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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 12, 1998
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PROVIDENT AMERICAN CORPORATION
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-13591 23-2214195
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2500 DeKalb Pike, Norristown, Pennsylvania 19404
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(Address of principal executive offices/Zip Code)
Former name, former address, and former fiscal year, if changed since last
report: N/A
---
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EXPLANATORY NOTE
On December 23, 1998, Provident American Corporation
("Provident" or the "Company") filed a Current Report on Form 8-K to supplement
and update the information contained in the periodic reports filed during 1998
and to disclose additional information or transactions occurring subsequent to
September 30, 1998. Such information relates primarily to the operations of its
majority owned subsidiary, HealthAxis.com Inc., formerly known as Insurion Inc.
("HealthAxis"), as well as certain financing transactions engaged in by the
Company in order to fund the continuing operations of HealthAxis. The purpose of
this Form 8-K/A is to file Exhibits 10.2, 10.3 and 10.4, which were omitted from
the initial Form 8-K and for which a confidential treatment request has been
filed with the Securities and Exchange Commission.
Item 7. Financial Statements and Exhibits
(a) Financial Statements.
None
(b) Exhibits.
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The following exhibits are filed herewith:
S-K Item
Number Description
- ------ -----------
10.1* Share Purchase Agreement dated November 13, 1998 between
Provident American Corporation, Lynx Private Equity Partners
I, LLC, James Burke, Craig Gitlitz and Interhotel Company Ltd.
10.2 First Amendment to the Amended and Restated Interactive
Marketing Agreement between America Online, Inc., Provident
Health, Inc. and HealthAxis.com Inc. (This document has been
redacted to remove certain portions for which confidential
treatment has been requested by the Company pursuant to Rule
24b-2).
10.3 Promotion Agreement dated June 27, 1998 between Insurion, Inc.
and CNET, Inc. (This document has been redacted to remove
certain portions for which confidential treatment has been
requested by the Company pursuant to Rule 24b-2) and the First
Amendment thereto dated November 13, 1998.
10.4 Amended and Restated Agreement dated November 13, 1998 between
LYCOS, Inc. and Insurion, Inc. (This document has been
redacted to remove certain portions for which confidential
treatment has been requested by the Company pursuant to Rule
24b-2).
10.5* Agreement dated September 15, 1998 between PILIC and
HealthAxis related to the Series A Convertible Preferred
Shares.
10.6* Certificate of Designation related to the Series A Convertible
Preferred Stock of HealthAxis.com Inc.
10.7* Certificate of Designation related to the Series B Convertible
Preferred Stock of HealthAxis.com Inc.
* Previously filed in Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 23, 1998.
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SIGNATURE
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.
PROVIDENT AMERICAN CORPORATION
Date: 1/18/99 By: /s/ Alvin H. Clemens
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Alvin H. Clemens
Chairman of the Board and
Chief Executive Officer
Date: 1/12/99 By: /s/ Francis L. Gillan
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Francis L. Gillan III
Chief Accounting Officer and
Treasurer
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Confidential
FIRST AMENDMENT TO AMENDED AND RESTATED INTERACTIVE MARKETING AGREEMENT
-----------------------------------------------------------------------
This First Amendment to Amended and Restated Interactive Marketing
Agreement (this "Amendment"), dated as of November 13, 1998, is between (i)
America Online, Inc. ("AOL"), a Delaware corporation, with offices at 22000 AOL
Way, Dulles, Virginia 20166, and (ii) Provident Health Services, Inc., a
Pennsylvania corporation ("PHI") and HealthAxis.com Inc., a Pennsylvania
corporation ("HAI" and collectively with PHI, "Marketing Partner" or "MP"), each
having offices at 2500 DeKalb Pike, Norristown, Pennsylvania 19404-0511. AOL and
MP may be referred to individually as a "Party" and collectively as "Parties."
RECITALS
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AOL and PHI entered into an Amended and Restated Interactive Marketing
Agreement dated as of February 1, 1998 (the "Agreement"). HAI is an affiliate of
PHI and PHI assigned its rights under the Agreement to HAI. Capitalized terms
used in this Amendment without other definition are defined as in the Agreement.
In light of both parties' desire to amend certain terms of the Agreement, the
parties hereby agree as follows:
TERMS
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1. The Agreement is amended to provide that references in the Agreement to
"this Agreement" or "the Agreement" (including indirect references such
as "hereunder," "hereby," "herein" and "hereof") shall be deemed to be
references to the Agreement as amended by this Amendment.
2. PHI and HAI shall be jointly and severally liable for all obligations,
liability and indemnities of MP under the Agreement as amended by this
Amendment.
3. The definition of "Launch" is deleted in its entirety from Exhibit B of
the Agreement. The parenthetical "(other than Medical Policies)" is
deleted from the definition of "Co-Sponsor." The following definitions
are added to Exhibit B of the Agreement:
(a) Soft Launch Date. The later to occur of (i) November 1, 1998 and
(ii) the date upon which MP has fulfilled the "Soft Launch
Requirements" set forth on Schedule X to this Agreement.
(b) Official Launch Date. January 31, 1999.
(c) Official Launch Requirements. The "Official Launch Requirements"
set forth on Schedule X to this Agreement.
(d) Coverage Rate. For any calendar month, the percentage of AOL's
membership base residing in states in which MP offers Qualifying
Individual Medical Policies, which Coverage Rate shall be
calculated for a particular calendar month as of the first
working day of the last complete calendar week falling within the
preceding calendar month.
(e) Qualifying Individual Medical Policies. Individual Medical
Policies that are issued by a company or companies with .... of
.... or better and are Competitive with all other health
insurance policies available to individuals in the relevant
state.
(f) Best Rating. The rating designated by A.M. Best Company, Inc.
(g) Competitive. (i) in good standing with the regulatory agency of
the applicable state or states and not appearing on any "watch
list" or similar designation, (ii) meeting or
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exceeding all material quality averages and/or applicable
standards of the health insurance industry and (iii) as
determined by a mutually agreed upon third party reviewer who is
a recognized authority in the health insurance industry, (a)
reasonably competitive in all material respects, including
without limitation each of the following: quality, price, scope
and selection, customer service and fulfillment, speed and
accuracy of claims processing (whether claims processing is
performed by MP or the policy issuer), financial strength of
issuer, and quality, scope and selection of health care providers
and (b) evaluated as a whole, among the market leaders in the
relevant product category.
4. The first paragraph of Section 1.2 is deleted in its entirety and the
following is inserted in lieu thereof:
"1.2. Impressions. AOL will provide up to.... Impressions in the
aggregate, during the period (the "Soft Launch Period") from the
Soft Launch Date until MP has fulfilled the Official Launch
Requirements. For each calendar month of the Initial Term from
and after MP has fulfilled the Official Launch Requirements, AOL
will provide up to the number of Impressions equal to....
multiplied by the Adjusted Coverage Rate; provided, however, that
the total aggregate Impressions AOL is committed to provide for
the Initial Term shall not exceed.... . For each calendar month
of the Renewal Term (if applicable), AOL will provide up to the
number of Impressions equal to.... multiplied by the Adjusted
Coverage Rate; provided, however, that the total aggregate
Impressions AOL is committed to provide during the Renewal Term
shall not exceed.... during any year or.... in total. The
"Adjusted Coverage Rate" shall mean the Coverage Rate.... by....;
provided, however, that if AOL is prohibited by law (as
reasonably advised by legal counsel) from delivering Impressions
to states in which the Affiliated MP Site does not offer a
Qualified Individual Medical Policy, then the Adjusted Coverage
Rate shall be the same as the Coverage Rate.
Any shortfall in delivered Impressions at the end of a month (or
the Soft Launch Period) below AOL's Impressions commitment for
such month (or the Soft Launch Period) will not be deemed a
breach of this Agreement by AOL; such shortfall will be added to
the Impressions commitment for the subsequent month. In the event
AOL has delivered fewer Impressions than AOL's total Impressions
commitment as of the end of the Term (a "Final Shortfall"), AOL
will provide MP, as its sole remedy, with either (i) continued
carriage of advertising placements on the AOL Network in
accordance with Section 1.1 for up to six (6) months or (ii)
credits for the purchase of advertising on the AOL Network which
have a total value equal to the value of the Final Shortfall
...., which credits may be redeemed for advertising, valued based
on the .... rate under .... (the total .... the number of
Impressions AOL is obligated to deliver .... , subject to
availability and AOL's then-current advertising policies, over a
.... period. In the event AOL provides an excess of Impressions
in any month (or the Soft Launch Period) above AOL's Impressions
commitment for such month (or the Soft Launch Period), such
excess may be applied against the Impressions commitment for any
subsequent month or months. Any or all Impressions provided by
AOL may, at AOL's option, be .... by restricting such
Impressions, in whole or in part, to .... in which MP offers
Qualifying Individual Medical Policies. AOL shall make reasonable
efforts to .... its Impressions commitments on a reasonably
....on a .... taking into account .... due to .... of the AOL
Service or specific areas in which MP receives Placements and
.... due to .... of Impressions."
5. Section 1.6 of the Agreement is deleted in its entirety.
6. Section 1.7 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"1.7. .... Rentals. ....
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7. The first sentence of Section 2.1.1 of the Agreement is deleted in its
entirety and the following is inserted in lieu thereof:
"MP will make available through the Affiliated MP Site the
comprehensive offering of Products described on Exhibit D and
other related Content, subject to the terms of this Agreement
(including this Section 2.1.1)."
8. Section 2.2 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"2.2. Launch; Production Work. MP will create and customize the
Affiliated MP Site (which shall, at AOL's option, be co-branded)
in accordance with this Agreement and AOL's specifications with
continuous navigational ability for AOL Members to return to an
agreed-upon point on the AOL Service from the Affiliated MP Site.
MP shall use its best efforts to fulfill the Soft Launch
Requirements set forth on Schedule X to this Agreement by no
later than November 3, 1998. MP shall use its best efforts to
fulfill the Official Launch Requirements by no later than January
1, 1999 but shall, in any event, fulfill the Official Launch
Requirements by no later than March 31, 1999. In the event MP's
fulfillment of the Official Launch Requirements is delayed beyond
March 31, 1999, then, in addition to any other remedies available
to AOL, (a) AOL may terminate this Agreement (if, after ten (10)
days following written notice to MP specifying the particular
requirement(s) that have not been fulfilled, MP has failed to
fulfill such requirement(s)), and (b) (i) AOL's Impression
commitments and the Site Revenue thresholds set forth in Section
1.2, (ii) the Transaction Revenue thresholds set forth in Section
4.2.1 and (iii) the Approved Application thresholds (as set forth
in the Renewal Term Performance Warrant Agreement, as defined in
Section 6.3), each shall be proportionately reduced. The Parties
shall work together to meet a deliverables schedule with respect
to the creation of the Affiliated MP Site, including dates for
the delivery of (i) preliminary specifications, (ii) first round
of specifications and (iii) final specifications and plans for
beta testing of the Affiliated MP Site, which deliverables
schedule shall be mutually agreed upon with the objective of
meeting the dates set forth in this Section. Each deliverable
shall be submitted to AOL for AOL's review and comment. MP shall
incorporate AOL's comments, which shall be commercially
reasonable, technologically feasible and provided in a timely
fashion, into such deliverables. AOL agrees not to unreasonably
withhold its approval of any such deliverables, provided they
comply with AOL's standard technical and performance requirements
and the terms of this Agreement. MP shall make available
sufficient staffing for the maintenance of the Affiliated MP Site
at all times. Except as agreed to in writing by the Parties
pursuant to the "Production Work" section of the Standard Online
Terms & Conditions attached hereto as Exhibit F, MP will be
responsible for all production work associated with the
Affiliated MP Site, including all related costs and expenses,
including, without limitation, all costs and expenses associated
with developing or modifying any forms, screens or pages within
the AOL Network associated with the Affiliated MP Site (including
modifications required for regulatory reasons or requested by AOL
to address AOL Member complaints, compliance issues or ease of
use and navigation) and/or at AOL's election, develop a health
insurance area (which shall be owned and controlled by AOL)
within the AOL Network linked to from the aggregated "Insurance
Center."
9. Section 2.8 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"2.8 Operating Standards. MP will ensure that the Affiliated MP Site
complies at all times with the standards set forth in Exhibit E.
In addition, (i) from and after the Soft Launch Date, MP shall
comply at all times with the "Soft Launch Requirements" set forth
in Schedule X to this Agreement and (ii) from and after the end
of the Soft Launch Period, MP shall comply at all times with the
Official Launch Requirements. Further, during the Renewal Term
(if applicable), MP shall comply at all times with paragraphs A.
and B. of
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Schedule Y to this Agreement (the "Renewal Term Additional
Standards"). To the extent standards are not established in
Exhibit E, the Official Launch Requirements or the Renewal Term
Additional Standards (if applicable) with respect to any aspect
or portion of the Affiliated MP Site (or the Products or other
Content contained therein), MP will provide such aspect or
portion at a level of accuracy, quality, completeness, and
timeliness that meets or exceeds prevailing standards in the
health insurance industry. In the event MP materially breaches
its obligations in paragraphs 2,3,8 or 9 of Exhibit E, its
obligations set forth in the Official Launch Requirements, or its
obligations set forth in the Renewal Term Additional Standards
(if applicable), AOL will have the right (in addition to any
other remedies available to AOL hereunder) to decrease the
Placements it provides to MP hereunder (and to decrease or cease
any other contractual obligation hereunder) until such time as MP
corrects its non-compliance (and in such event, (a) AOL will be
relieved of the proportionate amount of any Impressions
commitments made to MP by AOL hereunder corresponding to such
decrease in Placements and (b) the revenue threshold(s) set forth
in Sections 1.2 and 4.2 and the Approved Application thresholds
(as set forth in the Renewal Term Performance Warrant Agreement)
will each be adjusted proportionately to correspond to such
decrease in Placements and other obligations during the
non-compliance period)."
10. The following is added to the end of Section 3 of the Agreement:
"Notwithstanding the foregoing or anything to the contrary in
this Agreement:
(a) In addition to any other remedies available to AOL hereunder,
AOL's exclusivity obligations to MP shall terminate if MP fails
to (x) use its best efforts to fulfill the Official Launch
Requirements by January 1, 1999 and to comply with the Official
Launch Requirements at all times thereafter, (y) fulfill the
Official Launch Requirements on or before March 31, 1999 and
comply in all material respects with the Official Launch
Requirements at all times thereafter, or (z) comply with the
Renewal Term Additional Standards at all times during the Renewal
Term (if applicable).
(b) AOL's exclusivity obligations to MP shall terminate with respect
to any type or category of the Exclusive Products as to which, on
December 1, 1999 (or at any time thereafter following thirty (30)
days written notice and opportunity to cure), MP does not provide
an offering on the Affiliated MP Site, which offer (x) covers
.... in which at least .... of AOL's membership base .... and (y)
has a .... of .... or better and is Competitive with all other
similar products available in such state.
(c) Upon the expiration or termination of this Agreement or upon the
termination of AOL's exclusivity obligations hereunder, MP shall,
and shall cause its affiliates to, release and discharge in
writing any third party insurance carriers, underwriters or other
providers from any obligation precluding such third party from
entering into a relationship, agreement or arrangement with AOL
or its Affiliates; provided, however, that such release and
discharge may be conditioned upon termination of MP's (or its
affiliates') agency with such third party. To the extent
necessary to effectuate the intent of this provision, any such
third party shall be a third party beneficiary of this provision
of this Agreement."
11. Section 4.1.1 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"4.1.1 Initial Term. MP will pay AOL a guaranteed amount of Ten
Million Dollars ($10,000,000) during the Initial Term, ....)
of which shall be a fee (the "Holding Fee") in consideration
for AOL commencing the exclusivity provisions of this
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Agreement prior to the Official Launch Date and the remaining
.... of which shall be attributable to the Impressions
commitment and the placement and other services described
herein. Such guaranteed amount shall be paid as follows:
(a) .... within five (5) business days after the execution of
this Agreement;
(b) .... on or before .... ;
(c) .... on or before .... together with interest at the prime
rate from ....; and
(d) .... on or before ...., together with interest at the
prime rate from ....; and
(e) .... on ...., .... and ....; provided however, that MP
shall immediately pay AOL all amounts due and owing under
this paragraph (e) upon the consummation of an earlier
financing by MP.
Except as expressly provided in Section 5.7, the guaranteed
amount shall be non-refundable."
12. Section 4.1.2 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"4.1.2 Renewal Term. If MP exercises its right to renew this
Agreement pursuant to Section 5.2.1, MP will pay AOL a
guaranteed amount of Thirty-Three Million Five Hundred
Thousand Dollars ($33,500,000) on or before the first day of
the Renewal Term.
13. Section 4.2.5 of the Agreement is amended by adding the following to
the end of the Section:
"In the event the .... set forth in .... become .... for MP,
then, upon MP's request at any time after MP has generated at
least ....for .... on the Affiliated MP Site, AOL will agree
to discuss with MP in good faith possible .... that would be
mutually beneficial for the Parties."
14. Section 5.1 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"5.1 Term. Unless earlier terminated as set forth herein, the
initial term of this Agreement will commence on the Effective
Date and expire one (1) year from the Official Launch Date
(the "Initial Term")."
15. Section 5.2.1 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"5.2.1 By MP. Provided MP has fulfilled the requirements set forth on
Schedule Y and MP continues to be in compliance with such
requirements upon the expiration of the Initial Term, MP shall
have the one-time right to renew this Agreement for an
additional period of two (2) years (the "Renewal Term" and
together with the Initial Term, the "Term") by giving AOL
written notice of such election by not later than one hundred
twenty (120) days prior to the expiration of the Initial Term.
AOL shall have the right to conduct a quality audit prior to
the expiration of the Initial Term to ascertain whether MP has
fulfilled and continues to be in compliance with the
requirements set forth on Schedule Y."
16. Section 6 of this Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
"6.1 Grant of Warrants.
6.1.1 Initial Grant. Provident American Corporation ("Issuer")
hereby grants to AOL a
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warrant (the "Warrant") representing the right for a .... year period
to purchase up to three hundred thousand (300,000) shares of Issuer's
common stock, $0.10 par value per share (the "Common Stock"), at a
price per share equal to Four and 48/100 Dollars ($4.48).
6.1.2 Additional Grant During Initial Term. On November 13, 1998,
Issuer shall grant to AOL a warrant (the "Additional Warrant")
representing the right for a .... year period to purchase up
to three hundred thousand (300,000) shares of Common Stock at
a price per share equal to Three and 38/100 Dollars $3.38).
6.1.3 HA Warrants During Initial Term. On November 13, 1998, HA
shall grant to AOL a warrant (the "HA Warrant") representing
the right for a .... year period to purchase up to three
hundred thousand (300,000) shares of HA's common stock (the
"HA Common Stock"), at a price per share equal to One and
77/100 Dollars ($1.77).
6.1.4 Additional Grant During Renewal Term. If MP exercises its
right to renew this Agreement pursuant to Section 5.2.1,
Issuer shall grant to AOL a warrant (the "Renewal Term
Performance Warrant") representing the right for a .... year
period to purchase up to three hundred thousand (300,000)
shares of Common Stock at a price per share equal to Five and
15/100 Dollars ($5.15). The Renewal Term Performance Warrant
shall vest quarterly in accordance with the terms of the
Renewal Term Performance Warrant Agreement (as defined below).
6.2 Terms and Conditions. The rights, preferences and privileges of the
Warrant and the Common Stock issuable upon exercise of the Warrant
shall be as set forth in the Common Stock Warrant Agreement (defined
below). The rights, preferences and privileges of the Additional
Warrant and the Common Stock issuable upon exercise of the Additional
Warrant shall be as set forth in the Additional Warrant Agreement
(defined below). The rights, preferences and privileges of the HA
Warrant and the HA Common Stock issuable upon exercise of the HA
Warrant shall be as set forth in the HA Warrant Agreement (defined
below).The rights, preferences and privileges of the Renewal Term
Performance Warrant and the Common Stock issuable upon exercise of the
Renewal Term Performance Warrant shall be as set forth in the Renewal
Term Performance Warrant Agreement (defined below).
6.3 Approval; Final Agreement. Upon execution of this Agreement, Issuer
shall issue the Warrant and will enter into an Amended and Restated
Stock Subscription Warrant on the form attached hereto as Exhibit H-1
(the "Common Stock Warrant Agreement"), which will document the grant
of the Warrant hereby made to AOL. On November 13, 1998, Issuer shall
issue the Additional Warrant and the HA Warrant granted hereunder and
will enter into (i) a Stock Subscription Warrant on the form attached
hereto as Exhibit H-2 (the "HA Warrant Agreement"), which will document
the grant of the HA Warrant hereby made to AOL, and (ii) a Stock
Subscription Warrant on the form attached hereto as Exhibit H-3 (the
"Additional Warrant Agreement"), which will document the grant of the
Additional Warrant hereby made to AOL. Upon exercise by MP of its right
to renew this Agreement pursuant to Section 5.2.1, Issuer shall issue
the Renewal Term Performance Warrant and shall enter into a Stock
Subscription Renewal Performance Warrant on the form attached hereto as
Exhibit H-4 (the "Renewal Term Performance Warrant Agreement"). Issuer
hereby acknowledges and agrees that, in the event of a breach of the
provisions of this Section 6, AOL would be irreparably harmed and it
would be impossible for AOL to determine the amount of damages that
would result from such breach, and that accordingly, any remedy at law
for any such breach or threatened breach thereof, would be inadequate.
Accordingly, Issuer agrees that the provisions of this Section 6 may be
specifically enforced through equitable and injunctive relief in
addition to any other
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applicable rights or remedies AOL may have, from any court of competent
jurisdiction. Issuer hereby waives the claim or defense that a remedy
at law would be adequate in respect to this provision, and agrees to
have this Section 6 specifically enforced against Issuer without the
necessity of posting bond or other security, and consents to the entry
of injunctive relief enjoining or restraining any breach or threatened
breach of this Section 6. In addition, without limiting any other
remedy available hereunder, in the event Issuer has not issued the
Renewal Term Performance Warrant and executed and delivered the Renewal
Term Performance Warrant Agreement by not later than ninety (90) days
prior to the commencement of the Renewal Term (if MP has exercised its
right to renew this Agreement pursuant to Section 5.2.1), then AOL may,
at its option, terminate this Agreement upon the expiration of the
Initial Term.
17. Section 7 of the Agreement is deleted in its entirety.
18. Section B of Exhibit A to the Agreement is deleted in its entirety.
Paragraph 1. of Exhibit E is deleted in its entirety. Exhibit H-1 and
Exhibit H-2 of the Agreement are deleted in their entirety and the
Agreement is amended to add as Exhibits H-1, H-2, H-3 and H-4 thereto
the Exhibits H-1, H-2, H-3 and H-4 attached to this Amendment. The
Agreement is amended to add as Schedule X and Schedule Y thereto the
Schedule X and Schedule Y attached to this Amendment.
19. In consideration of and as a condition to AOL entering into this
Amendment, MP hereby irrevocably waives all Claims against AOL and its
affiliates arising out of, or otherwise related to, the Agreement and
forever releases AOL and its affiliates therefrom and further agrees
not to make or assert any Claims against AOL or its affiliates in
connection with the Agreement. "Claims" shall mean any and all claims,
demands and/or rights which arise or accrue on or before the date of
this Amendment.
20. This Amendment does not, and shall not be construed to, modify any term
or condition of the Agreement other than those specific terms and
conditions expressly referenced in this Amendment. Except as herein
provided, the Agreement shall remain unchanged and in full force and
effect. In the event of any inconsistency or discrepancy between the
Agreement and this Amendment, the terms and conditions set forth in
this Amendment shall control. This Amendment may be executed in
multiple counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same document.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the
date first set forth above.
AMERICA ONLINE, INC. PROVIDENT HEALTH SERVICES, INC.
By:/s/ David M. Coburn By: /s/ James O. Bowles
---------------------------- -----------------------------
Print Name: David M. Coburn Print Name: James O. Bowles
-------------------- ----------------------
Title: Senior Vice President Title: President
------------------------- --------------------------
HEALTHAXIS.COM INC.
By: /s/ Michael Ashker
----------------------------
Print Name: Michael Ashker
---------------------
Title: President & CEO
-------------------------
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Issuer hereby guarantees payment and performance of all MP's obligations under
the Agreement. In addition, by execution hereof, Issuer evidences its agreement
to the terms of Section 6 of the Agreement.
PROVIDENT AMERICAN CORPORATION
By: /s/ James O. Bowles
-------------------------------
Print Name: James O. Bowles
-----------------------
Title: President
----------------------------
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SCHEDULE X
Launch Requirements
-------------------
Soft Launch Requirements:
- -------------------------
1. Roll-out on a state-by-state basis of Qualified Individual Medical Policies
in .... covering at least .... of AOL's membership base.
2. The Affiliated MP Site shall be a mirrored site for access solely by AOL
Users, or if the Affiliated MP Site is not a mirrored site, MP must provide
adequate tracking of activity by AOL Users and transactions by AOL
Purchasers and continuous navigation back to AOL, in accordance with the
Agreement and reasonably acceptable to AOL. MP shall have provided test
results demonstrating to AOL's satisfaction that traffic entering the
Affiliated MP Site from the AOL Service, AOL.com and other areas of the AOL
Network is effectively distinguished from traffic entering the Affiliated
MP Site from the World Wide Web at large.
3. MP shall have completed systems testing (including without limitation,
system architecture, security, redundancy, and Y2K compliance) and all bugs
have been corrected, and such testing and bug correction shall have been
verified by AOL to its reasonable satisfaction.
4. Affiliated MP Site shall support AOL 3.0 browsers and up and conform to
AOL's standard web site operating standards and requirements of the
Agreement.
5. MP shall have a third party security audit of the Affiliated MP Site
completed (including without limitation, business processes, system
architecture, and physical plant) and complied with all recommendations of
such audit.
6. AOL shall have reasonably approved MP's privacy policy; such privacy policy
shall be posted on the Affiliated MP Site and must include a link for AOL
Members back to the AOL Privacy Policy. MP's privacy policy shall comply
with all applicable laws and regulations, including without limitation the
National Association of Insurance Commissioners Information and Privacy
Protection Model Act.
7. MP shall be in compliance with the AOL Merchant Certification Guidelines, a
copy of which shall be provided by AOL.
8. MP's call center/customer service support plan shall have been mutually
agreed upon by the Parties.
9. The Affiliated MP Site be in compliance with the Agreement and with all
applicable laws and regulations.
Official Launch Requirements:
- -----------------------------
1. MP shall have fulfilled and be in compliance with all of the Soft Launch
Requirements set forth above.
2. MP shall have deal performance reporting infrastructure complete;
sample/test reports must be provided for AOL review and be approved by AOL,
which approval shall not be unreasonably withheld.
3. MP shall have an employee on staff fully-trained in AOL's proprietary
Rainman language who will be responsible for generating periodic updates to
any Rainman areas associated with the Affiliated MP Site.
4. AOL shall have approved MP's detailed launch marketing plan, which approval
shall not be unreasonably withheld.
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5. AOL shall have approved MP's detailed launch public relations and offline
promotion plan, which approval shall not be unreasonably withheld.
6. The Affiliated MP Site (including the Content contained therein) shall, in
AOL's good faith judgment, meet or exceed all material quality averages
and/or applicable standards of the health insurance industry and be
reasonably competitive in all material respects with competing sites
offering products similar to the Exclusive Products at the time, including
without limitation, with respect to each of the following: quality, design,
functionality, and customer service and fulfillment. In addition, all
Products on the Affiliated MP Site shall be Competitive.
7. If, at any time (including after the Official Launch Date), AOL determines,
in its reasonable discretion, that (i) the Affiliated MP Site does not
provide adequate tracking of activity by AOL users and/or transactions by
AOL Purchasers (for any reason, including limitations in AOL's ability to
timely update data necessary to provide such tracking) and/or continuous
navigation back to AOL, (ii) AOL is not satisfied with the Affiliated MP
Site's accuracy, speed, ease of use or other characteristics, or (iii) the
Affiliated MP Site otherwise does not comply with the terms of this
Agreement, then MP shall create a mirrored version of the Affiliated MP
Site for purposes of this Agreement within sixty (60) days after written
notice from AOL.
8. The Affiliated MP Site shall employ 40-bit or 128-bit encryption, at AOL's
option with thirty (30) days notice, for all aspects and functions of the
Affiliated MP Site. MP shall ensure that the encryption on the MP
Affiliated Site employs the highest quality and most up-to-date technology
at all times.
9. The MP Affiliated Site shall obtain and display a TRUSTe license indicating
compliance with the standards and guidelines of the TRUSTe association.
11
<PAGE>
SCHEDULE Y
MP Renewal Requirements
-----------------------
A. Product Offering; Geographic Scope and Quality:
MP shall have a Qualified Individual Medical Policy offering issued by a company
or companies with a .... of .... or better in .... covering at least .... of
AOL's membership base. MP shall use commercially reasonable best efforts to have
(i) a small group Medical Policy offering issued by a company or companies with
a .... of .... or better in .... covering at least .... of AOL's membership base
and (ii) a product offering in each remaining category of the Exclusive Products
issued by a company or companies with a .... of .... or better in .... covering
at least .... of AOL's membership base. MP shall, in any event, have (a) a small
group Medical Policy offering in [states] ... covering at least ... of AOL's
membership base, which offering is Competitive with other similar products
available in the applicable state and (b) a product offering in each remaining
category of the Exclusive Products in .... covering at least .... of AOL's
membership base, which offering is Competitive with other similar products
available in the applicable state.
B. Affiliated MP Site:
In addition to the requirements set forth in item #6 of the Official Launch
Requirements, the Affiliated MP Site shall be among the top .... sites offering
products similar to the Exclusive Products in terms of traffic and audience
reach (as measured by page views and percentage of Internet/Online audience as
published by Media Metrix or another leading Internet audience research
organization acceptable to AOL).
C. Sales Strength:
MP must generate at least .... applications for .... on the Affiliated MP Site
during the twelve (12) month period following the Official Launch Date or ....
Approved Applications for its .... on the Affiliated MP Site during the final
three (3) months of the Initial Term.
12
<PAGE>
PROMOTION AGREEMENT
THIS PROMOTION AGREEMENT (this "Agreement") is dated as of June 14th, 1998,
between CNET, Inc., a Delaware corporation ("CNET"), on the one hand, and
Insurion, Inc., a Pennsylvania corporation ("Insurion"), on the other hand (the
"Company") (CNET and the Company, individually a "Party" and collectively, the
"Parties").
BACKGROUND
A. The Company operates an insurance sales business through its Internet
site located at www.healthaxis.com.
B. CNET produces television programs and operates a network of Internet
sites on the world wide web.
C. Pursuant to this Agreement, CNET will provide various links and other
online and television promotions to the Company to assist the Company in
conducting the Relevant Business (as defined below) and the Company will
compensate CNET for providing such promotions.
NOW THEREFORE, the Parties hereby agree as follows:
TERMS
1. DEFINITIONS
"Above the Fold" means the first displayed portion of a web page that is
visible without scrolling.
"AdvantEdge" means a certain category of lower cost/higher restriction
health plans offered by the Company or a designee of the company.
"Banner" means an advertising strip which appears Above the Fold,
occupying at least half of the width of a web page, that is capable of
displaying dynamic graphics and other content and embedded links. An
exemplar of a Banner as contemplated by this Agreement is found on
Exhibit A.
"Banner Program" means the number of Banner advertising Impressions per
month that constitutes a standard banner advertising program in
accordance with CNET's rate card for a particular CNET Site. For example,
a Banner Program on CNET.COM currently consists of at least [***] Banner
Impressions, and a Banner Program on SEARCH.COM currently consists of at
least [***] Banner Impressions.
"Co-Sponsored Sales" means insurance policies that are: (i) underwritten
by a third party insurance provider who has engaged the Company to market
and sell such policies through the Company Site; (ii) branded under the
trademark of such third party insurance provider;
<PAGE>
and (iii) purchased through online registration on the Company Site
during the Initial Term or the Renewal Term (as applicable) by a Tagged
User who accessed the Company Site through an Online Promotion during the
Term and for which policies the Company ultimately receives the premium.
"CNET Sales" means insurance policies that are underwritten by the
company or a designee of the company , as the principal insurance
provider: and purchased through online registration on the Company Site
during the Initial Term or the Renewal Term (as applicable) by a Tagged
User who accessed the Company Site from an Online Promotion during the
Term and for which policies the Company ultimately receives the premium,
but excluding any Co-Sponsored Policy Sales whereby Insurion is acting as
an agent.
"CNET Sales Payments" has the meaning set forth in Section 3.1(b)(i).
"CNET Sites" means the Internet sites operated by or for CNET or its
affiliates, including without limitation the sites referenced in Section
2.3 and in Exhibit B.
"Company Marks" has the meaning set forth in Section 6.
"Company Site" means the Internet site located at the URL
www.healthaxis.com or such other site as the Company may designate as its
replacement and through which the Company conducts the Relevant Business.
"Competitive Business" means any Relevant Business operated by a person
or entity other than the Company.
"Deficient Retail Impressions" means the total amount of Impressions
below the Retail Impressions due to have been delivered in each period
described in Section 2.3(a)(iv) if CNET does not deliver [***] of the
Impressions due to have been delivered in each such period.
"Graphical Link" means an advertising space appearing Above the Fold on a
web page that contains a graphical/HTML hypertext link to another web
page and has dimensions substantially similar to that illustrated in
Exhibit A.
"Impressions" means a user exposure to a page on the CNET Sites
containing an Online Promotion as such exposure is reasonably determined
and measured by CNET in accordance with standard methodologies and
practices customary in the industry.
"Initial Promotions" means the Banners described in Exhibit B to be
provided by CNET pursuant to Section 2.2.
"Initial Term" has the meaning set forth in Section 4.1.
"Launch" means the date on which the Company Site is made commercially
available for processing transactions.
"Online Promotions" means the Retail Promotions and the Initial
Promotions.
2
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"Referral Fee" means any commission fee and/or referral fee paid by a
co-sponsored insurance provider to the Company directly as consideration
for sourcing premiums for Co-Sponsored Sales. Expressly excluded are
administrative fee, application fee, association fee, up-front slotting
feesor advertising and marketing fee.
"Permanent Placement" means a Banner or Graphical Link that permanently
appears on a specified web page of the CNET Site.
"Products" means any products and services offered to Users by the
Company or through the Company Site.
"Promotions" means Banners, Permanent Placements, Graphical Links,
buttons and other online promotional content.
"Relevant Business" means the marketing and/or sale, through the Internet
or other online service, of medical and PPO, dental, vision,
prescription, long-term care and/or long-term disability insurance.
"Renewal Term" has the meaning set forth in Section 4.2.
"Retail Impressions" means the at least [***] Impressions of Retail
Promotions as defined in Section 2.3.
"Retail Promotions" means the Banners and Graphical Links as provided in
Section 2.3.
"Run-of-Site" means CNET's standard rotation of Banners applicable to
Banner Programs within a particular CNET Site.
"Snap" means CNET's Snap! aggregation service located at the URL
www.snap.com, together with any co-branded editions of such service.
"Tagged User" means each user who is tagged with a cookie (i.e.,
information is placed in the HTTP header in response to a browser
request) by the Company or CNET when accessing the Company Site through
an Online Promotion during the Term.
"Term" has the meaning set forth in Section 4.2.
"Users" means users of the CNET Sites.
"Web Board" means a standard advertisement run by and or for CNET to
promote web sites on its TV program known as TV.COM or its successors.
2. PROMOTIONS.
2.1 TV Promotions. CNET will provide the Company one 15 second Web
Board on its syndicated weekly TV program, TV.COM. Such Web Board
will run on each weekly episode of TV.COM during the Term ;
provided that TV.COM remains on
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the air throughout such period (the "TV Promotions"). Should
TV.COM not be run on the air during a portion of the Term, CNET
will run two DOWNLOAD.COM Banner Programs per month during such
portion of the Term in which TV.COM is not on the air, which shall
be in addition to the minimum Impressions requirements set forth
in this Agreement.
2.2 Initial Promotions. Prior to the Launch, CNET will provide Banners
for the Company as described in Exhibit B (the "Initial
Promotions"). The specific placement and location of the Initial
Promotions within the CNET Sites and Snap will be mutually agreed
upon by the Parties prior to running the Banners.
2.3 Retail Promotions. Consistent with the provisions of Section 2.6,
CNET will provide various Retail Promotions across the CNET Sites
as follows:
(a) Commencing upon the Launch, CNET will provide the Company
with a total of at least [***] Impressions of Retail
Promotions ("Retail Impressions") as follows:
(i) at least [***] Retail Impressions in accordance with
the monthly schedule described in Section 2.3(a)(iv)
during the Initial Term in the form of two Run-of-Site
Banner Programs per month per site on the following
sites:
CNET.COM
SEARCH.COM
NEWS.COM
DOWNLOAD.COM
(ii) at least [***] Retail Impressions within Snap in
accordance with the monthly schedule described in
Section 2.3(a)(iv) during the Initial Term in the form
of:
(1) Graphical Links within the following Snap
categories
Health
Business & Money
Insurance (to be created by CNET)
Living(1)
(2) Run-of-Site Banner Programs within Snap; and
(iii) at least an additional [***]overall Retail Impressions
during the Initial Term, which will include Banners
that appear on the first search results page for
searches on the following key words within SEARCH.COM
and Snap: [***]
- -------------------
(1) CNET may also create additional categories that relate to the Relevant
Business that will contain such Graphical Links.
-4-
<PAGE>
(iv) provided that the Launch occurs in accordance with
Section 2.9, the Retail Impressions described in
Sections 2.3(a)(i) and 2.3(a)(ii) will be delivered as
follows during the Initial Term:
(1) [***]of such Retail Impressions between Launch
and December 31, 1998;
(2) [***]of such Retail Impressions between January
1, 1999 and March 31, 1999;
(3) [***]of such Retail Impressions between April
1, 1999 and June 30, 1999;
(4) [***]of such Retail Impressions between July l,
1999 and September 30, 1999;
(5) [***]of such Retail Impressions between October
1, 1999 and December 31, 1999; and
(6) [***]of such Retail Impressions between January
1, 2000 and March 31, 2000.
CNET will use reasonable efforts to cause such
percentages of Retail Impressions to be delivered pro
rata on a monthly basis within each of the periods
described in 1 through 6 above. If there are Deficient
Retail Impressions in any of the periods described in
this Section 2.3(a)(iv), at the Company's option, CNET
will either: (i) over-deliver Impressions in the
succeeding period(s) in an amount at least equal to
such number of Deficient Retail Impressions and in such
allocation as reasonably agreeable to the Company; or
(ii) agree to a prorata reduction in the payments due
under Section 3.1(a)(iv).
(b) During the Renewal Term (as defined in Section 4.2), if any,
CNET will provide the Company with a total of at least
[***]Retail Impressions of substantially the same type as
described in Section 2.2 with respect to the Initial Term.
2.5 Search Results. During the Term, the Company Site will appear as
the first site link in all search result pages for searches
performed in SEARCH.COM for the Snap key words described in
Section 2.3(a)(iii).
2.6 Placement of Online Promotions. Subject to the requirements of
Section 2.3 and other terms contained herein, CNET will determine
the location of each Retail Promotion displayed throughout the
CNET Sites pursuant to Section 2.3(a)(i) and
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<PAGE>
(ii) and may phase in certain types of Retail Promotions as they
are developed by the Company. CNET will consult with the Company
concerning the location and type of the Online Promotions and will
use reasonable efforts to accommodate the Company's reasonable
requests with respect thereto. The Parties agree that the Online
Promotions will receive reasonable and appropriate prominence
designed to enhance user exposure to the Online Promotions and
promote the Company's status as CNET's exclusive provider of
services and products related the Relevant Business. CNET will
monitor and adjust accordingly the location and placement of
Retail Impressions as changes are made in the applicable CNET
Sites. In addition, CNET will use reasonable efforts to ensure
that Retail Promotions are placed on areas of the CNET Sites that
relate to the Relevant Business. On a monthly basis, the Parties
will evaluate the effectiveness of the Retail Promotions and
negotiate reasonably and in good faith to improve the performance
of the Impressions to the extent commercially reasonable for both
parties.
2.7 Design and Production of Online Promotions. The Company will
design any graphics, text, and other content required for the
Online Promotions, with reasonable assistance from CNET, and the
Company will supply digital copies of such graphics and other
materials to CNET. CNET will be responsible for incorporating the
Online Promotions into the CNET Sites and for ensuring that the
Online Promotions are accessible to Users.
2.8 Operation of CNET Site. CNET will be responsible for ensuring that
the CNET Sites function with reasonable reliability and in a
commercially reasonable manner throughout the Term. In particular,
CNET agrees that the CNET Sites will comply with the performance
standards set forth in Exhibit C throughout the Term. Any failure
by CNET to comply with this paragraph after 30 days notice and
cure period will be deemed to be a material breach of this
Agreement.
2.9 Operation of Company Site. The Company will insure that the Launch
occurs no later than November 1, 1998, which may be extended at
the option of the Company for a thirty (30) day period. The
Company will be responsible for ensuring that each link embedded
within an Online Promotion takes the User to the appropriate area
within the Company Site, and that the Company Site functions with
reasonable reliability and in a commercially reasonable manner
throughout the Term. In particular, the Company agrees that the
Company Site will comply with the performance standards set forth
in Exhibit C throughout the Term. Any failure by the Company to
comply with this paragraph after 30 days notice and cure period
will be deemed to be a material breach of this Agreement.
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<PAGE>
2.10 Reporting.
(a) CNET to the Company. Within 30 days after the end of each
month during the Term, CNET will provide: (i) a written
report to the Company indicating the number and location of
Retail Promotions displayed on each CNET Site during such
month and the number of times that a User used an embedded
link in each Retail Promotion during such month; and (ii)
other information in CNET's possession or control as
reasonably requested by the Company to verify the number of
Impressions and to perform market analysis of the Online
Promotions and TV Promotions. In addition, CNET will share
with the Company(without requirement of any additional
payment or consideration) certain demographic information
collected by CNET relating to Tagged Users and their usage
behavior; provided that CNET is under no obligation to incur
any additional burden, expense or liability to collect or
supply such information.
(b) The Company to CNET. Within 30 days after the end of each
month during the Term, the Company will provide a report to
CNET indicating the aggregate number of Tagged Users, CNET
Sales and Co-Sponsored Sales (including the aggregate number
Tagged Users responsible for such sales) during such month.
The Company will make this information available in a manner
which allows CNET and the Company to understand the
performance of the various Online Promotions.
(c) User Information. At least once each calendar quarter during
the Term, the Company will deliver to CNET all aggregate
data that the Company collects, if any, with respect to the
Tagged Users, CNET Sales, demographic data, buying behavior,
and a comparison to the respective average for the Company;
provided that the Company is under no obligation to incur
any additional burden, expense or liability to collect or
supply such information.
3. FEES.
3.1 Initial Term Fees. During the Initial Term, in consideration of
and subject to CNET's performance of the terms of this Agreement,
the Company will pay CNET:
(a) an aggregate of [***]payable as follows:
(i) [***] will be payable on June 30, 1998 in
exchange for the Initial Promotions to be
delivered during the second quarter of 1998.
(ii) [***] will be payable on September 30, 1998 in
exchange for the Initial Promotions to be
delivered during the third quarter of 1998;
(iii) [***]will be paid during the Initial Term in
exchange for the Retail Impressions, subject to
the reductions in payments to account for
Deficient Retail Impressions, payable as
follows:
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<PAGE>
[***]on December 31, 1998
[***]on March 31, 1999
[***]on June 30, 1999
[***]on September 30, 1999
[***]on December 31, 1999
[***]on March 31, 2000
(iv) [***]will be paid during the Initial Term in
exchange for the television Promotions within
TV.COM, payable as follows:
[***]on December 31, 1998
[***]on March 31, 1999
[***]on June 30, 1999
[***]on September 30, 1999
(b) policy fees (the "Policy Fees") as follows
(i) CNET Sales Payments. For each CNET Sale
completed during the period from November 1,
1998 until the end of the Initial Term (the
"Revenue Sharing Period") in excess of
[***]such CNET Sales, CNET will receive a
commission of [***]except for such CNET Sales
for the AdvantEdge policy for which the
commission will be [***] ("CNET Sales
Payments"). If the policy underlying a CNET
Sale is in effect for less than 6 months, CNET
will credit the Company [***]per month of early
termination against future Policy Fees, except
with respect to AdvantEdge policies, as to
which CNET will credit the Company [***] per
month of early termination. CNET Sales Payments
will be due within 30 days after the end of the
month in which the Company receives payment for
such CNET Sale, upon delivery of the report
referenced in Section 2.10(b).
(ii) Co-Sponsored Sales Payments. In addition to the
payments described above, for each Co-Sponsored
Sale completed during the Revenue Sharing
Period in excess of [***] Co-Sponsored Sales,
CNET will receive a commission of [***] of the
Referral Fee received by the Company
("Co-Sponsored Sales Payments"). Co-Sponsored
Sales Payments will be due 30 days after the
end of the month in which the Company receives
payment of Referral Fee for such Co-Sponsored
Sales, upon delivery of the report referenced
in Section 2.10(b).
3.2 Renewal Term Fees.
(a) Retail Impressions Payments. During the Renewal Term,
if any, the Company will pay CNET an aggregate of
[***] in exchange for the [***] guaranteed Retail
Impressions during such Renewal Term, payable as
follows:
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<PAGE>
[***] on June 30, 2000
[***] on September 30, 2000
[***] on December 31, 2000
[***] on March 31, 2001
(b) Renewal Policy Fees. In addition to the Retail
Impressions Payments during the Renewal Term, for
each CNET Sale completed during the Renewal Term in
excess of [***]such CNET Sales, CNET will receive a
commission of [***] except CNET will only receive
[***] for each such CNET Sale of an AdvantEdge
policy. If the policy underlying a CNET Sale is in
effect for less than 6 months, CNET will credit the
Company [***] per month of early termination (or
[***] per month for AdvantEdge policies) against
future Renewal Policy Fees. CNET will also receive a
non-regulated referral fee which is based upon [***]
of the Referral Fees that the Company receives from
each Co-Sponsored Sale completed during the Renewal
Term, if any, in excess of [***] Co-Sponsored Sales
made during the Renewal Term. CNET Sales Payments and
Co-Sponsored Sales Payments will be due within 30
days after the end of the quarter in which the
Company receives payment for such CNET Sales, upon
delivery of the report referenced in Section 2.10(b).
3.3 Payment. Payments under this Section 3 will be made in U.S.
Dollars by wire transfer of immediately available funds and
are nonrefundable once paid.
4. TERM AND TERMINATION.
4.1 Initial Term. The initial term of this Agreement will begin
within 72 hours of the execution of this Agreement during
which time the Company will promptly seek Board approval and
end on March 31, 2000, except that the Company may terminate
this Agreement upon [***] days notice if the Company deems
that they will be unable to fulfill the obligations of this
agreement (for reasons relating to insurance regulations) at
any time after payment of [***] pursuant to section 3.1(a)(i)
(the "Initial Term").
4.2 Renewal Option and Term. The Company, at its option, may
extend the Term for an additional 12 month period beginning on
April 1, 2000 and ending on March 31, 2001 (the "Renewal
Term") (the Initial Term and Renewal Term referred to as the
"Term"). The Renewal Option may be exercised by the Company
notifying CNET in writing during the period beginning January
1, 2000 and ending January 31, 2000.
4.3 Termination. Notwithstanding the foregoing, either Party may
terminate this Agreement at any time by giving written notice
of termination to the other Party, if the other Party commits
a material breach of its obligations hereunder that is not
cured within 30 days after notice thereof from the
non-breaching Party.
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<PAGE>
4.4 Effect of Termination. If this Agreement is terminated during
the Term for any reason, the required number of Retail
Impressions under Sections 2.2 and 2.3 will be pro rated
accordingly; provided that CNET will be required to deliver
after termination (in accordance with the terms of this
Agreement in effect before termination, which terms will
survive to the extent applicable thereto) any Deficient Retail
Impressions applicable to the period prior to termination, in
accordance with the last paragraph of Section 2.3(a)(iv).
Termination of this Agreement will not affect any obligations
arising prior to termination, including without limitation the
Company's obligation to pay fees with respect to CNET Sales
and Co-Sponsored Sales occurring and Impressions delivered
prior to termination.
4.5 Termination of Referral Fees and Renewal Fees. In the event of
the termination of this agreement, for whatever cause, the
Company will be obligated to pay CNET all referral and renewal
fees due through the end of the quarter in which the
termination has taken effect. However, all future referral and
renewal fees will cease.
5. EXCLUSIVITY. Prior to the expiration of the Initial Term, CNET will not
negotiate with any third party with respect to any agreement or arrangement to
provide Promotions for a Competitive Business within the CNET Sites. During the
Term, CNET , will not promote or display within any CNET Site any kind of
Promotions for a Competitive Business, and will not enter into any agreement or
arrangement regarding the same. The Parties acknowledge that the foregoing will
not prevent CNET from displaying text links and other references to a
Competitive Business as reasonably necessary to provide appropriate editorial
and search related services (e.g. by providing text links within articles and in
response to search results) within the CNET Sites for which no consideration is
received by CNET.
6. TRADEMARK LICENSES. The Company hereby grants during the Term to CNET a
non-exclusive, royalty-free license to use, display and publish the Company's
trademarks, trade names, service marks and logos that may be delivered by the
Company to CNET expressly for inclusion in the Online Promotions, solely for use
in connection with the Online Promotions (the "Company Marks"). Any use of the
Company Marks by CNET must comply with any reasonable usage guidelines
communicated by the Company to CNET from time to time. Nothing contained in this
Agreement will give CNET any right, title or interest in or to the Company Marks
or the goodwill associated therewith, except for the limited usage rights
expressly provided above. CNET acknowledges and agrees that, as between the
Company and CNET, the Company is the sole owner of all rights in and to the
Company Marks.
7. RESPONSIBILITY FOR THE COMPANY PRODUCTS AND CNET SITES.
7.1 The Company acknowledges and agrees that, as between the
Company and CNET, the Company will be solely responsible for
any claims or other losses associated with or resulting from
the marketing or operation of the Company Site or the offer or
sale of any Products by the Company or through the Company
Site. CNET is not authorized to make, and agrees not to make,
any representations or warranties concerning the Products,
except to the extent (if any) contained within Promotions
delivered to CNET by the Company.
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<PAGE>
7.2 CNET acknowledges and agrees that, as between the Company and
CNET, CNET will be solely responsible for any claims or other
losses associated with or resulting from the operation of the
CNET Sites.
8. REPRESENTATIONS AND WARRANTIES.
8.1 Each Party. The Parties each represent and warrant that its
entry into, and performance of its obligations hereunder are
rightful and do not violate any other agreement to which it is
a party, and that its conduct in performing this Agreement
will be in conformity with all applicable and valued laws,
rules and regulations.
8.2 The Company. The Company hereby represents and warrants to
CNET that the Company has, and will have throughout the Term,
all full and unrestricted rights to use and exploit and to
authorize CNET to use the Company Marks as contemplated by
this Agreement and that CNET's use of the Company Marks will
not infringe any trademark right of any third party within the
United States.
9. MUTUAL INDEMNIFICATION.
9.1 Indemnification by CNET. CNET shall indemnify and hold
harmless the Company, its parents, subsidiaries, directors,
officers, employees and shareholders from and against any
costs, losses, liabilities and expenses, including all court
costs, reasonable expenses and reasonable attorney's fees
(collectively, "Losses") that the Company may suffer, incur or
be subjected to by reason of any legal action, proceeding,
arbitration or other claim by a third party, whether commenced
or threatened, arising out of or as a result of (a) any breach
or alleged breach by CNET of its representations, warranties
or covenants hereunder; or (b) the operation of the CNET Sites
(except in cases where the Company is required to indemnify
CNET under the following paragraph), including claims of
infringement or misappropriation of intellectual property
rights.
9.2 Indemnification by the Company. Except to the extent the
Company is entitled to indemnification from CNET under Section
9.1, the Company shall indemnify and hold harmless CNET, its
parents, subsidiaries, directors, officers, employees and
shareholders from and against any Losses that CNET may suffer,
incur or be subjected to by reason of any legal action,
proceeding, arbitration or other claim by a third party,
whether commenced or threatened, arising out of or as a result
of (a) any breach or alleged breach by the Company of its
representations, warranties or covenants hereunder; (b) claims
of infringement or misappropriation of intellectual property
rights as a result of the authorized use by CNET of the
Company Marks or any content provided by the Company to CNET
expressly for display in connection with or as part of the
Online Promotions and TV Promotions in accordance with this
Agreement; or (c) the operation of the Company Site or the
offer or sale of the Products through the Company Site.
9.3 Indemnification Procedures. If an indemnifiable claim should
be made against either Party, the party seeking
indemnification (the "Indemnified Party") shall
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<PAGE>
promptly notify the other Party (the "Indemnifying Party"). If
an Indemnified Party provides such notice, the Indemnified
Party shall permit the Indemnifying Party to control the
defense, disposition or settlement of the matter at its own
expense; provided that the Indemnifying Party shall not,
without the consent of the Indemnified Party enter into any
settlement or agree to any disposition that imposes an
obligation on the Indemnified Party that is not wholly
discharged or dischargeable by the Indemnifying Party, or
imposes any conditions or obligations on the Indemnified Party
other than the payment of monies that are readily measurable
for purposes of determining the monetary indemnification or
reimbursement obligations of Indemnifying Party. The
Indemnified Party shall notify Indemnifying Party promptly of
any claim for which Indemnifying Party is responsible and
shall cooperate with Indemnifying Party in every commercially
reasonable way to facilitate defense of any such claim;
provided that the Indemnified Party's failure to notify
Indemnifying Party shall not diminish Indemnifying Party's
obligations under this Section except to the extent that
Indemnifying Party is materially prejudiced as a result of
such failure. An Indemnified Party shall at all times have the
option to participate in any matter or litigation through
counsel of its own selection and at its own expense.
10. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE
OTHER PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT, UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL (OTHER THAN LOST PROFITS FOR BREACH OF
CONTRACT) OR INCIDENTAL DAMAGES.
11. MISCELLANEOUS.
11.1 Assignment. This Agreement may not be assigned by either
Party, except (a) to the transferee of substantially all of
the business operations of such Party (whether by asset sale,
stock sale, merger or otherwise) or (b) to any entity that
controls, is controlled by or is under common control with
such Party. Each Party acknowledges that the other Party may
reorganize its business so that certain of the business or
obligations hereunder are operated or performed by affiliates
of such other Party, in which case such affiliates may perform
on behalf of such other Party pursuant to this Agreement;
provided that such other Party will not be relieved of any of
its obligations hereunder.
11.2 Relationship of Parties. This Agreement will not be construed
to create a joint venture, partnership or the relationship of
principal and agent between the Parties hereto, nor to impose
upon either Party any obligations for any losses, debts or
other obligations incurred by the other Party except as
expressly set forth herein.
11.3 Entire Agreement. This Agreement constitutes and contains the
entire agreement between the Parties with respect to the
subject matter hereof and supersedes any prior oral or written
agreements. This Agreement may not be amended except in
writing signed by both Parties. Each Party acknowledges and
agrees that the other
-12-
<PAGE>
has not made any representations, warranties or agreements of
any kind, except as expressly set forth herein.
11.4 Audit Rights. Each Party will have the right to engage an
independent third party to audit the books and records of the
other Party relevant to the verification of Online Promotions,
the calculation of Retail Impressions or the calculation of
CNET Sales, upon reasonable notice and during normal business
hours, and the other Party will provide reasonable cooperation
in connection with any such audit. The Party requesting the
audit will pay all expenses of the auditor unless the audit
reveals an underpayment by the other Party of more than 5%, in
which case the other Party will reimburse all reasonable
expenses of the auditor.
11.5 Applicable Law and Venue. This Agreement will be construed in
accordance with and governed by the laws of the State of
California, without regard to principles of conflicts of law.
11.6 Confidentiality. In connection with the activities
contemplated by this Agreement, each Party may have access to
confidential or proprietary technical or business information
of the other Party, including without limitation (a)
proposals, ideas or research related to possible new products
or services; (b) financial statements and other financial
information; and (c) the material terms of the proposed
relationship between the Parties (collectively, "Confidential
Information"). Each Party will take reasonable precautions to
protect the confidentiality of the other Party's Confidential
Information, which precautions will be at least equivalent to
those taken by such Party to protect its own Confidential
Information. Except as required by law or as necessary to
perform under this Agreement, neither Party will knowingly
disclose the Confidential Information of the other Party or
use such Confidential Information for its own benefit or for
the benefit of any third party. A Party's "Confidential
Information" does not include any information that is or
becomes generally available to others (other than through a
breach of this provision by the other Party) or that is or was
independently developed or obtained by the other Party without
use of or reliance upon any Confidential Information received
in connection with the proposed business relationship.
Notwithstanding the foregoing, the following information will
not be considered "Confidential Information" provided that
such information is not publicly identified as relating to or
coming from the Company: (a) information contained in the
reports described in Section 2.10, and (b) any information
obtained by CNET from Users who affirmatively request to be
added to an e-mail newsletter.
11.7 Press Release. Each Party may issue a press release which is
agreed upon by the Parties, concerning the business
relationship contemplated by this Agreement, and each Party
will provide an appropriate quote from one of its senior
executive officers for use in the other Party's release. The
Company agrees that CNET's press releases may disclose the
total consideration payable to CNET hereunder. Each Party will
provide the other with a reasonable opportunity to review and
comment on its press release.
-13-
<PAGE>
11.8 Waiver. The failure of either Party to insist upon or enforce
strict performance by the other Party of any provision of this
Agreement or to exercise any right under this Agreement will
not be construed as a waiver or relinquishment to any extent
of such Party's right to assert or rely upon any such
provision or right in that or any other instance; rather, the
same will be and remain in full force and effect.
11.9 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original and all of which
together constitute one and the same document.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first written above.
CNET, INC., PROVIDENT AMERICAN INSURANCE
a Delaware corporation CORP., a Pennsylvania corporation
By: /s/ David Overmyer By: /s/ Alvin H. Clemens
------------------------------ ------------------------------
Name: David Overmyer Name: Alvin H. Clemens
---------------------------- ----------------------------
Title: Vice President Finance Title: Chairman and CEO
and Administration ---------------------------
---------------------------
By: /s/ Michael Ashker
------------------------------
Name: Michael Ashker
----------------------------
Title: President
---------------------------
INSURION, INC.,
a Pennsylvania corporation
By: /s/ Alvin H. Clemens
------------------------------
Name: Alvin H. Clemens
----------------------------
Title: Chairman and CEO
---------------------------
By: /s/ Michael Ashker
------------------------------
Name: Michael Ashker
----------------------------
Title: President
---------------------------
-14-
<PAGE>
EXHIBIT A
1. Banner - the Datek Online advertisement taken from CNET.COM is an exemplar of
a Banner
[GRAPHIC OMITTED]
2. Graphical Link - the IBM advertisement taken from NEWS.COM is an exemplar of
a Graphical Link:
A-1
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Another example of a Graphical Links is the promotional button (88 x 31 pixels)
for ETRADE, which appears at
http://www.news.com/Investor/Quote/0,208,0~3~0~~CNWK~~~~~~,00.html___________.
A-2
<PAGE>
EXHIBIT B
INITIAL PROMOTIONS
CNET will display Banners on the CNET Sites and Snap with an aggregate value,
based on CNET's then-current rates, equal to [***] during the second quarter of
1998 and [***] during the third quarter of 1998, as indicated in the table
below:
---------------------------------------------------------------------
Number of Impressions
Site: Banner Value Per Month
---------------------------------------------------------------------
CNET.COM [***] [***], in the month of June 1998
(second quarter 1998)
---------------------------------------------------------------------
CNET.COM [***] [***] for the months of July 1998,
August 1998, September 1998 (third
quarter 1998
---------------------------------------------------------------------
B-1
<PAGE>
EXHIBIT C
PERFORMANCE STANDARDS
1. The Company Site. The Company Site and the Company's related
operations must comply with the following performance standards throughout
the Term:
1.1 The Company Site will be operational and fully functional in all
material respects (i.e. capable of displaying information, receiving purchases
and conducting transactions as contemplated in the ordinary course of business)
at least 97% of the time during any 30 day period.
1.2 The average time required to start displaying the HTML on a page of
the Company Site after a link from a CNET Site shall not exceed a daily average
of 3 seconds, and the average time required to deliver an entire page of the
Company Site over the open Internet shall not exceed a daily average of 6
seconds. For both measurements, the Company may assume high-speed connectivity
to the Internet (not modem connection speeds).
1.3 Without limiting the effect of 1 and 2, the Company shall provide
to users coming to the Company Site from the Retail Promotions at least the same
level of service as is offered to users coming directly to the Company Site.
2. The CNET Sites. The CNET Sites and CNET's related operations must
comply with the following performance standards throughout the Term.
2.1 CNET will be operational and fully functional in all material
respects (i.e. capable of displaying information, receiving purchases and
conducting transactions as contemplated in the ordinary course of business) at
least 97% of the time during any 30 day period.
C-1
<PAGE>
FIRST AMENDMENT TO PROMOTION AGREEMENT
THIS FIRST AMENDMENT TO THE PROMOTION AGREEMENT (the "Amendment") is dated as of
November 13, 1998 between CNET, Inc., with its principal place of business
located at 150 Chestnut Street, San Francisco, California 94111 ("CNET"), and
Insurion, Inc., with its principal place of business located at 2500 DeKalb
Pike, Norristown, PA 19404 (the "Company"). CNET and Company entered into the
Promotion Agreement dated June 14, 1998 (the "Agreement") wherein CNET agreed to
provide various promotions on the CNET Sites and CNET television shows. Company
has been unable to comply with certain provisions of the Agreement, and CNET and
Company have determined that it is in the best interest of each party to modify
the Agreement on the terms set forth in this Amendment. Accordingly, the
parties, intending to be legally bound, hereby agree as follows:
1. Delivery of Promotions. Notwithstanding the terms of Section 2 of the
Agreement, CNET will not provide any Promotions. Online Promotions, or TV
Promotions (collectively the "Programs") for the Company during October,
November and December 1998 (collectively the "Fourth Quarter") or January
1999, and no Impressions will be due prior to January 31, 1999. All
Programs that were intended in the Agreement to be delivered during the
Fourth Quarter and January 1999 will be delivered, at CNET's discretion
and subject to available inventory, over the remainder of the Term
beginning on February 1, 1999, provided that CNET will use commercially
reasonable efforts to deliver all TV Promotions by December 31, 1999.
2. Payment for Promotions. Notwithstanding the terms of Section 3 of the
Agreement, if the Company completes a round of financing after November
17, 1998, for at least $500,000 during the Fourth Quarter, then on or
before December 31, 1998, the Company will pay to CNET the sum of
$75,000, which will be applied to reduce the $250,000 debt owed to CNET
for Programs provided for the Company during July, August and September
1998 (collectively the "Third Quarter"). Notwithstanding the foregoing,
all amounts due to CNET for Programs provided for the Company during the
Third Quarter will be due and payable on March 31, 1999, and the Company
agrees to promptly pay the same. Further, the Company will pay for
Programs to be delivered in January, February and March 1999 on or before
March 31, 1999. All Programs delivered after March 31, 1999, will be paid
for in advance at the beginning of each month during which such Programs
will run, with the first such payment due on or before April 1., 1999.
After April 1, 1999, if payment for the Programs is not received by the
tenth day of any month, CNET may terminate the Agreement immediately upon
written notice to Company.
3. Upon the execution of this Amendment, each reference in the Agreement to
"this Agreement," "hereunder," "hereof," "herein," or words of like
import, and each reference in any document related thereto, or executed
in connection herewith, shall mean and be a reference to the Agreement as
amended hereby, and the Agreement and this Amendment shall be read
together and construed as one single instrument. Any capitalized terms
not defined herein shall have the meaning set forth in the Agreement.
4. Except as specifically amended above, the Agreement and any document
related thereto or executed in connection therewith shall remain in full
force and effect and are hereby ratified and confirmed in all respects.
5. The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right,
power or remedy of either party under any document related thereto, or
constitute a waiver of any provision of any document related thereto.
IN WITTNESS WHEREOF, the parties have executed this Amendment effective the day
and year first written above.
CNET, INC. INSURION, INC.
By: /s/ Martin Green By: /s/ Michael Ashker
------------------------------ ------------------------------
Name: Martin Green Name: Michael Ashker
------------------------------ ------------------------------
Title: Vice President Title: President
------------------------------ ------------------------------
<PAGE>
AMENDED AND RESTATED AGREEMENT
------------------------------
This Amended and Restated Agreement, dated as of November 13, 1998 (the
"Effective Date") amends, supercedes and restates the original Agreement, dated
as of June 26, 1998, as amended on October 30, 1998, and is made by and between
Lycos, Inc., a Delaware corporation with a principal place of business at 400-2
Totten Pond Road, Waltham, MA 02154 (including its subsidiary Tripod, Inc.,
"Lycos"), and Insurion, Inc., a Pennsylvania corporation with a principal place
of business at 2500 DeKalb Pike, Norristown, PA 19404 ("Insurion") (Lycos and
Insurion are each a "Party," and collectively, the "Parties"). This Amended and
Restated Agreement shall be referred to herein as the "Agreement."
Recitals
--------
A. Lycos is the owner or licensee of certain Web services
(collectively, the "Lycos Services"), which are accessible through the Lycos
Site (as defined below);
B. Insurion conducts the Relevant Business (as defined below), and is
the operator of certain Web services (the "Insurion Services"), which are
accessible through the Insurion Site (as defined below);
C. Lycos would like to promote and provide Graphical Links and Banners
within the Lycos Services to the Co-Branded Site (as defined below) so that
users of the Lycos Services may have access to the Insurion Services; and
D. Insurion wants to establish the Co-Branded Site and have it linked
to the Lycos Site in order to expose the Insurion Services to Lycos' users.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lycos and Insurion hereby agree as
follows:
Terms
1. Definitions.
a. "Above the Fold" means the first displayed portion of a Web page
that is visible without scrolling.
b. "Banner" means an advertising strip as reflected on Lycos' current
rate card that is capable of displaying dynamic graphics and other content and
embedded links. An example of a Banner as contemplated by this Agreement is
found on Exhibit C.
c. "Co-Branded Site" means the co-branded version of the Insurion Site.
d. "Confidential Information" has the meaning set forth in Section 9.
<PAGE>
e. "Co-Sponsored Policies" means insurance policies: (i) that are
underwritten by a third party insurance provider who has engaged Insurion to act
as an agent to market and sell such policies through the Insurion Site; (ii)
that are purchased through online registration on the Co-Branded Site during the
Term by a user who accessed the Co-Branded Site through an Online Promotion; and
(iii) for which Insurion ultimately receives the premium payment from such user.
f. "First Term" means the first 12 months of the Term.
g. "Graphical Link" means an advertising space on a Web page, as
reflected on Lycos' current rate card, that contains a graphical/HTML hypertext
link to another Web page. An example of a Graphical Link as contemplated by this
Agreement is found on Exhibit C.
h. "Impressions" means a user exposure to a page on the Lycos Site
containing an Online Promotion as such exposure is reasonably determined and
measured by Lycos in accordance with standard methodologies and practices
customary in the industry.
i. "Insurion Policies" means insurance policies: (i) that are
underwritten by Provident or a designee of Provident, as the principal insurance
provider; (ii) that are purchased through online registration on the Co-Branded
Site during the Term by a user who accessed the Co-Branded Site from an Online
Promotion; and (iii) for which Insurion ultimately receives the premium payment
from such user.
j. "Insurion Site" means the Internet site located at the URL
www.healthaxis.com or such other site as Insurion may designate as a successor
site.
k. "Lycos Services" means the Web services which are owned or licensed
by Lycos and which are accessible through the Lycos Site.
l. "Lycos Site" means the Internet site located at the URL
www.lycos.com.
m. "Online Promotions" means the Graphical Links and Banners delivered
by Lycos pursuant to Section 2.a. below..
n. "Permanent Placement" means a Banner or Graphical Link that
permanently appears on a specified Web page.
o. "Promotions" means Banners, Permanent Placements, Graphical Links,
buttons and other online promotional content.
p. "Provident" means Provident American Insurance Corporation,
Insurion's present parent company.
q. "Referral Fee" means any commission fee and/or referral fee paid by
a co-sponsored insurance provider to Insurion directly as consideration for
sourcing premiums for Co-
2
<PAGE>
Sponsored Policies. Expressly excluded are administrative fees, application
fees, association fees, up-front slotting fees or advertising and marketing
fees.
r. "Relevant Business" means the marketing and sale through the
Internet or other online services, .... .
s. "Second Term" means the last 12 months of the Term.
t. "Tripod Site" means the Internet site located at the URL
www.tripod.com.
2. Lycos' Obligations:
a. Site Integration Lycos shall provide Online Promotions (Above the
Fold for at least the Guaranteed Impression levels described in Section 2.d. of
this Agreement) linked to the Co-Branded Site from the following places:
(i) on the top level page and in all second level Guides
(Attachment 1) (excepting the categories Women and Diseases)
of the Health Web Guide.
(ii) on the top level page of the results from searches or queries
(Exhibit B) of the key words listed in Exhibit A.
(iii) on the top level page of the Small Biz Guide, (Attachment 2)
within the Business Web Guide.
(iv) on the top level page of the Careers Web Guide, (Attachment 3)
which is currently accessible from the Lycos Site home page.
(v) on the top level page of the Insurance and Taxes second level
Guides, (Attachment 4) which are currently within the Money
Web Guide.
(vi) on the top level page of the "Shopping for Life Insurance,"
"Health Insurance," "Spousal Health Plans," and "Your HMO"
Community Guides (Attachment 6) linked from the Insurance
Guide second level page (which is currently within the Money
Web Guide).
(vii) at Lycos' discretion, on the Tripod home page, Tripod member
home pages and Tripod targeted properties, including the
Health/Fitness, Sports, Jobs/Career, Money/Business and
Women's areas (Attachment 5).
(viii) as mutually agreed by the parties, on the Lycos Site home
page and on other Lycos pages.
Subject to the requirements of this Section 2.a., the Parties will determine the
location and type of each Online Promotion displayed throughout the Lycos Site
and may phase in certain types of Online Promotions as they are developed by
Insurion and as required in order to maximize the
3
<PAGE>
strategic value of the Online Promotions as determined and agreed to by the
Parties (such determination and agreement not to be unreasonably withheld in
light of quantifiable performance metrics). The Parties agree that the Online
Promotions will be prominently displayed to maximize the exposure of Insurion as
Lycos's exclusive provider of services and products related to the Relevant
Business. Lycos may, in its own discretion, redesign pages of the Lycos and
Tripod Sites; provided that Lycos will monitor and adjust accordingly the
location and placement of the Online Promotions as changes are made in the
applicable areas of the Lycos or Tripod Sites.
b. Omitted.
c. Exclusivity. During the Term, Lycos shall not enter into any
agreement or other arrangement pursuant to which Lycos agrees to promote or
display any kind of Promotions in the Lycos Site and the Tripod Site for any
entity or organization engaging in the Relevant Business.
d. Guaranteed Impressions. Lycos guarantees to provide Insurion with
.... in the ...., and .... in the ..... Lycos may spread the impressions over
the Term to account for the ramp-up of the Co-Branded Site and for the natural
growth of Internet users, as follows: .... of the Online Promotion Impressions
will be delivered in the .... of the ....; .... in the ....; .... in the ....;
.... in the ....; and .... in the ..... During the ...., Lycos shall deliver the
guaranteed Online Promotion Impressions evenly, taking into account natural
growth. If Lycos fails to meet any of these targets, the remaining Online
Promotion Impressions will be pro rated and delivered accordingly over the
remainder of the .... or ...., as applicable.
e. Overdelivery. Lycos may, with the prior approval of Insurion,
provide overdelivery of Impressions at a rate ....; provided that such
overdelivery will be limited to .... . If Insurion does not purchase these
additional impressions from .... , Lycos will deliver the base Impression levels
specified above and will manage the inventory on the Lycos Site accordingly.
Lycos may sell such Impressions to any entity other than an entity engaged in
the Relevant Business. In the event that Insurion purchases the additional
Impressions from .... and Lycos delivers more than ...., Lycos will provide the
Impressions over .... to Insurion at no charge.
f. Makegood Period. If at the end of the ...., Insurion has not sold
...., Lycos will continue to provide Impressions until the earlier of .... or
until .... have been sold (the "Makegood Period"). The Makegood Period shall
terminate and the .... shall begin when either: (i) Insurion has sold ....; or
(ii) Insurion sells .... in the Makegood Period. If the Makegood Period
terminates pursuant to (i) or (ii) above, Insurion shall pay to Lycos, upon
termination of the Makegood Period, the .... Prepaid Referral Fee installment.
No Pre-Paid Referral Fees (as defined in Section 2(b)) will be due during the
Makegood Period. In addition, if at the end of the Term, Insurion has not sold
.... , Lycos will continue to provide Impressions at the same rate as just prior
to the end of the Term until the earlier of a period of .... or until .... have
been sold.
g. Header File. Lycos shall provide Insurion with a header file (the
"Header File") that shall be 600x100 pixels.
3. Insurion's Obligations
4
<PAGE>
a. Exclusivity Payments. Insurion has paid Lycos .... for the
exclusivity provided by Lycos during .... In addition, during ..., Insurion
shall pay Lycos ... which will be in ... installments of ... commencing on the
first day of ....
b. Pre-Paid Referral Fees.
i. First Term. During the ...., Insurion shall pay Lycos .... (the
"Pre-Paid Referral Fee"). Insurion has paid Lycos .... The balance of ... shall
be paid in .... installments of .... The first installment will be due on the
... of the Term. The .... remaining payments will be made on the last day of
each successive .... period thereafter. This Pre-Paid Referral Fee is guaranteed
to Lycos regardless of transactions achieved by Insurion and will be recouped
from any Affiliated Branding Revenue Share (as described Section 3(d)), and
Policy Fees (as described Section 3(c)) owed by Insurion to Lycos.
ii. Second Term. Except as otherwise provided in Section 2(f),
during the ...., Insurion shall pay Lycos .... which will be paid in ....
installments of .... commencing on the first day of the ..... This Pre-Paid
Referral Fee is guaranteed to Lycos regardless of transactions achieved by
Insurion and will be recouped from any Affiliated Branding Revenue Share (as
described in Section 3(d)), and Policy Fees (as described in Section 3(c)) owed
by Insurion to Lycos.
iii. Underdelivery. If Lycos has delivered fewer than .... at the
end of the .... and Insurion has not sold ...., then the Pre-Paid Referral Fees
for the .... will be prorated by the percentage of actual Impressions delivered
by Lycos in the ..... For example, if at the end of the ...., Lycos has only
delivered .... of the .... guaranteed to Insurion, then Insurion quarterly
payments commencing on the first day of the .... will be reduced by .... of the
amount specified above.
c. Policy Fees. During the Term, Insurion shall pay Lycos .... sold as
follows: (1) .... upon signing and receipt of the premium for such ....; (2)
....upon renewal (....anniversary); and (3) .... upon renewal (....
anniversary). Notwithstanding the above, Insurion shall pay Lycos .... sold,
paid as follows: (1) .... upon signing and receipt of the premium; and (2) ....
upon renewal (.... anniversary).
d. Ongoing Incremental Revenues. In the event Insurion contracts with
another person or entity to provide advertising sponsorship for all or a portion
of the Co-branded Site, Insurion shall provide Lycos with .... of all ongoing
incremental revenues (reasonable program set-up fees are excluded) received from
that branding partner. In the event that Lycos contracts with another person or
entity to provide advertising sponsorship for all or a portion of the Co-branded
Site, Insurion shall provide Lycos with .... of all ongoing incremental revenues
(reasonable program set-up fees are excluded) received from that branding
partner. All such fees due Lycos shall be referred to as the "Affiliated
Branding Revenue Share". Both Lycos and Insurion must approve all branding
partners, which approval shall not be unreasonably withheld or delayed. Payment
shall be made in the month following the month in which Insurion actually
receives the ongoing incremental revenues. Lycos shall have the right, at its
expense (except as provided below) to audit Insurion's books and records for the
purpose of verifying the Affiliate Branding Revenue Share. If the auditor's
figures reflect an Affiliated Branding Revenue Share
5
<PAGE>
higher than those reported by Insurion, Insurion shall pay the difference. If
the auditor's figures vary more than .... from the figures provided by Insurion,
Insurion shall also pay the reasonable cost of the audit.
e. Referral and Policy Revenue. If Insurion sells more than ...
Co-Sponsored Policies, Insurion shall pay Lycos ... of all Referral Fees
("Co-sponsor Revenue Share") received by Insurion from such insurance
co-sponsors from the sale of the Co-Sponsored Policies in excess of ...
Co-Sponsored Policies. Payment shall be made quarterly. Lycos shall have the
right, at its expense (except as provided below) to audit Insurion's books and
records for the purpose of verifying the Co-sponsor Revenue Share. If the
auditor's figures reflect an Co-sponsor Revenue Share higher than those reported
by Insurion, Insurion shall pay the difference. If the auditor's figures vary
more than ... from the figures provided by Insurion, Insurion shall also pay the
reasonable cost of the audit.
f. Insurion Site. Insurion shall launch the Insurion Site between March
1, 1999 and May 1, 1999, and shall give Lycos thirty days prior notice of the
launch.
g. Co-Branded Site. Insurion shall launch the Co-Branded Site within
thirty (30) days after the date of launch of the Insurion Site. Insurion shall
operate and serve the Co-Branded Site in a manner consistent with the present
quality standards of Lycos and which meets response performance standards for
Lycos users at least as good as those of the Lycos Site. In addition, Insurion
will be responsible for system operation software costs, hardware costs, and
network costs. Insurion will generate daily traffic reports and provide Lycos
with audited traffic reports. Insurion will be responsible for integration of
Lycos' ad serving software (Accipter) with the Co-Branded Site. Additional
services and functionality that are developed by Insurion for the Insurion Site
(or any successor to it) will be provided by Insurion at no cost so that the
Co-Branded Site is maintained at a level substantially equal to the Insurion
Site as it appears from time to time. The Co-Branded Site will include the Lycos
frame surrounding the Content, but with Insurion's logo (hyperlinked to the
Insurion Site) displayed on each page. The URL of the Co-Branded Site will be
substantially similar to www.healthaxis.lycos.com. Insurion shall include the
Header File on each page that is served on the Co-Branded Site.
h. Lycos Site. Lycos will be responsible for ensuring that the Lycos
Site functions with reasonable reliability and in a commercially reasonable
manner consistent with the present quality and performance standards of Lycos
throughout the Term.
i. Online Promotions. Insurion shall provide to Lycos all content for
the Online Promotions, which content Lycos shall be delivered by Lycos in
accordance with this Agreement. The content provided by Insurion will be of
equal or greater quality than that provided by Insurion to any other third party
for online use.
6
<PAGE>
j. User Registration Data. To the extent permitted by any applicable
laws or contractual obligations, Insurion will provide Lycos with general
aggregated demographic registration data on all Lycos users who visit the
Co-Branded Site, whenever such registration data is collected from a Lycos user
and can be done readily without incurring material costs or burden. Such
aggregate demographic registration data will not include specific individual
information.
4. Term. The term ("Term") of this Agreement shall commence on the date that
Insurion launches the Co-Branded Site and continue for twenty-four ( 24) months
unless extended pursuant to Section 1(f) above or terminated earlier as provided
in Section 9 below.
5. Trademark Licenses:
a. Lycos hereby grants during the Term to Insurion a non-exclusive,
royalty-free, non-transferable license to reproduce, display and publish Lycos'
trademarks, tradenames, service marks, logos and the like that may be delivered
by Lycos to Insurion solely for the purposes specified in this Agreement (the
"Lycos Marks"). Any use of the Lycos Marks by Insurion must comply with
reasonable usage guidelines communicated by Lycos to Insurion from time to time.
Nothing contained in this Agreement will give Insurion any right, title or
interest in or to the Lycos Marks or the goodwill associated therewith, except
the limited usage rights expressly provided above. Insurion acknowledges and
agrees that as between Lycos and Insurion, Lycos is the sole owner of all rights
in and to the Lycos Marks.
b. Insurion hereby grants Lycos during the Term a non-exclusive,
royalty-free, non-transferable license to reproduce, display and publish
Insurion's trademarks, tradenames, service marks, logos and the like that may be
delivered by Insurion to Lycos solely for the purposes specified in this
Agreement (the "Insurion Marks"). Any use of the Insurion Marks by Lycos must
comply with reasonable usage guidelines communicated by Insurion to Lycos from
time to time. Nothing contained in this Agreement will give Lycos any right,
title or interest in or to the Insurion Marks or the goodwill associated
therewith, except the limited usage rights expressly provided above. Lycos
acknowledges and agrees that as between Insurion and Lycos, Insurion is the sole
owner of all rights in and to the Insurion Marks.
6. Representations and Warranties:
a. Each Party. Each party hereby represents and warrants as follows:
i. Corporate Power. Such party 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.
ii. Due Authorization. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
iii. Binding Agreement. This Agreement is a legal and valid
obligation binding upon it and enforceable with its terms. The execution,
delivery and performance of this
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Agreement by such party 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.
iv. Intellectual Property Rights. Each Party has, and will have
throughout the Term, all full unrestricted rights to use and exploit and to
grant or otherwise permit the other Party to use and exploit its Marks and other
intellectual property that may be provided by it to the other Party as
contemplated by this Agreement and that the other Party's use of its Marks and
such other intellectual property as contemplated by this Agreement will not
infringe any trademark or other intellectual property right of any third party
within the United States. If either Party's (the "Infringing Party")
intellectual property rights are alleged or held to infringe the intellectual
property rights of a third party, the Infringing Party shall, at its own
expense, and in its sole discretion, (1) procure for the non-Infringing Party
the right to continue to use the allegedly infringing intellectual property or
(2) replace or modify the intellectual property to make it non-infringing;
provided, however, if neither option is possible or economically feasible and if
the inability to use such intellectual property would cause a material breach of
this Agreement (as determined by the non-Infringing Party), the Infringing Party
may terminate this Agreement.
The representations and warranties and covenants in this Section 6
are continuous in nature and shall be deemed to have been given by each party at
execution of this Agreement and at each stage of performance hereunder. These
representations, warranties and covenants shall survive termination or
expiration of this Agreement.
7. Limitation of Warranty. EXCEPT AS EXPRESSLY WARRANTED IN SECTION 6 ABOVE,
EACH PARTY EXPRESSLY DISCLAIMS ANY FURTHER WARRANTIES, EXPRESS, IMPLIED, OR
STATUTORY, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LYCOS SPECIFICALLY
DISCLAIMS ALL LIABILITY FOR THE INSURION SITE AND THE CONTENT THEREIN, AND
INSURION SPECIFICALLY DISCLAIMS ALL LIABILITY FOR THE LYCOS SITE, THE TRIPOD
SITE AND THE CONTENT THEREIN.
8. Indemnification.
a. Insurion Indemnity. Insurion will at all times defend, indemnify and
hold harmless Lycos and its officers, directors, shareholders, employees,
accountants, attorneys, agents, successors and assigns from and against any and
all third party claims, damages, liabilities, costs and expenses, including
reasonable legal fees and expenses, arising out of or relating to: (a) any
breach or alleged breach of any warranty, representation, covenant or agreement
made by Insurion in this Agreement, (b)the development, operation or maintenance
of the Insurion Site or the Co-Branded Site, including claims of infringement or
misappropriation of intellectual property rights; or (c) claims of infringement
or misappropriation of intellectual property rights as a result of the
authorized use by Lycos of the Insurion Marks or any content provided by
Insurion to Lycos expressly for display in connection with or as part of the
Online Promotions in accordance with this Agreement.
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b. Lycos Indemnity. Lycos will at all times defend, indemnify and hold
harmless Insurion and its officers, directors, shareholders, employees,
accountants, attorneys, agents, successors and assigns from and against any and
all third party claims, damages, liabilities, costs and expenses, including
reasonable legal fees and expenses, arising out of or relating to: (a) any
breach or alleged breach of any warranty, representation, covenant or agreement
made by Lycos in this Agreement; (b) the development, operation or maintenance
of the Lycos Site, including claims of infringement or misappropriation of
intellectual property rights; or (c) claims of infringement or misappropriation
of intellectual property rights as a result of the authorized use by Insurion of
the Lycos Marks or any content provided by Lycos to Insurion expressly for
display on the Co-Branded Site in accordance with this Agreement(but
specifically excluding such claims relating to any content posted by users and
appearing in search results, chat or bulletin boards).
c. Indemnification Procedures. If an indemnifiable claim should be made
against either Party, the Indemnified Party shall promptly notify the other
Party (the "Indemnifying Party"). If an Indemnified Party provides such notice,
the Indemnified Party shall permit the Indemnifying Party to control the
defense, disposition or settlement of the matter at its own expense; provided
that the Indemnifying Party shall not, without the consent of the Indemnified
Party enter into any settlement or agree to any disposition that imposes an
obligation on the Indemnified Party that is not wholly discharged or
dischargeable by the Indemnifying Party, or imposes any conditions or
obligations on the Indemnified Party other than the payment of monies that are
readily measurable for purposes of determining the monetary indemnification or
reimbursement obligations of Indemnifying Party. The Indemnified Party shall
notify Indemnifying Party promptly of any claim for which Indemnifying Party is
responsible and shall cooperate with Indemnifying Party in every commercially
reasonable way to facilitate defense of any such claim; provided that the
Indemnified Party's failure to notify Indemnifying Party shall not diminish
Indemnifying Party's obligations under this Section except to the extent that
Indemnifying Party is materially prejudiced as a result of such failure. An
Indemnified Party shall at all times have the option to participate in any
matter or litigation through counsel of its own selection and at its own
expense.
9. Confidentiality, Press Releases.
a. Use and Non-Disclosure. The Parties agree and acknowledge that, as a
result of negotiating, entering into and performing this Agreement, each Party
has and will have access to certain of the other Party's Confidential
Information (as defined below). Each Party also understands and agrees that
misuse and/or disclosure of that information could adversely affect the other
Party's business. Accordingly, the parties agree that, during the Term and
thereafter, each party shall use and reproduce the other party's Confidential
Information only for purposes of this Agreement and only to the extent necessary
for such purpose and shall restrict disclosure of the other party's Confidential
Information to its employees, consultants or independent contractors with a need
to know and who are under a legal or contractual duty to maintain
confidentiality and shall not disclose the other party's Confidential
Information to any third party without the prior written approval of the other
party . Notwithstanding the foregoing, it shall not be a breach of this
Agreement for either party to disclose Confidential Information of the other
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party if required to do so under law or in a judicial or other governmental
investigation or proceeding, provided the other party has been given prior
notice and the disclosing party has sought all available safeguards against
widespread dissemination prior to such disclosure.
b. Confidential Information Defined. As used in this Agreement, the term
"Confidential Information" refers to: (i) the terms and conditions of this
Agreement; (ii) each party's trade secrets, business plans, strategies, methods
and/or practices; and (iii) other information relating to either party that is
not generally known to the public, including information about either party's
personnel, products, customers, marketing strategies, services or future
business plans. Notwithstanding the foregoing, the term "Confidential
Information" specifically excludes (A) information that is now in the public
domain or subsequently enters the public domain by publication or otherwise
through no action or fault of the other party; (B) information that is known to
either party without restriction, prior to receipt from the other party under
this Agreement, from its own independent sources as evidenced by such party's
written records, and which was not acquired, directly or indirectly, from the
other party; (C) information that either party receives from any third party
reasonably known by such receiving party to have a legal right to transmit such
information, and not under any obligation to keep such information confidential;
and (D) information independently developed by either party's employees or
agents provided that either party can show that those same employees or agents
had no access to the Confidential Information received hereunder.
c. Press Releases. Within two weeks of the Effective Date, Lycos and
Insurion will jointly prepare press releases concerning the existence of this
Agreement and the terms hereof. Otherwise, no public statements concerning the
existence or terms of this Agreement shall be made or released to any medium
except with the prior approval of Lycos and Insurion or as required by law.
10. Termination.
a. Omitted.
b. Launch. If after executing this Agreement, Insurion knows of any
material reason that would. preclude the Insurion Site from launching before
April 1, 1999, Insurion must disclose such material information to Lycos and
Lycos shall have the option of canceling this agreement, and keeping all monies
paid as of the date of such notice to Lycos. If Insurion does not launch the
Insurion Site and the Co-Branded Site by April 1, 1999, either party will have
the option to cancel the contract, in which case Lycos shall keep all monies
paid to Lycos as of the date of notice of such cancellation.
c. After The First Term. If at the end of the First Term Insurion has
failed to sell policies for which Provident or its designee is the principal
provider, then Insurion will have the option to terminate this Agreement on
fourteen days written notice to Lycos, provided that such notice must be made
within two week of the end of the First Term.
d. Makegood Period. If during the Makegood Period, Insurion fails to sell
Insurion Policies , Insurion and Lycos will have the option to terminate this
Agreement upon fourteen days written notice to the other party. If Insurion
elects to so terminate, Insurion shall not be
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obligated to pay Lycos any amount due Lycos arising from the sale of any
policies during that first quarter of the Makegood Period . If the Makegood
Period ends and Insurion has not sold a cumulative total of Insurion Policies ,
this Agreement will terminate on the last day of the Makegood Period.
e. Product Quality. If at the end of the first 12 months of the Term,
Lycos reasonably determines that the Relevant Business products and services
provided by Insurion to users are not competitive with other similar products
and services based on price, form and function, Lycos may terminate this
Agreement upon fourteen days written notice to Insurion.
f. Additional. Either 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; (e) upon the occurrence of a material breach of a material provision
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; (f) upon thirty (30) days written notice if
the other party's service, viewed as a whole, ceases to be competitive with
substantially similar services then being offered by third parties; or (g) by
mutual consent of the parties.
g. No Further Payments. Upon termination or expiration of this
Agreement, Insurion will make no further payments under Section 3.e. However,
Insurion will make those payments earned by Lycos as of the date of termination
or expiration unless this Agreement is terminated by Insurion pursuant to 10.f.
above.
11. Force Majeure. In the event that either party is prevented from performing,
or is unable to perform, any of its obligations under this Agreement due to any
cause beyond the reasonable control of the party invoking this provision, the
affected party's performance shall be excused and the time for performance shall
be extended for the period of delay or inability to perform due to such
occurrence.
12. Relationship of Parties. Insurion and Lycos are independent contractors
under this Agreement, and nothing herein shall be construed to create a
partnership, joint venture or agency relationship between Insurion and Lycos.
Neither party has authority to enter into agreements of any kind on behalf of
the other.
13. Assignment, Binding Effect. This Agreement may not be assigned by either
Party, except (a) to the transfer of substantially all of the business
operations of such Party (whether by sale, stock sale, merger or otherwise) or
(b) to any entity that controls, is controlled by or is under common control
with such Party; provided that Insurion demonstrates to Lycos' reasonable
satisfaction that such assignee has financial resources at least as good as
those of Insurion.
14. Choice of Law and Forum. This Agreement, its interpretation, performance or
any breach thereof, shall be construed in accordance with, and all questions
with respect thereto shall
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be determined by, the laws of the Commonwealth of Massachusetts applicable to
contracts entered into and wholly to be performed within said state. Insurion
hereby consents to the personal jurisdiction of the Commonwealth of
Massachusetts, acknowledges that venue is proper in any state or Federal court
in the Commonwealth of Massachusetts, agrees that any action related to this
Agreement must be brought in a state or Federal court in the Commonwealth of
Massachusetts, and waives any objection Insurion has or may have in the future
with respect to any of the foregoing.
15. Good Faith. The parties agree to act in good faith with respect to each
provision of this Agreement and any dispute that may arise related hereto.
16. Additional Documents/Information. The parties agree to sign and/or provide
such additional documents and/or information as may reasonably be required to
carry out the intent of this Agreement and to effectuate its purposes.
17. Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
18. No Waiver. The waiver by either party of a breach or a default of any
provision of this Agreement by the other party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either party to exercise or avail itself of
any right, power or privilege that it has, or may have hereunder, operate as a
waiver of any right, power or privilege by such party.
19. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
assigns.
20. Severability. Each provision of this Agreement shall be severable from every
other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
21. Notices. All notice required to be given under this Agreement must be given
in writing and delivered either in hand, by certified mail, return receipt
requested, postage pre-paid, or by Federal Express or other recognized overnight
delivery service, all delivery charges pre-paid, and addressed:
If to Lycos: Lycos, Inc.
400-2 Totten Pond Road
Waltham, MA 02154
Fax No.: (781) 370-2600
Attention: Chief Financial Officer
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with a copy to: Michael J. Riccio, Jr., Esquire
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, MA 02110
Fax No.: (617) 951-1295
If to Insurion: Michael Ashker
Insurion, Inc.
2500 DeKalb Pike
Norristown, PA 19404
Fax No.: (610) 279-1486
with a copy to: Weil, Gotshal & Manges LLP
2882 Sand Hill Road, Suite 280
Menlo Park, CA 94025
Fax No.: (650) 854-3713
22. Entire Agreement. This Agreement contains the entire understanding of the
parties hereto with respect to the transactions and matters contemplated hereby,
supersedes all previous agreements between Lycos and Insurion concerning the
subject matter, and cannot be amended except by a writing signed by both
parties. No party hereto has relied on any statement, representation or promise
of any other party or with any other officer, agent, employee or attorney for
the other party in executing this Agreement except as expressly stated herein.
23. Limitations of Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF SUCH DAMAGES ARE FORSEEABLE OR THAT PARTY HAS BEEN
ADVISED OR HAS CONSTRUCTIVE KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES),
ARISING FROM SUCH PARTY'S PERFORMANCE OR NON-PERFORMANCE PURSUANT TO ANY
PROVISION OF THIS AGREEMENT OR THE OPERATION OF SUCH PARTY'S SITE (INCLUDING
SUCH DAMAGES INCURRED BY THIRD PARTIES), SUCH AS, BUT NOT LIMITED TO, LOSS OF
REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS. NOTWITHSTANDING ANYTHING HEREIN
TO THE CONTRARY, HOWEVER, THIS SECTION SHALL NOT LIMIT EITHER PARTY'S LIABILITY
TO THE OTHER FOR (A) WILLFUL AND MALICIOUS MISCONDUCT; (B) DIRECT DAMAGES TO
REAL OR TANGIBLE PERSONAL PROPERTY; (C) BODILY INJURY OR DEATH CAUSED BY
NEGLIGENCE; (D) INDEMNIFICATION OBLIGATIONS HEREUNDER; OR (E) LOST PROFITS
DIRECTLY RELATED TO BREACH OF CONTRACT.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement
as of the date set forth above.
INSURION, INC. LYCOS, INC.
By: /s/ MICHAEL ASHKER By: /s/ EDWARD M. PHILIP
-------------------------------------- ----------------------------
Name: Michael Ashker Name: Edward M. Philip
-------------------------------------- ----------------------------
Title: President and Chief Executive Officer Title: Chief Operating Officer
-------------------------------------- ----------------------------
Date: November 13, 1998 Date: November 13, 1998
-------------------------------------- ----------------------------
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Exhibit A - Key Words
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