<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1999
REGISTRATION NO. 333-88595
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EGREETINGS NETWORK, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 5947 94-3207092
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
149 NEW MONTGOMERY STREET
SAN FRANCISCO, CA 94105
(415) 375-4100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
GORDON M. TUCKER
CHIEF EXECUTIVE OFFICER
EGREETINGS NETWORK, INC.
149 NEW MONTGOMERY STREET
SAN FRANCISCO, CA 94105
(415) 375-4100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
KENNETH L. GUERNSEY JOSE F. MACIAS
KARYN S. TUCKER BURKE F. NORTON
ANGELIQUE C. TREMBLE PABLO L. CHAVEZ
EDWARD A. KLEINHANS BROOKE D. COLEMAN
COOLEY GODWARD LLP WILSON SONSINI GOODRICH & ROSATI
ONE MARITIME PLAZA, 20TH FLOOR PROFESSIONAL CORPORATION
SAN FRANCISCO, CA 94111 650 PAGE MILL ROAD
(415) 693-2000 PALO ALTO, CA 94304
(650) 493-9300
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement number for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [X]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box: [ ]
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- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
The sole purpose of this post-effective Amendment No. 1 is to refile
Exhibits 10.10 and 10.11 to the Registration Statement. No changes have been
made to the Registration Statement other than to Item 16 (Exhibits and Financial
Statement Schedules) of Part II.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The Registrant hereby modifies Item 16 of Part II of the Registration
Statement for the purpose of refiling the following exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<C> <S>
10.10** Content Provider and Distribution Agreement between
Egreetings and Gibson Greetings, Inc., as amended on
September 30, 1999.
10.11** Agreement between Hotmail Corporation and Egreetings, as
amended through August 1998.
</TABLE>
- -------------------------
** Confidential treatment has been requested for portions of this document. The
information omitted pursuant to such confidential treatment request has been
filed separately with the Securities and Exchange Commission.
II-1
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City and County of San
Francisco, State of California, on the 16th day of December, 1999.
Egreetings Network, Inc.
By: /s/ ANDREW J. MOLEY
--------------------------------------
Andrew J. Moley
Chief Financial Officer
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
* Chief Executive Officer, December 16, 1999
- ----------------------------- Principal Executive Officer
Gordon M. Tucker and Director
/s/ ANDREW J. MOLEY Senior Vice President and December 16, 1999
- ----------------------------- Chief Financial Officer,
Andrew J. Moley Principal Financial Officer
and Principal Accounting
Officer
* Director December 16, 1999
- -----------------------------
Stewart Alsop
* Director December 16, 1999
- -----------------------------
Charles A. Holloway
* Director December 16, 1999
- -----------------------------
Brendon S. Kim
* Director December 16, 1999
- -----------------------------
Peter Nieh
* Director December 16, 1999
- -----------------------------
Frank J. O'Connell
* Director December 16, 1999
- -----------------------------
Lee Rosenberg
*By: /s/ ANDREW J. MOLEY
- -----------------------------
Andrew J. Moley
Attorney-in-fact
</TABLE>
II-2
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<C> <S>
10.10** Content Provider and Distribution Agreement between
Egreetings and Gibson Greetings, Inc., as amended on
September 30, 1999.
10.11** Agreement between Hotmail Corporation and Egreetings, as
amended through August 1998.
</TABLE>
- -------------------------
** Confidential treatment has been requested for portions of this document. The
information omitted pursuant to such confidential treatment order has been
filed separately with the Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 10.10
CONTENT PROVIDER AND DISTRIBUTION AGREEMENT
THIS AGREEMENT (hereinafter "Agreement") is entered into as of December
4, 1997 (the "Effective Date"), by and between THE VIRTUAL MALL, INC., a
California corporation doing business as "Greet Street" ("Greet Street"), and
GIBSON GREETINGS, INC., a Delaware corporation ("Gibson"), (together the
"Parties"), with reference to the following:
A. Greet Street is engaged in the business of developing and
distributing multimedia communication and messaging products that are sent by
electronic means such as E-mail. These products, which may be thought of as an
electronic version of a greeting card, typically combine media elements, such as
professionally produced layouts, characters, animation, sound and storylines
together with the sender's personal greeting or message (which itself may be
comprised of text, a sound or an image, or a combination thereof), and are
generally referred to in this Agreement as "Digital Greeting Products." Greet
Street distributes Digital Greeting Products through a variety of online
distribution channels operated by or secured by Greet Street including its own
worldwide web site (www.greetst.com) (collectively, the "Store").
B. Gibson is engaged in the business of developing and distributing
printed greeting cards and desires to utilize its greeting card development
capabilities and its licensed rights to provide content for Digital Greeting
Products.
C. Greet Street and Gibson have entered into that certain Series D
Preferred Stock Purchase Agreement, dated December 4, 1997, pursuant to which
Gibson will make an equity investment in Greet Street (the "Purchase
Agreement").
NOW THEREFORE, in consideration of the foregoing, and the mutual
promises and covenants contained herein, the Parties agree as follows:
1. GENERAL RELATIONSHIP.
1.1 MANAGEMENT. Gibson and Greet Street will appoint a senior level
manager from each company who will have the overall authority and responsibility
- -to manage the strategic relationship between the Parties. Initially, these
roles will be filled by George White from Gibson and Tony Levitan from Greet
Street. In addition, each company will designate the individual(s) to be
responsible for managing and coordinating the following key areas of the
relationship: (a) overall Business Plan, including market research, (b)
Licensing, (c) Production, and (d) Merchandising & Marketing. Gibson and Greet
Street agree to designate such individual(s) within one week after the Effective
Date. The goals and responsibilities of the various key areas of the
relationship are defined in the following paragraphs. These goals and
responsibilities refer to Digital Greeting Products only. Within the reasonable
parameters established by
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
-1-
<PAGE> 2
this Agreement, Gibson will control the areas of the Gibson business plan,
Gibson licensing, Gibson content, and marketing and merchandising of
Gibson-branded, separate areas within the Store, analogous to a particular
brands aisle in a supermarket (the "Gibson Areas").
1.2 BUSINESS PLAN.
1.2.1 The Parties will cooperate as provided below for the overall
goal of gathering the information necessary to develop a business plan (the
"Business Plan"), with specific strategy and implementation plans for Licensing,
Production and Merchandising & Marketing. This initial business planning process
will specify the initial activities of the Parties and lay out a general idea of
their resource requirements moving forward. The members of the Business Planning
team will obtain market research and conduct other activities reasonably
necessary to develop the Business Plan, including, without limitation, primary
and secondary research in the following areas: (a) market segments, e.g.,
consumer and business, with respect to size, growth, characteristics,
demographics, where/access points; (b) product segments, including technology
adoption; (c) competitive environment; and (d) consumer habits and needs. Based
upon the findings of this research, as well as feedback from the appropriate
areas of both companies, the team will draft and circulate a Business Plan
outlining the specific goals to provide a roadmap for calendar year 1998 for
each of the key areas. The Business Plan will also provide specific deliverables
for each of the key areas of the relationship as described below.
1.2.2 The Parties will use commercially reasonable efforts to
complete the initial market research in connection with the development of the
Business Plan within 45 days after the Effective Date and to complete the
initial Business Plan within 60 days after the Effective Date.
1.2.3 Subsequent to completion of the initial business planning
process outlined above, the Business Planning team will continue market research
activities on an on-going basis, and based on such research, together with
feedback from the various teams described in Sections 1.3-1.5 below as well as
other relevant information from Gibson and Greet Street, will update the
Business Plan outlining the specific goals in order to provide a roadmap for
each of the key areas on a quarterly basis thereafter. In addition to such
quarterly updates, the Business Planning team will develop an annual Business
Plan for each calendar year during the term of this Agreement.
1.3 LICENSING. The Licensing team will identify and prioritize desirable
licensors for the non-musical content of Digital Greeting Products. The members
of this team will help develop licensing agreement terms and formats which
Gibson will attempt to incorporate into licensing agreements with the potential
licensors. After an initial annual plan for this area of the strategic
relationship has been developed, the Licensing team will meet on a quarterly
basis to evaluate and provide updates for the following quarters. In addition,
this team will provide
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<PAGE> 3
budget proposals and general feedback for the Business Planning team.
1.4 PRODUCTION. The Production team will be responsible for selecting
design criteria and product form/type, setting production goals and
deliverables, setting up a production schedule, and coordinating production
resources on a quarterly basis. They will receive input from the Merchandising &
Marketing team on what type of content is needed. In addition, this team will
provide budget proposals and general feedback for the Business Planning team.
1.5 MERCHANDISING & MARKETING. The Merchandising & Marketing team will
advise Gibson regarding merchandising in the Gibson Areas, including the mix and
amount of Gibson content type reflective of overall market demand, e.g.,
birthday, holidays, business, etc., the scope and range of licensed properties
reflected in the SKUs offered, as well as displaying content in the Gibson
Areas, subject to Gibson's reasonable approval. The team will also be
responsible for devising and implementing an ongoing marketing strategy and
promotional events and products for the Gibson Areas. The members of the team
will meet on a quarterly basis to provide a roadmap for the merchandising and
marketing activities for the Gibson Areas for the following quarter. In
addition, this team will provide budget proposals and general feedback for the
Business Planning team.
2. CONTENT ACQUISITION. Gibson will use reasonable efforts to obtain licenses
to use name brand and other creative assets desirable in the development of
Digital Greeting Products and to secure the electronic rights necessary for the
development and distribution of Digital Greeting Products under all current and
future licenses entered into by Gibson. Greet Street will assist Gibson in
determining which content would be desirable to license from the third party
owners of such content (collectively, "Content Licensors"). Gibson will use
reasonable efforts to facilitate a direct relationship between Greet Street and
each Content Licensor whenever such a relationship would ensure improved
implementation of a particular license or would facilitate incorporation of
particular content into Digital Greeting Products. In addition, Gibson will
provide Greet Street with copies of the relevant sections of all of its licenses
and similar agreements that are relevant to the development or distribution of
Digital Greeting Products, to the extent allowed by the terms of such agreements
and subject to Greet Street's execution of a non-disclosure agreement in
substantially the form of the NDA referenced in Section 14.3 below.
3. WEB SITE LINKS. Gibson will use reasonable efforts to ensure that each
Content Licensor with a site on the Worldwide Web provides a link from such site
to the relevant area of the Store and makes reference to the Store in its
conventional marketing activities.
4. PRODUCTION VOLUME. Gibson agrees to produce Digital Greeting Products
based on either original Gibson content or content acquired by Gibson from
Content Licensors through licensing or similar transactions ("Gibson Greeting
Products") in the quantities set forth below:
- - A minimum of [*********] by December 31, 1998, with a minimum of **********
per quarter thereafter; and
- - A minimum of [*************************************] combined, such designs
to be made available to Greet Street [**********] before the applicable
holiday.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
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<PAGE> 4
5. APPROVAL RIGHTS. Greet Street may reject any Gibson Digital Greeting
Product SKU for the Store which it in good faith believes contains inappropriate
content (e.g., content which is generally accepted as being of bad taste or
offensive to ordinary sensibilities), fails to meet Greet Street's technical
specifications or fails to be merchantable within the meaning of the Uniform
Commercial Code, and such rejected SKU will not be counted toward the production
volume set forth in Section 4 above.
6. TRAINING. Greet Street will provide at its own expense up to [***] hours
of initial training for Gibson employees or representatives in the areas of
digital production, licensing, and merchandising, and will provide
[****************] hours of production training for each new Digital Greeting
Product technology, such as its proposed Flix(TM) product. In addition, at
Gibson's option, Gibson may temporarily position at Greet Street's facilities
one or more individual(s) in the areas of creative and digital production for
initial training.
7. COMPENSATION AND PAYMENT.
7.1 ROYALTY. Greet Street will pay Gibson a quarterly royalty payment
based on the higher of the following two aggregate royalty calculations:
(a) (i) with respect to sales of Digital Greeting Products
incorporating content for which royalties are owed by Gibson to one or more
Content Licensor(s), [********************] (as defined below), and (ii) with
respect to sales of Digital Greeting Products incorporating content for which
royalties or similar amounts are owed by Gibson to one or more Content
Licensor(s), a percentage of Net Revenues (as defined below) equal to
[******************************************************************************]
provided that in no case will the total amount owing to Gibson exceed
[******************]; or
(b) [***********************] (as defined below) from sales of Gibson
Digital Greeting Products, regardless of whether the content incorporated
therein is licensed from a Content Licensor.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
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<PAGE> 5
[*******************************************************************************
********************************************************************************
********************************************************************************
******************************************************************************
****************************************************************************
****************************************************************************
************************************************]
7.2 FREE GOODS. Gibson acknowledges that Greet Street may offer certain
Digital Greeting Products, including Gibson Digital Greeting Products, as
non-revenue generating premiums (for example to promote the sale of Gibson
Digital Greeting Products or to promote the use or sale of Digital Greeting
Products in general), and that such distributions shall not require any royalty
payment to Gibson. Notwithstanding the foregoing, Greet Street will not utilize
Gibson Digital Greeting Products in any such non-revenue-generating manner
without the prior written consent of Gibson, which consent will not be
unreasonably withheld or delayed.
7.3 REPORTS AND PAYMENT TO GIBSON. Within 45 days of the end of each
calendar quarter during the term of this Agreement, beginning with the calendar
quarter in which Greet Street first actually receives-any revenues from the sale
of Gibson Digital Greeting Products, Greet Street shall submit a report to
Gibson setting forth all of the information reasonably necessary to calculate
the payments due to Gibson for such month, including the amount of any allowable
adjustments in connection therewith. Such report shall include the calculation
of royalties due under Section 7.1 above, and shall include the appropriate
payment based on the higher of the two calculations.
8. CONTENT EXCLUSIVITY. All Gibson Digital Greeting Products will be
provided to Greet Street for distribution (whether paid, sponsored or free) on
an exclusive basis for as long as Greet Street maintains the "Impressions" (as
defined below) levels set forth below. Notwithstanding the foregoing, Gibson
will retain the right to (i) sell Gibson Digital Greeting Products on its own
Web site, and (ii) sell or license Gibson Digital Greeting Products either
directly, or indirectly through a third party, solely in connection with a
CD-ROM or similar disk-based product sold through retail channels (a "Retail
Product") which includes a compilation of Gibson Digital Greeting Products but
does not provide the end-user with the capability of directly or indirectly
connecting to a third party's Web site (i.e., a site other than the Store or
Gibson's Web site) for the purpose of either updating the Retail Product or
downloading any additional Gibson Digital Greeting Products or entering into any
transaction with respect to the sending of any Gibson Digital Greeting Products
by e-mail or other electronic means, other than the Gibson Digital Greeting
Products that are included in the original compilation that forms a part of the
Retail Product; provided that Gibson shall make reasonable efforts to ensure
that the Retail Product provides the end-user with the capability of connecting
to the Store. Gibson may revoke the foregoing exclusivity rights of Greet Street
with respect to Gibson Digital Greeting Products, and such rights will become
non-exclusive, in the event that Greet Street fails to achieve [*****]
Impressions (as defined below) during calendar year 1998, and [*****]
Impressions during each calendar quarter thereafter, provided that Greet Street
will have a period of [*****] after any such measurement period to provide
reasonable assurances (e.g., through executed distribution contracts or
otherwise) to Gibson that Greet Street will achieve cumulative Impressions over
a period consisting of the measurement period during which it failed to achieve
the required Impressions plus a [*****] period thereafter, that equal or exceed
the product of (a) [*****] Impressions and (b) the total number of calendar
quarters covered thereby. For purposes hereof, an "Impression" means any graphic
and/or textual message delivered by or on behalf of Greet Street or the Store to
an on-line user over (i) the internet, whether through the Store or any other
internet site resulting from existing or future distribution arrangements, or
(ii) any other similar electronic distribution channel, including America Online
or other proprietary network, based on distribution arrangements entered into
after the Effective Date. The exclusivity rights provided by this Section shall
apply only to products in digital form and nothing herein shall prevent Gibson
from manufacturing or distributing printed products consisting of the same of
similar designs and/or editorial as may be contained in the Gibson Digital
Greeting Products.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
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<PAGE> 6
9. ANCHOR TENANCY.
9.1 ANCHOR TENANT STATUS. Subject to Section 9.2 below, during the
term of this Agreement, Gibson shall be an Anchor Tenant of the Store, and
Greet Street will provide positioning, promotion and level of exposure for the
Gibson brand and Gibson properties [******************************************
******************************************************************************
******************************************************************************
************************************************************************
************************************************************************
*******************************************************************************
***********************************************]
9.2 TERMINATION OF ANCHOR TENANT STATUS. Greet Street reserves the right
to revoke Gibson's Anchor Tenant status in the event that Gibson fails to
provide either (a) the number of SKUs of Gibson Digital Greeting Products
specified in Section 4 above, or (b) sufficient SKUs of Gibson Digital Greeting
Products to be among the top three (3) providers of Digital Greeting Products to
Greet Street as measured by the number of Digital Greeting Product SKUs offered
by Greet Street at the end of each calendar quarter. Notwithstanding the
foregoing, if Gibson has achieved at least 75% of the required production
volume of Gibson Digital Greeting Product SKUs during the applicable period,
then prior to revocation of Gibson's Anchor Tenant status, Gibson will have a
period of 90 days to remedy such deficiency by providing Greet Street with a
sufficient number of SKUs of Gibson Digital Greeting Products so that at the
end of such 90-day period, both (a) the total production volume for the
applicable period, plus such 90-day period, will equal the cumulative
production volume that Gibson was required to produce over such combined period
of time, and (b) the number of Gibson Digital Greeting Products provided to
Greet Street will then place Gibson among the top three (3) providers of
Digital Greeting Products to Greet Street as measured by the number of Digital
Greeting Product SKUs at the end of such 90-day period.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
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<PAGE> 7
9.3 Gibson Store. Gibson acknowledges that Greet Street's standard package
for Anchor Tenants may be modified by Greet Street from time-to-time.
Notwithstanding the foregoing, for so long as Gibson remains an Anchor Tenant,
Greet Street will maintain a "vendor-store" that will feature only Gibson
Digital Greeting Products. Costs of production for such store, if any, will be
borne by Gibson. Gibson will have merchandising control within the Gibson
"vendor-store" as specified in the then current Greet Street guidelines for
Anchor Tenants, including number of SKUs, frequency of rotation, etc., provided
that in the event that any conflict exists between such guidelines and the
terms of this Agreement (including specifically, but not limited to,
commitments as to the minimum number of SKUs to be provided by Gibson or
maintained in such store) the terms of this Agreement shall prevail.
9.4 [*************] Regardless of Gibson's participation as an Anchor
Tenant, during the term of this Agreement, Gibson Digital Greeting Products
will be [**************************************************]
10. DEVELOPMENT OF CONTENT PROVIDER TOOLS.****************************
************************************************************************
*************************************************************************
*************************************************************************
11. TERM OF AGREEMENT.
11.1 INITIAL TERM; RENEWALS. The term of this Agreement will commence on
the Effective Date and expire five (5) years thereafter, subject to early
termination as specifically provided in this Agreement. At Gibson's election,
after the expiration of the initial five-year term, this Agreement may be
extended for additional serial one-year renewal periods, provided that (a)
Gibson is not then in breach of this Agreement, and (b) Gibson makes a firm
offer on terms that are acceptable to Great Street, including a commitment to
maintain Gibson's status as an Anchor Tenant throughout the renewal period,
which commitment shall include continuing to satisfy the requirements of Section
9.2(b) above (but measured as of the commencement of each such renewal period),
and during such renewal period either matching or exceeding (i) the payment and
other terms (including providing similar non-cash benefits' if any) or any third
party that is both an Anchor Tenant and one of the three largest providers of
Digital Greeting Products to Greet Street, or (ii) the minimum payment and other
terms then in effect for a party to become an Anchor Tenant, if at the
commencement of the renewal period there are only two such Anchor Tenants.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
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<PAGE> 8
11.2 TERMINATION FOR BREACH. Either Party may terminate this Agreement
upon 30 days' prior written notice for breach by the other Party of a material
obligation if the breach is not remedied during such notice period.
11.3 TERMINATION PURSUANT TO PURCHASE AGREEMENT. Greet Street may
terminate this Agreement upon the occurrence of an event that would entitle
Greet Street (or its assignee) to repurchase Gibson's shares of capital stock in
Greet Street pursuant to the Purchase Agreement.
11.4 RESIDUAL RIGHTS. Greet Street will retain the right to continue to
distribute all Gibson Digital Greeting Products then in the Store's product
database for a period of six (6) months after any termination or expiration of
this Agreement. Gibson acknowledges that Greet Street's service allows customers
to re-send Digital Greeting Products that they previously have sent through
Greet Street. For example, by way of illustration only, if a recipient were to
accidentally delete their greeting, the sender would be able to use this service
to re-send the original personalized greeting to that recipient. Accordingly,
following the expiration or termination of this Agreement, Greet Street will be
allowed to continue to enable customers to re-send through Greet Street's
infrastructure, Gibson Digital Greeting Products previously purchased by such
customers.
12. INDEMNIFICATION.
12.1 BY GREET STREET. Greet Street will defend, hold harmless and
indemnify Greet Street and its affiliates and their shareholders, officers,
directors and agents (each, a "Gibson Party"), and each of their respective
successors and assigns, from and against any and all losses, damages, claims,
costs, expenses or liabilities (including reasonable attorneys' fees) incurred
by Gibson or any Gibson Party arising out of or related to any claims that any
portion of a Gibson Digital Greeting Product provided by Greet Street infringes
any copyright, trademark, patent, trade secret or other right of a third party.
12.2 BY GIBSON. Gibson will defend, hold harmless and indemnify Greet
Street and its affiliates and their shareholders, officers, directors and agents
(each, a "Greet Street Party"), and each of their respective successors and
assigns, from and against any and all losses, damages, claims, costs, expenses
or liabilities (including reasonable attorneys' fees) incurred by Greet Street
or any Greet Street Party arising out of or related to any claims that any
content provided by Gibson or a licensor of Gibson and incorporated into a
Digital Greeting Product infringes any copyright, trademark, patent, trade
secret or other right of a third party.
12.3 GENERAL. A Party seeking indemnification hereunder shall: (i)
promptly notify the indemnifying Party of the claim or action and furnish the
indemnified Party a copy of each communication, notice or other action relating
to such claim or action; (ii) permit the indemnifying Party to assume sole
authority to conduct the trial or settlement of such claim or action and any
negotiations related
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<PAGE> 9
thereto; and (iii) provide such information and assistance as may be reasonably
requested by the indemnifying Party in connection with such claim or action.
13. PRESS RELEASES.
Neither Party shall make any public announcement or issue any press
release concerning this Agreement except with the consent of the other Party or
insofar as the disclosing Party in good faith believes such announcement is
required by law.
14. GENERAL.
14.1 FORCE MAJEURE. Neither Party shall be liable or deemed to be in
default for any delay or failure in performance under this Agreement resulting
directly or indirectly by reason of fire, flood, earthquake, explosion or other
casualty, strikes or labor disputes, inability to obtain supplies or power, war
or other violence, any law, order, proclamation, regulation, ordinance, demand
or requirement of any government agency, or any other act or condition
whatsoever beyond the reasonable control of the affected Party, provided that
the Party so affected shall take all reasonable steps to avoid or remove such
cause of nonperformance and shall resume performance hereunder with dispatch
whenever such causes are removed. Notwithstanding the above, a Party materially
adversely affected by said delay, failure or interruption may terminate this
Agreement if said delay, failure or interruption should exceed 90 days, but the
terminating Party shall not be entitled to any damages or other relief except
termination.
14.2 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, United States of America,
as applied to agreements signed and performed entirely in California.
14.3 ARBITRATION. Any controversy or claim, whether based on contract,
tort, statute or other legal theory (including but not limited to any claim of
fraud or misrepresentation), arising out of or related to this Agreement or the
Mutual Nondisclosure Agreement dated October 20, 1997 (the "ISIDA"), or the
breach thereof, except for a dispute concerning the ownership by a Party of any
patent, copyright, trade secret or other proprietary right, shall be resolved by
arbitration administered by the American Arbitration Association under its
Commercial Arbitration Rules, modified as follows:
(a) the arbitration shall be held in a mutually agreeable location
other than San Francisco, California or Cincinnati, Ohio, before three
arbitrators;
(b) the arbitrators shall not have the power to award any damages
excluded by, or in excess of any damage limitations expressed in, this
Agreement;
(c) in order to prevent irreparable harm, the arbitrators may grant
temporary or permanent injunctive or other equitable relief;
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<PAGE> 10
(d) subject to Section 14.10 below, costs and expenses of the
arbitration shall be borne as provided by the rules of the American Arbitration
Association;
(e) the arbitrators may order discovery to the extent the
arbitrators deem it appropriate;
(f) the decisions and awards of the arbitrators, including temporary
or permanent injunctive or other relief, shall be final and binding on the
Parties and may be enforced in any court having jurisdiction; and
(g) notwithstanding anything to the contrary in this Section 14.3,
in the event of alleged violation of a Party's intellectual property rights
(including but not limited to unauthorized disclosure of confidential
information), that Party may seek temporary injunctive relief from any court of
competent jurisdiction pending appointment of the arbitrators. The Party
requesting such relief shall simultaneously file a demand for arbitration of the
dispute, and shall request the American Arbitration Association to proceed under
its rules for expedited hearing. In no event shall any such temporary injunctive
relief continue for more than 60 days.
14.4 INDEPENDENT CONTRACTORS. It is expressly agreed that Greet
Street and Gibson are acting hereunder as independent contractors, and under no
circumstances shall any of the employees of one Party be deemed the employees of
the other for any purpose. This Agreement shall not be construed -as authority
for either Party to act for the other Party in any agency or other capacity, or
to make commitments of any kind for the account of or on the behalf of the
other. This Agreement shall not be construed as establishing any joint venture
between the Parties and any actions, proposed actions, plans, budgets, or
projections made or proposed to be made by any team created pursuant to this
Agreement (including specifically, but not limited to, Sections 1.2, 1.3, 1.4
and 1.5 hereof) shall be subject to approval by both Greet Street and Gibson.
14.5 NOTICE. Any notice required to be given by either Party to the
other shall be deemed given five (5) business days after being deposited in the
postal system in registered or certified form with return receipt requested,
postage paid, addressed to the notified Party at the address for notices set
forth in the Purchase Agreement, but only if the Party giving notice receives a
return receipt within 10 business days after the notice is mailed; (ii) on the
next business day if dispatched to the notified Party at the address set forth
in the Purchase Agreement via a courier service that guarantees next business
day delivery, but only if the records of such courier service confirm that such
delivery was in fact made the next business day; or (iii) immediately upon
dispatch if dispatched by facsimile transmission to the notified Party at the
facsimile telephone number set forth in the Purchase Agreement, the dispatching
Party receives an electronic confirmation of receipt, and the dispatching Party
also promptly gives notice as provided in clause W or (ii) of this Section 14.5.
Either Party may change the
-10-
<PAGE> 11
postal address or facsimile telephone number to which notice is sent by written
notice to the other Party.
14.6 ASSIGNMENT. This Agreement is not assignable by either Party
hereto without the prior written consent of the other, except that this
Agreement shall be assignable by Greet Street in connection with the sale of
substantially all of its assets, or by Greet Street to a successor corporation
in the event of a merger or a consolidation, provided that Greet Street first
provides Gibson with written notice of such assignment. This Agreement shall be
binding upon and inure to the benefits of the Parties and their respective
successors and permitted assigns.
14.7 SEVERABILITY. If any provision of this Agreement is determined
by a court of competent jurisdiction to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other part
or provision of this Agreement unless as a result the rights of either Party are
materially diminished or the obligations and burdens of either Party are
materially increased so as to be unjust or inequitable.
14.8 WAIVER. No waiver by any Party of any breach of any provision
hereof shall constitute a waiver of any other breach of that or any other
provision hereof.
14.9 ENTIRE AGREEMENT; HEADINGS. This Agreement and the NDA, as well
as the Purchase Agreement (including all of the agreements referred to therein
to which Greet Street and Gibson are both parties), together constitute the
entire agreement between the Parties with respect to the subject matter hereof
and supersedes all previous proposals, both oral and written, negotiations,
representations, commitments, writings and other communications between the
Parties. This Agreement may not be modified except by an instrument in writing
signed by a duly authorized representative of each of the Parties. The section
headings and captions in this Agreement are for convenience of reference only
and shall not be considered in interpreting this Agreement.
14.10 ATTORNEYS' FEES. If any legal action at law or in equity,
arbitration or other action or proceeding is necessary to enforce the terms of
this Agreement, the prevailing Party shall be entitled to reasonable attorneys'
fees in addition to costs of suit and to any other relief which that Party may
be entitled. This provision shall be construed as applicable to the entire
Agreement.
14.11 CUMULATIVE REMEDIES. Except as may be provided herein, the
rights and remedies provided herein shall be cumulative and in addition to any
other remedies available at law or equity.
-11-
<PAGE> 12
14.12 COUNTERPARTS. This Agreement may be executed in one or more
Counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement by
their duly authorized representatives as of the date first set forth above.
THE VIRTUAL MALL, INC. GIBSON GREETINGS, INC.
(DBA GREET STREET)
By: /s/ FREDRICK L. CAMPBELL By: /s/ J.T. WILSON
-------------------------------- ---------------------------------
Print Name: FREDRICK L. CAMPBELL Print Name: J.T. WILSON
------------------------ -------------------------
Title: CEO Title: CHIEF FINANCIAL OFFICER
----------------------------- ------------------------------
-12-
<PAGE> 13
FIRST AMENDMENT TO
CONTENT PROVIDER AND DISTRIBUTION AGREEMENT
BETWEEN EGREETINGS NETWORK AND GIBSON GREETINGS, INC.
THIS FIRST AMENDMENT TO CONTENT PROVIDER AND DISTRIBUTION AGREEMENT
(this "Amendment") is made and entered into as of September 30, 1999, by and
between Egreetings Network ("EGN"), formerly known as The Virtual Mall d/b/a
"Greet Street", a California corporation with principal offices at 501 Second
Street, Suite 114, San Francisco, California 94107 and Gibson Greetings, Inc.
("Gibson"), a Delaware corporation with principal offices at 2100 Section Road
Cincinnati, Ohio 45237.
WHEREAS, the parties have entered into that certain Content Provider and
Distribution Agreement dated as of December 4, 1997 (the "Agreement"), under
which Gibson granted to EGN certain rights to use content owned or licensed by
Gibson in Digital Greeting Products; and
WHEREAS, the parties wish to amend the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein and in the Agreement, the parties hereby agree
to amend the Agreement as follows:
1. All capitalized terms used herein and not otherwise defined in this
Amendment shall have the meanings ascribed to them in the Agreement. All
references to "Greet Street" in the Agreement shall be deemed to be references
to EGN. The defined term the "Store" in the last sentence of Paragraph "A" of
the Recitals to the Agreement is hereby deleted and replaced with the new
defined term the "EGN Web Site".
2. Paragraph "A" of the Recitals to the Agreement is hereby amended by
adding the following two sentences after the second sentence thereof: "For the
avoidance of doubt, products that cannot be sent electronically and personalized
by the addition of a message from the sender (e.g., so-called "Webisodes" that
are intended solely for viewing on a Web site) shall not be deemed Digital
Greeting Products under the Agreement. Products that are not Digital Greeting
Products are sometimes referred to herein as "Non-Digital Greeting Products".
3. Paragraph 1.3 of the Agreement and the third and fourth sentences of
Paragraph 2 of the Agreement are hereby deleted in their entirety.
4. Paragraph 4 of the Agreement is hereby deleted and replaced with the
following:
"4. Production Volume. During each calendar quarter of the term
of this Agreement, Gibson agrees to produce and deliver to EGN an
aggregate of no less than [*************************] Digital
Greeting Products ("Gibson Digital Greeting Products") based on
either original Gibson content ("Original Content") or content
acquired by Gibson from Content Licensors through licensing or
similar transactions ("Licensed Content"). For purposes of
determining whether Gibson has satisfied the foregoing minimum
delivery obligation in any calendar quarter, [**** ********
******* ******** ******* ********* ** *** **** ** *******
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
1.
<PAGE> 14
***************************************************************
************************************************************
**************************************************************
***********************************************************
*****************************************************************
**************************************************] If the
parties mutually agree, any Digital Greetings Products provided
by Gibson to EGN in any calendar quarter in excess of [**********
**************] shall be applied to the delivery requirement for
the next quarter."
5. Paragraph 7.1 of the Agreement is hereby deleted and replaced with
the following new paragraph 7.1:
"7.1. Royalty.
(a) In consideration of the rights granted herein, EGN
will pay Gibson within forty-five (45) days following the end of
each calendar quarter of the term a royalty in the amount of: (i)
[**************] in respect of each Gibson Digital Greeting
Product derived from Original Content that is sent from the EGN
Web Site during such quarter; and (ii) [****************] in
respect of each Gibson Digital Greeting Product that is derived
from Licensed Content or contains at least five frames of
animation and that is sent from the EGN Web Site during such
quarter.
(b) [****************************************************
***********************************************************
***********************************************************
*********************************************************
*************************************************************
*****************************************************************
**************************************************************
********************************************] The royalty rates
payable by EGN to major content archives, publishers, or media
companies, or to any third party that provides consideration to
EGN in addition to content licenses (e.g., marketing or
promotional exposure, or placement fees or other monetary
consideration) shall not be considered in determining the
Standard Royalty Rate."
6. The first sentence of Paragraph 8 of the Agreement is hereby deleted
and replaced with the following text:
"Gibson hereby grants to EGN, during the term, the exclusive
right and license, throughout the world, to reproduce,
distribute, publicly perform and display, market and
commercialize the Gibson Digital Greeting Product delivered to
EGN hereunder on and in connection with Digital Greeting
Products, and to utilize the Gibson Digital Greeting Product in
connection with the marketing and promotion of Digital Greeting
Product. Prior to public distribution, EGN will provide Gibson
with a pre-release copy of each Gibson Digital Greeting Product.
EGN will not publicly release the applicable Gibson Digital
Greeting Product until such time as Gibson has approved (or has
been deemed to have approved) such Gibson
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
2.
<PAGE> 15
Digital Greeting Product as set forth in the next sentence.
Gibson will have five (5) business days, from date of receipt, to
approve the applicable Digital Greeting Product (which approval
shall not be unreasonably withheld), at which time, in the
absence of notice of disapproval, approval shall be deemed
received. EGN shall have no right to edit, adapt, alter or
otherwise change the appearance or content of any Gibson Digital
Greetings Product with the prior written consent of Gibson, which
shall not be unreasonably delayed or withheld, provided, however,
that, EGN shall have the right to alter, modify, or adapt such
content in order to meet EGN's technical and production
specifications. Without limitation of the foregoing, during the
term, Gibson will not authorize or license any third party to
display, perform, publish, reproduce, transmit or distribute
Digital Greeting Product embodying any work owned, created, or
licensed by Gibson."
7. The third and fourth sentences of Paragraph 8 of the Agreement are
hereby deleted and replaced with the following sentence:
"Gibson may revoke the foregoing exclusivity rights granted to
EGN pursuant to this Paragraph 8 in the event that (i) the total
number of Digital Greeting Products sent from the EGN Web Site
during any month of the term is less than the total number of
Digital Greeting Products sent from the EGN Web Site during the
month of August, 1999 (the "Target Amount"); and (ii) the number
of Digital Greeting Products sent from the EGN Web Site in any of
the three (3) months following the month in which the initial
shortfall occurred does not exceed the Target Amount."
8. The following paragraph shall be deemed added as a new Paragraph 8A
to the Agreement:
"8A. Non-Digital Greeting Product.
(a) During the period commencing on the earlier of January
1, 2000 or the date EGN launches Non-Digital Greeting Product on
the EGN Web Site and continuing until the end of the term of this
Agreement, no party other than EGN shall be authorized to
reproduce, use, or distribute a Non-Digital Greeting Product
through any means of online or electronic distribution,
including, but not limited to, electronic mail, the Internet
and/or the World Wide Web ("Non-Digital Greeting Product Rights")
unless: (a) Gibson first notifies EGN of all of the material
terms and conditions of the proposed agreement pursuant to which
such Non-Digital Greeting Product Right is to be granted and (b)
Gibson offers to enter into an agreement with EGN on the same
terms and conditions described in Gibson's notice. If EGN does
not accept Gibson's offer within fifteen (15) days after its
receipt, Gibson may then enter into the proposed agreement with
the third party concerned upon terms not less favorable to Gibson
than the terms set forth in the notice and offer to EGN.
(b)[***************************************************
*************************************************************
***********************************
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
3.
<PAGE> 16
**************************************************************
****************************************************************
****************************************************************
**************************************************************
***************************************************************
*******************************************]
(c) Gibson shall use best efforts to cause any licensee of
Non-Digital Greeting Products other than EGN to [**********
***************************************************************
***************************************************************
*******************************************]
9. Paragraph 9 of the Agreement is hereby deleted and replaced with the
following new Paragraph 9:
"9. Placement of Gibson Digital Greeting Product. Provided that
Gibson has fulfilled the delivery requirements set forth in Paragraph 4 above:
(a) EGN will provide [****************************************
**********************************************************************
*********************************************************************
********]
(b) EGN will provide Gibson with up to five (5) sub-channel
placements on the EGN Web Site featuring certain branded Gibson
properties mutually agreed to by the parties, which list of properties
may by revised by Gibson once per quarter; and
(c) [********************************************************
***********************************************************************
********************************************************************
***********************************************************************
**********************************************************************
***********************************************************************
**********************************************************************]"
10. The second sentence of Paragraph 11.1 of the Agreement is hereby
deleted.
11. The parties agree that except as and to the extent specifically
modified by this Amendment, all terms and conditions of the Agreement shall be
unaffected and shall remain in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
to be duly executed as of the date first set forth above.
EGREETINGS NETWORK GIBSON GREETINGS, INC.
By: /s/ ANDREW P. MISSAN By: /s/ JAMES E. THAXTON
-------------------------- --------------------------
(signature) (signature)
Name: ANDREW P. MISSAN Name: JAMES E. THAXTON
------------------------ ------------------------
(print) (print)
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
4.
<PAGE> 1
EXHIBIT 10.11
[GREET STREET LETTERHEAD]
August 21, 1997
Scott Weiss
Director, Business Development
Hotmail Corporation
1290 Oakmead Parkway, Suite 218
Sunnyvale, CA 94086
AGREEMENT BETWEEN HOTMAIL CORPORATION AND GREET STREET
Dear Scott:
This Agreement is entered into as of August 21, 1997, by and between THE VIRTUAL
MALL, INC., d.b.a. GREET STREET, a California corporation with its principal
office at 123 Townsend Street, San Francisco, California 94107 ("Greet Street")
and HOTMAIL CORPORATION, a California corporation with its principal office at
1290 Oakmead Parkway, Sunnyvale, California 94086, ("Hotmail") concerning Greet
Street's provision of social expression and electronic greeting products and
services to Hotmail's users.
1. Background
Hotmail is the leading Web-based free E-mail service.
Greet Street is the leading provider of online digital greetings and social
expression products (also referred to as Dynamic E-mail). Greet Street's service
allows customers to personalize digital postcards and animated E-greetings(R)
products and have them delivered by E-mail or via the Internet to the
recipient(s) of their choice. Animated E-greetings(R) products are currently
scheduled for launch later this year.
2. Greet Street Responsibilities
Greet Street agrees to undertake the following responsibilities:
a) Store creation
Greet Street will create and host a co-branded Web site (hereafter referred to
as "the Store"). The Store will be based upon Greet Street's current Web site,
but will include the Hotmail logo in the main category frame. Such logo will be
prominently positioned and displayed according to Greet Street's standards for
partner logos. The Store homepage will incorporate more extensive co-branding,
with the Hotmail logo displayed at least as prominently as the Greet Street
logo. Greet Street will provide Hotmail with specifications for any
Hotmail-specific copy or artwork required for inclusion in the Store. It is
anticipated that Hotmail will implement a frame at the top of the Store to allow
for easy return back to. Hotmail.
The Store will offer a wide array of digital greeting products, appropriate for
a broad consumer audience in addition to specific community niches. For the
purposes of rating the content of these
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1
<PAGE> 2
products, Greet Street's product database is segmented into categories that
roughly correspond to the commonly accepted G, PG and R ratings of motion
pictures. Greet Street agrees that it will not offer products within the Store
in those categories which Hotmail instructs Greet Street in writing not to
offer.
Hotmail understands that the design and structure of the Store is subject to
modification by Greet Street from time to time. However, Hotmail shall have the
right to review and approve the introduction of new product types that are
materially different from Greet Street's current offerings (Animated Greetings
will be considered part of Greet Street's current offerings. Hotmail will not
withhold such approval so long as the new offering (a) is demonstrably similar
in nature or an enhancement to existing digital greeting products, (b) does not
adversely impact Hotmail's operating resources and (c) does not violate or
conflict with any agreement to which Hotmail is a party or by which the Hotmail
service is bound.
b) Store management
Greet Street will be responsible for all management and operation of the Store,
including, for example, all customer service, content management and product
loading. Greet Street will (a) provide and manage all servers,
telecommunications, facilities maintenance, operations and technical support
related to the delivery of the Store, and (b) provide all technical, support,
sales, administrative and management personnel, facilities, equipment, supplies
and services as are necessary to develop, launch and maintain the Store as
contemplated by this Agreement.
Hotmail will make commercially reasonable efforts to ensure that Greet Street's
products may be received and displayed by users of the Hotmail service.
Greet Street will make commercially reasonable efforts to operate the Store in
compliance with commonly accepted technical performance standards and will make
commercially reasonable efforts to ensure that the technical performance
standards for the Store will meet or exceed the measured performance of Greet
Street's other commercially available Web sites.
c) Technical integration
Hotmail and Greet Street agree to mutually determine a minimum level of
integration between Hotmail's E-mail service and the Store's product ordering
and personalization process. For example, by way of illustration only, Hotmail
may choose to pass Greet Street the E-mail addresses of each user so that Greet
Street may automatically populate the "From" field of Dynamic E-mail products
purchased by that customer.
Greet Street and Hotmail agree to mutually explore further options for
integrating the Store with Hotmail's service.
d) Order tracking
Greet Street's server software will record every purchase that originates from
the Store. This includes purchases from customers who have clicked through to
the Store directly from Hotmail and from those who have "bookmarked" the Store
and returned there to make a purchase independently of Hotmail. Greet Street's
reporting requirements are detailed in Section 7.
2
<PAGE> 3
e) Restrictions on usage
Greet Street will implement terms and conditions of sale that are at least as
restrictive as those implemented from time to time by Hotmail in connection with
`spamming' and harassment by users of its Email service, and such terms and
conditions of sale shall specifically prohibit the use of the Store for the
purposes of `spamming' or harassment. Furthermore, Greet Street will make
commercially reasonable efforts to prevent usage of the Store for such purposes
and will reasonably cooperate with Hotmail to respond to any such `spamming' or
harassment that is determined to have originated from the Store.
3. Hotmail Responsibilities
a) Integration of the Store with Hotmail
The Store will be, accessed through each of the main communication areas of
Hotmail, including:
o E-mail Compose page;
o Compose Reply-Mail page;
o Address Book;
o Address QuickList.
In the event that Hotmail introduces additional communication utilities and
areas (for example, "buddy" lists and chat functionality), the parties will
mutually determine whether to link to the Store from these areas. Hotmail will
give reasonable consideration to Greet Street's request for such links but will
not be obligated to include them. Any new areas on the Hotmail site
(www.Hotmail.com) will be covered by Section 5 on exclusivity.
Hotmail agrees that the Store will be accessible with no more than one click
from each of the communication areas listed above and will be clearly and
prominently available to every Hotmail customer during every session in which
the communication areas are accessed:
o Hotmail users will access the Store via a "button" on each of the
communication areas that are hyperlinked to the Store. Such buttons will be
presented in such a manner as to make them appear an integral extension of
the Hotmail service and will be provided with the same level of prominence
as the other integral functions of those areas. For example, the button on
the E-mail Compose page will have the same level of prominence as the
current "E-mail Lookup" button.
o Greet Street and Hotmail will mutually determine the wording and/or
artwork to be placed on these buttons. If, at any time, Hotmail allows or
enables other third parties to display their trademarks and/or trademark
notices on those pages within the Hotmail service containing buttons linking
to the Store, then Hotmail shall enable Greet Street to display its
trademark "E-greetings(R)," and associated trademark notices, provided that
all use of Greet Street's trademarks shall be subject to Greet Street's
trademark usage guidelines and quality control
3
<PAGE> 4
standards. Where necessary, Hotmail will provide Greet Street with
specifications for any artwork or copy to be provided by Greet Street.
Greet Street understands that the design and overall structure of the Hotmail
service is subject to modification and that such modification may affect the
placement and size of certain elements of the interface. However, Hotmail agrees
that such modifications will not materially and adversely affect the overall
prominence and accessibility of the buttons and links to the Store.
b) Promotion
Hotmail will make commercially reasonable efforts to promote the use of Greet
Street' services on an on-going basis. Specifically, Hotmail undertakes the
following promotions as no cost to Greet Street:
i. "Welcome" page promotion
Hotmail is planning to introduce a "Welcome" page that will be displayed to
every user immediately after they have logged in to the Hotmail service.
It is currently anticipated that the Welcome page will be available on or before
the Launch Date of the Store. The purpose of the Welcome page is to provide
Hotmail with a premium area on which to communicate with customers and sell
advertising. For the purposes of this Agreement, the "Launch Date" is the
earlier of (a) date upon which the Store is first made publicly accessible from
Hotmail via such links as detailed above and (b) October 1, 1997.
Hotmail agrees to provide Greet Street with a total of [********************] of
promotion on the welcome page with a limited frequency of [*******] impressions
per user per consecutive running promotion. The days of promotion must be used
in increments of at least [**************] each and are limited to [*********]
different runs in total. Only [*************************************] will be
allowed in the first [********************] following the Launch Date, unless
the Welcome page is not available on or before the Launch Date. Such promotion
will be at the same level of prominence offered to most other third parties.
Hotmail will enable `pacing' of such impressions at such time as pacing is
readily available as part of Hotmail's course of normal business operations.
ii. Banner impressions
Hotmail will provide Greet Street with [***********************] banner
impressions each [*****] during the first [**************] following the Launch
Date. For the second [********************] following the Launch Date, Hotmail
will provide Greet Street with monthly advertising impressions equal to [***
*******************************************************************************
************************************************************] (this royalty is
described in Section 7 - Royalty Payments). By way of example only, if the
advance royalty guarantee payable for the [***************************] were to
equal [********], then Hotmail would provide Greet Street with [***********
***********] free impressions each month.
iii. Targeting of promotion and banner impressions
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
4
<PAGE> 5
The banner impressions to be provided to Greet Street by Hotmail. as described
above may be used by Greet Street at its discretion, provided that Hotmail is
given reasonable advance notice of Greet Street's requirements and that the
necessary impressions inventory has not already been pre-sold to another third
party. Hotmail further agrees that:
o Greet Street may elect to target advertising impressions to any of the
specific areas of the Hotmail service and demographic splits offered to
other Hotmail advertisers. Hotmail agrees that Greet Street may target at
least [******************] of its free advertising impressions to the E-mail
compose pages.
o After [********] days from the Launch Date, Greet Street may provide Hotmail
with the E-mail addresses of specific Store customers for exposure to
certain advertising and promotion impressions on Hotmail. For example, Greet
Street may elect to compile a list of frequent Store customers, infrequent
Store customers, etc. Greet Street will provide this information to Hotmail
on a timely basis, no more frequently than is mutually deemed acceptable, in
the format specified by Hotmail.
o Greet Street may elect to target promotions and banners to Hotmail users who
have never purchased from the Store.
If any component of Greet Street's marketing activities requires Hotmail's
assistance for implementation, Hotmail will have the option (but not the
obligation) to participate at its discretion. Hotmail will give reasonable
consideration to such participation. Greet Street agrees to share the learning
from any such marketing activities or testing in which Hotmail participates.
iv. Future Promotional Opportunities
If Hotmail creates event or holiday-specific areas within its service (for
example, Christmas promotional area, Valentine's Day promotional area, Mother's
Day promotional area, etc.), then Hotmail and Greet Street shall mutually
determine whether to establish a link to the Store from such areas. Hotmail will
give reasonable consideration to Greet Street's request for such links, but,
will not be obligated to include them
v. Reporting
Hotmail will create a monthly report detailing, for each calendar month
following the Launch Date:
o The number of page views for each promotional banner or button that is
hyperlinked to the Store;
o The number of transfers from each promotional banner or button that is
hyperlinked the Store;
o The total number of active Hotmail users (defined as those who access the
Hotmail service a minimum of once per week during such month);
o The total number of E-mail messages sent by Hotmail customers during such
month.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
5
<PAGE> 6
Hotmail will send this report to Greet Street no later than twenty (20) days
after the end of each month during the term of this Agreement following the
Launch Date. Hotmail will make commercially reasonable efforts to provide Greet
Street with page view and other reports on a more timely basis (e.g. daily or
weekly) if the reports are readily available as part of Hotmail's course of
normal business operations.
4. Other Promotional Undertakings
a) Promotional mailing to Hotmail users
Hotmail will work with Greet Street to send one promotional product (for
example, a digital postcard) to the entire Hotmail user base. This promotional
mailing may be divided into no more than [*******] distributions to take place
throughout the term of this Agreement. The first of these distributions shall
occur no later than [***********] after the Launch Date. [**********************
******************************************************************************
******************************************************************************
*****************************************************************************]
It is anticipated that the mailing will take the form of a personalized
communication from Hotmail to its users (e.g. "Dear Joe, The Hotmail Staff
wishes you a Happy Holidays) and will serve to promote the use of the Store
through Hotmail.
Greet Street agrees that all marketing to Hotmail users will be conducted
within the bounds of commonly accepted ethical marketing practices. Furthermore,
Greet Street will provide a clear method for Hotmail users within the Store to
opt out of receiving promotional mailings and agrees that any promotional E-mail
sent by Greet Street to Hotmail users will clearly describe how such users may
opt-out of receiving any further E-mail communication from Greet Street.
b) Greet Street advertising commitment
Greet Street agrees to spend no less than [********] to purchase additional
advertising on Hotmail over the term of this Agreement, beyond the free
advertising and promotion to be provided by Hotmail pursuant to Section 3(b)
(Promotion) above. [*********************************************************
****************************************************************] At least
[*******] of the total commitment must be spent within the [**************
******] following the Launch Date and an additional [*******] within the first
[******** ******] following the Launch Date.
5. Exclusivity
The Store represents an important new channel of distribution for Greet Street's
Dynamic E-mail products, and Greet Street is willing to undertake the necessary
investment to develop this distribution channel, conditioned upon Hotmail's
agreement as follows:
[**************************************************************************
********************************************************************************
******************************************************************************
******************************************************************************
*******************************************************]
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
6
<PAGE> 7
[******************************************************************************
*****************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************
********************************************************************************
****************************************************************************
************************************************************************
*************************************************************************
********************************************************************************
*******************************************************************************]
6. Customer Information and Marketing
Greet Street will provide Hotmail, on a quarterly basis, an electronic report
which includes the E- mail addresses of all Hotmail users who have (a) made
purchases or (b) sent free cards in the Store. In addition, after 120 days from
the Launch Date, Greet Street will provide on a quarterly basis Greet Street's
standard aggregate report on all Hotmail user information collected that will
include a card category, purchase volumes by date, average purchase frequency
and a report of other services used (e.g. reminders for Holidays, birthdays
etc.). However, due to privacy considerations, this report will not include the
details of specific customer orders, purchase volumes or order history. Greet
Street will provide Hotmail with such reports on a more timely basis (e.g.,
monthly, weekly or daily), if the reports are readily available as part of Greet
Street's course of normal business operations.
Any personal information collected by Greet Street from Hotmail customers who
purchase from the Store will remain confidential to Greet Street. For example,
by way of illustration only, credit card details, birthdays, details of friends
& relatives and other personal information are provided by customers to the
Store on a confidential basis and will not be provided to Hotmail.
Hotmail warrants that it shall keep all customer information provided by Greet
Street confidential and will not share such information with any third party,
nor sell advertising to any party engaged in the Dynamic E-mail business based
upon such information both during the term of and for [*************] following
the expiration of this agreement. However, Hotmail may, on a confidential basis,
share aggregate information (as described above) provided by Greet Street with
parties who are not engaged in the Dynamic E-mail business.
In addition, Hotmail shall not engage, nor shall it permit or enable any third
party to engage, in direct promotion, advertising or other forms of marketing,
which (i) is based upon the customer information provided to it by Greet Street,
that would be reasonably likely to jeopardize Greet Street's relationships with
its customers, or (ii) includes, mentions or refers to, either directly or
indirectly, Greet Street, or any of Greet Street's other trademarks, without the
prior written approval of Greet Street, which approval will not be withheld
unreasonably.
7. Royalty Payments
[****************]
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
7
<PAGE> 8
[**************************************************************************
*********************************************
* ****************************** ********
* ************************** *******
* ***************************** ********]
[*******************************************************************************
**************************************************************************
*****************************************************************************
******************************************************************************
***************************************************************************
****************************************************************************
******************************************************************************
*****************************************************************************
*******************************************************************************
*******************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
******************************************************************************
********************************************************************************
**************************************************************************
****************************************************************************
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****************************************************************************
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****************************************]
b) Royalties
As consideration for the performance by Hotmail of its obligations under this
Agreement, Greet Street will pay a royalty to Hotmail equal to [*************
********************************************************************************
*******************************************************************************
*******************************************************************************
***************************************************************************
******************************************************]
Greet Street will provide Hotmail with a monthly report with the following
information:
- - The total number of transfers received from Hotmail and total number of
unique visits to the Store;
- - The total number of completed transactions within the Store;
- - The total gross revenues booked from these completed transactions, and;
- - Such other information as may be necessary to calculate the royalties payable
(or credited against advances paid) to Hotmail under this Agreement.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
8
<PAGE> 9
Greet Street will send this report to Hotmail, together with a check payable to
Hotmail for the amount equal to any royalties due on such revenue as specified
above, no later than thirty (30) days after the end of each calendar quarter
following the Launch Date.
Hotmail will have the right, at its own expense, to direct an independent
certified public accounting firm to inspect and audit of all the accounting and
sales books and records of Greet Street that are relevant to gross revenues
booked by Greet Street from the sale of product in the Store; provided that (a)
any such inspection and audit will be conducted during regular business hours
in such a manner as not to interfere with normal business activities; (b) in no
event will audits be made hereunder more frequently than once each calendar
year; (c) if any audit should disclose an underpayment, Greet Street will
immediately pay such amount to Hotmail; and (d) the reasonable fees and expenses
relating to any audit which reveals an underpayment in excess of five percent
(5%) of the amount owing will be borne entirely by Greet Street.
8. Term, Termination and Renewal
This Agreement shall commence on August 21, 1997 and terminate one year after
the termination date.
In the event of any material breach hereof by a party, the other party will have
the right to terminate this Agreement following thirty (30)-days' written notice
and opportunity to cure. Termination will not affect accrued payment
obligations, but no further advance royalty payments shall be due following
termination. In the event Greet Street terminates this Agreement as a result of
an uncured breach by Hotmail, Hotmail shall refund all advances paid to it by
Greet Street, less the amount of royalties, if any, that shall have been
credited or recouped against such amounts as of the effective date of
termination.
If, other than under Title 11 of the United States Code, either party becomes
subject to any voluntary or involuntary insolvency, cession, bankruptcy, or
similar proceedings, then the other party shall have the right to immediately
terminate this Agreement.
At the expiration of this Agreement, Greet Street shall have the right to
notice of, and to bid for a renewal term to this Agreement or for any Dynamic
E-mail or other electronic greetings service transaction that Hotmail offers to
any third party. Hotmail agrees that it will not enter into a binding contract
or commitment with any third party that prevents or otherwise excludes, Greet
Street from bidding for the right to operation such a service on Hotmail.
9. Confidentiality
Both parties shall treat as confidential and proprietary all confidential
information provided by one party to the other in connection with this Agreement
and the party receiving such information shall not use or disclose such
information to any third parties (except to the extent otherwise permitted by
this Agreement) without the prior written consent of the disclosing party,
unless such information is or becomes generally known to the public or is
independently
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
9
<PAGE> 10
developed or generated by the receiving party by personnel who have no access to
the information disclosed to the receiving party or as otherwise required by
law.
In addition, neither party will reveal the specific financial terms of this
Agreement to a third party, with limited exceptions to allow the party to reveal
such information to its legal and financial advisers, accountants, and actual or
prospective investors and lenders, to permit a party to enforce its rights
hereunder, and otherwise as required by law.
10. Licenses
If at any time, Hotmail grants Greet Street the right to include its trademark
notices within the Hotmail, service as contemplated in Section 3a, then Greet
Street will grant Hotmail an appropriate trademark usage license.
Hotmail hereby grants to Greet Street a nonexclusive, royalty-free, worldwide
license under all of Hotmail's intellectual property rights to use, modify,
reproduce, publicly display, publicly perform, distribute and transmit the
Hotmail trademark and logo in the Store, and connection with the distribution,
marketing and promotion of the Store, subject in each case to compliance with
Hotmail brand guidelines as disclosed to Greet Street in writing from time to
time.
11. Representations and Warranties
Each party represents and warrants to the other party that such party has the
full corporate right, power and authority to enter into this Agreement and to
perform the acts required of it hereunder; and the execution of this Agreement
by such party, and the performance by such party of its obligations and duties
hereunder, do not and will not violate any agreement, binding obligation or
commitment to which such party is a party or by which it is otherwise bound; and
when executed and delivered by such party, this Agreement will constitute the
legal, valid and binding obligation of such party, enforceable against such
party in accordance with its terms, except to the extent that such enforcement
may be subject to applicable federal or state bankruptcy, insolvency,
reorganization, fraudulent conveyance or other laws or court decisions relating
to or affecting the rights of creditors generally, and such enforcement may be
limited by equitable principles of general applicability. In addition, Greet
Street represents and warrants to Hotmail that it is the owner of all right,
title and interest in and to, or is the licensee with the right to use,
reproduce, distribute and sell as contemplated in this Agreement, the Dynamic
Email products to be marketed and sold in the Store, and that the Dynamic Email
products (prior to their modification or customization by Hotmail customers) do
not and will not (x) infringe on or violate any intellectual property right of
any third party or (y) violate any applicable law, regulation or third party
right when used in a manner consistent with this Agreement. In the event that
any party becomes aware of any such infringement (or alleged infringement) or
violation, such party will promptly notify the other party and shall provide all
information relating to such matters as such other party may reasonably request.
EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 11, NEITHER PARTY MAKES, AND EACH
PARTY HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING THE PRODUCTS AND SERVICES CONTEMPLATED BY THIS AGREEMENT,
INCLUDING ANY IMPLIED
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
10
<PAGE> 11
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE
OF PERFORMANCE.
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 ANY
PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR
ANTICIPATED PROFITS OR LOST BUSINESS.
12. Indemnification
Subject to the limitations set forth below, Greet Street, at its own expense,
will defend, or at its option settle, any claim, suit or proceeding against
Hotmail and pay any final judgment entered or settlement against Hotmail in any
such claim, suit or proceeding, to the extent that such claim, suit or
proceeding is based upon (a) the infringement of any trademark or service mark
rights by the E-greetings trademark or the Greet Street logo; (b) the
infringement or misappropriation of any patent, copyright or trade secret, or
violation of any other third party right, in connection with the operation of
the Store; or (c) any other third party claim arising out of, relating to or
resulting from the operation of the Store, except to the extent such claim
arises out of or results from the negligence or willful misconduct of Hotmail,
including any breach by Hotmail of its obligations under this Agreement. Greet
Street will have no obligation to Hotmail pursuant to this Section 12 unless:
(x) Hotmail gives Greet Street prompt written notice of the claim, suit or
proceeding and cooperates reasonably with Greet Street; and (y) Greet Street is
given the right to control and direct the investigation, preparation, defense
and settlement of the claim, suit or proceeding.
Subject to the limitations set forth below, Hotmail, at its own expense, will
defend, or at its option settle, any claim, suit or proceeding against Greet
Street and pay any final judgment entered or settlement against Greet Street in
any-such claim, suit or proceeding, to the extent that such claim, suit or
proceeding is based upon (a) the infringement of any trademark or service mark
rights by the Hotmail trademark or logo; (b) the infringement or
misappropriation of any patent, copyright or trade secret or the violation of
any other third party right; or (c) any third party claim arising out of,
relating to or resulting from the operation of Hotmail's service (excluding the
Store), except to the extent such claim arises out of or results from the
negligence or willful misconduct of Greet Street including any breach by Greet
Street of its obligations under this Agreement. Hotmail will have no obligation
to Greet Street pursuant to this Section 12 unless: (x) Greet Street gives
Hotmail prompt written notice of the claim, suit or proceeding and cooperates
reasonably with Hotmail; and (y) Hotmail is given the right to control and
direct the investigation, preparation, defense and settlement of the claim, suit
or proceeding.
13. Press Release
Upon the execution of this Agreement the parties will work together to write a
joint press release, describing the relationship created by this Agreement. The
parties agree to collaborate to write additional joint press releases on an
on-going basis.
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
11
<PAGE> 12
14. Miscellaneous Provisions
a) Intellectual Property
Except as expressly provided in Section 11 of this Agreement, Greet Street will
acquire no title to or interest in any of Hotmail's copyrights, trademarks or
other intellectual property rights and Hotmail shall acquire no title to or
interest in any of Greet Street's copyrights, trademarks or other intellectual
property rights.
b) Parties not Joint Venturers
This Agreement is intended as a distribution agreement between the parties, and
nothing contained herein shall be construed so as to make the parties partners
or joint venturers or agents of one another.
c) Modifications and Waivers
No waiver or modification of any of the terms of this Agreement shall be valid
unless in writing, signed by both parties. Failure by either party to enforce
any rights under this Agreement shall not be construed as a waiver of such
rights.
d) Invalidity of Separable Provisions
If any provision of this Agreement is for any reason held to be invalid, such
provision shall be enforced to the maximum extent permissible and the remaining
provisions of this Agreement will remain in full force and effect, provided that
the essential purposes of this Agreement may be maintained.
e) Entire Understanding; Amendments
This Agreement contains the entire understanding of the parties with respect to
its subject matter, and supersedes all prior or contemporaneous understandings
and communications between the parties on that subject matter. No provision of
this Agreement may be changed or modified except as provided in a separate
writing, signed by the parties. There are no representations, warranties,
promises, or undertakings between the parties other than those contained in this
Agreement.
f) Choice of Law and Jurisdiction
This Agreement shall be construed and governed in accordance with the laws of
the State of California as applied to contracts made and performed therein,
without reference to its conflict of laws principles. Both parties hereby submit
to jurisdiction in State and Federal Courts in California.
g) Attorneys' Fees
12
<PAGE> 13
If any legal action at law or in equity, arbitration or other action or
proceeding is necessary to enforce the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees in addition to costs of
suit and to any other relief which that party may be entitled.
h) Force Majeure
Neither party shall be liable for any failure or delay in the performance of
obligations due to force majeure, namely any cause or matter not within its
reasonable control and not reasonably foreseeable by the party. Such a party
shall be entitled to suspend performance of its obligations under this Agreement
to the extent that and for so long as effected by the force majeure.
i) Construction
The captions and section headings of this Agreement are intended for ease of
reference only and shall not be used in the interpretation or construction of
this Agreement. This Agreement shall be construed as a whole, according to its
fair meaning, and not in favor of or against any party. By way of example and
not in limitation, this Agreement shall not be construed in favor of the party
receiving a benefit nor against the party responsible for the drafting of any
particular language in this Agreement.
j) Counterparts
This Agreement may be executed in one or more counterparts, each of which will
be deemed an original but all of which together will constitute one and the same
instrument.
k) Changes over Time
The parties acknowledge that because of the rapid pace of technological change
and evolution in the industries associated with the Internet and software
related thereto, many of the underlying facts and circumstances (including
assumptions regarding the facts and circumstances) that were the basis for the
allocation of various rights and obligations pursuant to this Agreement are
likely to change over time. In drafting this Agreement, the parties have
addressed relevant facts and issues as they exist with current technologies and
today's business models; however, the parties also intend for this Agreement to
remain in force throughout the term as such technologies and business models
change over time, with appropriate modifications to reflect such equitable
adjustments as are required to maintain a substantially comparable allocation of
rights and obligations in light of changed circumstances. The parties do not
intend for this Agreement to be effectively nullified or abrogated because of
changed circumstances, but rather intend that the intent and purpose of this
Agreement be preserved as circumstances change. To such end, the parties agree
that certain provisions regarding the parties' respective rights and obligations
under this Agreement, while drafted to address current circumstances, are also
intended to reflect general principles to be implemented by the parties in a
pragmatic and meaningful way as such circumstances change. Notwithstanding the
foregoing, the provisions of this Section 14(i) shall not apply to those rights
and/or obligations that should not be affected by changes in technology and/or
business models.
13
<PAGE> 14
IN WITNESS HEREOF, the parties have executed this Agreement as of the date set
forth above.
Hotmail Corporation The Virtual Mall, Inc.
(d/b/a Greet Street)
By: /s/ Scott Wiseman By: /s/ Paul Lipman
--------------------------------- --------------------------
Paul Lipman,
Its: Director, Business Development Director of Business Development
14
<PAGE> 15
ADDENDUM TO AGREEMENT
BETWEEN
HOTMAIL CORPORATION AND GREET STREET
As permitted by section 14e. of the Agreement Between Hotmail Corporation and
Greet Street, that became effective on August 21st, 1997, the parties hereby
agree to amend the Agreement as of August 1, 1998 (Addendum Effective Date) as
follows:
Modifications and Amendments
The following paragraph will be added at the end of Section 3bi:
The current promotion of an "Email greetings" button on Hotmail's "Centerpoint"
page will be deemed (acceptable as a "welcome" page promotion each day of
Centerpoint promotion will count towards Greet Street's aforementioned [*******]
of promotion. This button will remain in effect until October 1998. As of the
effective date of this addendum, Greet will have a total of [*********] Mail-me
banner campaigns consisting of a minimum of [********] impressions per campaign.
The following paragraph will be added at the end of Section 3bii:
Hotmail agrees to bonus Greet Street an additional 1 million banner impressions
per month as of the Addendum Effective Date for the term of the agreement. Greet
Street may elect to accrue these additional impressions and use them all in one
month during the contract term.
Section 4a shall be deleted.
The following paragraph will be added at the end of Section 7a:
Greet Street will make an additional payment to Hotmail in the amount of
[*******] on October 1, 1998.
The following paragraph will be added at the end of Section 8 paragraph 1:
"This Agreement Shall commence on August 21 and terminate one (1) year after the
Launch Date" Shall be modified as follows:
This Agreement shall commence on August 21 and will expire on November 1, 1998.
The agreement will renew automatically on November 1, 1998 for successive thirty
(30) day periods unless one party serves written notice to the other party of
its intention not to renew at least ten (10) days. prior to the end of the
period. The additional renewal periods are subject to the following contractual
modifications:
Substitute Section 7 with:
Greet Street agrees to pay Hotmail a fixed fee of [*******] per month
([*******] for the month of October, as specified above).
[*] - Indicates confidential information that has been
omitted and filed separately with the Securities
and Exchange Commission.
<PAGE> 16
IN WITNESS WHEREOF, each of the parties hereto have executed this
Addendum as of the Addendum effective date.
Hotmail Corporation Greet Street
By: /s/ Sabeer Bhatia By: /s/ Paul Lipman
---------------------------------- -------------------------
Name: Sabeer Bhatia Name: Paul Lipman
---------------------------------- -------------------------
Title: GM, Hotmail - MS Title: VP, Consumer Business
--------------------------------- -----------------------
Date: 8/11/98 Date: 8/7/98
---------------------------------- -------------------------
