 1998 and 1997 and its
cash flows for the three month periods ended March 31, 1998 and 1997. The
consolidated financial statements included herein have been prepared in
accordance with generally accepted accounting principles and the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. These consolidated financial statements should be read in conjunction
with the Company's audited consolidated financial statements for the year ended
December 31, 1997, which were included as part of the Company's Form S-1, as
amended, as filed with the Securities and Exchange Commission (the "SEC").
Results for the interim period are not necessarily indicative of results
that may be expected for the entire year.
2. Public Offering of Common Stock.
On March 26, 1998, the Company completed its initial public offering of
3,220,000 shares of common stock at a price of $6.50 per share. Net proceeds
from this offering, net of underwriting discounts and offering costs, were
$18,857,000.
3. Short-Term Loan.
On March 19, 1998, the Trustees of General Electric Pension Trust loaned
the Company $500,000 at an interest rate of 15% per annum. The proceeds of the
loan were utilized by the Company for working capital purposes. Jeffrey S.
Tauber pledged 172,500 of his shares of Common Stock as security for the loan.
The loan was repaid on March 27, 1998.
5
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Safe Harbor for Forward-Looking Statements
From time to time, the Company may publish statements which are not
historical fact, but are forward-looking statements relating to such matters as
anticipated financial performance, business prospects, technological
developments, new products, research and development activities and similar
matters. The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements.
These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical and anticipated results or other expectations expressed in the
Company's forward looking statements. Such forward-looking statements may be
identified by the use of certain forward-looking terminology, such as "may,"
"will," "expect," "anticipate," "intend," "estimate," "believe," "goal," or
"continue," or comparable terminology that involves risks or uncertainties.
Actual future results and trends may differ materially from historical results
or those anticipated depending on a variety of factors, including, but not
limited to those set forth under "Overview" and "Liquidity and Capital
Resources" included in this Management's Discussion and Analysis of Financial
Condition and Results of Operations. Particular attention should be paid to the
cautionary statements involving the Company's limited operating history, the
unpredictability of its future revenues, the unpredictable and evolving nature
of its key markets, the intensely competitive on-line commerce and entertainment
environments, the Company's dependence on its strategic alliances and key
suppliers and distributors, and the risks associated with capacity constraints,
systems development, relationships with artists, and the management of growth.
Except as required by law, the Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information, future events
or otherwise. Readers, however, should carefully review the factors set forth in
other reports or documents that the Company has filed or files from time to time
with the SEC.
Overview
CyberShop was in a test period from its inception in December 1994 until
it commenced its operations in September 1995 and is still in the early stages
of development. The Company did not have revenues, cost of revenues or gross
profit from inception on December 1, 1994 through December 31, 1994. In 1995 and
throughout most of 1996, the Company's primary activities related to
establishing relationships with manufacturers, which resulted in the payment of
set up fees by certain manufacturers to display products in the Company's
on-line stores, and developing the Company's proprietary systems operating
procedures. The Company has been selling merchandise on the Internet since
September 1995 and on AOL since November 1996. Accordingly, the Company has a
limited operating history and is still in the early stages of development.
The Company recognizes product revenues when goods are shipped to the
customer. Typically, the Company receives payment from the customer's credit
card through a financial institution within two to four business days. The
amount received by the Company is net of any credit card transaction fees
deducted by the financial institution. The Company carries minimal inventory and
typically pays its vendors for goods within 30 to 60 days.
The Company intends to increase its operating expenses to fund increased
marketing and advertising, to enhance existing stores and to establish strategic
relationships important to the success of the Company. The Company expects that
it will continue to incur net losses and generate negative cash flow from
operations for the foreseeable future as it continues to develop its business.
6
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Results of Operations
Three Month's Ended March 31, 1998 compared to Three Months Ended March 31,
1997.
Revenues: Revenue is comprised of sales of products offered in the Company's
on-line stores and vendor set-up fees. Total revenues increased by 114%, or
$225,000, from $197,000 in the first quarter of 1997 to $422,000 in the first
quarter of 1998. Product sales increased by 189%, or $255,000, from $135,000 in
the first quarter of 1997 to $390,000 in the first quarter of 1998. This
increase was primarily attributable to increased marketing efforts, an expanded
customer base and repeat purchases from existing customers. Set-up fees
decreased by 48%, or $30,000, from $62,000 in the first quarter of 1997 to
$32,000 in the first quarter of 1998, as a result of a decrease in emphasis on
collecting set-up fees and an increase in emphasis on product sales.
Cost of Revenues: Cost of revenues consists primarily of the cost of products
sold to customers, including shipping and handling. Costs of revenues increased
by 192%, or $192,000, from $100,000 in the first quarter of 1997 to $292,000 in
the first quarter of 1998, primarily due to increased product sales. Gross
profit margins related to product sales were 25.1% in the first quarter of 1998
compared to 25.9% in the first quarter of 1997.
Operating Expenses: Operating expenses consist primarily of personnel expenses,
on-line, radio and print advertising, public relations and other promotional
expenses, including payments to AOL, and general corporate expenses. Operating
expenses increased by 107%, or $470,000, from $439,000 in the first quarter of
1997 to $909,000 in the first quarter of 1998. The increases were primarily
attributable to higher personnel costs related to the increased infrastructure
of the Company, higher advertising and promotional expenses and an increase in
AOL fees.
Liquidity and Capital Resources
On March 26, 1998, the Company completed its initial public offering
("IPO") of 3,220,000 shares of Common Stock at a price of $6.50 per share. Net
proceeds from the IPO, net of underwriting discounts and offering costs, were
$18,857,000. Prior to the IPO, the Company had financed its operations primarily
from capital contributions from private investors. At March 31, 1998, the
Company had cash and cash equivalents of $18,687,000, working capital of
$17,894,000, stockholders' equity of $18,077,000 and no debt. The Company
believes that its existing capital resources will enable it to maintain its
operations for at least the next twelve months.
Net cash used in operations in the first quarter of 1998 was $847,000,
primarily due to the $775,000 net loss.
Capital expenditures, primarily for computer equipment to support the
Company's expansion and increased infrastructure, were $82,000 in the first
quarter of 1998. In May 1998, the Company entered into agreements to purchase
and install new state of the art integrated electronic commerce and accounting
systems for approximately $900,000. In addition, as of May 1998, the Company is
negotiating with a view to entering into a 10-year lease for space in Jersey
City, New Jersey. If this lease is executed, the Company anticipates that it
will make capital expenditures for leasehold improvements, furniture and
equipment relating to this space of approximately $350,000. No other material
commitments for capital expenditures are currently outstanding or contemplated.
Net cash provided by financing activities in the first quarter of 1998 was
$18,829,000, consisting of the net proceeds of its IPO of $18,857,000, partially
offset by payments of capital lease obligations of $28,000. On March 19, 1998,
the Trustees of General Electric Pension Trust loaned the Company $500,000 for
working capital purposes, which was repaid with IPO proceeds on March 27, 1998.
On March 31, 1998, the Company entered into a two-year sponsorship and
marketing agreement with Excite, Inc. Under the terms of the agreement,
cybershop.com will be more prominently presented than any other competitive
online department store on the Excite and WebCrawler services.
7
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The Company believes that its computer systems and software products,
including its new system which will be installed during 1998, are fully year
2000 compatible. However, it is possible that certain computer systems or
software products of the Company's suppliers or customers may not accept input
of, store, manipulate and output dates in the year 2000 or thereafter without
error or interruption. The Company may be required to make significant
expenditures to identify, address or remedy any potential year 2000 problems, or
to satisfy liabilities to which the Company may become subject as a result of
such problems.
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On March 20, 1998 the Company's Registration Statement on Form S-1 (File
No. 333-42707) was declared effective by the SEC. Pursuant to the Registration
Statement the Company registered and sold 3,220,000 shares of Common Stock at a
price of $6.50 per share. The managing underwriters were C.E. Unterberg, Towbin
and Fahnestock & Co. Inc. The aggregate price of the amount offered and sold was
$20,930,000.
The following sets forth the Company's reasonable estimates of the total
expenses incurred by the Company, from the effective date of the Registration
Statement through March 31, 1998, in connection with the issuance and
distribution of the securities registered.
(i) underwriting discounts and commissions $1,465,000
(ii) finders' fees --
(iii) expenses paid to or for underwriters --
(iv) other expenses 608,000
----------
Total $2,073,000
==========
None of the above payments were direct or indirect payments to the
Company's officers or directors, persons owning 10% or more of the Common Stock,
affiliates of the Company or other persons.
The net offering proceeds to the Company after deducting the total
expenses set forth above were $18,857,000.
From the effective date of the Registration Statement through March 31,
1998, the Company used the following amounts from the net offering proceeds for
the purposes set forth below:
Construction of plant $ --
Building and facilities --
Purchase and installation
of machinery and equipment --
Purchase of real estate --
Acquisition of other business --
Repayment of indebtedness 500,000
Working capital --
Temporary investments $18,357,000
On March 19, 1998, the Trustees of General Electric Pension Trust loaned
the Company $500,000 at an interest rate of 15% per annum. The proceeds of the
loan were utilized by the Company for working capital purposes. Jeffrey S.
Tauber pledged 172,500 of his shares of Common Stock as security for the loan.
The loan was repaid on March 27, 1998.
The use of proceeds set forth above does not represent a material change
in the use of proceeds described in the Registration Statement.
8
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Item 6. Exhibits and Reports on Form 8-K
a. The following is a list of exhibits filed as part of this Form 10-Q:
2. Plan of acquisition, reorganization, arrangement, liquidation or
succession: None
3. Articles of Incorporation:
3.1 Certificate of Incorporation, as amended and as currently in effect
(Incorporated by reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (File No. 333-42707).
By-Laws:
3.2 By-Laws as currently in effect (Incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-1 (File No.
333-42707).
10. Material Contracts:
10.1 Sponsorship Agreement dated as of March 31, 1998 between Excite, Inc. and
the Company.
11. Statement re computation of per share earnings: Statement regarding
computation of per share earnings is not required because the computation
can be readily determined from the material contained in the financial
statements included herein.
15. Letter re unaudited financial information: None
16. Letter re change in accounting principles: None
19. Report furnished to security holders: None
22. Published report regarding matters submitted to vote of security holders:
None
23. Consents of Experts and Counsel: None
24. Power of Attorney: None
27. Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only
99. Additional Exhibits: None
b. There were no reports on Form 8-K filed during the quarter ended March 31,
1998
9
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 14, 1998 By: /s/ Jeffrey S. Tauber
---------------------
Jeffrey S. Tauber
President, Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
Date: May 14, 1998 By: /s/ Gary S. Finkel
------------------
Gary S. Finkel
Vice President, Chief Financial Officer
and Treasurer
(Principal Accounting Officer)
10
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Exhibit Index
10.1 Sponsorship Agreement dated as of March 31, 1998 between Excite, Inc. and
the Company.
27. Financial Data Schedule.
11
THE COMPANY HAS REQUESTED
CONFIDENTIAL TREATMENT
WITH RESPECT TO CERTAIN
PORTIONS OF THIS
AGREEMENT ACCORDINGLY,
CERTAIN PORTIONS HAVE
BEEN REDACTED
Exhibit 10.1
SPONSORSHIP AGREEMENT
This agreement ("Agreement") is entered into as of the 31st day of March, 1998
("Effective Date"), by and between Excite, Inc., a California corporation,
located at 555 Broadway, Redwood City, California 94063 ("Excite"), and
CyberShop, a Delaware corporation, located at 130 Madison Avenue, New York, New
York 10016 ("Client").
RECITALS
A. Excite maintains a site on the Internet at http://www.excite.com (the
"Excite Site"), a site at http://www.webcrawler.com (the "WebCrawler
Site") and owns, manages or is authorized to place advertising on
affiliated Web sites worldwide (collectively, the "Excite Network") which,
among other things, allow its users to search for and access content and
other sites on the Internet.
B. Within the Excite Site and the WebCrawler Site, Excite currently organizes
certain content into topical channels, including "shopping" channels (the
"Shopping Channels").
C. Client operates an on-line department store at its Web site located at
http:// cybershop.com (the "Client Site").
D. Client wishes to promote its business to Excite's users through promotions
and advertising in various portions of the Excite Network.
Therefore, the parties agree as follows:
1. SPONSORSHIP OF THE SHOPPING CHANNELS
a) Commencing on the Launch Date (as defined below), Client will be
promoted in the Excite Shopping Channel and the WebCrawler Shopping
Channel:
i) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed in the Excite Shopping Channel home page "Such
a Deal" promotional rotation in two (2) separate
one-week rotations during each year of the term of the
Agreement, once every six (6) months.
ii) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed in the Excite Shopping Channel home page "Shop
Here First" promotional rotation in four (4) separate
one-week rotations during each year of the term of the
Agreement, once every quarter.
<PAGE>
CONFIDENTIAL
iii) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed on the Excite Shopping Channel home page under
the department listings, subject to the following
conditions:
A) Client is allocated eight (8) separate
one-week link displays in each year of the
term of the Agreement. Only one (1) link to
the Client Site may be displayed on the
Excite Shopping Channel home page under the
department listings at any one time. Links
to the Client Site may not appear under the
Auctions, Books or Gourmet & Groceries
department listings and may not appear in
more than four (4) different department
listings during each year of the term of the
Agreement.
B) The display of all links on the Excite
Shopping Channel home page under the
department listings is subject to
availability at the time.
iv) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed on the front pages of the following
departments of the Excite Shopping Channel subject to
the following conditions:
A) A link to the Client Site will be displayed
on the front page of the Department Stores &
Malls department of the Excite Shopping
Channel for the term of the Agreement.
B) A link to the Client Site will be displayed
on the front page of one other department of
the Excite Shopping Channel of Client's
choice for the term of the Agreement, other
than the Auctions, Books or Gourmet &
Groceries departments of the Excite Shopping
Channel.
C) Client is allocated twelve (12) months of
link display in three (3) separate
four-month blocks on the front page of
departments of the Excite Shopping Channel
other than the Auctions, Books, Department
Stores & Malls or Gourmet & Groceries
departments of the Excite Shopping Channel
in each year of the term of the Agreement.
This allocation of links may not be used in
more than one (1) department at any one
time.
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CONFIDENTIAL
v) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed in the "Shop Here First" promotional rotation
on the front pages of the following departments of the
Excite Shopping Channel subject to the following
conditions:
A) Client is allocated four (4) separate
four-week link displays in the "Shop Here
First" promotional rotation on the front
page of departments of the Excite Shopping
Channel other than the Auctions, Books or
Gourmet & Groceries departments of the
Excite Shopping Channel in each year of the
term of the Agreement. This allocation of
links may not be used in more than one (1)
department at any one time.
vi) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed in the WebCrawler Shopping Channel home page
"Special Web Price!" promotional rotation in two
separate one-week rotations during each year of the term
of the Agreement, once every six (6) months.
vii) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed in the WebCrawler Shopping Channel home page
"Featured Merchants" promotional rotation in four
separate one-week rotations during each year of the term
of the Agreement, once every quarter.
viii) A link or links to the Client Site (consistent with the
format used on similar links on the same page) will be
displayed on the WebCrawler Shopping Channel home page
under the department listings, subject to the following
conditions:
A) Client is allocated eight (8) separate
one-week link displays in each year of the
term of the Agreement. Only one (1) link to
the Client Site may be displayed on the
WebCrawler Shopping Channel home page under
the department listings at any one time.
Links to the Client Site may not appear in
more than four (4) different department
listings during each year of the term of the
Agreement.
B) Links to the Client Site may not appear
under the Auctions, Books or Home &
Groceries department listings.
C) The display of all links on the WebCrawler
Shopping Channel home page under the
department listings is subject to the
availability at the time.
3
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CONFIDENTIAL
ix) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed on the front pages of the following
departments of the WebCrawler Shopping Channel subject
to the following conditions:
A) A link to the Client Site will be displayed
on the front page of four (4) departments of
the WebCrawler Shopping Channel of Client's
choice for the term of the Agreement, other
than the Auctions, Books or Home & Groceries
departments of the WebCrawler Shopping
Channel.
x) A link to the Client Site (consistent with the format
used on similar links on the same page) will be
displayed in the "Featured Merchants" promotional
rotation on the front pages of the following departments
of the WebCrawler Shopping Channel subject to the
following conditions:
A) Client is allocated four (4) separate
four-week link displays in the "Featured
Merchants" promotional rotation on the front
page of departments of the WebCrawler
Shopping Channel other than the Auctions,
Books or Home & Groceries departments of the
Excite Shopping Channel in each year of the
term of the Agreement. This allocation of
links may not be used in more than one (1)
department at any one time.
xi) Excite will deliver XXXXXXXXX impressions of the Client
promotional placements described in this Section 1
during the first year of the term of this Agreement.
Sixty (60) days prior to the end of the first year after
the Launch Date, Excite and Client will negotiate in
good faith to establish allocated number of impressions,
advertising banners and promotional placements described
in this Section 1 for the second year of the term of the
Agreement. If the parties fail to reach agreement
concerning performance details for the second year of
the term, Client may cancel, effective on the later of
the first anniversary of this Agreement or such time as
Excite has delivered XXXXXXX clickthroughs, provided
this latter date is not more than 16 months after the
Launch Date.
2. SPONSORSHIP OF EXCITE LIFESTYLE CHANNEL
a) A link to the Client Site (consistent with the format used on
similar links on the same page) will be displayed in the Excite
Lifestyle Channel home page "Exciting Stuff" promotional rotation in
one (1) one-week rotation each month during the term of the
Agreement. Excite will make reasonable commercial
4
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CONFIDENTIAL
efforts to display this link during mutually-determined holiday
weeks, subject to availability.
b) A link to the Client Site (consistent with the format used on
similar links on the same page) will be programmed in the default
configuration of the "Favorite Links" listing of Web sites on the
Home & Garden department home page of the Excite Lifestyle Channel
during the term of the Agreement. Due to the user's control over the
Web sites displayed in the "Favorite Links" listing, the parties
acknowledge that Excite cannot guarantee or estimate the number of
times Client's link in the "Favorite Links" listing will be
displayed.
c) Excite will deliver XXXXXXXXXXXXXXXX impressions of the Client
promotional placements described in this Section 2 during the first
year of the term of this Agreement. Sixty (60) days prior to the end
of the first year after the Launch Date, Excite and Client will
negotiate in good faith to establish allocated number of
impressions, advertising banners and promotional placements
described in this Section 2 for the second year of the term of the
Agreement. If the parties fail to reach agreement concerning
performance details for the second year of the term, Client may
cancel, effective on the later of the first anniversary of this
Agreement or such time as Excite has delivered XXXXXXX
clickthroughs, provided this latter date is not more than 16 months
after the Launch Date.
3. SPONSORSHIP OF EXCITE ENTERTAINMENT CHANNEL
a) A link to the Client Site (consistent with the format used on
similar links on the same page) will be displayed in the "Exciting
Stuff" promotional rotation on Client's choice or either the home
page of the Music or Movies department of the Excite Entertainment
Channel in one (1) one-week rotation each month during the term of
the Agreement, subject to availability. Excite will make reasonable
commercial efforts to display this link during mutually-determined
holiday weeks, subject to availability.
b) Excite will deliver XXXXXXXXXXXX impressions of the Client
promotional placements described in this Section 3 during the first
year of the term of this Agreement. Sixty (60) days prior to the end
of the first year after the Launch Date, Excite and Client will
negotiate in good faith to establish allocated number of
impressions, advertising banners and promotional placements
described in this Section 3 for the second year of the term of the
Agreement. If the parties fail to reach agreement concerning
performance details for the second year of the term, Client may
cancel, effective on the later of the first anniversary of this
Agreement or such time as Excite has delivered XXXXXXX
clickthroughs, provided this latter date is not more than 16 months
after the Launch Date.
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4. SPONSORSHIP OF WEBCRAWLER HOME & FAMILY CHANNEL
a) A link to the Client Site (consistent with the format used on
similar links on the same page) will be displayed in the "Services"
(or equivalent) promotional rotation on the home page of the
WebCrawler Home & Family Channel in two (2) separate one-week
rotations each year during the term of the Agreement, once every six
(6) months.
b) Excite will deliver XXXXXXXXXXXX impressions of the Client
promotional placements described in this Section 4 during the first
year of the term of this Agreement. Sixty (60) days prior to the end
of the first year after the Launch Date, Excite and Client will
negotiate in good faith to establish allocated number of
impressions, advertising banners and promotional placements
described in this Section 4 for the second year of the term of the
Agreement. If the parties fail to reach agreement concerning
performance details for the second year of the term, Client may
cancel, effective on the later of the first anniversary of this
Agreement or such time as Excite has delivered XXXXXXXX
clickthroughs, provided this latter date is not more than 16 months
after the Launch Date.
5. ADVERTISING ON THE EXCITE SITE
a) Excite will display Client's banner advertising on Excite Search
results pages in response to mutually determined keywords, subject
to availability.
b) Excite will display Client's banner advertising in rotation on
mutually determined Excite Channels, subject to availability.
c) Excite guarantees the display of XXXXXX such banners during the
first year of the term of the Agreement. Sixty (60) days prior to
the end of the first year after the Launch Date, Excite and Client
will negotiate in good faith to establish allocated number of
impressions, advertising banners and promotional placements
described in this Section 5 for the second year of the term of the
Agreement. If the parties fail to reach agreement concerning
performance details for the second year of the term, Client may
cancel, effective on the later of the first anniversary of this
Agreement or such time as Excite has delivered XXXXXXX
clickthroughs, provided this latter date is not more than 16 months
after the Launch Date.
d) Excite will provide forty-eight (48) hour turnaround on replacing
GIF banners supplied by Client. HTML advertising banners must be
submitted by Client to Excite for review at least five (5) business
days in advance of Excite
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beginning implementation. After completing its review, Excite will
implement approved HTML banners in no more than two (2) business
days.
e) Client may have up to twenty (20) different advertising banners in
rotation for display during any one week. Excite will link Client's
advertising banners to a maximum of twenty (20) different URLs
submitted by Client.
6. LAUNCH DATE, RESPONSIBILITY FOR EXCITE NETWORK AND REPORTING
a) Client and Excite will use reasonable efforts to implement the
display of the promotional placements and advertising described in
the Agreement by April 15, 1998 (the "Launch Date").
b) Excite will have sole responsibility for providing, hosting and
maintaining, at its expense, the Excite Network. Excite will have
sole control over of the "look and feel" of the Excite Network
including, but not limited to, the display, appearance and placement
of the parties' respective names and/or brands and the promotional
links.
c) Excite will in "good faith" ensure Client that the above mentioned
banners and promotional placements will be more prominently
presented than any other "competitive retailer's" banners or
promotional placements for the term of the Agreement. For the
purposes of this Agreement, a "competitive retailer" means an
on-line department store comparable to Bloomingdale's, Macy's,
Burdine's, Shopping.com, Chef's Catalog or iQVC.
d) Excite will provide Client with monthly reports substantiating the
number of impressions of Client's advertising banners and
promotional placements displayed on the Excite Network and the
resulting number of clickthroughs to the Client's site. At the time
that Excite makes audited impression reports available to its
advertisers, Client will receive audited impression reports.
7. SPONSORSHIP, ADVERTISING AND VARIABLE REVENUE SHARE FEES
a) In exchange for XXXXXXXXXXXXXXXXXXXXXXXX the Client will pay Excite
sponsorship and advertising fees of XXXXXXXXXXX for the first year
of the term of the Agreement. These fees will be paid in equal
monthly installments
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of XXXXXXXXXXXXXXXXX. The first monthly payment will be due upon the
display of the first of the promotional placements and advertising
described in the Agreement. Subsequent installments will be due on a
monthly basis thereafter. XXXXXXXXXXXXXXXXXXXXXX.
b) In exchange for XXXXXXXXXXXXX the Client will pay Excite sponsorship
and advertising fees of XXXXXXXXXXXXXXXXX for the second year of the
term of the Agreement. These fees will be paid in equal monthly
installments of XXXXXXXXXXXXXXXXXXXXXXX. The first monthly payment
will be due upon the first anniversary of the display of the first
of the promotional placements and advertising described in the
Agreement. Subsequent installments will be due on a monthly basis
thereafter. XXXXXXXXXXXXXXX.
c) Excite will maintain accurate records of the XXXXXXXXXXX delivered
under this Agreement as described in Sections 7(a) and 7(b). Should
these results differ to those provided by Client's server by more
than 10%, Client may, once per quarter during Excite's regular
business hours and at Client's sole expense, review these records to
verify the accuracy and appropriate accounting of XXXXXXXXX
delivered pursuant to the Agreement. Should Client's review
determine that Excite's XXXXXXXX results are inaccurate by 5% or
more, then Excite shall pay for all reasonable costs incurred by
Client for the review of Excite's records.
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d) Separate and apart from the sponsorship and advertising fees paid
for the XXXXXXXXXXXXXXXXXXXXXXXXXX detailed above in Sections 7(a)
and 7(b), Client will pay Excite a variable revenue share to be
calculated based on sales, excluding any and all amounts collected
for sales tax, shipping and handling charges, and credits for
returned goods and/or services, Client derives from visits to the
Client Site via links from the promotional placements and
advertising on the Excite Site described in Sections 1 - 5. Payments
will be made according to the following schedule:
i) For the year between the Launch Date and the first
anniversary of the Launch Date:
o For revenues between XXXXXXXXXXXXXXXX of
sales, excluding any and all amounts
collected for sales tax, shipping and
handling charges, and credits for returned
goods and/or services.
o For revenues in excess of
XXXXXXXXXXXXXXXXXXX of all sales, excluding
any and all amounts collected for sales tax,
shipping and handling charges, and credits
for returned goods and/or services.
ii) For the year between the first anniversary of the Launch
Date and the second anniversary of the Launch Date:
o For revenues between XXXXXXXXXXXXXX of
sales, excluding any and all amounts
collected for sales tax, shipping and
handling charges, and credits for returned
goods and/or services.
o For revenues in excess of XXXXXXXXXXXXX of
all sales, excluding any and all amounts
collected for sales tax, shipping and
handling charges, and credits for returned
goods and/or services.
o For revenues in excess of
XXXXXXXXXXXXXXXXXXXXXX of all sales,
excluding any and all amounts collected for
sales tax, shipping and handling charges,
and credits for returned goods and/or
services.
o For revenues in excess of XXXXXXX of all
sales, excluding any and all amounts
collected for sales tax, shipping and
handling charges, and credits for returned
goods and/or services.
e) Client will pay Excite its variable revenue share payments within
thirty (30) days after the close of each month.
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CONFIDENTIAL
f) The sponsorship and advertising fees and variable revenue share
payments are net of any agency commissions to be paid by Client.
g) Client will maintain accurate records with respect to the
calculation of all variable revenue share payments due under this
Agreement. Once per year, the parties will review these records to
verify the accuracy and appropriate accounting of all payments made
pursuant to the Agreement. In addition, Excite may, upon no less
than thirty (30) days prior written notice to Client, cause an
independent Certified Public Accountant to inspect the records of
Client reasonably related to the calculation of such payments during
Client's normal business hours. The fees charged by such Certified
Public Accountant in connection with the inspection will be paid by
Excite unless the payments made to Excite are determined to have
been less than ninety-five percent (95%) of the payments actually
owed to Excite, in which case Client will be responsible for the
payment of the reasonable fees for such inspection.
8. PUBLICITY
Unless required by law, neither party will make any public
statement, press release or other announcement relating to the terms
of or existence of this Agreement without the prior written approval
of the other. Such approval will not be unreasonably withheld.
Notwithstanding the foregoing, the parties agree to issue an initial
press release regarding the relationship between Excite and Client,
the timing and wording of which will be mutually agreed upon.
9. TERM AND TERMINATION
a) The term of this Agreement will begin on the Launch Date and will
not end until Excite displays of a total of XXXXXXXXXXXXX
impressions of Client's advertising banners and promotional
placements on the Excite Site and Excite has made reasonable
commercial efforts to deliver, at minimum, a goal of XXXXXXXX
clickthroughs to the Client Site. Regardless of Excite's actual
delivery of impressions and clickthroughs, the term of this
Agreement will not be shorter than two (2) years after the display
of the first of Client's advertising banners and promotional
placements, subject to the termination rights set forth below.
b) Sixty (60) days prior to the end of the first year after the Launch
Date, Excite and Client will negotiate in good faith to establish
allocated number of impressions, advertising banners and promotional
placements for the second year of the term of the Agreement.
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<PAGE>
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c) Excite's goal is to deliver XXXXXXXXXXXXXXXXXXXXXXXX clickthroughs
to the Client Site during the fourth through sixth months
(inclusive) after the Launch Date, XXXXXXXXXXXXXXXX clickthroughs to
the Client Site during the seventh through ninth months (inclusive)
after the Launch Date, and XXXXXXXXXXXXXXXXXXXX clickthroughs to the
Client Site during the ninth through twelfth months (inclusive)
after the Launch Date.
d) In the event that Excite has not delivered XXXXXXXXXXXXXXXX
clickthroughs to the Client Site by the end of twelve (12) months
after the Launch Date, the first year of the term of the Agreement
will be extended without additional sponsorship and advertising fees
for up to an additional four (4) months. In the event that Excite
has not delivered XXXXXXXXXXXXXXXXXXXXX clickthroughs to the Client
Site by end of the additional four-month period, Client may
terminate this Agreement immediately upon delivery of written notice
to Excite.
e) Either party may terminate this Agreement if the other party
materially breaches its obligations hereunder and such breach
remains uncured for thirty (30) days following the notice to the
breaching party of the breach.
f) All undisputed payments that have accrued prior to the termination
or expiration of this Agreement will be payable in full within
thirty (30) days thereof.
g) The provisions of Section 12 (Confidentiality and User Data),
Section 13 (Indemnity), Section 14 (Limitation of Liability) and
Section 15 (Dispute Resolution) will survive any termination or
expiration of this Agreement.
10. TRADEMARK OWNERSHIP AND LICENSE
a) Client will retain all right, title and interest in and to its
trademarks, service marks and trade names worldwide, subject to the
limited license granted to Excite hereunder.
b) Excite will retain all right, title and interest in and to its
trademarks, service marks and trade names worldwide, subject to the
limited license granted to Client hereunder.
c) Each party hereby grants to the other a non-exclusive, limited
license to use its trademarks, service marks or trade names only as
specifically described in this Agreement. All such use shall be in
accordance with each party's reasonable policies regarding
advertising and trademark usage as established from time to time.
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CONFIDENTIAL
d) Upon the expiration or termination of this Agreement, each party
will cease using the trademarks, service marks and/or trade names of
the other except:
i) As the parties may agree in writing; or
ii) To the extent permitted by applicable law.
11. CONTENT OWNERSHIP
a) Client will retain all right, title and interest in and to the
Client Site worldwide including, but not limited to, ownership of
all copyrights and other intellectual property rights therein.
b) Excite will retain all right, title, and interest in and to the
Excite Network worldwide including, but not limited to, ownership of
all copyrights, look and feel and other intellectual property rights
therein.
12. CONFIDENTIALITY AND USER DATA
a) For the purposes of this Agreement, "Confidential Information" means
information about the disclosing party's (or its suppliers')
business or activities that is proprietary and confidential, which
shall include all business, financial, technical and other
information of a party marked or designated by such party as
"confidential or "proprietary" or information which, by the nature
of the circumstances surrounding the disclosure, ought in good faith
to be treated as confidential.
b) Confidential Information will not include information that (i) is in
or enters the public domain without breach of this Agreement, (ii)
the receiving party lawfully receives from a third party without
restriction on disclosure and without breach of a nondisclosure
obligation, (iii) the receiving party knew prior to receiving such
information from the disclosing party or (iv) the receiving party
develops independent of any information originating from the
disclosing party.
c) Each party agrees (i) that it will not disclose to any third party
or use any Confidential Information disclosed to it by the other
except as expressly permitted in this Agreement and (ii) that it
will take all reasonable measures to maintain the confidentiality of
all Confidential Information of the other party in its possession or
control, which will in no event be less than the measures it uses to
maintain the confidentiality of its own information of similar
importance.
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<PAGE>
CONFIDENTIAL
d) The usage reports provided by Excite to Client hereunder will be
deemed to be the Confidential Information of Excite.
e) The terms and conditions of this Agreement will be deemed to be
Confidential Information and will not be disclosed without the
written consent of the other party.
f) For the purposes of this Agreement, "User Data" means all
information pertaining to users referred to the Client Site from the
Excite Network during the term of the Agreement that is not
submitted by or collected from Users in connection with their
purchases or other interactive activities while signed on to the
Client Site. The parties acknowledge that any individual user of the
Internet could be a user of Excite and/or Client through activities
unrelated to this Agreement and that user data gathered independent
of this Agreement, even from individuals who are users of both
parties' services, will not be deemed to be "User Data" for the
purposes of this Agreement.
g) User Data will be deemed to be the joint property of the parties
and, subject to the limitations contained herein, both parties will
retain all rights to make use of any User Data obtained through this
Agreement.
h) Client will provide to Excite all User Data collected by Client
within thirty (30) days following the end of each calendar month
during the term of this Agreement in a mutually-determined
electronic format.
i) Client will not use User Data to directly or indirectly solicit any
Excite users either individually or in the aggregate during the term
of this Agreement and for a period of twelve (12) months following
the expiration or termination of this Agreement.
j) Neither party will sell, disclose, transfer or rent any User Data
which could reasonably be used to identify a specific named
individual ("Individual Data") to any third party nor will either
party use Individual Data on behalf of any third party without the
express permission of the individual user. Where user permission for
dissemination of Individual Data to third parties has been obtained,
each party will use commercially reasonable efforts to require the
third party recipients of Individual Data to provide an
"unsubscribe" feature in any email communications generated by, or
on behalf of, the third party recipients of Individual Data.
k) Notwithstanding the foregoing, each party may disclose Confidential
Information or User Data (i) to the extent required by a court of
competent jurisdiction or other governmental authority or otherwise
as required by law or (ii) on a "need-to-know" basis under an
obligation of confidentiality to its legal counsel, accountants,
banks and other financing sources and their advisors.
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13. INDEMNITY
a) Client will indemnify, defend and hold harmless Excite, its
affiliates, officers, directors, employees, consultants and agents
from any and all third party claims, liability, damages and/or costs
(including, but not limited to, attorneys fees) arising from:
i) The breach of any representation or covenant in this
Agreement; or
ii) Any claim that Client's advertising banners infringe or
violate any third party's copyright, patent, trade
secret, trademark, right of publicity or right of
privacy or contain any defamatory content; or
iii) Any claim arising from content displayed on the Client
Site.
Excite will promptly notify Client of any and all such claims and
will reasonably cooperate with Client with the defense and/or
settlement thereof; provided that, if any settlement requires an
affirmative obligation of, results in any ongoing liability to or
prejudices or detrimentally impacts Excite in any way and such
obligation, liability, prejudice or impact can reasonably be
expected to be material, then such settlement shall require Excite's
written consent (not to be unreasonably withheld or delayed) and
Excite may have its own counsel in attendance at all proceedings and
substantive negotiations relating to such claim.
b) Excite will indemnify, defend and hold harmless Client, its
affiliates, officers, directors, employees, consultants and agents
from any and all third party claims, liability, damages and/or costs
(including, but not limited to, attorneys fees) arising from:
i) The breach of any representation or covenant in this
Agreement; or
ii) Any claim arising from the Excite Network other than
content or services provided by Client.
Client will promptly notify Excite of any and all such claims and
will reasonably cooperate with Excite with the defense and/or
settlement thereof; provided that, if any settlement requires an
affirmative obligation of, results in any ongoing liability to or
prejudices or detrimentally impacts Client in any way and such
obligation, liability, prejudice or impact can reasonably be
expected to be material, then such settlement shall require Client's
written consent (not to be unreasonably withheld or delayed) and
Client may have its own counsel in attendance at all proceedings and
substantive negotiations relating to such claim.
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CONFIDENTIAL
c) EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND
HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE REGARDING SUCH SUBJECT MATTER.
14. LIMITATION OF LIABILITY
EXCEPT UNDER SECTIONS 13(a) AND 13(b), IN NO EVENT WILL EITHER PARTY
BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF EITHER PARTY FOR
DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR
ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE
AMOUNTS TO BE PAID BY CLIENT TO EXCITE HEREUNDER.
15. DISPUTE RESOLUTION
a) The parties agree that any breach of either of the parties'
obligations regarding trademarks, service marks or trade names,
confidentiality and/or User Data would result in irreparable injury
for which there is no adequate remedy at law. Therefore, in the
event of any breach or threatened breach of a party's obligations
regarding trademarks, service marks or trade names or
confidentiality, the aggrieved party will be entitled to seek
equitable relief in addition to its other available legal remedies
in a court of competent jurisdiction.
b) In the event of disputes between the parties arising from or
concerning in any manner the subject matter of this Agreement, other
than disputes arising from or concerning trademarks, service marks
or trade names, confidentiality and/or User Data, the parties will
first attempt to resolve the dispute(s) through good faith
negotiation. In the event that the dispute(s) cannot be resolved
through good faith negotiation, the parties will refer the
dispute(s) to a mutually acceptable mediator.
c) In the event that disputes between the parties arising from or
concerning in any manner the subject matter of this Agreement, other
than disputes arising from or concerning trademarks, service marks
or trade names, confidentiality and/or User Data, cannot be resolved
through good faith negotiation and mediation, the parties will refer
the dispute(s) to the American Arbitration Association for
resolution through binding arbitration by a single arbitrator
15
<PAGE>
CONFIDENTIAL
pursuant to the American Arbitration Association's rules applicable
to commercial disputes.
16. GENERAL
a) Assignment. Neither party may assign this Agreement, in whole or in
part, without the other party's written consent (which will not be
unreasonably withheld), except that no such consent will be required
in connection with (i) a merger, reorganization or sale of all, or
substantially all, of such party's assets or (ii) either party's
assignment and/or delegation of its rights and responsibilities
hereunder to a wholly-owned subsidiary or joint venture in which the
assigning party holds an interest. Any attempt to assign this
Agreement other than as permitted above will be null and void.
b) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, notwithstanding
the actual state or country of residence or incorporation of Excite
or Client.
c) Notice. Any notice under this Agreement will be in writing and
delivered by personal delivery, express courier, confirmed
facsimile, confirmed email or certified or registered mail, return
receipt requested, and will be deemed given upon personal delivery,
one (1) day after deposit with express courier, upon confirmation of
receipt of facsimile or email or five (5) days after deposit in the
mail. Notices will be sent to a party at its address set forth in
this Agreement or such other address as that party may specify in
writing pursuant to this Section.
d) No Agency. The parties are independent contractors and will have no
power or authority to assume or create any obligation or
responsibility on behalf of each other. This Agreement will not be
construed to create or imply any partnership, agency or joint
venture.
e) Force Majeure. Any delay in or failure of performance by either
party under this Agreement will not be considered a breach of this
Agreement and will be excused to the extent caused by any occurrence
beyond the reasonable control of such party including, but not
limited to, acts of God, power outages and governmental
restrictions.
f) Severability. In the event that any of the provisions of this
Agreement are held to be unenforceable by a court or arbitrator, the
remaining portions of the Agreement will remain in full force and
effect.
g) Entire Agreement. This Agreement is the complete and exclusive
agreement between the parties with respect to the subject matter
hereof, superseding any prior agreements and communications (both
written and oral) regarding
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CONFIDENTIAL
such subject matter. This Agreement may only be modified, or any
rights under it waived, by a written document executed by both
parties.
h) Counterparts. This Agreement may be executed in counterparts, each
of which will serve to evidence the parties' binding agreement.
CyberShop Excite, Inc.
By: /s/ Jill Markus By: /s/ Robert C. Hood
--------------------------- -----------------------------------
Name: Jill Markus Name: Robert C. Hood
------------------------ --------------------------------
Title: V.P. Store Development Title: Exec. VP-Chief Financial Officer
------------------------ --------------------------------
Date: March 31, 1998 Date: March 31, 1998
------------------------- ---------------------------------
130 Madison Avenue 555 Broadway
New York, New York 10016 Redwood City, California 94063
212.532.3553 (voice) 650.568.6000 (voice)
212.532.3613 (fax) 650.568.6030 (fax)
17
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 18,687,000
<SECURITIES> 0
<RECEIVABLES> 37,000
<ALLOWANCES> (10,000)
<INVENTORY> 30,000
<CURRENT-ASSETS> 18,808,000
<PP&E> 403,000
<DEPRECIATION> (219,000)
<TOTAL-ASSETS> 18,998,000
<CURRENT-LIABILITIES> 914,000
<BONDS> 0
0
0
<COMMON> 7,000
<OTHER-SE> 18,070,000
<TOTAL-LIABILITY-AND-EQUITY> 18,998,000
<SALES> 390,000
<TOTAL-REVENUES> 422,000
<CGS> 292,000
<TOTAL-COSTS> 292,000
<OTHER-EXPENSES> 909,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (775,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (775,000)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> (.19)
</TABLE>
