<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1999
REGISTRATION NO. 0-25507
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 5
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(B)
OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
IPARTY CORP.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7373 13-401 2236
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
41 EAST 11TH STREET, 11TH FLOOR
NEW YORK, NEW YORK 10003
(212) 331-1225
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
Securities to be registered under Section 12 (b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
- --------------------------------------- ---------------------------------------
Common Stock, par value $0.001 OTC Bulletin Board
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 5 to the Registrant's Form 10-SB is being filed solely
for the purpose of refiling Exhibit 10.19.
1
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS AND ITEM 2. DESCRIPTION OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION LOCATION
- -------- ---------------------------------------------------------------------------------- -------------------
<S> <C> <C>
3.1 Restated Certificate of Incorporation of WSI Acquisitions Corp., and Certificate Previously Filed
of Merger by iParty Corp. into WSI Acquisition Corp.
3.2 By-Laws of WSI Acquisitions Corp. Previously Filed
4 Certificate of Designation of Series A Preferred Stock of WSI Acquisitions, Corp. Previously Filed
4.1 Certificate of Designation of Series B Convertible Preferred Stock of the Company Previously Filed
4.2 Certificate of Designation of Series C Convertible Preferred Stock of the Company. Previously Filed
4.3 Warrant Agreement between the Company, Continental Stock Transfer and Trust Previously Filed
Company and Commonwealth Associates, LP.
4.4 Warrant Agreement between the Company, Continental Stock Transfer and Trust Previously Filed
Company and Commonwealth Associates, LP.
10.1 Merger Agreement by and between iParty Corp. and WSI Acquisitions Corp. Previously Filed
10.2 1998 Incentive and Non-Qualified Stock Option Plan Previously Filed
10.3 Fry MultiMedia Web Site Development Agreement Previously Filed
10.4 iVillage Web Site Development Service Agreement Previously Filed
10.5 Order Trust Agreement by and between the Company and Order Trust. Previously Filed
10.6 Consulting Agreement of Byron Hero Previously Filed
10.7 Employment Agreement of Maureen Broughton Murrah Previously Filed
10.8 Employment Agreement of Patrick Farrell Previously Filed
10.9 Employment Agreement by and between the Company and Sal Perisano Previously Filed
10.10 StarGreetings License Agreement Previously Filed
10.11 Service Agreement between the Company and TechSpace LLC (as amended) Previously Filed
10.12 Consulting Agreement of Sal Perisano Previously Filed
10.13 Finder's Fee Agreement between iParty LLC and Byron Hero Previously Filed
10.14 Form of "StarGreeting" Agreement with Celebrities Previously Filed
10.15 Funding Agreement between the Company, Robert H. Lessin and Ajmal Khan Previously Filed
10.16 Fulfillment Agreement between the Company and Taymark Previously Filed
10.17 Agreement between the Company and Rare Medium, Inc. Previously Filed
10.18 Agreement between the Company and LinkShare Corporation Previously Filed
10.19 Agreement between the Company and America Online, Inc. Filed Herewith*
10.20 Agreement between the Company and Kirshenbaum Bond Partners Previously Filed
10.21 Consulting Agreement between the Company and Stuart Moldaw Previously Filed
21 Subsidiaries of the Company Previously Filed
27.1 Financial Data Schedule Previously Filed
</TABLE>
- ------------------
* Certain portions of this exhibit have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed with
the Securities and Exchange Commission.
2
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934,
the registrant has caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
iPARTY CORP.
By: /s / SAL PERISANO
------------------------------------
Name: Sal Perisano
Title: Chief Executive Officer
December 30, 1999
3
<PAGE>
[LOGO]
AMERICA
ONLINE
AMERICA ONLINE, INC.
NETWORK SHOPPING - WEB LINK ORDER FORM
MERCHANT TO FILL IN ALL INFORMATION. (PLEASE PRINT)
Legal Name of Merchant: iParty
--------------------------------------------------------
Trade Name of Merchant (if different):
-----------------------------------------
Merchant Business Contact: Sal Perisano
-----------------------------------------------------
Address: 41 East 11th Street, 11th Floor, New York, NY 10003
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Phone: 212/699-3751
-------------------------------------------------------------------------
Fax: 212/331-1207
---------------------------------------------------------------------------
Email: [email protected]
-------------------------------------------------------------------------
Name of Technical Contact:
-----------------------------------------------------
Phone:
-------------------------------------------------------------------------
Email:
-------------------------------------------------------------------------
Customer Service Contact (AOL use):
--------------------------------------------
Customer Service Phone (customer use):
-----------------------------------------
Customer Service email (customer use):
-----------------------------------------
Customer Service address (customer use):
---------------------------------------
Is your web site built?
--------------------
Web Site URL:
------------------------------------------------------------------
This is the main URL that is used by the merchant site.
Silver Tenant Store Name:
------------------------------------------------------
Applicable to SILVER MERCHANTS ONLY. This is name for the store listing in the
Silver Tenant spot. Text should be the registered company trade/brandname. The
text must be 21 characters or less.
Customer Service URL:
----------------------------------------------------------
A site where customers can contact merchant with ordering questions etc.
(required).
Privacy Policy URL:
------------------------------------------------------------
Area on merchant web site where customers can read merchant's policies regarding
privacy and security (required).
Keywords:
----------------------------------------------------------------------
A keyword on AOL will bring any user directly to your website. The keyword
should be the registered company trade/brand name. The keyword must be 16
characters or less.
Search terms for AOL Shopping Channel Product Search Tool:
- --------------------------------------------------------------------------------
Up to a maximum of five, subject to AOL's approval, and only available to Anchor
or Gold Tenant Merchants
Information Contained on page 1 of Exhibit A has been omitted based upon
a request for confidential treatment. The omitted parties have been separately
filed with Securities of Exchange Commission.
<PAGE>
CONFIDENTIAL
SHOPPING CHANNEL PROMOTIONAL AGREEMENT
This Agreement, (the "Agreement") dated as of September __, 1999 (the
"Effective Date"), is made and entered into by and between America Online, Inc.
("AOL"), a Delaware corporation, with its principal offices at 22000 AOL Way,
Dulles, Virginia 20166 and iParty, ("MERCHANT") a __________________
corporation, with its principal offices at 41 East 11th Street (each a "Party"
and collectively the "Parties").
INTRODUCTION
AOL owns, operates and distributes the AOL Service, AOL.com, the CompuServe
Service and the Netscape Netcenter. MERCHANT wishes to secure a promotional
placement within the shopping channel of the AOL Service, AOL.com, the
CompuServe Service and the Netscape Netcenter (as specified in Exhibit A) (each
channel, a "Shopping Channel") which, when activated, will provide access to
MERCHANT's site on the World Wide Web or its area on the AOL Service or
CompuServe Service (as the case may be) (the "Merchant Site") where MERCHANT
offers content, products and/or services for sale. Terms not defined herein
shall be defined on the attached Exhibit B.
TERMS
1. MERCHANT PROGRAMMING. MERCHANT will make available through the Merchant
Site the certain products, content and/or services specified in Exhibit A
(the "Products") in accordance with the Standard Shopping Channel Terms
and Conditions set forth on Exhibit C.
2. PROMOTIONAL OBLIGATIONS.
2.1 AOL Promotion of MERCHANT. Commencing on a date set forth on Exhibit
A hereto, AOL will provide the promotion(s) set forth in Exhibit A
(the "Promotion"). Except to the extent expressly described in
Exhibit A, the specific form, placement, positioning, duration and
nature of the Promotion(s) will be as determined by AOL in its
reasonable discretion (consistent with the editorial composition of
the applicable screens) and the nature of the Promotion being
purchased by MERCHANT, as reflected in Exhibit A. The specific
content to be contained within the Promotions (including, without
limitation, within any advertising banners or contextual promotions)
will be determined by MERCHANT, subject to AOL's technical
limitations, the terms of this Agreement and AOL's then-applicable
policies relating to advertising and promotions. Each Promotion will
link only to the Merchant Site and will promote only Products listed
on Exhibit A. MERCHANT acknowledges that the sole obligation of AOL,
pursuant to this Agreement, is to display the Promotion(s) in the
Shopping Channel(s) in accordance with the terms and conditions
hereto.
2.2 MERCHANT Cross-Promotion.
A. Within each Merchant Site, MERCHANT shall include a
promotional banner ("AOL Promo") appearing on the first screen
of the Merchant Site, to promote such AOL products or services
as AOL may reasonably designate (for example, the America
Online(Registered) brand service, the CompuServe(Registered)
brand service, the AOL.com(Registered) site, the Netscape
Netcenter(Trademark) site, ICQ, the Digital City(Registered)
services or the AOL Instant Messenger(Trademark) service); AOL
will provide the creative content to be used in the AOL Promo
(including designation of links from such content to other
content pages). MERCHANT shall post (or update, as the case
may be) the creative content supplied by AOL (within the
spaces for the AOL Promo) within a commercially reasonable
period of time from its receipt of such content from AOL.
Without limiting any other reporting obligations of the
Parties contained herein, MERCHANT shall provide AOL with
monthly written reports specifying the number of Impressions
to the pages containing the AOL Promo during the prior month.
B. In MERCHANT's television, radio, print and "out of home"
(e.g., buses and billboards) advertisements and in any
publications, programs, features or other forms of media over
which MERCHANT exercises at least partial editorial control,
MERCHANT will include specific references or mentions (orally
where possible) of the availability of the Merchant's Site
through the America Online(Registered) brand service, which
are at least as prominent as any references that MERCHANT
makes to any other MERCHANT online or Internet site (by way of
site name, related company name, URL or otherwise). Without
limiting the generality of the foregoing, MERCHANT's listing
of the "URL" for any Merchant online site will be accompanied
by a reasonably prominent listing of the "keyword" term on the
AOL Service for Merchant's Site.
2
<PAGE>
3
<PAGE>
3. PAYMENTS; REPORTS.
3.1 Placement Fees. MERCHANT will pay AOL $454,107 for displaying the
Promotion within the Shopping Channel on the AOL Service, AOL.com,
the CompuServe Service and the Netscape Netcenter. The total amount
of $454,107 will be payable in three equal installments, with the
first such payment to be made upon the Effective Date, the second
such payment to be made ninety (90) days from the earliest launch
date of the AOL Shopping Commerce Center(s) specified on Exhibit A
attached hereto and the last payment to be made ninety (90) days
from the second installment.. MERCHANT will be provided a credit
against any amounts already paid to AOL by MERCHANT for promotional
carriage under MERCHANT's existing agreement with AOL which overlap
promotional carriage provided for hereunder, if any, as established
by the launch date of the applicable AOL Shopping Commerce Center(s)
specified on Exhibit A attached hereto. MERCHANT agrees that, except
as specified herein, once the Promotion is installed, there will be
no refunds or proration of rates if MERCHANT elects to discontinue
display of the Promotion prior to expiration of the Term. Should AOL
fail to display the Promotion in accordance with the terms of this
Agreement due to MERCHANT's failure to comply with any requirement
of this Agreement, MERCHANT will remain liable for the full amount
indicated above.
3.2 Reports. AOL will provide MERCHANT with monthly usage information
related to the Promotion in substance and form reasonably determined
by AOL. MERCHANT may not distribute or disclose usage information to
any third party without AOL's prior written consent. MERCHANT will
provide AOL with monthly reports, in a form reasonably satisfactory
to AOL, which detail the number of daily items, orders and gross
sales through the Merchant Site on the AOL Service, AOL.com, the
CompuServe Service and the Netscape Netcenter (as applicable). AOL
acknowledges that such reports may constitute Confidential
Information under the Amendment, and will not disclose such
Confidential Information to third parties, except as part of
aggregate data from which the MERCHANT and the Merchant Site are not
identifiable.
4. TERM. Unless otherwise rightfully terminated pursuant to the terms and
conditions in the Exhibits attached hereto, this Agreement will terminate
ten (10) months from the latest launch date of the AOL Shopping Channel
Commerce Center(s) specified on Exhibit A attached hereto (the "Term").
5. EXISTING AGREEMENTS. To the extent that MERCHANT has any existing shopping
channel agreement(s) with AOL in effect as of the Effective Date such
agreements shall terminate on the date that the last promotion described
in the existing agreement is replaced with Promotion(s) described in this
Agreement.
6. PRESS RELEASES. Each Party will submit to the other Party, for its prior
written approval, which will not be unreasonably withheld or delayed, any
press release or any other public statement ("Press Release") regarding
the transactions contemplated hereunder. Notwithstanding the foregoing,
either Party may issue Press Releases and other disclosures as required by
law or as reasonably advised by legal counsel without the consent of the
other Party and in such event, the disclosing Party will provide at least
five (5) business days prior written notice of such disclosure. The
failure to obtain the prior written approval of the other Party will be
deemed a material breach of this Agreement. Because it would be difficult
to precisely ascertain the extent of the injury caused to the
non-breaching Party, in the event of such material breach, the
non-breaching party may elect to either (i) terminate this Agreement
immediately upon notice to the other Party, and the cure provision of
Section 12 on Exhibit D of this Agreement shall not apply, or (ii) as
liquidated damages, elect to modify the Impression commitment hereunder by
fifteen percent (15%) (either an increase in Impressions if AOL has
materially breached the Agreement or a decrease in Impressions if MERCHANT
has materially breached the Agreement).
7. GENERAL TERMS. The general legal terms and conditions set forth on Exhibit
D attached hereto are hereby made a part of this Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.
AMERICA ONLINE, INC. iParty
By: By: /s/ Sal V. Perisano
------------------------------ ----------------------------------
Print Name: Print Name: Sal V. Perisano
---------------------- --------------------------
Title: Title: Chief Executive Officer
--------------------------- -------------------------------
Date: Date: Sept. 27, 1999
---------------------------- --------------------------------
Tax ID/EIN#:
------------
5
<PAGE>
EXHIBIT A
Description of Products:
The only categories of Products to be sold through the Merchant Site are as
listed below:
Product List: [MERCHANT to provide detailed, specific list; AOL sales person to
submit list for review by AOL Advertising Operations]
Impressions: Impressions for a Manufacturing Promotional Placement in Kids, Toys
& Babies
The screens on which the promotions appear on each of the AOL Service, AOL.com,
the CompuServe Service, the Netscape Netcenter and any other product or service
owned, operated, distributed or authorized to be distributed by or through AOL
or its affiliates worldwide through which such Party elects to offer the
Merchant Site (which may include, without limitation, Internet sites promoting
AOL products and services and any "offline" information browsing products of AOL
or its affiliates) will receive a minimum of [**confidential treatment
requested**] Impressions in the aggregate (the "Impressions Commitment"),
subject to the remainder of this paragraph. In the event there is (or will be in
AOL's reasonable judgment) a shortfall in Impressions as of the end of the
Initial Term (a "Shortfall"), AOL will provide MERCHANT, as its sole remedy,
with either: (i) advertising placements through reasonably comparable
advertising, (reasonably calculated to reach an audience substantially similar
to the audience targeted by the Impressions Commitment, as determined by AOL),
on AOL properties (determined by AOL) which have a total value, based on AOL's
then-current advertising rate card, equal to the value of the Shortfall
(determined by multiplying the percentage of Impressions that were not delivered
by the total, guaranteed payment provided for in Section 3 of the Agreement); or
(ii) a refund of a pro-rata portion of the fee allocable to the display of the
Promotion based on the number of Impressions not delivered.
Impressions: [**confidential treatment requested**] Impressions in the Gold
Position in the Tabletop & Entertainment Department
The screens on which the promotions appear on each of the AOL Service, AOL.com,
the CompuServe Service, the Netscape Netcenter and any other product or service
owned, operated, distributed or authorized to be distributed by or through AOL
or its affiliates worldwide through which such Party elects to offer the
Merchant Site (which may include, without limitation, Internet sites promoting
AOL products and services and any "offline" information browsing products of AOL
or its affiliates) will receive a minimum of [**confidential treatment
requested**] Impressions in the aggregate (the "Impressions Commitment"),
subject to the remainder of this paragraph. In the event there is (or will be in
AOL's reasonable judgment) a shortfall in Impressions as of the end of the
Initial Term (a "Shortfall"), AOL will provide MERCHANT, as its sole remedy,
with either: (i) advertising placements through reasonably comparable
advertising, (reasonably calculated to reach an audience substantially similar
to the audience targeted by the Impressions Commitment, as determined by AOL),
on AOL properties (determined by AOL) which have a total value, based on AOL's
then-current advertising rate card, equal to the value of the Shortfall
(determined by multiplying the percentage of Impressions that were not delivered
by the total, guaranteed payment provided for in Section 3 of the Agreement); or
(ii) a refund of a pro-rata portion of the fee allocable to the display of the
Promotion based on the number of Impressions not delivered.
** The confidential portion has been omitted and filed separately with the
Commission.
<PAGE>
Description of Specific Promotion(s):
|_| Manufacturers Promotional Placement In the Kids, Toys & Babies Commerce
center
To commence on the launch date of October 1, 1999, specified below on the AOL
Service and twelve (12) months from the Launch Date, MERCHANT will have a
position in the Manufacturers Promotional Placement in the Kids, Toys & Babies
commerce center of the Shopping Channel on the AOL Service. Commencing on the
launch date of the corresponding commerce center (described above) of the
Shopping Channel on each of AOL.com, the CompuServe Service and the Netscape
Netcenter, MERCHANT will have a position in the Manufacturers Promotional
Placement as specified herein and such promotion shall terminate twelve (12)
months from the Launch Date. As an Manufacturer Promotional Placement Partner
in a department, MERCHANT will have be entitled to the following:
Principal Exposure on the AOL Service, AOL.com, the CompuServe Service and the
Netscape Netcenter:
o Rotating 151W x 125H pixels promotional space with corporate brand or
logo, product offering graphic and product offering two-line text field on
the department front screen.
Additional Promotion on the AOL Service Shopping Channel:
o Product listing availability through the AOL Product Search, subject to
Merchant's participation and the terms and conditions set forth on Exhibit
C Section 3.
o Banner rotation on the AOL Product Search screen of the AOL Service. These
banner rotations will be divided proportionately among all shopping
channel merchants.
o Up to three (3) AOL Keywords(Trademark) for use from the AOL Service, for
registered MERCHANT trade name or trademark (subject to the other
provisions contained herein).
o Fifteen percent (15%) discount from the then-current rate card on
purchases of additional advertising banners or buttons on the AOL Service,
AOL.com, the CompuServe Service and the Netscape Netcenter, subject to
availability for the period requested (with such purchases to be made in
accordance with the then-applicable Standard Advertising Insertion Order
for the property in question). Sponsorships are not entitled to the
aforementioned discount.
o Eligibility to participate in the following AOL Shopping promotional
programs (the "Program Areas") subject to the terms and conditions set
forth on Exhibit C Section 3:
o Quick Gifts
o Standard Seasonal Catalogs or Special Event Merchandising
areas (e.g., Christmas Shop), subject to MERCHANT's
participation in AOL's Quick Checkout and AOL's Search Product
as described on Exhibit C Section 3.
o Premier-level Seasonal Catalogs or Special Event Merchandising
areas (e.g., Golf Outings), subject to MERCHANT's
participation in AOL's Quick Checkout and AOL's Search Product
as described on Exhibit C Section 3.
o Gift Reminder
o Newsletters
All additional Promotions on the AOL Service, AOL.com, the CompuServe Service,
the Netscape Netcenter or the AOL Network not specified herein will be
determined at AOL's reasonable discretion; provided that the additional,
standard Promotions to be provided to the MERCHANT within the Shopping areas on
the AOL Service, AOL.com, the CompuServe Service and the Netscape Netcenter will
be comparable in nature to the additional, standard Promotions provided to other
similarly situated MERCHANTs in the same category (i.e. Anchor Tenant, Gold
Tenant or Silver Tenant).
<PAGE>
|_| GOLD TENANT PROMOTION In the Home Commerce Center
To commence on the launch date of the AOL commerce center specified below on the
AOL Service (the "AOL Commerce Center Launch Date") and terminate ten (10)
months from the AOL Commerce Center Launch Date, MERCHANT will become a "Gold
Tenant" in the Tabletop & Entertaining department(s) of the Home commerce center
of the Shopping Channel on the AOL Service. Commencing on the launch date of the
corresponding commerce center (described above) of the Shopping Channel on each
of AOL.com, the CompuServe Service and the Netscape Netcenter, MERCHANT will
become a Gold Tenant as specified herein and such promotion shall terminate ten
(10) months from the AOL Commerce Center Launch Date. As a Gold Tenant in a
department, MERCHANT will be entitled to the following:
Principal Exposure on the AOL Service, AOL.com, the CompuServe Service, and the
Netscape Netcenter:
o One continuous (24/7)143 x 30 pixels button with corporate brand or logo
on the department front screen.
Additional Promotion on the AOL Service:
o Rotation with other Gold Tenants in the department on a promotional banner
with text and branded art promotion on the department front screen. These
banner rotations are reserved for the Gold Tenant Merchant's on the
department screen and will be divided proportionately among them.
o Product listing availability through the AOL Product Search, subject to
Merchant's participation and the terms and conditions set forth on Exhibit
C Section 3.
o Banner rotation on the AOL Product Search screen of the AOL Service. These
banner rotations will be divided proportionately among all shopping
channel merchants.
o Up to three (3) AOL Keywords(Trademark) for use from the AOL Service, for
registered MERCHANT trade name or trademark (subject to the other
provisions contained herein).
o Fifteen percent (15%) discount from the then-current rate card on
purchases of additional advertising banners or buttons on the AOL Service,
AOL.com, the CompuServe Service, and the Netscape Netcenter, subject to
availability for the period requested (with such purchases to be made in
accordance with the then-applicable Standard Advertising Insertion Order
for the property in question). Sponsorships are not entitled to the
aforementioned discount.
o Eligibility to participate in the following AOL Shopping promotional
programs (the "Program Areas") subject to the terms and conditions set
forth on Exhibit C Section 3:
o Quick Gifts
o Standard Seasonal Catalogs or Special Event Merchandising
areas (e.g., Christmas Shop), subject to MERCHANT's
participation in AOL's Quick Checkout and AOL's Search Product
as described on Exhibit C Section 3.
o Premier-level Seasonal Catalogs or Special Event Merchandising
areas (e.g., Golf Outings), subject to MERCHANT's
participation in AOL's Quick Checkout and AOL's Search Product
as described on Exhibit C Section 3.
o Gift Reminder
o Newsletters
All additional Promotions on the AOL Service, AOL.com, the CompuServe Service,
the Netscape Netcenter or the AOL Network not specified herein will be
determined at AOL's reasonable discretion; provided that the additional,
standard Promotions to be provided to the MERCHANT within the Shopping areas on
the AOL Service, AOL.com, the CompuServe Service and the Netscape Netcenter will
be comparable in nature to the additional, standard Promotions provided to other
similarly situated MERCHANTs in the same category (i.e. Anchor Tenant, Gold
Tenant or Silver Tenant).
<PAGE>
EXHIBIT B
Definitions
Additional Merchant Channel. Any other distribution channel (e.g., an
Interactive Service other than AOL) through which MERCHANT makes available an
offering comparable in nature to the Merchant Site.
AOL Member. Any authorized user of the AOL Service, including any sub-accounts
using the AOL Service under an authorized master account.
AOL Network. (i) The AOL Service and (ii) any other product or service owned,
operated, distributed or authorized to be distributed by or through AOL or its
Affiliates worldwide through which such party elects to offer the Merchant Site
(which may include, without limitation, AOL-related Internet sites, "offline"
information browsing products, international versions of the AOL brand service,
and CompuServe).
AOL Service. The standard narrow-band U.S. America Online(Registered) brand
commercial online service.
AOL User. Any user of the AOL Service, AOL.com, the CompuServe Service, the
Netscape Netcenter, or the AOL Network.
AOL.com. The standard narrow-band U.S. version of its primary website marketed
under the AOL.com(Registered) brand.
CompuServe Service. The standard narrow-band affiliate U.S.
CompuServe(Registered) brand commercial online service.
Content. Text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data, Products,
advertisements, promotions, links, pointers and software, including any
modifications, upgrades, updates, enhancements and related documentation.
Impression. User exposure to the commerce center screens, department level
screens and any other promotional inventory screens (i.e. AOL Welcome Screen)
containing the applicable promotion or advertisement, as such exposure may be
reasonably determined and measured by AOL in accordance with its standard
methodologies and protocols.
Interactive Service. Means and refers to an entity offering one or more of the
following: (i) online or Internet connectivity services (e.g., an Internet
service provider); (ii) an interactive site or service featuring a broad
selection of aggregated third party interactive content or navigation thereto
(e.g., an online service or search and directory service) and/or marketing a
broad selection of products and/or services across numerous interactive commerce
categories (e.g., an online mall or other leading online commerce site); (iii) a
persistent desktop client; or (iv) communications software capable of serving as
the principal means through which a user creates, sends or receives electronic
mail or real time or "instant" online messages (whether by telephone, computer
or other means), including without limitation greeting cards.
Keyword Search Terms. The Keyword(Trademark) online search terms made available
on the AOL Service for use by AOL Members, combining AOL's Keyword(Trademark)
online search modifier with a term or phrase specifically related to MERCHANT
(and determined in accordance with the terms of this Agreement).
Merchant Interactive Site. Any site (other than the Merchant Site) which is
managed, maintained, owned or controlled by Merchant or its agents.
Netscape Netcenter. The standard narrow-band primary website of Netscape
Communications Corporation marketed under the "Netcenter(Trademark)" brand.
Promotional Materials. Any marketing, advertising or other promotional
materials, excluding Press Releases, related to this Agreement and/or
referencing the other Party and/or its trade names, trademarks and service
marks.
<PAGE>
EXHIBIT C
Standard Shopping Channel Terms & Conditions
1. Merchant Site. MERCHANT will work diligently to develop and implement the
Merchant Site, consisting of the specific Product(s) set forth in Exhibit A and
any additional Products agreed upon in writing by the Parties subsequent to the
Effective Date. Except as mutually agreed upon in writing by the Parties, the
Merchant Site will contain only categories of Products, Services and Content
that are directly related to the MERCHANT Products listed in Exhibit A. All
sales of Products through the Merchant Site will be conducted through a direct
sales format (e.g. no auctions or clubs), absent the mutual consent of the
Parties. MERCHANT will ensure that the Merchant Site does not in any respect
promote, advertise, market or distribute the products, services or content of
any other Interactive Service.
2. Management of Merchant Site. MERCHANT will manage, review, delete, edit,
create, update and otherwise manage all Content available on or through the
Merchant Site, in a timely and professional manner and in accordance with the
terms of this Agreement and AOL's applicable Terms of Service and Privacy Policy
(as set forth on the AOL Service). MERCHANT will ensure that the Merchant Site
is current, accurate and well-organized at all times. MERCHANT warrants that the
Merchant Site and any material contained therein: (i) will conform to AOL's
applicable Terms of Service and Privacy Policy; (ii) will not infringe on or
violate any copyright, trademark, U.S. patent or any other third party right,
including without limitation, any music performance or other music-related
rights; and (iii) will not contain any Product which violates any applicable law
or regulation, including those relating to contests, sweepstakes or similar
promotions. AOL will have no obligations with respect to the Products available
on or through the Merchant Site, including, but not limited to, any duty to
review or monitor any such Products; provided, however, that AOL reserves the
right to review and approve any additional Products and any third-party content,
products or services that MERCHANT makes or desires to make available through
the Merchant Site. Upon AOL's request, MERCHANT agrees to include within the
Merchant Site a product disclaimer (the specific form and substance to be
mutually agreed upon by the Parties) indicating that transactions are solely
between MERCHANT and the AOL Users who purchase products from MERCHANT. MERCHANT
will ensure that neither MERCHANT nor any content, product or service contained
within the Merchant Site, linked to the Promotion or otherwise relating the
Agreement shall (i) disparage AOL; (ii) promote a competitor of AOL; or (iii)
state or imply that AOL endorses MERCHANT's Products.
3. Optimization of Merchant Site. MERCHANT will take all reasonable steps
necessary to conform its promotion and sale of Products through the Merchant
Site to the then-existing commerce technologies made available to MERCHANT by
AOL. MERCHANT will be given an opportunity to implement, at MERCHANT's option,
AOL's "quick checkout" tool which allows AOL Users to enter payment and shipping
information which is then passed from AOL's centralized server unit to MERCHANT
for order fulfillment ("AOL Quick Checkout") and AOL's "product search" tool
technology which allows AOL Users to run a customized search among Merchant's
detailed inventory data ("AOL Product Search"); provided however that in the
event that MERCHANT declines participation in these programs then AOL reserves
the right to reduce or prohibit MERCHANT's participation in any other
incremental merchandising programs offered through the Shopping Channel.. At
Merchant's request, AOL will make all reasonable efforts to provide the tools
for the MERCHANT (i) to enable Merchant Site with the AOL Quick Checkout
technology and functionality and (ii) to allow integration of Merchant's
detailed inventory data into AOL's Search Product database. Collection, storage
and disclosure of AOL Quick Checkout information which MERCHANT provides to AOL,
will be subject to AOL's privacy policy and all confidentiality requirements
hereunder. To the extent that the Merchant Site offers AOL's Quick Checkout,
MERCHANT will ensure that the AOL Quick Checkout is of equal placement and
promotion prominence to other available payment options. AOL reserves the right
to review and test the Merchant Site from time to time to determine whether the
site is compatible with AOL's, CompuServe's and Netscape's then-available client
and host software and their corresponding networks. AOL will be entitled to
require reasonable changes to the content, features and/or functionality within
the Merchant Site to the extent such content, features or functionality will, in
AOL's good faith judgment, adversely affect operations of the AOL Network.
MERCHANT agrees to optimize operations of the Merchant Site consistent with
Exhibit E attached hereto.
4. Removal of Content. AOL will have the right to remove, or direct MERCHANT to
remove, any Content in the Merchant Site (including, without limitation, any
features, functionality or technology) which, as reasonably determined by AOL
(i) violates AOL's then-standard Terms of Service or Privacy Policy (as set
forth on the AOL Service), any other standard, written AOL policy generally
applicable to other Shopping Channel merchants or the terms of this Agreement,
(ii) is inconsistent in any manner with the terms of the Agreement or with the
Product description set forth in Exhibit A or (iii) is otherwise in conflict
with AOL's programming objectives or its existing contractual commitments to
third parties. In addition, in the event that AOL reasonably believes that
software, technology or other technical components of the Merchant Site will
materially affect AOL, CompuServe or Netscape or other operations, MERCHANT will
work in good faith with AOL to limit access to such components from the AOL
Service, AOL.com, the CompuServe Service and the Netscape Netcenter. MERCHANT
will take all commercially reasonable steps using MERCHANT's then-available
technology to block access by AOL Users to Content which AOL desires to remove
or have removed pursuant to any of the foregoing. In the event that MERCHANT
cannot, through such efforts, block access to the Content in question, then
MERCHANT will provide AOL prompt written notice of such fact no later than five
(5) days after AOL notifies MERCHANT of AOL's objection to such Content. AOL may
then, at its option, either (i) restrict access by AOL Users to the Content in
question using technology available to AOL or (ii) terminate all links,
promotions and advertisements for the Merchant Site until such time as the
Content in question is no longer displayed. MERCHANT will cooperate with AOL's
reasonable requests to the extent AOL elects to implement any of the foregoing
access restrictions.
5. Promotional Placement. MERCHANT acknowledges that the sole obligation of AOL,
pursuant to this Agreement, is to display the Promotion in the Shopping Channel
in accordance with the terms and conditions of the Agreement. The specific
positioning of the Promotion on any screen in the Shopping Channel shall be as
determined by AOL, consistent with the editorial composition of such screen and
the nature of the Promotion being purchased by MERCHANT, unless otherwise
mutually agreed upon by the Parties. AOL reserves the right to reject, cancel or
remove at any time the Promotion for any reason with fifteen (15) days prior
notice to MERCHANT, and AOL will refund to MERCHANT a pro-rata portion of the
fee allocable to the display of the Promotion based on the number of days that
the Promotion was displayed. Except for the pro-rata refund set forth in the
foregoing sentence, AOL will not be liable in any way for any rejection,
cancellation or removal of the Promotion. AOL reserves the right to redesign or
modify the organization, navigation, structure, "look and feel" and other
elements of the AOL Service, AOL.com, the CompuServe Service, the Netscape
Netcenter and the AOL Network, at its sole discretion at any time without prior
notice. MERCHANT acknowledges and agrees that AOL will own all right, title and
interest in and to the elements of graphics, design, organization, presentation,
layout, user interface, navigation and stylistic convention (including the
digital implementations thereof) which are generally associated with online
areas contained within the AOL Network. In the event such modifications
materially affect the placement of the Promotion, AOL will notify MERCHANT and
will work with MERCHANT to display the Promotion in a comparable location and
manner. If AOL and MERCHANT cannot reach agreement on a substitute placement,
MERCHANT will have the right to cancel the Promotion, upon sixty (60) days
advance written notice to AOL. In such case, MERCHANT will only be responsible
for the pro-rata portion of payments attributable
<PAGE>
to the period from the Effective Date through the end of the sixty (60) day
notice period and in--such event that any amounts have been prepaid to AOL by
Merchant, Merchant will receive a pro-rata refund of all amounts paid to AOL
which correspond to the number of days that the Promotion was not displayed.
MERCHANT may not resell, trade, exchange, barter or broker to any third party
any promotional or advertising space which is the subject of this Agreement
MERCHANT will not be entitled to any refund or proration for delays caused by
MERCHANT's failure to deliver to AOL any materials relating to the Promotion.
6. Product Offering. MERCHANT will ensure that the Merchant Site generally
includes all of the Products and other Content (including, without limitation,
any features, offers, contests, functionality or technology) that are then made
available by or on behalf of MERCHANT through any Additional MERCHANT Channel
unless prohibited by this Agreement.
7. Pricing and Terms. MERCHANT will ensure that: (i) the prices for Products in
the MERCHANT Site generally do not exceed the prices for the Products offered by
or on behalf of MERCHANT through any Additional MERCHANT Channel; and (ii) the
terms and conditions related to Products in the MERCHANT Site are generally no
less favorable in any respect to the terms and conditions for the Products
offered by or on behalf of MERCHANT through any Additional MERCHANT Channel.
8. Exclusive Offers. MERCHANT will generally promote through the Merchant Site
any special or promotional offers made available by or on behalf of MERCHANT
through any Additional MERCHANT Channel. In addition, MERCHANT shall promote
through the Merchant Site on a regular and consistent basis special offers
exclusively available to AOL Users (the "AOL Exclusive Offers"). MERCHANT shall,
at all times, feature at least one AOL Exclusive Offer for AOL Users (except as
otherwise mutually agreed upon by the Parties). The AOL Exclusive Offer made
available by MERCHANT shall provide a substantial member benefit to AOL Users,
either by virtue of a meaningful price discount, product enhancement, unique
service benefit or other special feature. MERCHANT will provide AOL with
reasonable prior notice of Exclusive Offers so that AOL can in its editorial
discretion, market the availability of such offers. At MERCHANT's option,
MERCHANT will work with AOL or its authorized agents to develop a customized AOL
rewards program, which shall be a promotional program or plan that is intended
to provide AOL users with rewards or benefits in exchange for, or on account of,
their past or continued loyalty to, or patronage or purchase of, the products or
services of Merchant or any third party. (e.g. a promotional program similar to
a "frequent flier" program), to be provided through AOL's "AOL Rewards" program,
accessible on the AOL Service at Keyword: "AOL Rewards." Merchant's
participation in such promotional rewards program is subject to AOL's approval
and may also require the payment of certain reasonable administration fees to
AOL or its authorized agents or contractors operating the program.
9. Customer Service. It is the sole responsibility of MERCHANT to provide
customer service to persons or entities purchasing Products through the AOL
Service, AOL.com, the CompuServe Service, the Netscape Netcenter or the AOL
Network ("Customers"). MERCHANT will bear full responsibility for all customer
service, including without limitation, order processing, billing, fulfillment,
shipment, collection and other customer service associated with any Products
offered, sold or licensed through each Merchant Site, and AOL will have no
obligations whatsoever with respect thereto. Merchant Site shall include clear
and conspicuous disclosure of its customer service policies and a phone number
and an email or street address at which customers may contact MERCHANT. MERCHANT
shall provide a name of a customer service contact for use by AOL and a
telephone number and email or street address to which AOL may forward or refer
customer inquiries or complaints relating to MERCHANT. MERCHANT will receive all
emails from Customers via a computer available to MERCHANT's customer service
staff and generally respond to such emails within one business day of receipt.
MERCHANT will be able to receive all orders electronically in addition to any
other methods which Merchant chooses to offer and generally process all orders
within one business day of receipt, provided Products ordered are not advance
order items. MERCHANT will ensure that all orders of Products are received,
processed, fulfilled and delivered on a timely and professional basis. MERCHANT
will offer AOL Users who purchase Products through such the Merchant Site a
money-back satisfaction guarantee. MERCHANT will bear all responsibility for
compliance with federal, state and local laws in the event that Products are out
of stock or are no longer available at the time an order is received. MERCHANT
will also comply with the requirements of any federal, state or local consumer
protection or disclosure law. Payment for Products will be collected by MERCHANT
directly from customers. MERCHANT's order fulfillment operation will be subject
to AOL's reasonable review.
10. Launch Dates. In the event that any terms contained herein relate to or
depend on the commercial launch date of the online area or other property
contemplated by this Agreement (the "Launch Date"), then it is the intention of
the Parties to record such Launch Date in a written instrument signed by both
Parties promptly following such Launch Date; provided that, in the absence of
such a written instrument, the Launch Date will be as reasonably determined by
AOL based on the information available to AOL. For each day beyond the Launch
Date that the actual commercial launch of the Merchant Site is delayed (e.g.,
due to MERCHANT or the Merchant Site not being ready), then AOL will be entitled
to reduce the Impressions Commitment pro rata and decrease the promotions it
provides to MERCHANT hereunder.
11. Merchant Certification Program. MERCHANT will participate in any generally
applicable "Certified Merchant" program operated by AOL or its authorized agents
or contractors. Such program may require merchant participants on an ongoing
basis to meet certain reasonable standards relating to provision of electronic
commerce through the AOL Service, AOL.com, the CompuServe Service and the
Netscape Netcenter and may also require the payment of certain reasonable
certification fees to AOL or its authorized agents or contractors operating the
program. At MERCHANT's option, MERCHANT may (i) participate in the
BizRate(Registered) Program, a service offered by Binary Compass Enterprises,
Inc. (BCE), which provides opt-in satisfaction surveys to Users who purchase
Products through such Merchant Site, or such other provider of such services as
AOL may designate or approve from time to time, and (ii) provide a link to
BizRate's then-current standard survey forms, or such other survey forms offered
by any other party that AOL may reasonably designate or approve from time to
time. To the extent MERCHANT participates in the BizRate(Registered) Program,
MERCHANT's participation shall be based upon a separate written agreement which
MERCHANT will enter into with BCE, or other such party reasonably designated or
approved by AOL. MERCHANT hereby authorizes BCE to provide to AOL any and all
reports provided to MERCHANT by BCE, or other third party providing such
services, and agrees to provide written notice of such authorization to BCE, or
such other third party.
12. Traffic Flow/Navigation. MERCHANT will take reasonable efforts to ensure
that AOL traffic is either kept within the Merchant Site or channeled back into
the AOL Network (e.g. hypertext links). The Parties will work together on
implementing mutually acceptable links from the Merchant Site back to the AOL
Network. In the event that AOL points to the Merchant Site or any other Merchant
Interactive Site or otherwise delivers traffic to such site hereunder. MERCHANT
will ensure that navigation back to the AOL Network from such site, whether
through a particular pointer or link, the "back" button on an Internet browser,
the closing of an active window, or any other return mechanism, shall not be
interrupted by MERCHANT through the use of any intermediate screen or other
device not specifically requested by the user, including without limitation
through the use of any html pop-up window or any other similar device. Rather,
such AOL traffic shall be pointed directly back to the AOL Network as designated
by AOL. AOL will be entitled to establish navigational icons, links, pointers
connecting the Merchant Site (or portions thereof) with other content areas on
or outside of the AOL Network. Additionally, in cases where an AOL User performs
a search for Merchant through any search or navigational tool or mechanism that
is accessible or available through the AOL Network (e.g., Promotions, Keyword
Search Terms, or any other similar promotions or navigational tools), AOL shall
have the right
<PAGE>
to direct such AOL User to the Merchant Site, or any other Merchant Interactive
Site determined by AOL in its reasonable discretion.
<PAGE>
EXHIBIT D
Standard Legal Terms & Conditions
1. Production and Technical Services. Unless expressly provided for elsewhere in
the Shopping Channel Promotional Agreement which has been executed by AOL and
MERCHANT (the "Promotional Agreement," and, collectively with these Standard
Legal Terms and Conditions, the "Agreement") Agreement, (i) AOL will have no
obligation to provide any creative, design, technical or production services to
MERCHANT and (ii) the nature and extent of any such services which AOL may
provide to MERCHANT will be as determined by AOL in its sole discretion. The
terms regarding any creative, design, technical or productions services provided
by AOL to MERCHANT will be as mutually agreed upon by the parties in a separate
written work order. With respect to any routine production, maintenance or
related services which AOL reasonably determines are necessary for AOL to
perform in order to support the proper functioning and integration of the
Merchant Site ("Routine Services"), MERCHANT will pay the then-standard fees
charged by AOL for such Routine Services.
2. AOL Accounts. To the extent MERCHANT has been granted any AOL, CompuServe or
Netscape accounts, MERCHANT will be responsible for the actions taken under or
through its accounts, which actions are subject to AOL's applicable Terms of
Service and for any surcharges, including, without limitation, all premium
charges, transaction charges, and any applicable communication surcharges
incurred by any account issued to MERCHANT. Upon the termination of this
Agreement, all such accounts, related screen names and any associated usage
credits or similar rights, will automatically terminate. AOL will have no
liability for loss of any data or content related to the proper termination of
any such account.
3. Taxes. MERCHANT will collect and pay and indemnify and hold AOL harmless
from, any sales, use, excise, import or export value added or similar tax or
duty not based on AOL's net income, including any penalties and interest, as
well as any costs associated with the collection or withholding thereof,
including attorneys' fees.
4. Promotional Materials. Each Party will submit to the other Party, for its
prior written approval, which shall not be unreasonably withheld or delayed, any
Promotional Materials; provided, however, that after the initial public
announcement of the business relationship between the Parties in accordance with
the approval and other requirements contained herein, either Party's subsequent
factual reference to the existence of a business relationship between AOL and
MERCHANT in Promotional Materials, including, without limitation, the
availability of the Merchant Site through the AOL Network, or use of screen
shots relating to the distribution under this Agreement (so long as the AOL
Network is clearly identified as the source of such screen shots) for
promotional purposes shall not require the approval of the other Party. Once
approved, the Promotional Materials may be used by a Party and its affiliates
for the purpose of promoting the distribution of the Merchant Site through the
AOL Network and reused for such purpose until such approval is withdrawn with
reasonable prior notice. MERCHANT will not (i) issue any press releases,
promotions or public statements concerning the existence or terms of the
Agreement or (ii) use, display or modify AOL's trademarks, tradenames or
servicemarks in any manner, absent AOL's express prior written approval.
Notwithstanding the foregoing, either Party may issue press releases and other
disclosures as required by law or as reasonably advised by legal counsel without
the consent of the other Party and in such event, prompt notice thereof will be
provided to the other Party.
5. Representations and Warranties. Each Party represents and warrants to the
other Party that: (i) such Party has the full corporate right, power and
authority to enter into the Agreement and to perform the acts required of it
hereunder; (ii) the execution of the Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not and
will not violate any agreement to which such Party is a Party or by which it is
otherwise bound; (iii) when executed and delivered by such Party, the Agreement
will constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms; and (iv) such Party
acknowledges that the other Party makes no representations, warranties or
agreements related to the subject matter hereof that are not expressly provided
for in the Agreement.
6. License. MERCHANT hereby grants AOL a non-exclusive worldwide license to
market, license, distribute, reproduce, display, perform, transmit and promote
the Merchant Site and all content, products and services offered therein or
otherwise provided by MERCHANT in connection herewith (e.g., offline or online
promotional content, Promotions, etc.) through the AOL Network and through any
other product or service owned, operated, distributed or authorized to be
distributed by or through AOL or its affiliates worldwide through which such
Party elects to offer the Merchant Site (which may include, without limitation,
Internet sites promoting AOL products and services and any "offline" information
browsing products of AOL or its affiliates). AOL Users will have the right to
access and use the Merchant Site. Subject to such license, MERCHANT retains all
right, title to and interest in the Merchant Site. During the Term, AOL will
have the right to use MERCHANT's trademarks, trade names and service marks in
connection with performance of this Agreement, subject to any written guidelines
provided in writing to AOL. AOL hereby grants MERCHANT a non-exclusive worldwide
license to distribute, reproduce, display and transmit the AOL Promo as
described in Section 2.2 and any trademarks contained therein such AOL Promo,
solely in connection with MERCHANT's performance of its obligations pursuant to
this Agreement
7. Confidentiality. Each Party acknowledges that Confidential Information may be
disclosed to the other Party during the course of this Agreement. Each Party
agrees that it will take reasonable steps, at least substantially equivalent to
the steps it takes to protect its own proprietary information, during the term
of this Agreement, and for a period of three years following expiration or
termination of this Agreement, to prevent the duplication or disclosure of
Confidential Information of the other Party, other than by or to its employees
or agents who must have access to such Confidential Information to perform such
Party's obligations hereunder, who will each agree to comply with this
provision. "Confidential Information" means any information relating to or
disclosed in the course of the Agreement, which is or should be reasonably
understood to be confidential or proprietary to the disclosing Party, including,
but not limited to, the material terms of this Agreement, information about AOL
Users, technical processes and formulas, source codes, product designs, sales,
cost and other unpublished financial information, product and business plans,
projections, and marketing data. "Confidential Information" will not include
information (a) already lawfully known to or independently developed by the
receiving Party, (b) disclosed in published materials, (c) generally known to
the public, (d) lawfully obtained from any third party, or (e) required or
reasonably advised to be disclosed by law. MERCHANT shall not make, publish, or
otherwise communicate through the AOL Network any deleterious remarks concerning
AOL or it Affiliates, directors, officers, employees, or agents (including,
without limitation, AOL's business projects, business capabilities, performance
of duties and services, or financial position) which remarks are based on the
relationship established by this Agreement or information exchanged hereunder.
This section is not intended to limit good faith editorial statements made by
MERCHANT based upon publicly available information, or information developed by
MERCHANT independent of its relationship with AOL and its employees and agents.
8. Limitation of Liability; Disclaimer; Indemnification.
(a) Liability. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES
(EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES),
ARISING FROM BREACH OF THE AGREEMENT, THE SALE OF PRODUCTS, THE USE OR INABILITY
<PAGE>
TO USE THE AOL NETWORK, THE AOL SERVICE, AOL.COM, THE COMPUSERVE SERVICE, THE
NETSCAPE NETCENTER OR THE MERCHANT SITE, OR ARISING FROM ANY OTHER PROVISION OF
THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED
PROFITS OR LOST BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT
EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED
DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT
TO PARAGRAPH (C) BELOW. EXCEPT AS PROVIDED TO PARAGRAPH (C) BELOW, (I) LIABILITY
ARISING UNDER THIS AGREEMENT WILL BE LIMITED TO DIRECT, OBJECTIVELY MEASURABLE
DAMAGES, AND (II), THE MAXIMUM LIABILITY OF ONE PARTY TO THE OTHER PARTY FOR ANY
CLAIMS ARISING IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED THE AGGREGATE
AMOUNT OF PAYMENT OBLIGATIONS OWED TO AOL BY MERCHANT IN THE YEAR IN WHICH THE
EVENT GIVING RISE TO LIABILITY OCCURS; PROVIDED THAT MERCHANT WILL REMAIN LIABLE
TO AOL FOR THE AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO AOL PURSUANT
TO THE AGREEMENT.
(b) No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT,
NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING AOL.COM, THE AOL
SERVICE OR NETWORK, THE COMPUSERVE SERVICE, THE NETSCAPE NETCENTER OR THE
MERCHANT SITE, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AOL
SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING (I) THE PROFITABILITY OF THE
MERCHANT SITE, (II) THE NUMBER OF PERSONS WHO WILL ACCESS OR "CLICK-THROUGH" THE
PROMOTION, (III) ANY BENEFIT MERCHANT MIGHT OBTAIN FROM INCLUDING THE PROMOTION
WITHIN THE AOL SERVICE OR NETWORK, AOL.COM, THE NETSCAPE NETCENTER, OR THE
COMPUSERVE SERVICE OR (IV) THE FUNCTIONALITY, PERFORMANCE OR OPERATION OF THE
AOL, COMPUSERVE OR NETSCAPE SERVICES WITH RESPECT TO THE PROMOTION.
(c) Indemnity. Either Party will defend, indemnify, save and hold harmless the
other Party and the officers, directors, agents, affiliates, distributors,
franchisees and employees of the other Party from any and all third party
claims, demands, liabilities, costs or expenses, including reasonable attorneys'
fees ("Liabilities"), resulting from the Indemnifying Party's material breach of
any duty, representation, or warranty of the Agreement, except where Liabilities
result from the gross negligence or knowing and willful misconduct of the other
Party.
(d) Claims. If a Party entitled to indemnification hereunder (the "Indemnified
Party") becomes aware of any matter it believes is indemnifiable hereunder
involving any claim, action, suit, investigation, arbitration or other
proceeding against the Indemnified Party by any third party (each an "Action"),
the Indemnified Party will give the other Party (the "Indemnifying Party")
prompt written notice of such Action. Such notice will (i) provide the basis on
which indemnification is being asserted and (ii) be accompanied by copies of all
relevant pleadings, demands, and other papers related to the Action and in the
possession of the Indemnified Party. The Indemnifying Party will have a period
of ten (10) days after delivery of such notice to respond. If the Indemnifying
Party elects to defend the Action or does not respond within the requisite ten
(10) day period, the Indemnifying Party will be obligated to defend the Action,
at its own expense, and by counsel reasonably satisfactory to the Indemnified
Party. The Indemnified Party will cooperate, at the expense of the Indemnifying
Party, with the Indemnifying Party and its counsel in the defense and the
Indemnified Party will have the right to participate fully, at its own expense,
in the defense of such Action. If the Indemnifying Party responds within the
required ten (10) day period and elects not to defend such Action, the
Indemnified Party will be free, without prejudice to any of the Indemnified
Party's rights hereunder, to compromise or defend (and control the defense of)
such Action. In such case, the Indemnifying Party will cooperate, at its own
expense, with the Indemnified Party and its counsel in the defense against such
Action and the Indemnifying Party will have the right to participate fully, at
its own expense, in the defense of such Action. Any compromise or settlement of
an Action will require the prior written consent of both Parties hereunder, such
consent not to be unreasonably withheld or delayed.
(e) Acknowledgment. AOL and MERCHANT each acknowledges that the provisions of
this Agreement were negotiated to reflect an informed, voluntary allocation
between them of all risks (both known and unknown) associated with the
transactions contemplated hereunder. The limitations and disclaimers related to
warranties and liability contained in the Agreement are intended to limit the
circumstances and extent of liability. The provisions in paragraphs (a) through
(d) above and this paragraph (e) will be enforceable independent of and
severable from any other enforceable or unenforceable provision of this
Agreement.
9. Solicitation of Subscribers.
(a) During the term of the Agreement and for a two year period thereafter,
MERCHANT will not use the AOL Network (including, without limitation, the e-mail
network contained therein) to solicit AOL Members or AOL Users on behalf of
another Interactive Service. MERCHANT will not send unsolicited, commercial
e-mail through or into AOL's products or services, absent a Prior Business
Relationship. For purposes of this Agreement, a "Prior Business Relationship"
will mean that the AOL User to whom commercial e-mail is being sent has
voluntarily either (i) engaged in a transaction with MERCHANT or (ii) provided
information to MERCHANT through a contest, registration, or other communication,
which included notice to the AOL User that the information provided could result
in commercial e-mail being sent to that AOL User by MERCHANT or its agents. More
generally, any commercial e-mail to be sent through or into AOL's products or
services shall be subject to AOL's then-standard restrictions on distribution of
bulk e-mail (e.g., related to the time and manner in which such e-mail can be
distributed through the AOL service in question) and the limitations set forth
in Exhibit C.
(b) MERCHANT shall ensure that its collection, use and disclosure of information
obtained from AOL Users under this Agreement ("User Information") complies with
(i) all applicable laws and regulations (ii) AOL's standard privacy policies,
available on the AOL Service at the keyword term "Privacy", and (iii) AOL's
applicable Terms of Service.
(c) MERCHANT will not disclose User Information to any third party in a manner
that Identifies AOL User as end users of an AOL product or service or use User
Information collected under this Agreement to market an Interactive Service
competitive with AOL; provided that the restrictions in this subsection (c)
shall not restrict MERCHANT's use of any information collected independently of
this Agreement.
10. AOL User Communications. To the extent MERCHANT is otherwise permitted to
send communications to AOL Users (in accordance with the other requirements
contained herein):, (i) any solicitations in such communications to purchase
products or services shall promote the Merchant Site available through the AOL
Network as the principal means through which to purchase any such products or
services; (ii) any direct links to specific offers within such communications
shall link to the Merchant Site; (iii) MERCHANT shall limit the subject matter
of such communications to those categories of products, services and/or content
which are specifically contemplated by this Agreement, and (iv) MERCHANT will
provide the recipient with a prominent and easy means to "opt-out" of receiving
any future commercial e-mail communications from Merchant. In addition, in any
communication to AOL Users or on the Merchant Site, MERCHANT will not encourage
AOL Users to take any action inconsistent with the scope and purpose of this
Agreement, including without limitation, the following actions: (a) using
interactive sites other than the Merchant Site; (b) bookmarking of other
interactive sites; (c) changing the default home page on the AOL browser, or (d)
using any interactive service other than the AOL, Netscape and CompuServe
Services.
11. Keyword(Trademark) Search Terms. Any Keyword Search Terms to be directed to
Merchant's Site shall be (i) subject to availability and (ii) limited to the
combination of the Keyword(Tradermark) search modifier combined
<PAGE>
with a registered trademark of MERCHANT. AOL reserves the right at any time to
revoke MERCHANT's use of any Keywords that are not registered trademarks of
MERCHANT. MERCHANT acknowledges that its utilization of a Keyword Search Term
will not create in it, nor will it represent it has, any right, title or
interest in or to such Keyword Search Term, other than the right, title and
interest MERCHANT holds in MERCHANT's registered trademark independent of the
Keyword Search Term. Without limiting the generality of the foregoing, MERCHANT
will not: (a) attempt to register or otherwise obtain trademark or copyright
protection in the Keyword Search Term; or (b) use the Keyword Search Term,
except for the purposes expressly required or permitted under this Agreement. To
the extent AOL allows AOL Users to "bookmark" the URL or other locator for the
Merchant Site, such bookmarks will be subject to AOL's control at all times.
Upon the termination of this Agreement, MERCHANT's rights to any Keywords and
bookmarking will terminate.
12. Miscellaneous. Neither Party will be liable for, or be considered in breach
of or default under the Agreement on account of, any delay or failure to perform
as required by the Agreement (except with respect to payment obligations) as a
result of any causes or conditions which are beyond such Party's reasonable
control and which such Party is unable to overcome by the exercise of reasonable
diligence. MERCHANT's rights, duties, and obligations under the Agreement are
not transferable. The Parties to the Agreement are independent contractors.
Neither Party is an agent, representative or partner of the other Party. Neither
Party will have any right, power or authority to enter into any agreement for or
on behalf of, or incur any obligation or liability of, or to otherwise bind, the
other Party. The failure of either Party to insist upon or enforce strict
performance by the other Party of any provision of the Agreement or to exercise
any right under the Agreement will not be construed as a waiver or
relinquishment to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather, the same will be
and remain in full force and effect. Sections 3, 4, 7, 8, 9, 10, 11, and 12 of
these Standard Legal Terms and Conditions, will survive the completion,
expiration, termination or cancellation of the Promotional Agreement. Either
Party may terminate the Agreement at any time with written notice to the other
Party in the event of a material breach of the Agreement by the other Party,
which remains uncured after thirty days written notice thereof. Any notice,
approval, request, authorization, direction or other communication under this
Agreement will be given in writing and will be deemed to have been delivered and
given for all purposes (i) on the delivery date if delivered by electronic mail
on AOL's network or systems (to screenname "[email protected]" in the case of
AOL) or by confirmed facsimile; (ii) on the delivery date if delivered
personally to the Party to whom the same is directed; (iii) one business day
after deposit with a commercial overnight carrier, with written verification of
receipt; or (iv) five business days after the mailing date, whether or not
actually received, if sent by U.S. mail, return receipt requested, postage and
charges prepaid, or any other means of rapid mail delivery for which a receipt
is available. In the case of AOL, such notice will be provided to both the
Senior Vice President for Business Affairs (fax no. 703-265-1206) and the Deputy
General Counsel (fax no. 703-265-1105), each at the address of AOL set forth in
the first paragraph of this Agreement. In the case of MERCHANT, except as
otherwise specified herein, the notice address will be the address for MERCHANT
set forth in the first paragraph of this Agreement, with the other relevant
notice information, including the recipient for notice and, as applicable, such
recipient's fax number or AOL email address, to be as reasonably identified by
AOL. Except as otherwise specified herein, the Agreement sets forth the entire
agreement between MERCHANT and AOL, and supersedes any and all prior agreements
of AOL or MERCHANT with respect to the transactions set forth herein. No change,
amendment or modification of any provision of the Agreement will be valid unless
set forth in a written instrument signed by the Party subject to enforcement of
such amendment. MERCHANT will promptly inform AOL of any information related to
the Merchant Site which could reasonably lead to a claim, demand, or liability
of or against AOL and/or its affiliates by any third party. MERCHANT will not
assign this Agreement or any right, interest or benefit under this Agreement
without the prior written consent of AOL. Assumption of the Agreement by any
successor to MERCHANT (including, without limitation, by way of merger,
consolidation or sale of all or substantially all of MERCHANT's stock or assets)
will be subject to AOL's prior written approval. Subject to the foregoing, this
Agreement will be fully binding upon, inure to the benefit of and be enforceable
by the Parties hereto and their respective successors and assigns. Except where
otherwise specified herein, the rights and remedies granted to a Party under the
Agreement are cumulative and in addition to, and not in lieu of, any other
rights or remedies which the Party may possess at law or in equity. In the event
that any provision of the Agreement is held invalid by a court with jurisdiction
over the Parties to the Agreement, (i) such provision will be deemed to be
restated to reflect as nearly as possible the original intentions of the Parties
in accordance with applicable law and (ii) the remaining terms, provisions,
covenants and restrictions of this Agreement will remain in full force and
effect. The Agreement may be executed in counterparts, each of which will be
deemed an original and all of which together will constitute one and the same
document. The Agreement will be interpreted, construed and enforced in all
respects in accordance with the laws of the Commonwealth of Virginia, except for
its conflicts of laws principles. MERCHANT hereby irrevocably consents to the
exclusive jurisdiction of the courts of the Commonwealth of Virginia and the
federal courts therein in connection with any action arising under this
Agreement.
<PAGE>
EXHIBIT E
Operations
1. MERCHANT Site Infrastructure. MERCHANT will be responsible for all
communications, hosting and connectivity costs and expenses associated
with the MERCHANT Site. MERCHANT will provide all hardware, software,
telecommunications lines and other infrastructure necessary to meet
traffic demands on the MERCHANT Site from the AOL Network. MERCHANT will
design and implement the network between the AOL Service and MERCHANT Site
such that (i) no single component failure will have a materially adverse
impact on AOL Members seeking to reach the MERCHANT Site from the AOL
Network and (ii) no single line under material control by the Merchant
will run at more than 70% average utilization for a 5-minute peak in a
daily period. In this regard, MERCHANT will provide AOL, upon request,
with a detailed network diagram regarding the architecture and network
infrastructure supporting the MERCHANT Site. In the event that MERCHANT
elects to create a custom version of the MERCHANT Site in order to comply
with the terms of this Agreement, MERCHANT will bear responsibility for
all aspects of the implementation, management and cost of such customized
site.
2. Optimization; Speed. MERCHANT will use commercially reasonable efforts to
ensure that: (a) the functionality and features within the MERCHANT Site
are optimized for the client software then in use by AOL Members; and (b)
the MERCHANT Site is designed and populated in a manner that minimizes
delays when AOL Members attempt to access such site. At a minimum,
MERCHANT will ensure that the MERCHANT Site's data transfers initiate
within fewer than fifteen (15) seconds on average. Prior to commercial
launch of any material promotions described herein, MERCHANT will permit
AOL to conduct performance and load testing of the MERCHANT Site (in
person or through remote communications), with such commercial launch not
to commence until such time as AOL is reasonably satisfied with the
results of any such testing.
3. User Interface. MERCHANT will maintain a graphical user interface within
the MERCHANT Site that is competitive in all material respects with
interfaces of other similar sites based on similar form technology. AOL
reserves the right to review and approve the user interface and site
design prior to launch of the Promotions and to conduct focus group
testing to assess compliance with respect to such consultation and with
respect to MERCHANT's compliance with the preceding sentence.
4. Technical Problems. MERCHANT agrees to use commercially reasonable efforts
to address material technical problems (over which MERCHANT exercises
control) affecting use by AOL Members of the MERCHANT Site (a "MERCHANT
Technical Problem") promptly following notice thereof. In the event that
MERCHANT is unable to promptly resolve a MERCHANT Technical Problem
following notice thereof from AOL (including, without limitation,
infrastructure deficiencies producing user delays), AOL will have the
right to regulate the promotions it provides to MERCHANT hereunder until
such time as MERCHANT corrects the MERCHANT Technical Problem at issue.
5. Monitoring. MERCHANT will ensure that the performance and availability of
the MERCHANT Site is monitored on a continuous basis. MERCHANT will
provide AOL with contact information (including e-mail, phone, pager and
fax information, as applicable, for both during and after business hours)
for MERCHANT's principal business and technical representatives, for use
in cases when issues or problems arise with respect to the MERCHANT Site.
6. Security. MERCHANT will utilize Internet standard encryption technologies
(e.g., Secure Socket Layer -- SSL) to provide a secure environment for
conducting transactions and/or transferring private member information
(e.g. credit card numbers, banking/financial information, and member
address information) to and from the MERCHANT Site. MERCHANT will
facilitate periodic reviews of the MERCHANT Site by AOL in order to
evaluate the security risks of such site. MERCHANT will promptly remedy
any security risks or breaches of security as may be identified by AOL's
Operations Security team.
7. Technical Performance.
i. MERCHANT will design the MERCHANT Site to support the AOL-client
embedded versions of the Microsoft Internet Explorer 3.XX and 4.XX
browsers (Windows and Macintosh), the Netscape Browser 4.XX, and
make commercially reasonable efforts to support all other AOL
browsers listed at: "http://webmaster.info.aol.com/"
ii. To the extent MERCHANT creates customized pages on the MERCHANT Site
for AOL Members, Merchant will develop and employ a methodology to
detect AOL Members (e.g. examine the HTTP User-Agent field in order
to identify the "AOL Member-Agents" listed at:
http://webmaster.info.aol.com/").
iii. MERCHANT will periodically review the technical information made
available by AOL at http://webmaster.info.aol.com.
iv. MERCHANT will design its site to support HTTP 1.0 or later protocol
as defined in RFC 1945 and to adhere to AOL's parameters for
refreshing or preventing the caching of information in AOL's proxy
system outlined in the document provided at the following URL:
http://webmaster.info.aol.com. The Merchant is responsible for the
manipulation of these parameters in web based objects so as to allow
them to be cached or not cached as outlined in RFC 1945.
v. Prior to releasing material, new functionality or features through
the MERCHANT Site ("New Functionality"), MERCHANT will use
commercially reasonable efforts to: (i) test the New Functionality
to confirm its compatibility with AOL Service client software and
(ii) provide AOL with written notice of the New Functionality so
that AOL can perform tests of the New Functionality to confirm its
compatibility with the AOL Service client software. Should any new
material, new functionality or features through the Merchant Site be
released without notification to AOL, AOL will not be responsible
for any adverse member experience until such time that compatibility
tests can be
<PAGE>
performed and the new material, functionality or features qualified
for the AOL Service.
8. AOL Internet Services MERCHANT Support. AOL will provide MERCHANT with access
to the standard online resources, standards and guidelines documentation,
technical phone support, monitoring and after-hours assistance that AOL makes
generally available to similarly situated web-based partners. AOL support will
not, in any case, be involved with content creation on behalf of MERCHANT or
support for any technologies, databases, software or other applications which
are not supported by AOL or are related to in this Exhibit E. any MERCHANT area
other than the MERCHANT Site. Support to be provided by AOL is contingent on
MERCHANT providing to AOL demo account information (where applicable), a
detailed description of the MERCHANT Site's software, hardware and network
architecture and access to the MERCHANT Site for purposes of such performance
and the coordination of load testing as AOL elects to conduct. As described
elsewhere in this Agreement, MERCHANT is fully responsible for all aspects of
hosting and administration of the Merchant Site and must ensure that the site
satisfies the specified access and performance requirements as outlined
17
