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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 8, 1999
FREESHOP.COM, INC.
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(Exact Name of Registrant as Specified in Charter)
Washington
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(State or Other Jurisdiction of Incorporation)
0-27065 91-1809146
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(Commission File Number) (IRS Employer Identification No.)
95 South Jackson Street
Suite 300
Seattle, Washington 98104
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (206) 441-9100
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
The press release attached as Exhibit 99.1 is hereby incorporated by reference.
ITEM 7. EXHIBITS
10.1 Marketing Agreement with eNews.com, Inc. dated December 8, 1999
(Confidential treatment has been requested as to certain portions of this
exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended. Confidential portions will be filed separately with the Securities an
Exchange Commission.)
99.1 Press release dated December 21, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FREESHOP.COM, INC.
Date: January 10, 2000 By /s/ Timothy C. Choate
---------------------------------
Timothy C. Choate
President and Chief Executive Officer
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Exhibit Index
Exhibit
Number Exhibit
- ------- -------
10.1 Marketing Agreement with eNews.com, Inc. dated December 8,
1999 (Confidential treatment has been requested as to
certain portions of this exhibit pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
Confidential portions will be filed separately with the
Securities an Exchange Commission.)
99.1 Press Release dated December 21, 1999
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MARKETING AGREEMENT
THIS MARKETING AGREEMENT ("Agreement") is made December 8, 1999, by and
between eNews.com, Inc. ("eNews"), a Delaware corporation, located at 1225 19th
Street NW, Suite 400, Washington, D.C. 20036, and FreeShop.com, Inc.
("FreeShop"), a Washington corporation, located at 95 South Jackson Street,
Seattle, Washington 98104.
WHEREAS, FreeShop wishes to offer free trials for and paid
subscriptions to magazines on (a) its web site located at www.freeshop.com, (b)
replacement and successor addresses thereto, and (c) as commercially reasonable
and legally and contractually possible, its affiliated sites (all such sites
being collectively defined as the "Site"); and
WHEREAS, eNews wishes to become FreeShop's exclusive multi-publisher
magazine provider for FreeShop's magazine category promoting a range of the free
trial and paid magazine subscription offers eNews has available on its web site
at www.enews.com and successor sites thereto (the "Magazines");
NOW, THEREFORE, for good and valuable consideration, the parties hereto
agree to the following terms and conditions:
1. OFFER PLACEMENT/PROMOTION.
1.1. FreeShop Magazine Store. FreeShop shall design, build, host and operate
at its sole responsibility, liability and expense a section of the Site to be
known as the FreeShop magazine store (the "Magazine Store"). The sole purpose of
the Magazine Store shall be the offering of free trials for and selling of
magazine subscriptions, banner advertising, sponsorships, links and promotion of
other FreeShop content, promotions and sites, and promotion of other magazine
offers as described in Section 5.3. Without limiting the foregoing, FreeShop
shall have the sole responsibility and liability for coordinating all elements
of the promotion of the Magazines on the Site. eNews shall use commercially
reasonable efforts to fulfill the orders for the Magazines arising pursuant to
this Agreement.
1.2. Magazine Offer Links. FreeShop shall place a continuous link to the
Magazine Store on the front screen and/or home page of the Site. FreeShop will
also take such other steps as are commercially reasonable under the
circumstances to actively and continuously promote the Magazine Store and the
Magazines in email promotions and on other areas of the Site.
1.3. Presentation Materials. eNews shall provide FreeShop with such cover
graphics, promotional text, and pricing information for the Magazines (the
"Presentation Materials") as eNews reasonably deems appropriate. The
Presentation Materials may be updated from time to time as eNews reasonably
deems appropriate. eNews will transmit updated Presentation Materials in a
mutually agreed format to FreeShop and will promptly notify FreeShop upon
transmission.
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
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1.4. Changes. FreeShop will use commercially reasonable efforts to execute any
and all changes in the promotional elements, such as text and photo, arising
from changes in the Presentation Materials for the Magazines provided by eNews
within five (5) business days of receipt of the same.
2. MAGAZINE OFFERINGS.
2.1. Magazine Offers. eNews shall make available to FreeShop for inclusion in
the Magazine Store all free trial and paid magazine subscriptions available on
www.enews.com that eNews is legally and contractually able and that are
otherwise appropriate for inclusion in the Magazine Store. eNews shall use
reasonable commercial efforts to supply FreeShop with a range of exclusive or
premium offers not generally made available to third parties or on its own web
site. FreeShop may exclude selected Magazines from the Magazine Store, and
FreeShop has the right in its sole discretion to refuse Presentation Materials
or to request removal of Presentation Materials from the Site for any reason.
FreeShop's online marketing and distribution partners and their respective
agents have the right in their sole discretion and for any reason to refuse
Presentation Materials or to request removal of Presentation Materials for
specific Magazines, or for Magazines in general, from their sites or sites
co-branded with FreeShop, respectively.
3. RIGHTS GRANTED.
3.1. License to eNews Marks. Subject to all the terms and conditions of this
Agreement, eNews grants FreeShop the right and license to use the Presentation
Materials on the Site during the term of this Agreement for the sole purpose of
generating Magazine orders and sales through the Site. Except for the actual
content of the Presentation Materials as supplied by eNews, the use of the
Presentation Materials shall be at FreeShop's sole liability and expense. Upon
the expiration or termination of this Agreement, FreeShop shall have no further
rights to use the Presentation Materials. At no time shall FreeShop make any
claim thereto. FreeShop shall not use, directly or indirectly, in whole or in
any part thereof, eNews' name, or any trade name, trademark or service mark
owned by eNews unless approved in advance by eNews in writing.
4. ORDER PROCESSING, FULFILLMENT AND SUPPORT.
4.1. Customer Agreements.
4.1.1. If eNews provides FreeShop with a copy of certain terms and conditions
binding upon customers desiring to order Magazines, FreeShop shall include a
summary of those terms and conditions on each offer page as well as provide a
link on the offer page for each Magazine for customers to review and understand
the guaranteed delivery information and such other terms and conditions before
ordering. The link shall be set up so that a customer seeking to order a
Magazine may view the page containing the terms and conditions prior to
completing an order.
4.1.2. FreeShop shall make available to its customers a toll-free telephone
number and e-mail address to be provided by eNews in conjunction with all
orders, to enable customers to contact
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
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eNews directly for customer service inquiries and cancellations. eNews will
report to FreeShop any and all orders for Magazines taken via telephone or
email, which orders shall be included under this Agreement for the purposes of
commission payments and other terms.
4.2. Order Information.
4.2.1. A "Lead" is defined as a legitimate third-party customer request actually
received by eNews from FreeShop to receive a free trial magazine subscription,
with valid credit card information and billing to occur after ninety (90) days
unless canceled. FreeShop will deliver to eNews on an every business day basis
via electronic transmission all Leads received by FreeShop, including the
following information received by FreeShop in connection with each Lead: (i)
full first and last name; (ii) complete mailing address for both billing and
shipping; (iii) credit card billing information, including valid credit card
number, expiration date and name of credit card holder; and (iv) email address
when received, which eNews may use only for confirmation and renewal purposes
with respect to the magazine subscription being ordered unless the particular
customer opts-in to receiving other email communications as hereinafter
described. FreeShop shall make available to customers as part of the magazine
order process the ability to opt-in to receiving email communications from eNews
about magazine and non-magazine products and services, and shall provide eNews
with the email addresses of those customers who opt-in. eNews will use the email
addresses of those customers who do opt-in solely for eNews internal business
operations and consistent with the opt-in language presented to customers, and
shall not make those email addresses available to any other party for any
reason. Within several weeks after receipt of each Lead, FreeShop will send to
the customer an email communication for purposes of selling additional Magazine
subscriptions mutually determined by FreeShop and eNews.
4.3. Order Fulfillment. eNews shall be solely responsible for timely
fulfillment of orders (provided FreeShop has delivered the Lead sufficiently
timely in order for eNews to do so) and for all expenses associated therewith.
4.4. Cancellations. eNews will process cancellations of subscriptions in
accordance with the eNews cancellation policy as provided from time to time to
FreeShop for inclusion in the Site.
4.5. "Bill-Me" Program. FreeShop and eNews will use commercially reasonable
efforts to develop an effective "Bill Me" program, offering free trial magazine
subscriptions without requiring credit card information prior to the trial
period, with the terms and conditions of such a program to be mutually agreed.
If the parties are able to mutually agree to terms for such a program, then the
program shall otherwise be included under the terms of this Agreement.
5. MAGAZINE COMMISSIONS AND PAYMENTS.
5.1. Payments. Subject to adjustment as provided below, eNews shall pay to
FreeShop *** ($***) for each Lead received by eNews from FreeShop under this
Agreement ("Commissions") to be calculated and payable on a monthly basis,
within thirty (30) days after the end of the
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
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calendar month in which the Lead is received by eNews, net of any adjustment for
Commissions previously paid as described below in this Section 5.1. eNews will
bear all risk of cancellations for each month's Leads, provided the cancellation
rate ("Cancellation Rate") for such month's Leads does not exceed *** percent
(***%) over the next three calendar months. If the Cancellation Rate exceeds ***
percent (***%) over those succeeding three (3) calendar months, the Commission
for each Lead received in that prior month will be reduced proportionately by
the amount the Cancellation Rate exceeds *** percent (for example, the
Commission per Lead with a *** percent Cancellation Rate, or *** percent greater
cancellations, would be $***, which is *** percent less than $***). By way of
example, if the Cancellation Rate for Leads received in January exceeded ***
percent over the period February through April, an adjustment to the Commission
paid to FreeShop for each Lead received in January would be made in May and
would be deducted from Commissions otherwise payable to FreeShop for Leads
received in May. Notwithstanding the foregoing, the minimum Commission per Lead,
regardless of Cancellation Rate, shall be *** dollars ($***) throughout the term
of this Agreement. If Commissions have been reduced due to the Cancellation Rate
exceeding *** percent, then eNews and FreeShop will reasonably coordinate on
strategies to improve the Cancellation Rate. No Commission payment shall be due
for any Leads that cannot be processed by eNews due to invalid or missing
information needed to fulfill the order.
5.2. Renewals. eNews and FreeShop will reasonably cooperate to maximize
renewals for Magazine subscriptions sold under this Agreement. For all such
renewals received by eNews during the term of this Agreement, eNews shall pay
FreeShop an amount equal to *** percent (***%) of the renewal revenues, net of
direct fees to publishers, cancellations, taxes, delivery, fulfillment and
processing fees and other fees or charges of any kind paid to third-parties and
directly associated with such renewals, within thirty (30) days of the end of
the month in which such revenues are received by eNews.
5.3. Exclusivity. During the term of this Agreement, eNews shall be the
exclusive multi-publisher magazine source for magazines or magazine offers for
the Site. FreeShop may, however, continue to enter into marketing arrangements
with individual publishers to promote the magazines they publish and other
products they offer except for magazines published by others. Nothing in this
Agreement shall restrict eNews from entering into similar or other agreements of
any kind with any third-party.
6. *** FEES.
6.1 *** Fees. Subject to the maximum amounts stated below, eNews will pay
FreeShop a *** dollar ($***) *** fee for each Lead (the "*** Fee"). The maximum
*** Fees payable to FreeShop shall be (a) *** dollars ($***) in the first year
after the Reference Date, (b) *** dollars ($***) in the second year after the
Reference Date, and (c) *** dollars ($***) in the third year after the Reference
Date. *** Fees shall be payable within thirty (30) days of the end of the month
in which such *** Fees accrue.
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
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6.2. *** Fee Reconciliation. Within thirty (30) days following the anniversary
of the Reference Date the parties shall reconcile the prior year's *** Fees paid
against the *** for such year. In the event the *** are equal to or greater than
*** but less than ***, eNews shall pay to FreeShop an amount equal to ***
dollars ($***) less the total *** Fees for such year already paid to FreeShop by
eNews pursuant to Section 6.1 above (for example, if the *** equal ***, eNews
would make a $*** reconciliation payment to FreeShop). In the event the *** are
less than *** or equal to or greater than *** no reconciliation payment shall be
due to either party. All reconciliation payments under this Section shall be
paid within forty-five (45) days following the anniversary of the Reference
Date.
7. TERM AND TERMINATION.
7.1. Term. The term of this Agreement shall commence on the earlier of March
15, 2000, or thirty days after written notice from FreeShop to eNews; provided,
however, that eNews obligations to make payments to FreeShop pursuant to
Sections 5 and 6 shall not commence until the first day of the month in which
there is a day on which FreeShop has delivered to eNews at least *** (***)
Leads, and the first day of the following month shall be referred to herein as
the "Reference Date". Unless earlier terminated as herein provided, this
Agreement shall expire on a date three (3) years after the Reference Date.
7.2. Termination. A party may terminate this Agreement if (a) the other party
files a petition for bankruptcy or is adjudicated bankrupt; (b) a petition in
bankruptcy is filed against the other party and such petition is not dismissed
within sixty (60) days of the filing date; (c) the other party becomes insolvent
or makes an assignment for the benefit of its creditors pursuant to any
bankruptcy law; (d) a receiver is appointed for the other party or its business
or the other party commits any other act of bankruptcy; or (e) upon the
occurrence of a material breach of this Agreement by the other party, if such
breach is not cured within thirty (30) days after written notice is received by
the breaching party identifying the matter constituting the material breach. Any
material failure by eNews to make payments to FreeShop when due pursuant to
Sections 5 or 6 shall be deemed a material breach.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS.
8.1. By eNews. eNews represents, warrants and covenants that:
8.1.1. eNews is duly organized and validly existing under the laws of the state
of its incorporation and has full corporate power and authority to enter into
this Agreement and to carry out the provisions hereof; and
8.1.2. eNews is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder (including such authorizations from the
publishers of the Magazines); and
8.1.3. This Agreement is a legal and valid obligation binding upon eNews and
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
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eNews does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it may be bound, nor violate any law
or regulation of any court, governmental body or administrative or other agency
having jurisdiction over it; and
8.1.4. With the exception of discounts, rebates and other special offers or
terms subsidized or required by the publisher or distributor of a Magazine, the
subscription rates and terms offered to consumers by eNews hereunder shall be no
greater than the lowest prices for such Magazine that eNews makes available to
similarly situated consumers through third-parties similarly situated to
FreeShop and through eNews' own web site at www.enews.com and successor sites
thereto; and 8.1.5 The Presentation Materials do not infringe the rights of any
third party, and are not libelous or otherwise illegal; and
8.1.6. Except for instances that individually or in the aggregate would not have
a material adverse effect, eNews is not and will not be in default or violation
(nor is there any event which, with notice or lapse of time or both, would
constitute a default or violation) in any respect under any law, rule,
regulation, writ, injunction, order or decree of any federal, state or local
court or any federal, state, local or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, as a result of
the execution of and performance of the transactions contemplated by this
Agreement and compliance with its provisions by eNews; and
8.1.7. There are no actions, suits, claims, investigations, or legal arbitration
or administrative proceedings in progress, pending, or threatened by or against
eNews (or any of its assets or properties) whether at law or in equity, whether
civil or criminal in nature, or whether before or by a federal, state, local or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign or any person, that question the validity
of this Agreement or the right of eNews to enter into it.
8.2. SUBJECT TO THE FOREGOING SUBSECTIONS 8.1.1 - 8.1.7, ENEWS 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. ENEWS 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.
8.3. By FreeShop. FreeShop represents, warrants and covenants that:
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
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8.3.1. FreeShop is duly organized and validly existing under the laws of the
state of its incorporation and has full corporate power and authority to enter
into this Agreement and to carry out the provisions hereof; and
8.3.2. FreeShop is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder; and
8.3.3. This Agreement is a legal and valid obligation binding upon FreeShop and
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by FreeShop does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which
it may be bound, nor violate any law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it; and
8.3.4. FreeShop shall be solely responsible for the development, operation,
content (other than the content of the Presentation Materials) and maintenance
of the Site and all portions thereof and will take all steps necessary to
accurately display and maintain the Presentation Materials, including offer
terms; and
8.3.5. Any and all content and materials, other than the Presentation Materials,
which are posted on the Site, do not and will not violate or infringe upon the
rights of any third party, and are not and will not be libelous, untrue or
otherwise illegal; and
8.3.6. Except for instances that individually or in the aggregate would not have
a material adverse effect, FreeShop is not and will not be in default or
violation (nor is there any event which, with notice or lapse of time or both,
would constitute a default or violation) in any respect under any law, rule,
regulation, writ, injunction, order or decree of any federal, state or local
court or any federal, state, local or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, as a result of
the execution of and performance of the transactions contemplated by this
Agreement and compliance with its provisions by FreeShop; and
8.3.7. There are no actions, suits, claims, investigations, or legal arbitration
or administrative proceedings in progress, pending, or threatened by or against
FreeShop (or any of its assets or properties) whether at law or in equity,
whether civil or criminal in nature, or whether before or by a federal, state,
local or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign or any person, that question the validity
of this Agreement or the right of FreeShop to enter into it; and
8.3.8. FreeShop shall maintain the Magazine Store with a level of support no
less favorable than the support it provides to the other parts of the Site.
8.4. SUBJECT TO THE FOREGOING SUBSECTIONS 8.3.1 - 8.3.8, FREESHOP MAKES NO
REPRESENTATIONS OR WARRANTIES TO ANY PERSON OR ENTITY WITH RESPECT TO ANY
SERVICES PERFORMED OR ANY INFORMATION,
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
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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. FREESHOP 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. INDEMNIFICATION.
9.1. Indemnification Provisions. Each party (the "Indemnitor") hereunder shall
indemnify and hold harmless the other (the "Indemnitee") against and from all
claims, liabilities, suits, damages, costs (including without limitation,
reasonable attorneys' 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 (including without limitation any action by any
governmental agency or instrumentality of any kind) 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 (provided, however, that the failure to provide
such notice shall only excuse the Indemnitor from its obligations hereunder if
and then to the extent it is prejudiced by such failure), (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.
An Indemnitor's obligation under this Section 9 shall not affect the other
party's rights to seek any other remedy upon a default by the Indemnitor under
this Agreement. All sums payable by the Indemnitor in accordance with this
Section 9 shall be paid without any deduction, withholding, counterclaim or
set-off. If any taxes are required to be paid by the Indemnitee on any payments
made to such party by the Indemnitor under this Section 9, the Indemnitee shall
give prompt notice to the Indemnitor of such required tax payment and shall
provide the Indemnitor with reasonable documentation of such requirement. The
Indemnitor shall then promptly pay such additional amounts as may be necessary
to ensure that the net amount actually received by the Indemnitee shall not be
less than the amount the Indemnitee would have received had such tax payment not
been required.
10. LIMITATION OF LIABILITY.
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
<PAGE> 9
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EXCEPT FOR CLAIMS UNDER SECTION 11, 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. EXCEPT FOR CLAIMS UNDER
SECTION 11, 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.
11. 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, (d) which is furnished to Receiving Party or its
representatives by a third party not under an obligation of confidentiality to
Disclosing Party, or (e) is required to be disclosed by law, rule or regulation
or the order of any court, administrative agency or other tribunal, provided
that in the case of such an order the Receiving Party gives notice of such order
to the Disclosing Party prior to responding to it and takes no action to
interfere with any efforts the Disclosing Party may make to quash or oppose it.
12. RELATIONSHIP.
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 and eNews, 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.
13. FORCE MAJEURE.
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
<PAGE> 10
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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 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 except for any act or order of a court,
government or governmental agency alleging unfair trade practices.
14. 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. Any attempted assignment in violation of this section
will be void and without effect. The issuance of or trading in any securities,
other than in or as part of a transaction which is substantially equivalent to
the sale of all or substantially all of the equity of the party in question,
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.
15. SURVIVAL.
Sections 5.2, 6.2, 8, 9, 10, 11, 20, 21 and such other sections and provisions
which reasonably should be viewed as surviving termination of this Agreement
shall survive termination hereof. The provisions of this Agreement shall survive
any termination of this Agreement with respect to any matter arising while this
Agreement was in effect as to such matter.
16. SEVERABILITY.
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.
17. WAIVER.
The failure to enforce any provision of this Agreement will not be a waiver of
the right to subsequent enforcement of that provision or any other provision of
the Agreement
18. 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
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
<PAGE> 11
11
addressed to the respective party at the address set forth after its name above
(or to such other address as either party shall advise the other) to the
attention of its Chief Executive Officer, or (d) on the next business day if
sent via internationally recognized carrier such as FedEx or U.P.S. and
addressed to the respective party at the address set forth after its name above
(or to such other address as either party shall advise the other) to the
attention of its Chief Executive Officer.
19. HEADINGS.
Headings and captions are for convenience only and are not to be used in the
interpretation of this Agreement.
20. CHOICE OF LAW, DISPUTE RESOLUTION AND JURISDICTION.
20.1. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Washington, without giving effect to
the principles of conflicts of law.
20.2 Arbitration. The parties expressly agree that any dispute, controversy or
claim arising out of or relating to this Agreement, or a breach thereof, shall
be determined by binding arbitration before a panel of three (3) arbitrators
(selected from a panel of persons who are attorneys having experience with and
knowledge of the computer, internet and electronic commerce business) under the
Commercial Arbitration Rules of the American Arbitration Association. Such
arbitration shall be held in Denver, Colorado (or such other place as the
parties may agree upon in writing). Any provisional or equitable remedy which
would be available from a court of law shall be available from the arbitrators
to the parties. The parties shall have the right to engage in limited discovery
by way of one deposition per party (limited to six hours) and requests for the
production of documents. All issues regarding discovery requests shall be
decided by the arbitrators. Any decision or award of the arbitrators shall be
final and binding on all the parties to this Agreement and shall not be subject
to appeal or review by any court or tribunal. Judgment upon any award rendered
by the arbitrators may be entered in any court having jurisdiction. The parties
hereby consent to the non-exclusive jurisdiction of the courts of the States of
New York and Washington or to any Federal Court located within the States of New
York or Washington for any action (i) to compel arbitration, (ii) to enforce the
award of the arbitrators or (iii) prior to the appointment and confirmation of
the arbitrators, for temporary, interim or provisional equitable remedies and to
service of process in any such action by registered mail, return receipt
requested, or by any other means provided by law. Costs for the arbitration
proceeding shall be borne equally by the parties. Each party will be responsible
for paying its own attorneys' fees.
21. COMPLETE AGREEMENT.
This Agreement 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.
22. COUNTERPARTS.
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
<PAGE> 12
12
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.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first above written.
FREESHOP.COM, INC. ENEWS.COM, INC.
By: /s/ Tim Choate By: /s/ RFG
---------------------------- ----------------------------
Title: President & CEO Title: VP Marketing & Sales
------------------------- -------------------------
12/8/99
***Confidential portion omitted pursuant to a confidential treatment request
submitted to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Confidential portions have been provided separately to the Commission.
<PAGE> 1
FREESHOP.COM SIGNS EXCLUSIVE AGREEMENT WITH
ENEWS.COM VALUED AT OVER $10 MILLION
Results-Based, Three-Year Alliance Expected to Generate Hundreds of Thousands
Of New Customers for Enews.com
SEATTLE, Dec. 21/PRNewswire/ -- FreeShop.com, Inc. (Nasdaq: FSHP) today
announced an exclusive, three-year marketing agreement with Enews.com.
Beginning in the first quarter of 2000, FreeShop will offer Enews.com's full
selection of nearly 1,000 titles on its site at http://www.freeshop.com.
FreeShop also will market Enews.com subscriptions extensively through email
distribution and other marketing channels. Fees to FreeShop.com for this
agreement are expected to exceed $10 million based on anticipated results.
"FreeShop has established itself as a leader in customer acquisition
online, exceeding one million orders in November 1999. This agreement reflects
the power of the FreeShop audience and model, and is representative of the
types of larger-scale partnerships we will now be able to strike," said Tim
Choate, FreeShop president and CEO. "With FreeShop's position as the e-tailer
with the third-highest monthly order volume behind eBay and Amazon(1), we
expect to be able to develop more high-value relationships like this one over
the next year. We're thrilled about working with Enews.com, the leader in
online magazine subscriptions, and delivering them a large volume of new
customers."
"We are extremely excited to bring our magazine subscription offers to such
a tremendous audience," said Brian Hecht, President and CEO of Enews.com.
"FreeShop customers are looking for a broad selection of great magazines at
terrific prices, and Enews.com has them. We feel that FreeShop will be one of
our most important partners for customer acquisition, and that this partnership
will aid us significantly in our continued outstanding growth."
FreeShop.com offers one of the widest audiences of online shoppers
available today, including an established base of more than two million members
of its Club FreeShop opt-in, e-mail newsletter program, and its millions of
monthly visitors. FreeShop currently serves more than 350 clients seeking to
acquire new customers, including leading companies as eBay, DrugEmporium.com,
PETsMART, Swiss Colony, and BMG.
About FreeShop.com, Inc.
FreeShop.com is a leading online direct marketing network that connects
marketers and consumers in a fun, interactive environment. Consumers seeking to
explore, learn about or try new products can choose from a variety of free,
trial and promotional offers from hundreds of well-known companies. The
FreeShop Network includes FreeShop.com (http://www.freeshop.com), featuring
free and trial offers; CatalogSite (http://www.catalogsite.com), offering
hundreds of free catalogs; and Worldwide Brochures (http://www.wwb.com),
offering more than 15,000 free travel brochures. FreeShop.com is headquartered
in Seattle, Washington, and publicly traded on Nasdaq: FSHP. For more
information, please visit http://www.freeshop.com.
About Enews.com
Enews.com is the leading magazine retailer on the Internet, offering
subscriptions to nearly 1,000 magazines from more than 650 publishers. In
recent months, Enews.com has been cited as the eighth largest eCommerce site on
the Web, a "Top 100 Web Site," by PC Data, and the ninth most visible
advertiser on the Web. Enews.com is the exclusive or premier magazine seller on
Yahoo!, Lycos, Tripod, and Webcrawler, as well as on barnesandnoble.com. The
company also boasts an extensive affiliate program, The Newsstand Network,
which includes more than 35,000 Web sites selling Enews.com magazines to niche
audiences. The company was founded in 1993 and is based in Washington, D.C.
This press release contains statements which may constitute
"forward-looking statements" within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. Such statements include expectations regarding
projected fees under the Enews.com agreement, development of future high-value
relationships, and the ability of the company to deliver customers to Enews.com.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those contemplated by such
forward-looking statements. Important factors currently known to management that
could cause actual results to differ materially from those in forward-looking
statements include fluctuation of the Company's operating results, the ability
to compete successfully and the ability to integrate acquired companies. The
Company undertakes no obligation to update or revise forward-looking statements
to reflect exchanged assumptions, the occurrence of unanticipated events or
changes to future operating results.
NOTE: (1) Deutsche Banc Alex. Brown report, Dec. 3, 1999.
CONTACT: Stacy Benedec Director of Investor Relations, 206-441-9100, ext.
158, or [email protected], or Heidi Hutchinson, Public Relations,
206-441,9100, ext. 211, or [email protected], both of FreeShop.com, Inc.; or
Joanne Chaseman, Corporate Communications of Enews.com, 202-466-8688, or
[email protected].
SOURCE FreeShop.com, Inc.
Web site: http://www.freeshop.com
