<PAGE> 1
As filed with the Securities and Exchange Commission on September 27, 1999.
File No. 333-81151
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FREESHOP.COM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
WASHINGTON 7310 91-1809146
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
<TABLE>
<S> <C>
JOHN WADE
CHIEF FINANCIAL OFFICER
FREESHOP.COM, INC.
95 SOUTH JACKSON STREET 95 SOUTH JACKSON STREET
SUITE 300 SUITE 300
SEATTLE, WASHINGTON 98104 SEATTLE, WASHINGTON 98104
(206) 441-9100 (206) 441-9100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE (NAME, ADDRESS, INCLUDING ZIP CODE, AND
NUMBER, TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL FOR SERVICE)
EXECUTIVE OFFICES)
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COPIES TO:
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<S> <C>
CHRISTOPHER J. BARRY STEPHEN M. GRAHAM
BRYCE L. HOLLAND, JR. PERKINS COIE LLP
DORSEY & WHITNEY LLP 1201 THIRD AVENUE, 48TH FLOOR
U.S. BANK CENTRE, SUITE 4200 SEATTLE, WASHINGTON 98101
1420 FIFTH AVENUE (206) 583-8888
SEATTLE, WASHINGTON 98101
(206) 903-8800
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following 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 for the same offering. [ ]
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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. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table states the costs and expenses, other than the
underwriting discounts and commissions, payable by the registrant in connection
with the sale of common stock being registered by this registration statement.
All amounts shown are estimates, except the Securities and Exchange Commission
registration fee, the NASD filing fee and the Nasdaq National Market listing
fee.
<TABLE>
<CAPTION>
AMOUNT
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<S> <C>
Securities and Exchange Commission Registration Fee......... $ 12,788
NASD Filing Fee............................................. 5,100
Nasdaq National Market Listing Fee.......................... 87,500
Legal Fees and Expenses..................................... 250,000
Accountants' Fees and Expenses.............................. 200,000
Blue Sky Filing and Counsel Fees and Expenses............... 5,000
Printing and Engraving Expenses............................. 170,000
Transfer Agent and Registrar Fees........................... 3,500
Miscellaneous Expenses...................................... 16,112
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Total............................................. $750,000
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act (the "Washington Act") authorize a court to award, or a
corporation's board of directors to grant, indemnification to directors and
officers on terms sufficiently broad to permit indemnification under certain
circumstances for liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"). Article 6 of the registrant's Second Amended and
Restated Articles of Incorporation and Article IX of the registrant's Amended
and Restated Bylaws together provide for indemnification of the registrant's
directors, officers, employees and agents to the maximum extent permitted by
Washington law. The registrant has entered into agreements with its directors
and officers arising out of their service as officers and director, as
applicable, and has agreed to advance expenses to defend claims subject to
indemnification. The directors and officers of the registrant also may be
indemnified against liability they may incur for serving in that capacity
pursuant to a liability insurance policy maintained by the registrant for such
purpose.
Section 23B.08.320 of the Washington Act authorizes a corporation to limit
a director's liability to the corporation or its shareholders for monetary
damages for acts or omissions as a director, except in certain circumstances
involving intentional misconduct, self-dealing or illegal corporate loans or
distributions, or any transaction from which the director personally receives a
benefit in money, property or services to which the director is not legally
entitled. Article 6 of the registrant's Articles of Incorporation contains
provisions implementing, to the fullest extent permitted by Washington law, such
limitations on a director's liability to the registrant and its shareholders.
Reference is also made to the form of Underwriting Agreement filed as
Exhibit 1.1 to this Registration Statement for certain provisions regarding the
indemnification of officers and directors of the registrant by the underwriters
in connection with matters specifically provided in writing by the underwriters
for inclusion in this Registration Statement.
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<PAGE> 3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since the registrant's inception in June 1997, the registrant has issued
and sold the following unregistered securities:
1. On June 30, 1997, the registrant issued 4,600,820 shares of common stock
and 774,194 shares of series A convertible preferred stock to Online
Interactive, Inc. for aggregate consideration consisting of the contribution to
the registrant of the operating assets and liabilities of the FreeShop Division
of Online Interactive, Inc. The 774,194 shares of series A convertible preferred
stock were convertible into the same number of shares of common stock.
2. On July 18, 1997, the registrant issued 387,097 shares of Common Stock
to Timothy C. Choate and 387,097 shares of common stock to John P. Ballantine
upon conversion of series A preferred stock held by each of them.
3. During the period July 1997 through June 1998, the registrant issued an
aggregate of 964,872 shares of common stock to 21 investors for a consideration
of $1.025 per share, or an aggregate of $989,003.
4. On August 22, 1997, the registrant issued options for 24,391 shares of
common stock exercisable at a price of $1.025 per share, expiring February 22,
1998, to each of Othneil D. Palomino and Dwayne Walker. These options were
issued outside of the registrant's 1997 stock option plan.
5. On September 7, 1997, the registrant issued options for 146,340 shares
of common stock exercisable at a price of $1.025 per share, expiring October 30,
1997, to Michael Tannen and Johan Liedgren. The expiration of these options was
extended to January 15, 1998. These options were issued outside of the
registrant's 1997 stock option plan.
6. On October 15, 1997, the registrant issued Warrants for 2,400 shares of
common stock exercisable at a price of $1.02 per share, expiring October 23,
2002, to Hallco Leasing Corporation in partial consideration of an equipment
lease.
7. During the period October 1997 through December 1997, the registrant
issued a total of 31,841 shares of common stock to its landlord, Merrill Place
LLC, in lieu of rent payments in the aggregate amount of $32,637.
8. On January 16, 1998, the registrant issued Warrants for 1,300 shares of
common stock exercisable at a price of $1.02 per share, expiring January 16,
2002, to Karrie Lee for consulting services.
9. On January 19, 1998, the registrant issued Warrants for 14,000 shares of
common stock exercisable at a price of $1.02 per share, expiring January 23,
2003, to Hallco Leasing Corporation in partial consideration of an equipment
lease.
10. On January 23, 1998, the registrant issued Warrants for 400 shares of
common stock exercisable at a price of $1.02 per share, expiring December 31,
2002, to Dennis Green for consulting services.
11. On January 23, 1998, the registrant issued Warrants for 10,000 shares
of common stock exercisable at a price of $1.02 per share, expiring January 23,
2002, to Employco, Inc. for consulting services.
12. On March 17, 1998, the registrant issued a $50,000 convertible
promissory note to Oki Enterprises, LLC, with a maturity date of March 1, 2000.
The principal balance of the note was convertible at the discretion of the
holder at any time prior to the maturity date into shares of the registrant's
preferred stock on the same terms at which the registrant may then be offering
preferred stock to other investors.
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<PAGE> 4
13. On June 30, 1998, the registrant issued 1,456 shares of common stock to
Anthony Lee Simonelli in consideration of consulting services valued at $1,492
rendered to the registrant.
14. During the period June 1998 through September 1998, the registrant
issued an aggregate of 612,674 shares of common stock to 22 investors at $1.50
per share for aggregate consideration of $919,004.
15. On September 18, 1998, the registrant issued Warrants for 10,000 shares
of common stock exercisable at a price of $1.50 per share, expiring September
18, 2003, to Imperial Bank in partial consideration of a credit facility.
16. On December 11, 1998, the registrant issued 1,619,387 shares of common
stock, and Warrants to purchase 1,174,143 shares of common stock at $4.29565 per
share, 716,290 shares at $4.986 per share and 1,572,822 shares at $5.522975 per
share and 13,332 shares of common stock at $3.965 per share to Fingerhut for an
aggregate consideration of $4,000,000.
17. In February 1999, the registrant issued an aggregate of 160,000 shares
of common stock to a total of ten investors at $2.50 per share for aggregate
consideration of $400,000.
18. On April 5, 1999, the registrant issued 20,000 shares of common stock
to Oki Enterprises, LLC, in exchange for the $50,000 convertible promissory note
referenced in paragraph 12 above.
19. On May 6, 1999, in accordance with an Asset Purchase Agreement among
the registrant, Commonsite, LLC and a shareholder of Commonsite, the registrant
issued 52,920 shares of common stock to Commonsite in connection with the
registrant's purchase of certain of Commonsite's assets.
20. On May 24, 1999, the registrant issued 293,536 shares of series B
convertible preferred stock in lieu of common stock to Fingerhut for aggregate
consideration of $5,043,704 upon the exercise by Fingerhut of a Warrant
identified in paragraph 16 above. Each share of series B convertible preferred
stock is convertible into four shares of common stock.
21. On May 25, 1999, the registrant issued 10,000 shares of common stock to
Employco for aggregate consideration of $10,250 upon the exercise by Employco of
Warrants identified in paragraph 11 above.
22. On June 8, 1999, the registrant issued 179,072 shares of series B
convertible preferred stock in lieu of common stock to Fingerhut for aggregate
consideration of $3,571,420 upon the exercise by Fingerhut of a warrant
identified in paragraph 16 above. Each share of series B convertible preferred
stock is convertible into four shares of common stock.
23. Since inception, the registrant has issued an aggregate of 1,839,883
options to purchase common stock, with exercise prices ranging from $0.15 to
$4.27 per share, to employees, directors, advisors and service providers under
the registrant's 1997 stock option plan. Of these options, options for 811,492
shares have been canceled without being exercised, options for 75,102 shares
have been exercised and options for 953,289 shares remain outstanding.
The sales and issuances of securities described in paragraphs 3, 14, 16,
17, 19, 20 and 22 above were exempt from Securities Act registration pursuant to
Rule 506 of Regulation D under the Securities Act. The sales and issuances of
securities described in paragraphs 1, 2, 6-13, 15, 18 and 21 above were exempt
from Securities Act registration under Section 4(2) of the Securities Act, on
the basis that the transactions did not involve a public offering. The sales and
issuances of securities described in paragraphs 4, 5 and 23 above were exempt
from Securities Act registration under Rule 701 under the Securities Act, on the
basis that these options were offered and sold in accordance with a written
compensatory benefit plan or contract.
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<PAGE> 5
No underwriters were used in connection with these sales and issuances.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
1.1** Form of Underwriting Agreement.
3.1** Second Amended and Restated Articles of Incorporation of
registrant.
3.2** Amended and Restated Bylaws of registrant.
4.1** Specimen Stock Certificate.
4.2** Form of Common Stock Warrant.
5.1** Opinion of Dorsey & Whitney LLP.
10.1** Form of Indemnification Agreement between the registrant and
each of its directors.
10.2** 1997 Stock Option Plan, as amended.
10.3** Form of Stock Option Agreement.
10.4** Investor Subscription Agreement, dated December 10, 1998,
between registrant and Fingerhut Companies, Inc.
10.5** Warrant Agreement, dated December 10, 1998, between
registrant and Fingerhut Companies, Inc.
10.6** Stockholders Agreement, dated December 10, 1998, among
registrant, Timothy C. Choate, John P. Ballantine and
Fingerhut Companies, Inc.
10.7** Asset Purchase Agreement, dated May 5, 1999, among
registrant, Travel Companions International, Inc., Jeff Mohr
and Janet Mohr.
10.8** Asset Purchase Agreement, dated May 6, 1999, among
registrant, Commonsite, LLC and Alan Bennett.
10.9** Registration Rights Agreement, dated May 6, 1999, between
registrant and Commonsite, LLC.
10.10** Loan and Security Agreement, dated September 18, 1998,
between registrant and Imperial Bank.
10.11** Lease Agreement, dated September 23, 1997 and amended as of
February 16, 1999, between registrant and Merrill Place LLC.
10.12** Promotion Agreement, dated May 18, 1998 and amended as of
June 30, 1998 and September 30, 1998, between registrant and
CNET, Inc.
10.13+** Linkshare Network Membership Agreement, dated September 23,
1998, between registrant and Linkshare Corporation.
10.14** Letter Agreement dated June 18, 1999 between registrant and
Fingerhut.
10.15** Escrow Agreement dated June 18, 1999 between registrant and
Fingerhut.
10.16** Common Stock Purchase Warrant dated January 26, 1998 in
favor of Karrie Lee.
10.17** Warrant to Purchase Stock dated September 18, 1998 in favor
of Imperial Bank.
10.18** Common Stock Purchase Warrant dated January 23, 1998 in
favor of Hallco Leasing Corporation.
10.19** Common Stock Purchase Warrant dated December 4, 1997 in
favor of Hallco Leasing Corporation.
10.20** Common Stock Purchase Warrant dated January 26, 1998 in
favor of Employco, Inc.
10.21+ Marketing Agreement with NewSub Services, Inc. effective as
of June 1, 1999.
23.1** Consent of PricewaterhouseCoopers LLP, independent auditors.
23.2** Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
24.1** Power of Attorney (included on the signature page).
27.1** Financial Data Schedule.
</TABLE>
- -------------------------
** Previously filed.
+ Confidential treatment has been requested as to certain portions of this
exhibit. Omitted portions have been filed separately with the Securities and
Exchange Commission.
B. Financial Statement Schedules.
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions, are inapplicable or not material, or the information
called for thereby is otherwise included in the financial statements and
therefore has been omitted.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names by the underwriter to permit prompt
delivery to each purchaser.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be a part of this
Registration Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Seattle,
state of Washington, on September 24, 1999.
FREESHOP.COM, INC.
By: /s/ TIMOTHY C. CHOATE
------------------------------------
Timothy C. Choate
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
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<CAPTION>
SIGNATURE TITLE DATE
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<C> <C> <S>
/s/ TIMOTHY C. CHOATE Chairman, President and September 24, 1999
- ----------------------------------------------------- Chief Executive Officer
Timothy C. Choate (principal executive
officer)
/s/ JOHN A. WADE Secretary, Vice President, September 24, 1999
- ----------------------------------------------------- Finance and Chief
John A. Wade Financial Officer
(principal finance and
accounting officer)
* Director September 24, 1999
- -----------------------------------------------------
John P. Ballantine
* Director September 24, 1999
- -----------------------------------------------------
Kirk M. Loevner
* Director September 24, 1999
- -----------------------------------------------------
John B. Balousek
Director
- -----------------------------------------------------
William J. Lansing
* /s/ TIMOTHY C. CHOATE
- -----------------------------------------------------
Attorney-in-fact
</TABLE>
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<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
1.1** Form of Underwriting Agreement.
3.1** Second Amended and Restated Articles of Incorporation of
registrant.
3.2** Amended and Restated Bylaws of registrant.
4.1** Specimen Stock Certificate.
4.2** Form of Common Stock Warrant.
5.1** Opinion of Dorsey & Whitney LLP.
10.1** Form of Indemnification Agreement between the registrant and
each of its directors.
10.2** 1997 Stock Option Plan, as amended.
10.3** Form of Stock Option Agreement.
10.4** Investor Subscription Agreement, dated December 10, 1998,
between registrant and Fingerhut Companies, Inc.
10.5** Warrant Agreement, dated December 10, 1998, between
registrant and Fingerhut Companies, Inc.
10.6** Stockholders Agreement, dated December 10, 1998, among
registrant, Timothy C. Choate, John P. Ballantine and
Fingerhut Companies, Inc.
10.7** Asset Purchase Agreement, dated May 5, 1999, among
registrant, Travel Companions International, Inc., Jeff Mohr
and Janet Mohr.
10.8** Asset Purchase Agreement, dated May 6, 1999, among
registrant, Commonsite, LLC and Alan Bennett.
10.9** Registration Rights Agreement, dated May 6, 1999, between
registrant and Commonsite, LLC.
10.10** Loan and Security Agreement, dated September 18, 1998,
between registrant and Imperial Bank.
10.11** Lease Agreement, dated September 23, 1997 and amended as of
February 16, 1999, between registrant and Merrill Place LLC.
10.12** Promotion Agreement, dated May 18, 1998 and amended as of
June 30, 1998 and September 30, 1998, between registrant and
CNET, Inc.
10.13+** Linkshare Network Membership Agreement, dated September 23,
1998, between registrant and Linkshare Corporation.
10.14** Letter Agreement dated June 18, 1999 between registrant and
Fingerhut.
10.15** Escrow Agreement dated June 18, 1999 between registrant and
Fingerhut.
10.16** Common Stock Purchase Warrant dated January 26, 1998 in
favor of Karrie Lee.
10.17** Warrant to Purchase Stock dated September 18, 1998 in favor
of Imperial Bank.
10.18** Common Stock Purchase Warrant dated January 23, 1998 in
favor of Hallco Leasing Corporation.
10.19** Common Stock Purchase Warrant dated December 4, 1997 in
favor of Hallco Leasing Corporation.
10.20** Common Stock Purchase Warrant dated January 26, 1998 in
favor of Employco, Inc.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
10.21+ Marketing Agreement with NewSub Services, Inc. effective as
of June 1, 1999.
23.1** Consent of PricewaterhouseCoopers LLP, independent auditors
23.2** Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).
24.1** Power of Attorney (included on the signature page).
27.1** Financial Data Schedule.
</TABLE>
- -------------------------
** Previously filed.
+ Confidential treatment has been requested as to certain portions of this
Exhibit. Omitted portions have been filed separately with the Securities and
Exchange Commission.
<PAGE> 1
MARKETING AGREEMENT
MARKETING AGREEMENT ("Agreement") as of June 1, 1999 (the "Effective Date")
between Magazineoutlet.com, a division of NewSub Magazine Services LLC,
(collectively "MO"), located at 5 High Ridge Park, Stamford, CT 06905, and
Freeshop.com, Inc. ("FreeShop.com"), a Washington corporation, located at 95
South Jackson Street, Suite 300, Seattle, Washington 98104 ("FreeShop.com").
FreeShop.com wishes to offer subscriptions to consumer magazines on its web site
located at www.freeshop.com, and replacement and successor addresses thereto
(the "FreeShop.com Site") and forward orders for said magazines to MO, as well
as to test the viability of additional marketing programs.
1. MAGAZINE OFFERINGS.
1.1. Presentation Materials. MO shall provide FreeShop.com with MO
logo and graphics, logos of consumer brands offered by MO,
consumer magazine cover graphics, banners, offer copy, offer
elements and other copy, all of which may be updated in the
reasonable discretion of MO from time-to-time (collectively, the
"Presentation Materials"), for promotion of the consumer title
magazine subscription offers on the FreeShop.com Site. MO will
transmit updated Presentation Materials in a mutually agreed
format to FreeShop.com via email or FTP from time to time, and
will promptly notify FreeShop.com upon transmission.
1.2. Magazine Offers. Using the Presentation Materials, FreeShop.com
will market and offer to FreeShop.com Site visitors
("Offer(s)"), in accordance with the terms and conditions of the
Agreement, the magazine subscriptions authorized for promotion
on FreeShop.com by MO's best efforts, which are available
through MO's own web site at www.magazineoutlet.com as updated
from time to time hereafter with the consent of MO which will
not be unreasonably withheld, conditioned or denied (the
"Magazines"). FreeShop.com has the right in their sole
discretion to refuse advertising or to request removal of
advertising from the FreeShop.com site for any reason.
FreeShop.com'sonline marketing and distribution partners, and
their respective agents have the right in their sole discretion
to refuse advertising or to request removal of advertising for
specific Magazines from their site respectively for any reason.
FreeShop.com distribution partners and their respective agents
may not alter, modify or change the offers or promotion of those
offers in any way and FreeShop.com is solely responsible for
enforcing this.
2. OFFER PLACEMENT.
2.1. MO Store. Subject to the approval of MO not to be unreasonably
withheld, conditioned or denied, FreeShop.com shall design,
build, host and operate at its sole expense a premium, branded
section of the FreeShop.com Site to be known as the Freeshop.com
magazine store, which store shall be devoted entirely to
offering and selling the Magazines and shall feature e-commerce
functionality and features ("Magazine Store"), which shall be a
part of, and subject to the same conditions as, the FreeShop.com
Site.
[***] Confidential portion omitted pursuant to a confidential treatment request
submitted pursuant to Rule 406 under the Securities Act of 1933, as amended.
<PAGE> 2
2.2. Magazine Offer Links. FreeShop.com shall place a link to the
Magazine Store on the front screen of the FreeShop.com Site, in
a conspicuous location that is visible to customary users upon
initial receipt of the page without any scrolling or navigation.
FreeShop.com will also promote the Magazine Store and the
Magazines individually in email promotions and other areas of
the FreeShop.com Site as appropriate in FreeShop.com's
discretion, as well as through FreeShop.com affiliated sites.
2.3. Site Coordination. MO and FreeShop.com shall jointly coordinate
all elements of the placement of Presentation Materials on the
FreeShop.com Site.
2.4. Changes. FreeShop.com agrees to use best efforts to execute any
and all reasonable changes in the Presentation Materials within
five (5) business days of receipt of the same. Upon notice by
MO, FreeShop.com shall promptly remove any Magazines or other
materials on pages that contain content judged by MO in its sole
reasonable discretion to be objectionable or in other ways
offensive in a manner that would negatively affect MO.
3. RIGHTS GRANTED.
3.1. License to MO Marks. Subject to all the terms and conditions of
this Agreement, MO grants FreeShop.com the non-exclusive,
non-transferable, non-sublicensable, revocable right to use the
Presentation Materials during the term of the FreeShop.com
Agreement for the sole purpose of generating Magazine
subscription sales through the FreeShop.com Site. In addition to
other rights and remedies herein, MO reserves all of its rights,
and those of the other respective rights owners, in the
Presentation Materials, and FreeShop.com claims no rights
whatsoever in the Presentation Materials. All good will
attributed to the MO logo(s), tradenames(s) and trademarks ("MO
Marks") will inure to the benefit of MO exclusively.
4. ORDER PROCESSING, FULFILLMENT AND SUPPORT.
4.1. FreeShop.com-Customer Agreements.
4.1.1. MO may provide FreeShop.com with a copy of certain terms
and conditions binding upon customers to which the sale
or ordering of Consumer Magazines are subject ("Product
Agreement"), and FreeShop.com will provide a link on the
offer page for each Magazine for customers to review and
understand said terms and conditions before ordering
said Magazines. MO may change any provision of a Product
Agreement from time to time on thirty (30) days notice
to FreeShop.com, and shall have prior approval over how
the Product Agreement is presented to the consumer.
FreeShop.com will notify customers in the Product
Agreement that MO will send emails for the purpose of
managing their subscription(s). The customer will be
provided with the ability to opt out of any such
notices. MO may contact customers via email up to three
(3) times per year to manage existing subscriber
relationships. All such email messages will include a
link to FreeShop.com.
[***] Confidential portion omitted pursuant to a confidential treatment request
submitted pursuant to Rule 406 under the Securities Act of 1933, as amended.
<PAGE> 3
4.1.2. FreeShop.com shall place a toll-free telephone number
and e-mail address to be provided by MO on the Magazine
Store in conjunction with all orders, to enable
customers to contact MO directly for customer service
and to cancel Magazine subscriptions.
4.2. Order Information.
4.2.1. FreeShop.com will deliver to MO on a weekly basis via
secure electronic transmission in a file format
reasonably agreed to by MO and FreeShop.com all Magazine
subscription orders received by FreeShop.com including
the following information received by FreeShop.com for
each and every Lead: (i) full first and last names and
complete mailing address(es) for both billing and
shipping, one or more [***] (unless the customer has
opted out) (ii) one or more telephone number(s), (iii)
the quantity and titles of Magazine subscriptions, and
the corresponding Magazine code/source code supplied by
MO, (iv) the order date and any price information
associated with the order, and (v) complete, valid
credit card information guaranteeing payment of the
subscription fee in full, including credit card number,
expiration date and name of credit card holder (Visa,
MasterCard, American Express and Discover Card only)
(collectively, ("Leads"). FreeShop.com will be solely
responsible for collecting and transmitting to MO in
accordance with the terms and conditions of the
Agreement all Leads.
4.3 Cancellations. MO will process cancellations of subscriptions in
accordance with the MO cancellation policy as provided to
FreeShop.com for inclusion in the FreeShop.com Site, as modified
by MO from time-to-time. FreeShop.com shall promptly transmit to
MO all cancellation information or requests for MO to respond to
and/or process, upon receipt of the same and in accordance with
the terms of the Agreement. MO shall determine, in its sole
discretion, the validity of cancellations, and shall be solely
responsible for the refund of any subscription fees.
4.4 Records. FreeShop.com shall maintain records of each customer
order of a Magazine, including Consumer Order Information, for a
period of at least two (2) years from the date of each such
order.
4.5 Order Fulfillment. MO shall be solely responsible for
fulfillment of orders and all expenses directly associated
therewith.
4.6 Marketing Tests. When available during the Term of this
Agreement, FreeShop.com agrees to test in a format and on terms
to be mutually agreed in good faith by the parties, the
marketing of trade magazines ("FreeBizMag"), a credit card
security program (the "MO Credit Card Program"), and an internet
customer service system (the "MO Internet Service System") for
renewals and change of address to be offered by MO. Each of
these programs shall be implemented on the FreeShop.com site in
a timely fashion. Each program shall be implemented for a
reasonable testing period such that both parties will have
sufficient means to evaluate
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<PAGE> 4
the success of the tests. Following thorough evaluation, the
parties will jointly develop and execute an appropriate
implementation plan.
4.6.1 FreeBizMag: For the purposes of the test, FreeShop.com will
promote free business magazines on the FreeShop.com site. MO
will pay FreeShop.com $1 for each lead generated from the free
business magazine program. MO shall retain all right, title and
interest in and to FreeBizMag. FreeShop.com acknowledges that it
does not and shall have no right, title, or interest whatsoever
in or to FreeBizMag. Furthermore, FreeShop.com acknowledges that
it shall provide its cooperation in supporting FreeBizMag as
reasonably requested by MO.
4.6.2 MO Credit Card Program: For the purposes of the test,
FreeShop.com will promote a comprehensive credit card security
system, which will enable consumers to sign up for credit card
protection and insurance for purchases on the FreeShop.com Site.
MO shall retain all right, title and interest in and to the MO
Credit Card Program. FreeShop.com acknowledges that it does not
and shall have no right, title, or interest whatsoever in or to
the MO Credit Card Program. Furthermore, FreeShop.com
acknowledges that it shall provide its cooperation in supporting
the MO Credit Card Program as reasonably requested by MO.
4.6.3 MO Internet Service System: For the purposes of the test,
FreeShop will promote a magazine customer service program
including change of address renewals and other services relating
to magazine subscriptions. MO shall retain all right, title and
interest in and the MO Internet Service System. FreeShop.com
acknowledges that it does not and shall have no right, title, or
interest whatsoever in or to the MO Internet Service System.
Furthermore, FreeShop.com acknowledges that it shall provide its
cooperation in supporting the MO Internet Service System as
reasonably requested by MO.
5. CUSTOMER RESPONSIBILITY.
FreeShop.com agrees that customers who purchase Magazines through the Magazine
Store will be deemed to be customers of MO as well as FreeShop.com, for all
purposes, including without limitation information management and direct
marketing, subject to the MO rules, policies and operating procedures concerning
customer orders, and customer service in connection therewith and subject to the
terms of the Product Agreement presented to customers.
6. MAGAZINE COMMISSIONS AND PAYMENTS.
6.1 Payments. MO shall pay FreeShop.com [***] ($***) per each Lead
("Commissions"),within forty-five (45) days following receipt of
invoice
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<PAGE> 5
from FreeShop.com. Commission payments will be less any orders
that could not be processed by MO due to invalid, missing, or
untimely Lead information. If discrepancies are found following
commission payment, they will be deducted from the next monthly
payment.
6.2 Reports. FreeShop.com shall deliver to MO weekly reports via
email representing estimated Leads received for Magazines
through the FreeShop.com Site.
6.3 Renegotiate. MO and FreeShop.com agree to use their best efforts
to renegotiate a lower Commission rate if after six (6) months
from the Effective Date: (a) there are fewer than ten thousand
(10,000) Leads per month for three (3) or more consecutive
months, or (b) the rate of cancellation of Magazine
subscriptions placed through the FreeShop.com Site is greater
than twenty-five percent (25%).
6.4 Exclusivity. During the term of this Agreement, FreeShop.com
will not place offers through or on the FreeShop.com Site for
magazines from any company other than MO, nor shall it offer
such services itself, directly or indirectly, nor shall
FreeShop.com allow any magazine advertisements, promotions or
content from any company other than MO or links to any websites
which are primarily in the business of magazine subscription
services to appear on the FreeShop.com Site, other than MO. If
FreeShop.com links to a site which promotes magazines as an
ancillary business, that portion of the site must not be
available from the FreeShop.com site or MO must have approval
over any such relationships where magazines are offered.
Notwithstanding the foregoing sentence, FreeShop.com may solely
continue to offer the six (6) magazines set forth in Exhibit A
hereto ("FreeShop.com Magazines"), which it represents are being
actively offered on and sold through the FreeShop.com Site as of
the Effective Date, in a consistent manner and in conjunction
with the existing publisher(s) only; it being understood and
agreed that the FreeShop.com Magazines will not be advertised or
sold in the Magazine Store.
7. PROMOTIONAL MAGAZINES.
7.1. Value. During the term of the Agreement, FreeShop.com shall
accrue credit with MO, cumulatively on a monthly basis ("Accrued
Promotional Credit") for points which can be redeemed for annual
various magazine subscriptions of [***] dollars ($[***]) in
value based on the prices offered to customers in the Magazine
Store ("Promotional Magazines") up to a total aggregate value of
[***] ($[***]) dollars. The Promotional Magazines shall be made
available to FreeShop.com throughout the term and MO and
FreeShop.com will reasonably coordinate on the redemption
process for such Accrued Promotional Credit. MO shall notify
FreeShop.com as the Promotional Magazines become available up to
the then current amount of the Accrued Promotional Credit.
7.2. Continuous Service Customers. Subject only to the foregoing
subsection 7.1, Promotional Magazines shall be subject to all
terms and conditions of the
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<PAGE> 6
Agreement, including without limitation Customer Responsibility,
MO Magazine Policies and Conditions and MO's Continuous
ServiceSM subscription model for which the customer will be
billed in the ninth month of the annual Promotional Subscription
and yearly thereafter unless and until a subscription is
canceled.
8. TERM AND TERMINATION
8.1 Term. The term of this Agreement shall commence on the Effective
date and continue for a period of two (2) years ("Initial
Term"), and shall be automatically renewed thereafter for
subsequent one (1) year periods (collectively, "term").
8.2 Termination. Either party shall have the right to terminate this
Agreement:
8.1.1 if the other party commits a material breach and fails
to cure such breach within thirty (30) days following
written notice describing such breach;
8.1.2 upon ninety (90) days written notice; and
8.1.3 immediately by written notice upon the insolvency, or
the voluntary or involuntary bankruptcy, of the other
party, or if the other party makes an assignment for the
benefit of creditors, or has a receiver or trustee
appointed.
8.2 Actions upon Termination. Upon termination or expiration of this
Agreement for any reason whatsoever, FreeShop.com's rights
hereunder to market, promote, offer or otherwise act pursuant to
this Agreement shall immediately cease, and FreeShop.com shall
immediately and completely cease any such activity. Within five
(5) days after such termination or expiration FreeShop.com shall
return to MO all Presentation Materials and other materials
provided to FreeShop.com under this Agreement, and all copies
thereof, or upon request by MO destroy the same, and certify in
writing that the foregoing and all copies thereof have either
been so returned to MO or destroyed at the end of the
termination. Upon termination, FreeShop.com shall only be
entitled to Commissions earned.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1. By MO. MO represents, warrants and covenants:
9.1.1. the Magazine subscription rates offered through the
Magazine Store for paid new subscriptions shall be
equivalent to the best prices that MO makes available
through third-parties or MO's own web site to the
general public on the Internet;
9.1.2. MO shall offer customers under the Agreement the
incentive of two (2) months free at the commencement of
new Magazine subscriptions; and
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<PAGE> 7
9.1.3. the Presentation Materials do not infringe the rights of
any third party, and are not libelous or otherwise
illegal.
9.1.4. SUBJECT TO THE FOREGOING SUBSECTIONS 9.1.1 - 9.1.3, MO
MAKES NO REPRESENTATIONS OR WARRANTIES TO ANY PERSON OR
ENTITY WITH RESPECT TO ANY SERVICES PERFORMED OR ANY
INFORMATION, CONTENT OR OTHER MATERIALS PROVIDED OR MADE
AVAILABLE BY IT HEREUNDER, AND DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY
IMPLIED WARRANTIES ARISING OUT OF A COURSE OF
PERFORMANCE, DEALING OR TRADE USAGE. MO DOES NOT
REPRESENT THAT THE OPERATION OF ITS SERVICES WILL BE
UNINTERRUPTED OR ERROR-FREE, AND IT WILL NOT BE LIABLE
FOR THE CONSEQUENCES OF SUCH INTERRUPTIONS, ERRORS OR
NON-FULFILLMENT OF ORDERS.
9.2. By FreeShop.com. FreeShop.com represents, warrants and
covenants:
9.2.1. it is solely responsible for the development, operation,
and maintenance of the FreeShop.com Site and all
portions thereof. FreeShop.com agrees to use best
efforts to accurately display and maintain the
Presentation Materials, including offer terms, in good
working order, and not to alter or modify them in any
way without obtaining the prior written consent of MO.
Under no circumstance shall FreeShop.com vary the
authorized subscription prices by implicitly or
expressly offering discounts, premiums or any other
incentives specifically related to the Magazine Store.
FreeShop.com agrees to use best efforts to make any
imperative changes to Presentation Materials, such as
changes to price, within two (2) business days if
reasonably possible;
9.2.2. any and all content and materials, other than the
Presentation Materials, which are posted on the
FreeShop.com Site, do not violate or infringe upon the
rights of any third party, and are not libelous or
otherwise illegal;
9.2.3. FreeShop.com shall maintain the Magazine Store with a
level of support no less favorable than the support it
provides to the other parts of the FreeShop.com Site;
and
9.2.4. it shall use best efforts at all times to maximize sales
of Magazines through the Magazine Store.
9.2.5. SUBJECT TO THE FOREGOING SUBSECTIONS 9.2.1 - 9.2.4,
FREESHOP.COM MAKES NO REPRESENTATIONS OR WARRANTIES TO
ANY PERSON OR ENTITY WITH RESPECT TO ANY SERVICES
PERFORMED OR ANY INFORMATION, CONTENT OR OTHER MATERIALS
PROVIDED OR MADE
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<PAGE> 8
AVAILABLE BY IT HEREUNDER, AND DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY
IMPLIED WARRANTIES ARISING OUT OF A COURSE OF
PERFORMANCE, DEALING OR TRADE USAGE. FREESHOP.COM DOES
NOT REPRESENT THAT THE OPERATION OF ITS SERVICES WILL BE
UNINTERRUPTED OR ERROR-FREE, AND IT WILL NOT BE LIABLE
FOR THE CONSEQUENCES OF SUCH INTERRUPTIONS, ERRORS OR
NON-FULFILLMENT OF ORDERS.
10. MO POLICIES AND CONDITIONS.
10.1. Selection of Titles. MO may change its selection of magazine
titles, and their subscription prices, at any time, without
prior notice, in its sole discretion, and FreeShop.com agrees to
promptly adopt such modifications upon notice. MO does not
guarantee specific prices, or the availability of any product.
10.2. MO shall be exclusively responsible for all processing,
fulfillment and customer service related to Magazine orders. At
MO's sole discretion, it may reject any Magazine subscription
orders that do not comply with its requirements.
10.3. Territory. MO shall fulfill Magazine subscription orders through
the FreeShop.com Site within the U.S. and its military bases
only.
11. INDEMNIFICATION.
Each party (the "Indemnitor") shall indemnify and hold harmless the other (the
"Indemnitee") against and from all claims, liabilities, suits, damages, costs,
including without limitation, reasonable attorney's fees, disbursements and
court costs that Indemnitee may suffer, incur or be subjected to by reason of
any legal action, arbitration or other claim by a third party arising out of or
as a result of a breach of any of Indemnitor's representations, warranties, or
agreements hereunder; provided that (a) the Indemnitor is promptly notified in
writing of such claim or suit, (b) the Indemnitor shall have the sole control of
any defense and/or settlement thereof, (c) the Indemnitee furnishes to the
Indemnitor, on request, information available to the Indemnitee for such
defense, and (d) the Indemnitee reasonably cooperates in any defense and/or
settlement thereof as long as the Indemnitor pays all of the Indemnitee's
reasonable out of pocket expenses and attorneys' fees. The Indemnitee shall not
admit any such claim without prior consent of the Indemnitor and the Indemnitor
shall not enter into any settlement or compromise, which would require the
Indemnitee to make any payment or bear any obligation other than those set forth
herein without the Indemnitee's prior written consent.
12. LIMITATIONS OF LIABILITY.
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<PAGE> 9
EACH PARTY'S SOLE REMEDY AGAINST THE OTHER FOR LOSS OR DAMAGE ARISING OUT OF THE
PERFORMANCE OR NON-PERFORMANCE UNDER THIS AGREEMENT SHALL BE PROVEN DIRECT,
ACTUAL DAMAGES. NEITHER PARTY WILL BE LIABLE OR OBLIGATED UNDER ANY SECTION OF
THIS AGREEMENT OR UNDER CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY INDIRECT, INCIDENTAL, RELIANCE, SPECIAL, PUNITIVE, OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS OR COST OF PROCUREMENT OF SUBSTITUTE GOODS
OR SERVICES ARISING OUT OF ITS PERFORMANCE OR NON-PERFORMANCE UNDER THIS
AGREEMENT, WHETHER OR NOT SUCH PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
13. CONFIDENTIALITY.
Each party (the "Receiving Party") agrees that all proprietary information
concerning the other (the "Disclosing Party"), including without limitation
business and financial data, vendor lists, pricing and sales information, and
the terms of this Agreement, shall remain strictly confidential and shall not be
disclosed to third parties, with the sole exception of the Receiving Party's
accountants and attorneys on a confidential basis, or pursuant to valid legal
process, of which the Receiving Party shall provide immediate notice to the
Disclosing Party and cooperation in any attempt by the Disclosing Party to
oppose said process. Confidential information shall not include information (a)
which was lawfully in possession of Receiving Party prior to disclosure of such
information by Disclosing Party, (b) which was, or at any time becomes,
available in the public domain other than through a violation of this Agreement,
(c) which is documented by Receiving Party as having been developed by Receiving
Party independently or (d) which is furnished to Receiving Party or its
representatives by a third party not under an obligation of confidentiality to
Disclosing Party.
14. RELATIONSHIP.
Each party may identify the other as an "affiliate" in disclosing the nature of
services that are the subject matter of the Agreement. Under no circumstances
shall this Agreement, nor either party's activities under it, create any agency,
franchise, joint venture, partnership, sales representative or employment
relationship between FreeShop.com and MO, and neither party has any authority to
make or accept any offers on behalf of the other without prior written consent.
The parties will coordinate in the preparation and distribution of a mutually
agreed press release publicly announcing this relationship. In addition, MO
grants FreeShop.com the right to use MO's name and trademarks in promotional
materials which MO shall approve prior to their release. This right shall
continue until all promotional materials existing on the date of any termination
of this Agreement have been distributed or otherwise utilized.
15. FORCE MAJEURE.
Neither party shall be liable for nonperformance or delay in performance (other
than of obligations regarding confidentiality) caused by any event reasonably
beyond the control of such party including, but not limited to wars,
hostilities, revolutions, riots, civil
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<PAGE> 10
commotion, national emergency, strikes, lock-outs, unavailability of supplies,
epidemics, fire, flood, earthquake, force of nature, explosion, embargo, or any
other Act of God, or any law, proclamation, regulation, ordinance, or other act
or order of any court, government or governmental agency.
16. ASSIGNMENT.
Either party may assign this Agreement, and its rights, licenses and obligations
hereunder, subject to the prior written approval of the other which shall not be
unreasonably withheld, solely to any affiliate or other acquiror of all or of
substantially all of its equity securities, assets or business relating to the
subject matter of this Agreement, or pursuant to any internal re-organization.
Any attempted assignment in violation of this Section will be void and without
effect. The issuance of or trading in any securities which are registered under
the Securities Act of 1933, as amended, or in conjunction with any transaction
which is registered under the Securities and Exchange Act of 1934, as amended,
shall not be deemed to violate the provisions of this Section. Subject to the
foregoing, this Agreement will benefit and bind the parties' successors and
assigns.
17. SURVIVAL.
The following shall survive any expiration or termination of this Agreement: (a)
sections (and subsections thereof) numbers 3, 4, 5, 6, 7, 8.2, 10, 11, 12, 13,
14, 15, 17, 18, 19, 20, 21, 22, 23 and 24; (b) any accrued payment obligations;
(c) except as otherwise expressly provided herein, any right of action for
breach of this Agreement prior to termination, and (d) MO's rights, and
obligations to customers, relating to existing Magazine subscriptions and
fulfillment services.
18. SEVERABLE.
In the event that any of the provisions of this Agreement shall be held by a
court or other tribunal of competent jurisdiction to be unenforceable, such
provisions shall be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and effect and
enforceable.
19. WAIVER.
The failure to enforce any provision of the Agreement will not be a waiver of
the right to subsequent enforcement of the provision or any other provision of
the Agreement.
20. NOTICE.
Any notice or other correspondence required or permitted to be given pursuant to
this Agreement shall be in writing and shall be deemed to have been given (a)
immediately if served personally, (b) immediately if sent to a designated FAX
number (with confirmation of receipt), and simultaneously via first-class mail,
postage pre-paid and addressed to the persons set forth below, (c) three (3)
business days after if sent by certified or registered mail return receipt
requested, and addressed to the persons set forth
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<PAGE> 11
below, (d) on the next business day if sent via internationally recognized
carrier such as FedEx or U.P.S. and addressed to the persons set forth below.
If to Magazineoutlet.com:
Marti Schiff
President
With a copy to:
Lisa B. Dubrow
VP, General Counsel
If to FreeShop.com:
Tim Choate
President & CEO
With a copy to:
John Wade
CFO
21. HEADINGS.
Headings and captions are for convenience only and are not to be used in the
interpretation of this Agreement.
22. CHOICE OF LAW, DISPUTE RESOLUTION AND JURISDICTION.
22.1. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
22.2. ADR Procedures. In the event of any controversy or claim arising
out of this Agreement raised by either party, the party raising
the dispute will promptly notify the other party in writing of
the nature of the dispute and the factual background. Within the
fifteen (15) calendar day period following such notice, the
parties will initiate an attempt in good faith to reach a
reasonable solution to the dispute, including escalation to the
vice-president of each company responsible for the subject
matter of the dispute. If the dispute cannot be amicably
resolved within thirty (30) calendar days of written
notification, then either party may seek to resolve said dispute
by arbitration before a single arbitrator in accordance with the
commercial arbitration rules of the American Arbitration
Association, and judgement upon the award rendered by the
arbitrator may be entered in any court having jurisdiction
thereof. The place of arbitration shall be at a neutral site to
be reasonably determined by both parties. Each party shall
provide to the arbitrator, no later than fifteen (15) calendar
days following the date of the arbitrator's appointment, a
statement, including all supporting documents or other evidence
on which such party relies as to why it
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<PAGE> 12
believes that the dispute should be resolved in its favor, and
all such materials and any other materials provided to the
arbitrator by either party shall simultaneously be provided by
such party to the other party. Within twenty (20) calendar days
after the submission of such statements by all parties, the
arbitrator shall hold a hearing with respect to the dispute. At
such hearing, the arbitrator may, in his or her sole discretion,
allow the parties to call and cross-examine witnesses, make any
additional arguments or submit any additional materials to
support the position taken in their respective statements. The
arbitrator shall enter an award within fifteen (15) calendar
days following the hearing provided for herein. Nothing shall
preclude either party from making an application to the
arbitrator, for good cause, to expedite the proceedings, nor
restrict the arbitrator from granting such an application. In
addition to such other relief as the arbitrator may award, the
arbitrator shall be vested with jurisdiction and shall award to
the prevailing party its reasonable attorney's fees and
expenses, and all other costs associated with the arbitration.
The award rendered by the arbitrator shall be final, and
judgement may be entered upon it in accordance with applicable
law in any court having jurisdiction thereof.
23. COMPLETE AGREEMENT.
This Agreement (including the attached exhibits) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior discussions, documents, agreements and prior course of
dealing, and shall not be effective until signed by both parties.
24. COUNTERPARTS.
This Agreement may be executed in two counterparts, each of which shall be an
original; but such counterparts shall together constitute one and the same
instrument.
AGREED, this 13th day of AGREED, this 12th day of
August, 1999. August, 1999.
FREESHOP.COM, INC. NEWSUB MAGAZINE SERVICES LLC
By: /s/ John A. Wade By: /s/ Marti Schiff
------------------------------- -------------------------------
Title: Secretary, Vice President, Title: V.P. on Online Businesses
Finance and Chief Financial Officer
[***] Confidential portion omitted pursuant to a confidential treatment request
submitted pursuant to Rule 406 under the Securities Act of 1933, as amended.
