ASHFORD COM INC, S-1/A, 1999-09-22

ASHFORD COM INC
S-1/A, 1999-09-22
HOBBY, TOY & GAME SHOPS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 22, 1999.

REGISTRATION NO. 333-82759
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------

AMENDMENT NO. 5

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------

ASHFORD.COM, INC.
(Exact Name of Registrant as Specified in Its Charter)
----------------------

<TABLE>
<S> <C> <C>
DELAWARE 5944 76-0565398
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

3800 BUFFALO SPEEDWAY, SUITE 400
HOUSTON, TEXAS 77098
(713) 369-1300
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
----------------------

KENNETH E. KURTZMAN
3800 BUFFALO SPEEDWAY, SUITE 400
HOUSTON, TEXAS 77098
(713) 369-1300
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
----------------------

Copies to:

<TABLE>
<S> <C>
BRIAN K. BEARD ROBERT F. GRAY, JR.
ANTHONY M. ALLEN MICHAEL D. HANSEN
GUNDERSON DETTMER STOUGH FULBRIGHT & JAWORSKI L.L.P.
VILLENEUVE FRANKLIN & HACHIGIAN, LLP 1301 MCKINNEY STREET, SUITE 5100
8911 CAPITAL OF TEXAS HIGHWAY, SUITE 4240 HOUSTON, TEXAS 77010
AUSTIN, TEXAS 78759 (713) 651-5151
(512) 342-2300
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this registration statement.

----------------------

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, 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, please 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(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. [ ]
- ------------------

If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

----------------------

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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by Ashford.com in connection
with the sale of common stock being registered. All amounts are estimates except
the SEC registration fee, the NASD filing fees and the Nasdaq National Market
listing fee.

<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
---------
<S> <C>
SEC Registration fee........................................ $ 27,800
NASD fee.................................................... 10,500
Nasdaq National Market initial listing fee.................. 17,500
Printing and engraving...................................... 185,000
Legal fees and expenses..................................... 350,000
Accounting fees and expenses................................ 200,000
Directors and Officers Liability Insurance.................. 250,000
Blue sky fees and expenses.................................. 10,000
Transfer agent fees......................................... 10,000
Miscellaneous............................................... 139,200
----------
Total............................................. $1,200,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law permits a corporation
to include in its charter documents and in agreements between the corporation
and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law.

Article IX of Ashford.com's Amended and Restated Certificate of
Incorporation, to be filed in connection with the offering, provides for
indemnification of directors to the fullest extent permissible under Delaware
law.

Article VII of Ashford.com's Amended and Restated By-laws provides for the
indemnification of officers, directors and third parties acting on behalf of
Ashford.com if such person acted in good faith and in a manner reasonably
believed to be in and not opposed to the best interests of Ashford.com, and,
with respect to any criminal action or proceeding, the indemnified party had no
reason to believe his or her conduct was unlawful.

Ashford.com has entered into indemnification agreements with its directors
and executive officers, in addition to indemnification provided for in
Ashford.com's Amended and Restated By-laws, and intends to enter into
indemnification agreements with any new directors and executive officers in the
future.

Delaware law permits Ashford.com to purchase and maintain insurance on
behalf of any director, officer, employee or agent of Ashford.com against any
liability asserted against or incurred by them in such capacity or arising out
of their status as such whether or not Ashford.com would have the power to
indemnify such director, officer, employee or agent against such liability under
the applicable provisions of Delaware law, the Amended and Restated Certificate
of Incorporation or the Amended and Restated By-laws.

II-1
<PAGE> 3

The general effect of the foregoing provisions is to reduce the
circumstances in which an officer or director may be required to bear the
economic burdens of the foregoing liabilities and expenses.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since Ashford.com's inception on March 6, 1998, Ashford.com has sold and
issued the following securities:

(1) On December 4, 1998, Ashford.com issued 9,500,000 shares of Series
A preferred stock to one accredited investor for aggregate consideration of
approximately $3,245,000 in cash and conversion of a $755,000 note payable.
The issuance of the shares of Series A preferred stock was made in a
transaction exempt from registration under the Securities Act in reliance
on Section 4(2) of the Securities Act as transactions by an issuer not
involving any public offering.

(2) On April 17, 1999, Ashford.com issued 7,148,750 shares of Series B
preferred stock to five accredited investors for aggregate consideration of
approximately $29,096,000 in cash and conversion of a $1,004,000 note
payable. The issuance of the shares of Series B preferred stock was made in
a transaction exempt from registration under the Securities Act in reliance
on Section 4(2) of the Securities Act as transactions by an issuer not
involving any public offering.

(3) On July 8, 1999, Ashford.com issued 1,425,679 shares of Series C
preferred stock to eight accredited investors for aggregate consideration
of approximately $16,324,000 in cash. The issuance of the shares of Series
C preferred stock was made in a transaction exempt from registration under
the Securities Act in reliance on Section 4(2) of the Securities Act as
transactions by an issuer not involving any public offering.

(4) Since inception through August 31, 1999, Ashford.com has issued an
aggregate of 12,540,000 shares of common stock and 5,247,529 options to
purchase shares of its common stock to a number of our employees, directors
and consultants. These options and direct stock issuances have been issued
in transactions exempt from registration under the Securities Act in
reliance upon Rule 701 under the Securities Act.

The recipients of securities in Items (1), (2) and (3) described above
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and
appropriate legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access, through their relationships
with Ashford.com, to information about Ashford.com.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

II-2
<PAGE> 4

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4.1** -- Amended and Restated Investor Rights Agreement, dated
July 9, 1999, among the Registrant and the investors and
founders named therein.
4.2** -- Specimen Certificate of the Registrant's common stock.
4.3 -- See Exhibits 3.1 and 3.2 for provisions of the Company's
Amended and Restated Articles of Incorporation defining
the rights of the holders of common stock.
4.4 -- See Exhibits 3.3 and 3.4 for provisions of the Company's
By-laws defining the rights of holders of common stock.
5.1** -- Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to the Registrant.
10.1** -- Form of Indemnification Agreement entered into between
the Registrant and its directors and officers.
10.2** -- 1998 Stock Incentive Plan.
10.3** -- 1999 Equity Incentive Plan.
10.4** -- 1999 Employee Stock Purchase Plan.
10.5+** -- Watch Merchant Program Advertising and Promotion
Agreement dated February 26, 1999 between the Registrant
and Yahoo!, Inc.
10.6** -- Office Lease dated July 23, 1999 between the Registrant
and Crescent Real Estate Funding III, L.P.
10.7** -- Employment Agreement dated May 10, 1999 between the
Registrant and Kenneth E. Kurtzman.
10.8** -- Employment Agreement dated November 28, 1998 between the
Registrant and James H. Whitcomb, Jr.
10.9+ -- Fashion Accessories Program Advertising and Promotion
Agreement dated August 11, 1999 between the Registrant
and Yahoo!, Inc.
10.10+** -- Advertising Agreement dated July 30, 1999 between
Registrant and America Online, Inc.
10.11** -- Credit Agreement dated August 9, 1999 between the
Registrant and Chase Bank of Texas, National Association.
21.1** -- List of Subsidiaries of the Registrant.
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants.
23.2 -- Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to the Registrant. Reference is
made to Exhibit 5.1.
24.1** -- Power of Attorney.
24.2** -- Power of Attorney signed by Ms. Nicholas.
27.1** -- Financial Data Schedule.
99.1** -- Consent of International Data Corporation.
99.2** -- Consent of Data Monitor.
99.3** -- Consent of Global Industry Analysts.
</TABLE>

- ---------------

** Previously filed.

+ Confidential treatment requested as to certain portions of this exhibit and
the omitted portions have been filed with the Securities and Exchange
Commission.

(b) FINANCIAL STATEMENT SCHEDULE

Schedule II -- Valuations and Qualifying accounts.

Schedules not listed above have been omitted because the information
required to be shown therein is not applicable or is shown in the financial
statements or notes thereto.

II-3
<PAGE> 5

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 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 that:

(1) For purposes of determining any liability under the Securities Act
of 1933, 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 part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, 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.

II-4
<PAGE> 6

SIGNATURES

The purpose of this Amendment No. 5 is solely to file a revised Exhibit
10.9

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 5 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Houston, State of Texas, on this 22nd day of September, 1999.

ASHFORD.COM, INC.

By: /s/ KENNETH E. KURTZMAN
----------------------------------
Kenneth E. Kurtzman
Chief Executive Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 5 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:

/s/ J. ROBERT SHAW* Chairman of the Board September 22, 1999
- -----------------------------------------------------
J. Robert Shaw

/s/ KENNETH E. KURTZMAN Chief Executive Officer, Director September 22, 1999
- ----------------------------------------------------- (Principal Executive Officer)
Kenneth E. Kurtzman

/s/ DAVID F. GOW* Vice President, Finance and Chief September 22, 1999
- ----------------------------------------------------- Financial Officer (Principal
David F. Gow Financial and Accounting
Officer)

/s/ JAMES H. WHITCOMB, JR.* President and Chief Operating September 22, 1999
- ----------------------------------------------------- Officer, Director
James H. Whitcomb, Jr.

/s/ KEVIN R. HARVEY* Director September 22, 1999
- -----------------------------------------------------
Kevin R. Harvey

/s/ COLOMBE M. NICHOLAS* Director September 22, 1999
- -----------------------------------------------------
Colombe M. Nicholas

*By: /s/ KENNETH E. KURTZMAN
------------------------------------------------
Kenneth E. Kurtzman
Attorney-in-Fact
Pursuant to Power of Attorney
</TABLE>

II-5
<PAGE> 7

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

We have audited in accordance with generally accepted auditing standards,
the financial statements of Ashford.com, Inc. included in the Form S-1
Registration Statement and have issued our report thereon dated July 9, 1999.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. This Schedule is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This Schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects, the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

/s/ Arthur Andersen LLP

Houston, Texas
July 9, 1999

II-6
<PAGE> 8

ASHFORD.COM, INC. -- SCHEDULE II VALUATION
AND QUALIFYING ACCOUNTS

MARCH 31, 1999
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE
BALANCE AT THE AMOUNTS AT
BEGINNING OF CHARGED TO THE END OF
DESCRIPTION YEAR EXPENSE DEDUCTIONS YEAR
- ----------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>

March 31, 1999:
Allowance for Inventory
Obsolescence................... $-- $100 $-- $100
Allowance for Warranty Costs...... -- 40 (4) 36
</TABLE>
<PAGE> 9

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1** -- Form of Underwriting Agreement.
3.1** -- Amended and Restated Certificate of Incorporation of the
Registrant.
3.2** -- Form of Amended and Restated Certificate of Incorporation
of the Registrant, to be filed after the closing of the
offering made pursuant to this Registration Statement.
3.3** -- By-laws of the Registrant, as currently in effect.
3.4** -- Form of Amended and Restated By-laws of the Registrant to
be in effect after the closing of the offering made
pursuant to this Registration Statement.
4.1** -- Amended and Restated Investor Rights Agreement, dated
July 9, 1999, among the Registrant and the investors and
founders named therein.
4.2** -- Specimen Certificate of the Registrant's common stock.
4.3 -- See Exhibits 3.1 and 3.2 for provisions of the Company's
Amended and Restated Articles of Incorporation defining
the rights of the holders of common stock.
4.4 -- See Exhibits 3.3 and 3.4 for provisions of the Company's
By-laws defining the rights of holders of common stock.
5.1** -- Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to the Registrant.
10.1** -- Form of Indemnification Agreement entered into between
the Registrant and its directors and officers.
10.2** -- 1998 Stock Incentive Plan.
10.3** -- 1999 Equity Incentive Plan.
10.4** -- 1999 Employee Stock Purchase Plan.
10.5+** -- Watch Merchant Program Advertising and Promotion
Agreement dated February 26, 1999 between the Registrant
and Yahoo!, Inc.
10.6** -- Office Lease dated July 23, 1999 between the Registrant
and Crescent Real Estate Funding III, L.P.
10.7** -- Employment Agreement dated May 10, 1999 between the
Registrant and Kenneth E. Kurtzman.
10.8** -- Employment Agreement dated November 28, 1998 between the
Registrant and James H. Whitcomb, Jr.
10.9+ -- Fashion Accessories Program Advertising and Promotion
Agreement dated August 11, 1999 between the Registrant
and Yahoo!, Inc.
10.10+** -- Advertising Agreement dated July 30, 1999 between
Registrant and America Online, Inc.
10.11** -- Credit Agreement dated August 9, 1999 between the
Registrant and Chase Bank of Texas, National Association
21.1** -- List of Subsidiaries of the Registrant.
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants.
23.2 -- Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to the Registrant. Reference is
made to Exhibit 5.1.
24.1** -- Power of Attorney.
24.2** -- Power of Attorney signed by Ms. Nicholas.
27.1** -- Financial Data Schedule.
99.1** -- Consent of International Data Corporation.
99.2** -- Consent of Data Monitor.
99.3** -- Consent of Global Industry Analysts.
</TABLE>

- ---------------

** Previously filed.

+ Confidential treatment requested as to certain portions of this exhibit and
the omitted portions have been filed with the Securities and Exchange
Commission.

<PAGE> 1
EXHIBIT 10.9

EXECUTION COPY
CONFIDENTIAL

FASHION ACCESSORIES PROGRAM

ADVERTISING AND PROMOTION AGREEMENT

This Advertising and Promotion Agreement (this "Agreement") is entered
into as of August 11, 1999 (the "Effective Date") between Yahoo! Inc., a
Delaware corporation with offices at 3420 Central Expressway, Santa Clara, CA
95051 ("Yahoo") and Ashford.com, Inc., a Delaware corporation with offices at
3800 Buffalo Speedway, Suite 400, Houston, Texas 77098 ("Ashford").

In consideration of the mutual promises contained in this Agreement,
Yahoo and Ashford hereby agree as follows:

1. DEFINITIONS.

The following terms are used in this Agreement with the respective
meanings set forth below:

"Ashford Banner" shall mean the advertising promotions Ashford provides
to Yahoo hereunder and reasonably approved by Yahoo that: (a) promotes the
on-line sale of Fashion Accessories Products, (b) has dimensions no larger than
468 pixels wide by 60 pixels high, (c) does not have "looped" animation, (d)
does not have any animation longer than six seconds, (e) has a file size of no
greater than 12K, and (f) will permit users to navigate directly to a Page on
the Ashford Site relating to the Ashford Banner content. Yahoo may modify these
specifications (except clause (f)) at its reasonable discretion, provided that
any such modification does not have a material adverse impact on the value of
the Ashford Banner, as would be reasonably determined by a similarly situated
independent third party merchant.

"Ashford Banner Category Pages" shall mean those Pages within the
Ashford Banner Categories identified on Exhibit A.

"Ashford Banner Keywords" shall mean those keywords identified as such
on Exhibit A; provided that, Yahoo may substitute any such keyword for a
comparable keyword in its reasonable discretion with consent from Ashford, which
shall not be unreasonably withheld or delayed.

"Ashford Banner Pages" shall mean the Ashford Banner Category Pages and
Ashford Banner Search Results Pages.

"Ashford Banner Search Results Pages" shall mean those Pages displayed
upon a user's searching the Yahoo Main Site for an Ashford Banner Keyword.

"Ashford Brand Features" shall mean all trademarks, service marks,
logos and other distinctive brand features of Ashford that are used in or relate
to its business.

<PAGE> 2
EXECUTION COPY
CONFIDENTIAL

"Ashford Button" shall mean a link substantially similar in form as
that set forth on Exhibit B that: (a) contains an Ashford logo and has
dimensions no larger than 88 pixels wide by 31 pixels high, (b) does not contain
animation, (c) has a file size of no greater than 2K, (d) contains alt text of
no more than ten (10) characters (including spaces), (e) and will permit users
to navigate directly to a Page on the Ashford Site reasonably relating to the
Page on which such Ashford Button appears. Yahoo may modify these specifications
(except clause (e)) at its reasonable discretion, provided that any such
modification does not have a material adverse impact on the value of the Ashford
Button, as would be reasonably determined by a similarly situated independent
third party merchant.

"Ashford Button Category Pages" shall mean those Pages within the
Ashford Button Categories identified on Exhibit A.

"Ashford Button Keywords" shall mean those keywords identified as such
on Exhibit A; provided that, Yahoo may substitute any such keyword for a
comparable keyword in its reasonable discretion with consent from Ashford, which
shall not be unreasonably withheld or delayed.

"Ashford Button Pages" shall mean the Ashford Button Category Pages and
Ashford Button Search Results Pages.

"Ashford Button Pages Area" shall mean the area on the Ashford Button
Pages on which the Ashford Button appears (together with other merchant or Yahoo
buttons).

"Ashford Button Search Results Pages" shall mean those Pages displayed
upon a user's searching the Yahoo Main Site for an Ashford Button Keyword

"Ashford Competitors" shall mean those merchants listed on Exhibit G;
provided that, any such entity shall not be considered to be an Ashford
Competitor to the extent it [*]. The parties agree that during the Term, Ashford
may [*] (an "Ashford Competitor Update Request"). Notwithstanding the forgoing,
if Yahoo has already entered into a contractual relationship with any such third
party prior to its receipt of an Ashford Competitor Update Request, such third
party will not be added to such list [*].

"Ashford E-Mail" shall mean an e-mail message promoting Fashion
Accessories Products that: (a) is a single HTML mail message; (b) contains an
image in JPEG or GIF format under 5K in file size; (c) has a total page weight
of no more than 30K, (d) contains no animation longer than 6 seconds (with no
"looping") (e) contains no Java, JavaScript, frames, ActiveX, dynamic HTML,
background body image or background color, (f) contains up to four lines of text
as provided by Ashford and reasonably approved by Yahoo, with no more than 40
characters (including spaces) on each line. Yahoo may modify these
specifications at its reasonable discretion, provided that any such modification
does not have a material adverse impact on the value of the Ashford E-Mail, as
would be reasonably determined by a similarly situated independent third party
merchant.

"Ashford Front Page Promotion" shall mean a promotion substantially
similar in form as that set forth on Exhibit B which will appear on the home
page of the Yahoo Main Site, that will in all cases comply with Yahoo's current
front-page promotion guidelines attached as Exhibit D, which may be modified by
Yahoo at its sole discretion; provided that, in the event that any such

Certain confidential information on this page has been omitted and
filed with the Securities and Exchange Commission.

<PAGE> 3
EXECUTION COPY
CONFIDENTIAL

modification has a material adverse impact on the value of the Ashford Front
Page Promotion as would be reasonably determined by a similarly situated
independent third-party merchant, Ashford shall be permitted to substitute any
undelivered Ashford Front Page Promotion inventory for alternative promotions in
the Yahoo Main Site mutually agreed upon by the parties ("Substitue Front Page
Inventory"). Any substitutions shall be made based on the ratio of Yahoo's
then-current ratecard prices for the Substitute Front Page Inventory and the
then current value of the Ashford Front Page Promotion inventory to be
substituted (i.e., if at the time of substitution, the Substitute Front Page
Inventory is valued at a [*] cpm on Yahoo's then current ratecard, and the then
current value of the Ashford Front Page Promotion in the then current rate card
is [*], then Ashford shall get [*] the number of remaining impressions of the
Ashford Front Page Promotions when converted to the new inventory).

"Ashford Link" shall mean any link placed by Yahoo under this
Agreement, including, without limitation, the Ashford Banner, Ashford Button,
and Ashford E-Mail.

"Ashford Site" shall mean the web site owned by Ashford currently
located at http://www.ashford.com.

"Fashion Accessories Merchant" shall mean any company or other entity
that derives fifty percent (50%) or more of its revenue through the on-line sale
of Fashion Accessories Products.

"Fashion Accessories Merchant Program" shall mean Yahoo's program
consisting of certain marketing, advertising and promotional activities with
Fashion Accessories Merchants.

"Fashion Accessories Products" shall mean jewelry, certain leather
goods (e.g., handbags and wallets), pens, eyewear and similar fashion
accessories (e.g., watches).

"February 1999 Agreement" shall mean that Advertising and Promotion
Agreement, between Ashford and Yahoo, dated February 26, 1999.

"Launch Date" shall mean the date of first public availability of the
Ashford Links on the Yahoo Properties.

"Merchant Button" shall mean a link to a third party merchant's World
Wide Web site that substantially conforms to the specifications of Yahoo's then
current merchant promotional buttons.

"Page" means any World Wide Web page (or, for online media other than
Web sites, the equivalent unit of the relevant protocol).

"Page View" shall mean a user's request for a Page as measured by
Yahoo's advertising reporting system.

"Term" shall mean the period beginning on the Effective Date and
continuing for a period of twelve (12) months following the Launch Date.

"Treasure Hunt Click-Throughs" shall mean a user's "pressing" or
"clicking" on a Treasure Hunt Promotion "Win It" icon, as measured by Yahoo's
advertiser reporting system.

"Treasure Hunt Promotion" shall mean a multi-sponsor promotion on the
Yahoo Properties, conforming to the specifications set forth in Exhibit E (which
may be modified at

Certain confidential information on this page has been omitted and
filed with the Securities and Exchange Commission.

3
<PAGE> 4
EXECUTION COPY
CONFIDENTIAL

Yahoo's reasonable discretion, provided that any such modification does not have
a material adverse impact on the value of the Treasure Hunt Promotion), in which
users view sponsors' pages and answer demographic questions in exchange for
entries towards a drawing for prizes.

"Yahoo Brand Features" shall mean all trademarks, service marks, logos
and other distinctive brand features of Yahoo that are used in or relate to its
business.

"Yahoo Main Site" shall mean Yahoo's principal U.S. based directory to
the World Wide Web currently located at http://www.yahoo.com.

"Yahoo Properties" shall mean any Yahoo branded or co-branded media
properties, including, without limitation, Internet guides, that are developed
in whole or in part by Yahoo or its affiliates.

"Yahoo Sports" shall mean Yahoo's sports related property currently
located at http://sports.yahoo.com.

ASHFORD BANNER, FRONT PAGE PROMOTION AND SPORTS PROMOTION.

2.1 During the Term, Yahoo shall provide the Ashford Banner, on a
rotating basis until its Page View obligations under Section 7 are
met, on the Ashford Banner Pages. Yahoo agrees to use commercially
reasonable efforts to ensure that the Ashford Banners are served
on the Ashford Banner Pages during each month of the Term, unless
otherwise mutually agreed upon by the parties.

2.2 During the Term, Yahoo shall provide the Ashford Front Page
Promotion, on a rotating basis until its Page View obligations
under Section 7 are met, on the home page of the Yahoo Main Site.
Yahoo agrees to use commercially reasonable efforts to ensure that
the Ashford Front Page Promotions are served on the home page of
the Yahoo Main Site on the dates specified on Exhibit A or,
subject to availability, other dates mutually agreed upon by the
parties.

2.3 During the Term, Yahoo shall provide Ashford with an advertising
promotion valued at [*], calculated at a [*] discount off of
Yahoo's then current standard rate card prices, in Yahoo Sports.
The form of such advertisement shall be mutually agreed upon by
the parties but consistent with applicable standard forms of
advertising appearing in Yahoo Sports.

ASHFORD BUTTONS.

3.1 Yahoo shall provide the Ashford Button on the Ashford Button Pages
throughout the Term. The Ashford Button's placement on the Ashford
Button Pages shall rotate equally with any other buttons appearing
in the Ashford Button Pages Area (consistent with the limited
exclusivity provision of Section 6.1). Yahoo shall provide up to
three (3) text links to accompany the Ashford Button on the
Ashford Button Pages. In no case shall any Ashford Button text

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link exceed sixteen (16) characters (including spaces). Further,
each Ashford Button text link shall promote Fashion Accessories
Products and permit users to navigate via a link directly to a
Page on the Ashford Site relating to the Fashion Accessories
Products relevant to the Ashford Button Page on which such text
link appears.

ASHFORD E-MAILS AND TREASURE HUNT PROMOTION.

4.1 Yahoo shall deliver (i) [*] Ashford E-Mails to unique registered
users of its U.S. based email service through the Yahoo! Delivers
program (the "Yahoo Delivers Program"); and (ii) [*] Ashford
E-Mails to unique registered users of its U.S. based email service
through the Yahoo! Welcome and/or Birthday Club program (the
"Yahoo Welcome Program"). In addition, Yahoo shall deliver [*]
Treasure Hunt Click-Throughs. In all cases, Ashford E-Mails shall
be delivered only (x) to those registered users of Yahoo's U.S.
based e-mail service that have indicated during the registration
process for such service a willingness to receive promotional
solicitations via Yahoo Mail; and (y) in accordance with Yahoo's
privacy policy. The text of the Ashford E-Mail and materials
necessary for Ashford's participation in the aforementioned
programs shall be provided by Ashford and shall be subject to
Yahoo's reasonable approval and consistent with Yahoo's generally
applicable policies and guidelines for such messages and programs.
Yahoo shall use commercially reasonable efforts to target the
Ashford E-Mails delivery to its users based on gender and age
characteristics mutually agreed upon by the parties.

IMPLEMENTATION.

5.1 Yahoo will be solely responsible for the user interface and
placement of the Ashford Links and Ashford shall be solely
responsible for and shall provide Yahoo with all artwork and
design elements of the Ashford Links.

5.2 Ashford shall promptly provide Yahoo all URLs, URL formats (as
applicable), content, and other materials necessary for Yahoo to
provide the Ashford Links. All content and material contained in
the Ashford Links is subject to Yahoo's reasonable approval and
must comply with all applicable federal, state and local laws,
rules and regulations, including, without limitation, consumer
protection laws and rules and regulations governing product
claims, truth in labeling, and false advertising.

5.3 During the Term, Ashford hereby grants to Yahoo a non-exclusive,
worldwide, fully paid license to use, reproduce and display the
Ashford Brand Features (i) to indicate the location of the Ashford
Links as set forth herein and (ii) in connection with the
marketing and promotion of Ashford in the Yahoo Properties. In
association with the forgoing license, Yahoo agrees to comply with
the reasonable quality control guidelines provided by Ashford to
Yahoo

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from time to time. Yahoo agrees that all uses of the Ashford Brand
Features shall be on behalf of Ashford and the goodwill associated
therewith shall inure to the sole benefit of Ashford.

5.4 In no event shall the first Page on the Ashford Site to which
users click-through directly from any Ashford Link contain graphic
or textual hyperlinks, banner advertisements or promotions of the
following third parties: [*]. The parties agree that during the
Term, Yahoo may request in writing that other third parties are
added to the forgoing list (a "Section 5.4 Request"), provided
that such party is primarily involved in providing users [*].
Notwithstanding the forgoing, if Ashford has already entered into
a contractual relationship with any such third party prior to its
receipt of a Section 5.4 Request, such third party will not be
added to such list until the recited contractual obligations in
conflict with the above provisions have been satisfied.

5.5 Ashford shall place a Yahoo graphic link on the first Page of the
Ashford Site to which users directly click-through from any
Ashford Link. Such Yahoo graphic link shall be substantially
similar in form as that set forth on Exhibit B, unless the parties
mutually agree to an alternative placement; and (b) directly link
the user back to a Page on the Yahoo Properties either to the page
from which the user click-through from or to the Yahoo Main Site
home page.

5.6 During the Term, Yahoo hereby grants to Ashford a non-exclusive,
worldwide, fully paid license to use, reproduce and display the
Yahoo name and logo to indicate the location of the Yahoo graphic
links as set forth herein. In association with the forgoing
license, Ashford agrees to comply with the Trademark Usage
Guidelines attached as Exhibit H. Ashford agrees that all uses of
the Yahoos name and logo shall be on behalf Yahoo and the goodwill
associated therewith shall inure to the sole benefit of Yahoo.

5.7 The Ashford Site shall comply with the scale, speed and
performance requirements mutually agreed upon by the parties, but
in no event shall the scale, speed and performance of the Ashford
Site be materially less capable in such regard to comparable
similarly situated Yahoo merchants.

LIMITED EXCLUSIVITY; RIGHT OF FIRST PRESENTATION.

6.1 Yahoo shall display no more than one (1) Merchant Button of any
Ashford Competitor on the Ashford Button Pages. Further, in the
event that Yahoo elects to display seven (7) or more Merchant
Buttons on the Ashford Button Pages, Yahoo shall: (i) increase its
total Page View obligation set forth in Section 7.1 from [*] Page
Views to [*] Page Views; and (ii) increase the number of Page
Views referenced in Section 7.2 relating to the Ashford Button
from [*] to [*].

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6.2 For clarity, Ashford acknowledges that the foregoing limited
exclusivity provision of Section 6.1 shall not preclude Yahoo
from, among other things: (i) promoting or placing banners,
Merchant Buttons or any other advertising of any entity (including
Ashford Competitors) on any Yahoo Property other than the Ashford
Button Pages; (ii) subject to Section 6.1, promoting or placing
banners, Merchant Buttons or any other advertising of any entity
except Ashford Competitors on the Ashford Button Pages; or (iii)
promoting or placing banners or any other advertising except
Merchant Buttons of any entity (including Ashford Competitors) on
the Ashford Button Pages, provided that if Yahoo incorporates a
non-banner promotion which is larger than the Ashford Buttons on
the Ashford Button Pages, Ashford shall have the right to and
Yahoo will agree to exchange the relevant and affected Ashford
Button Page Views with [*].

6.3 Within thirty (30) days prior to the expiration of the Term, Yahoo
will provide written notice to Ashford in the event that Yahoo, at
its sole discretion, elects to extend the availability of the
Fashion Accessories Merchant Program described in this Agreement.
Yahoo shall describe Yahoo's reasonable business requirements for
such Fashion Accessories Merchant Program in its written notice to
Ashford. The parties will [*] with respect to such Fashion
Accessories Merchant Program [*]. If Ashford declines [*] with
Yahoo within ten (10) days after receiving such written notice
from Yahoo, or if the parties fail to [*] within ten (10) business
days following [*] (or such later date as is agreed by the
parties), Yahoo may offer the opportunity to any third party. The
parties acknowledge that the promotional opportunities and terms
offered in any Fashion Accessories Merchant Program may differ
substantially from those contained in this Agreement. Further,
under no circumstances shall the foregoing right of presentation
be deemed to restrict Yahoo's ability to extend merchant positions
in any subsequent Fashion Accessories Merchant Program to any
third parties, provided that Yahoo complies with the terms of this
Section 6.3.

6.4 Yahoo will provide written notice to Ashford in the event that
Yahoo, at its sole discretion, elects to create, during the Term,
a new promotional opportunity substantially similar in scope and
nature to this Fashion Accessories Merchant Program on the Yahoo
Main Site. Yahoo shall describe Yahoo's reasonable business
requirements for the new promotional opportunity in its written
notice to Ashford. If Ashford declines [*] with Yahoo within ten
(10) days after receiving such written notice from Yahoo, or if
the parties fail to [*] within ten (10) business days following
[*] (or such later date as is agreed by the parties), Yahoo may
offer the opportunity to any third party. For clarity, the parties
acknowledge that advertising and promotional opportunities that
are in the normal course of Yahoo's business including, but not
limited to,

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banner ads on category pages and keyword search results pages,
shall not be considered new promotional opportunities for the
purposes of this Section 6.4.

PAGE VIEWS.

7.1 With respect to the Ashford Button, Ashford Banner, and Ashford
Front Page Promotion, Yahoo shall deliver a minimum of [*] Page
Views.

7.2 Yahoo shall use reasonable commercial efforts to deliver such Page
Views as follows: [*] Page Views of the Ashford Button; [*] Page
Views of the Ashford Banner; and [*] Page Views of the Ashford
Front Page Promotion. Notwithstanding the foregoing, Yahoo's Page
View obligations are with respect to the program as a whole as set
forth in Section 7.1 above and Yahoo shall not be in breach of
this Agreement for failure to deliver the specific number of Page
Views in any of the areas set forth in this Section 7.2.

7.3 In the event that Yahoo fails to deliver [*] or less of (i.e.
delivers [*] or more of) the number of Page Views referred to in
Section 7.1 at the expiration of the Term, Yahoo will "make good"
the shortfall [*] after the end of the Term by extending its
obligations under Sections 2, 3 and 6 in the areas of the Yahoo
Main Site set forth therein (or similar mutually agreed upon
inventory) beyond the end of the Term until such Page View
obligation is satisfied. The provisions set forth in this Section
7.3 set forth the entire liability of Yahoo, and Ashford's sole
remedy, for Yahoo's breach of its Page View obligations set forth
in this Section 7.

7.4 Throughout the Term, Yahoo shall provide Ashford access to an
electronic database that describes Yahoo's calculation of the Page
Views delivered during the Term. The database will be updated
according to Yahoo's standard updating procedures.

COMPENSATION.

8.1 Slotting Fee. In consideration of Yahoo's performance and
obligations as set forth herein, Ashford will pay Yahoo a
non-refundable slotting fee equal to two million dollars
($2,000,000). Such fee shall be paid to Yahoo on the dates set
forth below with the first payment designated as a set up fee for
the design, consultation and development of the Ashford Links.

a) Payment Date
--------------------------------------------------------
b) [*] [*]

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c) [*] [*]
d) [*] [*]
e) [*] [*]
f) [*] [*]

8.2 Payment Information. All payments herein are non-refundable and
non-creditable (except as provided in Section 9.3(b)) and shall be
made by Ashford via wire transfer into Yahoo's main account
pursuant to the wire transfer instructions set forth on Exhibit C.

8.3 Late Payments. Any portion of the above payments which has not
been paid to Yahoo within [*] days of the dates set forth above
shall bear interest at the greater of (i) one percent (1%) per
month or (ii) the maximum amount allowed by law. Notwithstanding
the foregoing, any failure by Ashford to make the payments
specified in Sections 8.1 on the dates set forth therein shall
constitute a material breach of this Agreement.

TERMINATION.

9.1 Term. This Agreement shall commence upon the Effective Date and,
unless terminated as provided herein, shall remain in effect for
the Term.

9.2 Termination by Either Party with Cause. This Agreement may be
terminated at any time by either party: (i) immediately upon
written notice if the other party: (a) is declared insolvent; (b)
files a petition in bankruptcy; or (c) makes an assignment for the
benefit of its creditors; or (ii) thirty (30) days after written
notice to the other party of such other party's breach of any of
its obligations under this Agreement in any material respect (ten
(10) days in the case of a failure to pay), which breach is not
remedied within such notice period. In the event that Yahoo
provides a notice of termination under clause (ii) above, Yahoo
shall have the right to suspend its performance under this
Agreement for the notice period unless and until the breach is
fully remedied by Ashford prior to the expiration of the notice
period.

9.3 Termination by Yahoo.

a) Yahoo may terminate this Agreement upon forty-five (45) days
written notice to Ashford if (i) at any time during the Term
Yahoo reasonably determines that Ashford Site is not fully
operational with support for conducting on-line sales of
Fashion Accessories Products, or (ii) at any time during the
Term after October 1, 1999, Yahoo reasonably determines that
the Ashford Site is no longer one of the top five (5) sites
for the on-line sale of Fashion Accessories Products (as
determined, to the extent practical, over a reasonable period
of time, by an independent, qualified and industry-recognized
third party based on the quantity and quality of customers
and product offerings).

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b) In the event of a termination of this Agreement by Yahoo
pursuant to Section 9.3(a) or Section 14.5: (i) Ashford's
payment obligations after the effective date of such
termination (the "Section 9.3(a) Termination Date") shall
cease; and (ii) Yahoo shall continue providing the promotions
set forth in this Agreement until the value of such
promotions equal the amount of any payments already made by
Ashford through the Section 9.3(a) Termination Date, less the
value of promotions already delivered by Yahoo through the
Section 9.3(a) Termination Date. For the purposes of this
Section 9.3(b), the value of all promotions described in
clause (ii) of this Section 9.3(b) shall be calculated at the
same rate and discounts as the promotions described in
Sections 2, 3 and 4 of this Agreement. Any promotions
delivered by Yahoo pursuant to this Section 9.3(b) shall be
substantially similar to the promotions contemplated under
this Agreement unless otherwise mutually agreed upon by the
parties. Yahoo agrees that any promotions subject to this
Section 9.3(b) shall be delivered within four (4) month of
the Section 9.3(a) Termination Date.

9.4 Survival. The provisions of Sections 1, 7.3, 8, 9.3(b) and 10
through 14 and this 9.4 shall survive expiration or termination of
this Agreement; provided that, Ashford's payment obligations set
forth in Section 8.1 shall not survive a proper termination of
this Agreement: (i) by Ashford pursuant to Section 9.2; or (ii) by
Yahoo pursuant to Section 9.3(a) or 14.5.

CONFIDENTIAL INFORMATION AND PUBLICITY.

10.1 Terms and Conditions. The terms and conditions of this Agreement
shall be considered confidential and shall not be disclosed to any
third parties except to such party's accountants, attorneys, or
except as otherwise required by law. Neither party shall make any
public announcement regarding the existence of this Agreement
without the other party's prior written approval and consent. If
this Agreement or any of its terms must be disclosed under any
law, rule or regulation, the disclosing party shall (i) give
written notice of the intended disclosure to the other party at
least five (5) days in advance of the date of disclosure, (ii)
redact portions of this Agreement to the fullest extent permitted
under any applicable laws, rules and regulations, and (iii) submit
a request, to be agreed upon by Yahoo, that such portions and
other provisions of this Agreement requested by Yahoo receive
confidential treatment under the laws, rules and regulations of
the body or tribunal to which disclosure is being made or
otherwise be held in the strictest confidence to the fullest
extent permitted under the laws, rules or regulations of any other
applicable governing body.

10.2 Publicity. Any and all publicity relating to this Agreement and
subsequent transactions between Yahoo and Ashford and the method
of its release shall be approved in advance of the release, in
writing, by both Yahoo and Ashford. Subject to the pre-approval
restrictions of this Section 10.2, the parties agree that Ashford
may issue a press release relating to this Agreement.

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10.3 Nondisclosure Agreement. Yahoo and Ashford acknowledge and agree
that the Mutual Nondisclosure Agreement terms attached as Exhibit
F, shall be incorporated by reference and made a part of this
Agreement, and shall govern the use and disclosure of information
and all discussions pertaining to or leading to this Agreement.

10.4 User Data. All information and data provided to Yahoo by users of
the Yahoo Properties or otherwise collected by Yahoo relating to
user activity on the Yahoo Properties shall be retained by and
owned solely by Yahoo. All information and data provided to
Ashford on the Ashford Site or otherwise collected by Ashford
relating to user activity on the Ashford Site shall be retained by
and owned solely by Ashford. Each party agrees to use any
personally identifying user information only as authorized by the
user and shall not disclose, sell, license or otherwise transfer
any such user information to any third party without the consent
of the user or use the user information for the transmission of
"junk mail," "spam," or any other unsolicited mass distribution of
information.

10.5 Privacy of User Information. Ashford shall ensure that all
information provided by users of the Ashford Site is maintained,
accessed and transmitted in a secure environment and in compliance
with industry standard security specifications. Further, Ashford
shall provide a link to its privacy policy regarding the
protection of user data on those pages of the Ashford Site where
the user is requested to provide personal or financial
information.

INDEMNIFICATION.

11.1 Ashford, at its own expense, will indemnify, defend and hold
harmless Yahoo and its employees, representatives, agents and
affiliates, against any third party claim, suit, action, or other
proceeding brought against Yahoo based on or arising from a claim
any Ashford Brand Feature, any material, product or service
produced, distributed, offered or provided by Ashford, or any
material presented on the Ashford Site, infringes in any manner
any copyright, patent, trademark, trade secret or any other
intellectual property right of any third party, is or contains any
material or information that is obscene, defamatory, libelous,
slanderous, or that violates any law or regulation, or that
otherwise violates any rights of any person or entity, including,
without limitation, rights of publicity, privacy or personality,
or has otherwise resulted in any consumer fraud, product
liability, tort, breach of contract, injury, damage or harm of any
kind to any third party; provided, however, that in any such case:
(x) Yahoo provides Ashford with prompt notice of any such claim;
(y) Yahoo permits Ashford to assume sole control over the defense
or settlement of such action upon Ashford's written notice to
Yahoo of its intention to indemnify; and (z) upon Ashford's
written request, and at no expense to Yahoo, Yahoo will provide to
Ashford all available information and assistance necessary for
Ashford to defend and settle such claim. Ashford will not enter
into any settlement or compromise

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of any such claim, which settlement or compromise would result in
any liability to Yahoo, without Yahoo's prior written consent,
which shall not unreasonably be withheld. Ashford will pay any and
all costs, damages, and expenses (including, but not limited to,
reasonable attorneys' fees and costs awarded against Yahoo)
incurred by Yahoo in connection with or arising from any such
claim, suit, action or proceeding.

11.2 Yahoo, at its own expense, will indemnify, defend and hold
harmless Ashford and its employees, representatives, agents and
affiliates, against any claim, suit, action, or other proceeding
brought against Ashford based on or arising from a claim that any
Yahoo Brand Feature infringes in any manner any copyright, US
patent, trademark, trade secret or any other intellectual property
right of any third party; provided, however, that in any such
case: (x) Ashford provides Yahoo with prompt notice of any such
claim; (y) Ashford permits Yahoo to assume sole control over the
defense and settlement of such action upon Yahoo's written notice
to Ashford of its intention to indemnify; and (z) upon Yahoo's
written request, and at no expense to Ashford, Ashford will
provide to Yahoo all available information and assistance
necessary for Yahoo to defend and settle such claim. Yahoo will
not enter into any settlement or compromise of any such claim,
which settlement or compromise would result in any liability to
Ashford, without Ashford's prior written consent, which shall not
unreasonably be withheld. Yahoo will pay any and all costs,
damages, and expenses, (including, but not limited to, reasonable
attorneys' fees and costs awarded against Ashford) incurred by
Ashford in connection with or arising from any such claim, suit,
action or proceeding.

LIMITATION OF LIABILITY.

12.1 EXCEPT AS PROVIDED IN SECTION 11, UNDER NO CIRCUMSTANCES SHALL
ASHFORD, YAHOO, OR ANY AFFILIATE BE LIABLE TO THE OTHER PARTY FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES
ARISING FROM THIS AGREEMENT, EVEN IF THAT PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, SUCH AS, BUT NOT LIMITED TO,
LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.

INSURANCE.

13.1 Ashford agrees that it will maintain insurance with a carrier that
is reasonably acceptable to Yahoo and with coverage for commercial
general liability and errors and omissions of at least [*] per
occurrence. Ashford will name Yahoo as an additional insured on
such insurance and will provide evidence of such insurance to
Yahoo within ten (10) days of the Effective Date. Such insurance
policy shall not be cancelled or modified in a manner which makes
such policy non-compliant with this Section 13.1 without Yahoo's
prior written consent.

GENERAL PROVISIONS.

14.1 Independent Contractors. It is the intention of Yahoo and Ashford
that Yahoo and Ashford are, and shall be deemed to be, independent
contractors with

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respect to the subject matter of this Agreement, and nothing
contained in this Agreement shall be deemed or construed in any
manner whatsoever as creating any partnership, joint venture,
employment, agency, fiduciary or other similar relationship
between Yahoo and Ashford.

14.2 Entire Agreement. This Agreement, together with all Exhibits
hereto, represents the entire agreement between Yahoo and Ashford
with respect to the subject matter hereof and thereof and shall
supersede all prior agreements and communications of the parties,
oral or written, including without limitation the Letter of
Agreement executed on or about June 1, 1999, between Yahoo and
Ashford. The parties acknowledge and agree that this Agreement
shall have no effect on the February 1999 Agreement and the
February 1999 Agreement shall remain in full force and effect.

14.3 Amendment and Waiver. No amendment to, or waiver of, any provision
of this Agreement shall be effective unless in writing and signed
by both parties. The waiver by any party of any breach or default
shall not constitute a waiver of any different or subsequent
breach or default.

14.4 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of California without
regard to the conflicts of laws principles thereof.

14.5 Successors and Assigns. Neither party shall assign its rights or
obligations under this Agreement without the prior written consent
of the other party, which shall not unreasonably be withheld or
delayed. Notwithstanding the foregoing, either party may assign
this Agreement to an entity that acquires substantially all of the
stock or assets of a party to this Agreement; provided that if the
non-assigning party determines that the assignee will not have
sufficient capital or assets to perform its obligations hereunder,
or that the assignee is a competitor of the non-assigning party,
the non-assigning party can terminate this Agreement for
convenience at any time after such an assignment. All terms and
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted
transferees, successors and assigns.

14.6 Force Majeure. Neither party shall be liable for failure to
perform or delay in performing any obligation (other than the
payment of money) under this Agreement if such failure or delay is
due to fire, flood, earthquake, strike, war (declared or
undeclared), embargo, blockade, legal prohibition, governmental
action, riot, insurrection, damage, destruction or any other
similar cause beyond the control of such party.

14.7 Notices. All notices, requests and other communications called for
by this agreement shall be deemed to have been given immediately
if made by facsimile or Electronic mail (confirmed by concurrent
written notice sent via overnight courier for delivery by the next
business day), if to Yahoo at 3420

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Central Expressway, Santa Clara, CA 95051, Fax: (408) 731-3301
Attention: Vice President (e-mail: [*]), with a copy to its
General Counsel (e-mail: [*]), and if to Ashford at the physical
or electronic mail addresses set forth on the signature page of
this Agreement, or to such other addresses as either party shall
specify to the other. Notice by any other means shall be deemed
made when actually received by the party to which notice is
provided.

14.8 Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable for any reason, such
invalidity, illegality or unenforceability shall not effect any
other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision
had never been contained herein.

14.9 Sole Responsibility. Ashford will remain solely responsible for
the operation of the Ashford Site, and Yahoo will remain solely
responsible for the operation of the Yahoo Main Site. Each party:
(a) acknowledges that the Ashford Site and the Yahoo Main Site
may be subject to temporary shutdowns due to causes beyond the
operating party's reasonable control; and (b) subject to the
terms of this Agreement, retains sole right and control over the
programming, content and conduct of transactions over its
respective internet-based service.

14.10 Counterparts. This Agreement may be executed in two counterparts,
both of which taken together shall constitute a single
instrument. Execution and delivery of this Agreement may be
evidenced by facsimile transmission.

14.11 Authority. Each of Yahoo and Ashford represents and warrants that
the negotiation and entry of this Agreement will not violate,
conflict with, interfere with, result in a breach of, or
constitute a default under any other agreement to which they are
a party.

14.12 Attorneys Fees. The prevailing party in any action to enforce
this Agreement shall be entitled to reimbursement of its
expenses, including reasonable attorneys' fees.

[Signature page follows]

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This Advertising and Promotion Agreement has been executed by the duly
authorized representatives of the parties, effective as of the Effective Date.

YAHOO! INC. ASHFORD.COM

By: _____________________ By: ________________________

Name: ___________________ Name: ______________________

Title: ___________________ Title: ______________________

Attn: VP, Business Development Attn: VP, Business Development
3420 Central Expressway 3800 Buffalo Speedway, Suite 400
Santa Clara, CA 95051 Houston, TX 77098
Tel.: (408) 731-3300 Tel: 713-369-1300
Fax: [*] Fax: 713-629-5631
e-mail: [*] email: [email protected]

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EXHIBIT A

Ashford Banner Keywords:
- -----------------------
[*]

Ashford Banner Categories:
- -------------------------
[*]

Ashford Button Keywords:
- -----------------------
[*]

Ashford Button Categories:
- -------------------------
[*]

Dates for the Ashford Front Page Promotions: [*] through [*]; [*] through [*];
and [*] through [*] or other dates as mutually agreed by the parties.

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filed with the Securities and Exchange Commission.

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EXHIBIT B
(ATTACH SCREEN SHOTS)

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EXHIBIT C
Wire Transfer Instructions

Yahoo's Bank Information:

Institution Name: [*]
Institution Address: [*]
ABA: [*]
Beneficiary Name: [*]
Beneficiary Account Number: [*]

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EXHIBIT D
Front Page Promotion Guidelines

The Front Page Promotion shall be in the form of a banner advertisement and
subsequent promotion pages, and shall have the following specifications and
characteristics (references to the "sponsor" apply to the advertiser on whose
behalf the front page promotion is run).

Banner Specifications:

Size: 230 pixels wide by 33 pixels high. File size must not exceed 3k.

The banner can animate for a period of not more than 6 seconds. No endless
looping is permitted.

For a 14 day promotion campaign, the sponsor may run up to 6 different banners
that will rotate equally.

Background Color: Backgrounds which are not transparent must have a color(s)
which are using a HSB color space, between 0% and 50% in saturation, and between
50% and 80% in brightness. The hue may be any value. Yahoo reserves the right to
define the portions of a submitted image that comprises the background.
Transparent backgrounds are permitted.

All banners are subject to aesthetic and content approval by Yahoo. All artwork
must be submitted to Yahoo at least five (5) business days prior to the
promotion's launch date. Yahoo reserves the right to review, reject or modify
any part of any creative at its sole discretion. The sponsor shall ensure that
their promotion complies in all respects with applicable laws and regulations.
The sponsor expressly understands and agrees that the approval of the official
rules for any promotion by Yahoo shall not constitute an opinion as to the legal
appropriateness or adequacy of such rules or their manner of use.

Sweepstakes Prizes: Yahoo requires that front page promotion sponsors provide a
prize package of a minimum retail value. Values for different types of front
page promotions are set forth below.

Type of Promotion:
Prize Package Minimum
Front Page Banner $10,000
Front Page Text $10,000

Prize values for multi-sponsored promotions vary.

Sponsor is responsible for all shipping/handling charges and any other expenses
associated with prize fulfillment.

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Sponsor is responsible for sending 1099 notifications to the promotion winners
and the IRS.

Sponsor shall deliver prizes to winning contestant within six (6) weeks of the
promotion's conclusion.

Sponsor hosted promotions.
- -------------------------

A standard promotion hosted by the sponsor shall consist of the following:

Banner(s) or text links on a Yahoo hosted page that link to the sponsor hosted
promotion jump page.

A jump page consisting of promotion graphics, client graphics, copy/content and
contest description.

A rules page consisting of official rules that govern the promotion.

An entry form page consisting of promotion graphics and the entry form. The
entry form shall include the following disclaimer located directly next to the
"submit" button.

(Sponsor's Name) is solely responsible for the use of this information.

A thank you page consisting of graphics and text.

Total size of all graphics on each promotion page must be less than 35K. This is
to optimize loading times for contestants and to reduce the amount of people
that turn away from the promotion before the page loads.

If sponsor host's the promotion, sponsor further agrees to the following:
To allow Yahoo engineers to run a stress test program to test the sponsor's
server(s) capacity. A mutually agreed upon time will be arranged with sponsor to
run this test program, which simulates the traffic level that can be expected
from a front page promotion. Sponsor shall make necessary modifications to its
server capacity so that it will pass such test prior to the start date of the
promotion.

Submit promotion URLs at least five (5) business days prior to the starting date
of the promotion for Yahoo final approval (which may include Yahoo required
modifications to the promotion).

Sponsor may not post any contest page until it receives final approval of the
entire page from Yahoo.

Consistent with its privacy policy, Yahoo reserves the right to access all
aggregate information captured on entry form submissions through the promotion.
Sponsor agrees to provide such

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information to Yahoo immediately upon Yahoo's request. Yahoo's use of this
information will in all cases in accordance with its privacy policy.

Traffic sent to sponsor home page.
- ---------------------------------

In order to send traffic from the promotional banner on Yahoo directly to a
sponsor's home page instead of a jump page, the following requirements must be
met, with no exceptions:

Sponsor agrees to create a customized prominent graphic dedicated to
prize/contest details to be displayed on sponsor's home page. Such graphic shall
always be above the fold of the sponsor's home page and link directly to the
sweepstakes page/entry form.

Total pixel area of the graphic must be at least 28,080 k or the equivalent of a
468x60 banner.

All artwork/creative must be submitted to Yahoo at least five (5) business days
prior to the promotion's start date.

Yahoo reserves the right to review, reject or modify any part of any creative at
its sole discretion.

Sponsor shall be responsible for the design, layout, posting and maintenance of
the promotion pages.

Sponsor shall operate the contest on computers and network hardware under its
ownership or control.

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EXHIBIT E
Treasure Hunt Promotion Specifications

YAHOO! TREASURE HUNT: MATERIALS SPECS AND DUE DATES

Note: This is a general overview of the promotion's ad specs. When your
insertion order is completed, you will receive a customized version with the
game icon (gif) attached.

Welcome to Yahoo!'s Treasure Hunt! Please take a few minutes to review this
information, which details all the program basics.

CLIENT DELIVERABLES
Note: All deliverables are DUE EVERY FRIDAY, 12:00 PM EST. New campaigns "go
live" every Wednesday.

OFFER PAGE URL
Yahoo! has final approval on all client creative submitted. If file size and
creative does not meet Yahoo! specifications, we reserve the right to reject
any/all deliverables.

Offer pages are client specific and client hosted (your opportunity put a
specific offer in front of your audience). These pages are linked with game
pages and will include a "Win It" sweepstakes button which users click on to
continue through Treasure Hunt. These pages may contain email address opt-in
forms, software download capabilities, or links to other sites. OFFER PAGES MUST
NOT EXCEED 30K TO OPTIMIZE YAHOO!'S FAST PAGE LOADING STANDARDS. Include target
= "top" in the href tag if you have a framed site.

[YAHOO! BUTTON]

Note: every offer page must include this button. If the button does not appear
on the offer page, Yahoo! will remove the page until the button is included.

Your redirect URL for the button will be assigned to you when your completed
insertion order is received.

BANNER
468 x 60 -- 12k max., no looping and maximum 6 second animation. This will be
served after a player has seen your site and clicked on the entry button. HTML
banners are not allowed. The banner only re-directs back to your offer page (not
your Web site).

[Note: We do not report impressions or banner click-through rates from banners.
The emphasis of the banner is to provide supplemental branding and stimulate
opt-ins.]

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OPT-IN OFFER
Maximum 50 characters. This will appear under your banner and must clearly
indicate what the player is signing up for (i.e. "Yes, I want more information
on space age widgets!"). Every week, you will receive a list of the e-mail
addresses of players who checked the box next to your OPT-IN offer. If players
request to be removed from this list, you will be responsible for removing them
once the list is in your possession.

EMAIL INSERTS (RESTRICTED TO CERTAIN PACKAGES)
Promotion focused e-mail messaging is sent once per week on Wednesday and
includes scoring information and 1-3 sponsor messages. Multi-sponsor e-mail
messages are 30 words long and placed in the center of the message.

Click-throughs from email inserts will be included in the following week's
report to sponsors.

REPORTING:
Once per week, Yahoo! will send you a report that includes:

o # of clicks delivered per offer page (broken down by day)
o The number of email inserts sent and click-through statistics from the
email inserts (if applicable)

Twice per month, Yahoo! will send you a report that includes:

o The list of the opt-in email addresses. Opt-ins will be reported
distinctly by landing page.

TERMS AND CONDITIONS
BANNERS ON TREASURE HUNT

The banners on Treasure Hunt game pages provide supplemental branding and create
an opt-in email list for sponsors. Restrictions include:

o Banners must link back to the offer page within Treasure Hunt. These
banners cannot link to other pages within sponsors' sites.
o Impressions and click-throughs from banners are not reported separately,
nor can multiple banners be rotated. One banner follows each sponsor
offer page.
o Third party ad banner serving is not allowed
o Clients may submit new offer page/banner pairs each week with the same
deliverable timeline as stated above.

MULTIPLE OFFER PAGE RULES
The number of offer pages scheduled to run must be clearly outlined in the
Insertion Order. If sponsors want to run multiple pages simultaneously, they
must spend at least $5,000 per page (For example, to run three pages
simultaneously, they will need to spend $15,000).

The number of clicks that we will deliver per offer page will be roughly equal
to the total clicks on the Insertion Order divided by the number of offer pages.
However, these are estimates and some variation is likely to occur.

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BACK BUTTON
The back button on sponsors' offer pages must be enabled. However, there is no
back button requirement for any pages deeper in sponsors' sites.

BROWSER SPAWNING
The offer page is not permitted to spawn a new browser window when users click
back into the promotion.

INTERSTITIAL
Sponsor interstitial between offer pages and game pages are not permitted.

Competitive advertising
Offer pages may not feature banner ads from Yahoo's online portal competitors.

SPECIAL REQUIREMENTS FOR THE "WELCOME" PAGE ON TREASURE HUNT
Sponsors can purchase clicks to the first page of the Treasure Hunt promotion.
This high-profile page guarantees approximately 100% unique users. However, the
following restrictions apply:

o Unlike other offer pages in Treasure Hunt, all offers on the Welcome page
are hosted by Yahoo! (including graphics). The sponsor must provide the
basic HTML and graphics to Yahoo! and Yahoo! will re-purpose the material
to fit within the space and page size requirements.
o Graphics and HTML are limited to 20K and 500 pixels in width.
o Banner ads do not follow the Welcome page.
o Sponsors cannot put an email opt-in field in the Welcome page (or any
other type of form). Users must link to an email opt-in form.
o The Welcome page only provides general traffic; sponsors cannot reach
targeted selects from this page.
o Creative materials must be received 2 weeks before the launch date.
o The Insertion Order must specifically mention that the creative will run
on the Welcome Page.

CONTACTS FOR QUESTIONS AND COMMENTS:
Questions about ad specifications go directly to:
Mike Campos, Promotions Coordinator
[email protected]
(408) 530-5417

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EXHIBIT F
MUTUAL NONDISCLOSURE AGREEMENT TERMS

1. "Confidential Information" is that confidential, proprietary, and
trade secret information being disclosed by the disclosing party pursuant to
this Agreement.

2. Except as set forth in this Section 2, all Confidential Information
shall be in tangible form and shall be marked as Confidential or proprietary
information of the disclosing party. If the Confidential Information is
disclosed orally or visually, it shall be identified as such at the time of
disclosure and confirmed in a writing to the recipient within thirty (30) days
of such disclosure.

3. Each of the parties agrees that it will not make use of,
disseminate, or in any way disclose any Confidential Information of the other
party to any person, firm or business, except to the extent necessary for
negotiations, discussions, and consultations with personnel or authorized
representatives of the other party and any purpose the other party may hereafter
authorize in writing. Each of the parties agrees that it shall disclose
Confidential Information of the other party only to those of its employees who
need to know such information and who have previously agreed, either as a
condition to employment or in order to obtain the Confidential Information, to
be bound by terms and conditions substantially similar to those set forth in
this Exhibit D.

4. There shall be no liability for disclosure or use of Confidential
Information which is (a) in the public domain through no fault of the receiving
party (b) rightfully received from a third party without any obligation of
confidentiality, (c) rightfully known to the receiving party without any
limitation on use or disclosure prior to its receipt from the disclosing party,
(d) independently developed by the receiving party (e) generally made available
to third parties without any restriction on disclosure, or (f) communicated in
response to a valid order by a court or other governmental body, as otherwise
required by law, or as necessary to establish the rights of either party under
this Agreement (provided that the party so disclosing has provided the other
party with a reasonable opportunity to seek protective legal treatment for such
Confidential Information).

5. Each of the parties agrees that it shall treat all Confidential
Information of the other party with the same degree of care as it accords to its
own Confidential Information, and each of the parties represents that it
exercises reasonable care to protect its own Confidential Information.

6. Each of the parties agrees that it will not modify, reverse
engineer, decompile, create other works from, or disassemble any software
programs contained in the Confidential Information of the other party unless
otherwise specified in writing by the disclosing party.

7. All materials (including, without limitation, documents, drawings,
models, apparatus, sketches, designs and lists) furnished to one party by the
other, and which are

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designated in writing to be the property of such party, shall remain the
property of such party and shall be returned to it promptly at its request,
together with any copies thereof.

8. This terms set forth in this Exhibit D shall govern all
communications between the parties that are made during the period from the
Effective Date to the date on which either party receives from the other written
notice that subsequent communications shall not be so governed, provided,
however, that each party's obligations under Sections 2 and 3 with respect to
Confidential Information of the other party which it has previously received
shall continue unless and until such Confidential Information falls within
Section 4. Neither party shall communicate any information to the other in
violation of the proprietary rights of any third party.

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EXHIBIT G
ASHFORD COMPETITORS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
COMPANY WEBSITE
- --------------------------------------------------------------------------------
[*] [*]
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Certain confidential information on this page has been omitted and
filed with the Securities and Exchange Commission.

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EXHIBIT H
TRADEMARK USAGE GUIDELINES

1. General. All Yahoo Brand Features will be used only as explicitly
licensed by Yahoo, and only under the terms and conditions and for the purposes
described in such license. The other party to such license shall herein be
referred to as the "Licensee". All such uses shall be in a manner consistent
with the following guidelines.

2. Appearance of Logos. The Licensee shall ensure that the presentation
of the Yahoo Brand Features shall be consistent with Yahoo's own use of the
Yahoo Brand Features in comparable media.

3. Notices. All trademarks and service marks included in the Yahoo
Brand Features shall be designated with "SM", "TM" or "(R)", in the manner
directed by Yahoo.

4. Appearance. From time to time during the term of the license, Yahoo
may provide the Licensee with guidelines for the size, typeface, colors and
other graphic characteristics of the Yahoo Brand Features, which upon delivery
to the Licensee shall be deemed to be incorporated into these "Yahoo Trademark
Usage Guidelines".

5. Restrictions Upon Use. The Yahoo Brand Features shall not be
presented or used:

A. in a manner that could be reasonably interpreted to suggest
editorial content has been authored by, or represents the views or opinions of,
Yahoo or any Yahoo personnel;

B. in a manner that is misleading, defamatory, libelous, obscene or
otherwise objectionable, in Yahoo's reasonable opinion;

C. in a way that infringes, derogates, dilutes or impairs the rights
of Yahoo in the Yahoo Brand Features;

D. as part of a name of a product or service of a company other than
Yahoo, except as expressly provided in a written agreement by Yahoo.

6. Nonexclusive Remedy. The Licensee will make any changes to its use
of the Yahoo Brand Features as requested by Yahoo. The foregoing remedy shall be
in addition to any other legal and equitable rights that Yahoo may possess
relating to Licensee's use of the Yahoo Brand Features.

7. Revisions. These Guidelines may be modified at any time by Yahoo
upon written notice to the Licensee.

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EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report (and to all references to our Firm) included in or made a part of this
registration statement.

/s/ Arthur Andersen LLP

Houston, Texas
September 21, 1999