<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
|x| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2000
|_| Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ______________ to ______________
Commission file number 0-15586
dreamlife, inc.
---------------
(Exact name of registrant as specified in its charter)
Delaware 52-1373960
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
425 West 15th Street, 3rd floor, New York, New York 10011
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 313-9400
--------------------------------------------------------------------------------
Issuer's telephone number, including area code
--------------------------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed since last
report)
Indicate by check whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----
The number of shares outstanding of each of the issuer's classes of
common equity as of August 10, 2000 was as follows: 40,368,351 shares of common
stock
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
dreamlife, inc.
(A Development Stage Enterprise)
Balance Sheets
(in thousands, except share amounts)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
----------- ----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,135 $ 10,459
Accounts receivable 7 --
Prepaid expenses and other current assets 281 579
Cash held in escrow -- 100
-------- --------
Total current assets 4,423 11,138
Property and equipment, net of accumulated depreciation of $299 and $83, respectively 1,228 1,013
Deferred costs 75 --
Intangible assets, net of accumulated amortization of $2,574 and $1,386, respectively 4,556 5,744
Security deposits 277 277
-------- --------
Total assets $ 10,559 $ 18,172
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 739 $ 745
Accrued expenses 712 310
Obligations under capital lease, current portion 103 93
-------- --------
Total current liabilities 1,554 1,148
Obligations under capital lease, net of current portion 29 73
Stockholders' equity:
Common stock - $0.01 par value. Authorized 100,000,000 shares;
40,368,351 shares issued and outstanding at June 30, 2000
and December 31, 1999 403 403
Additional paid-in capital 34,399 37,042
Deferred compensation and other charges (1,513) (5,790)
Deficit accumulated during the development stage (24,313) (14,704)
-------- --------
Total stockholders' equity 8,976 16,951
-------- --------
Total liabilities and stockholders' equity $ 10,559 $ 18,172
======== ========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
dreamlife, inc.
(A Development Stage Enterprise)
Statements of Operations
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
PERIOD FROM APRIL 21, 1999
THREE MONTHS ENDED (DATE OF INCEPTION)
JUNE 30, 2000 TO JUNE 30, 1999
------------------ --------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenues:
Interactive services revenue $ 13 $ --
Commerce -- --
------------ ------------
Total Revenue 13 --
Cost of revenues 12 --
------------ ------------
1 --
Expenses:
Noncash compensation expense 548 3,982
Amortization of intangible assets 594 198
Advertising and marketing 846 --
General and administrative 2,906 521
------------ ------------
Total operating expenses 4,894 4,701
------------ ------------
Operating Loss (4,893) (4,701)
Interest income 82 63
------------ ------------
Net loss (4,811) (4,638)
Beneficial conversion attributable
to preferred stock -- --
------------ ------------
Net loss attributable to common
stockholders $ (4,811) $ (4,638)
============ ============
Basic and diluted net loss per common share $ (0.12) $ (0.66)
============ ============
Shares used in basic and diluted net
loss per common share calculation 40,368,351 7,065,561
============ ============
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PERIOD FROM APRIL 21, 1999
SIX MONTHS ENDED (DATE OF INCEPTION)
JUNE 30, 2000 TO JUNE 30, 2000
---------------- --------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenues:
Interactive services revenue $ 27 $ 27
Commerce 1 1
------------ ------------
Total Revenue 28 28
Cost of revenues 18 18
------------ ------------
10 10
Expenses:
Noncash compensation expense 1,634 10,206
Amortization of intangible assets 1,188 2,574
Advertising and marketing 1,454 1,454
General and administrative 5,545 10,664
------------ ------------
Total operating expenses 9,821 24,898
------------ ------------
Operating Loss (9,811) (24,888)
Interest income 202 575
------------ ------------
Net loss (9,609) (24,313)
Beneficial conversion attributable
to preferred stock -- 13,617
------------ ------------
Net loss attributable to common
stockholders $ (9,609) $ (37,930)
============ ============
Basic and diluted net loss per common share $ (0.24) $ (2.01)
============ ============
Shares used in basic and diluted net
loss per common share calculation 40,368,351 18,912,835
============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
dreamlife, inc.
(A Development Stage Enterprise)
Statement of Stockholders' Equity
Period from April 21, 1999 (date of inception)
to June 30, 2000
(in thousands, except share amounts)
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCK CONVERTIBLE PREFERRED STOCK
SERIES A PAR VALUE $.01 SERIES B PAR VALUE $.01
COMMON STOCK ------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------------- ------------- ----------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of shares pursuant to
merger of dreamlife, inc. and
CYL 7,047,828 $ 70 - $ - - $ -
Issuance of shares to members
of CYL pursuant to merger - - 99,059 1 - -
Issuance of shares in private
placement, net of expenses - - - - 178,582 2
Issuance of shares to acquire
Concept Development, Inc. - - - - - -
Issuance of shares pursuant to
exclusive license agreement - - - - - -
Exercise of stock options 268,857 3 - - - -
Issuance of common stock
options - - - - - -
Deferred compensation expense - - - - - -
Conversion of Convertible
Preferred Stock Series B 1,785,820 18 - - (178,582) (2)
Conversion of Convertible
Preferred Stock Series C 557,450 5 - - - -
Distribution of discontinued
operations - - - - - -
Conversion of Convertible
Preferred Stock Series A 30,708,396 307 (99,059) (1) - -
Net loss for the period from
April 21, 1999 (date of
inception) to
December 31, 1999 - - - - - -
-------------- ------------- ----------- ---------------- ------------- ---------------
Balance at December 31, 1999 40,368,351 $ 403 - $ - - $ -
Cancellation of stock options* - - - - - -
Deferred compensation expense* - - - - - -
Issuance of warrants* - - - - - -
Net loss for the six months*
ended June 30, 2000 - - - - - -
-------------- ------------- ----------- ---------------- ------------- ---------------
Balance at June 30, 2000* 40,368,351 $ 403 - $ - - $ -
============== ============= =========== ================ ============= ===============
<CAPTION>
DISTRIBUTION OF
CONVERTIBLE PREFERRED STOCK DISCONTINUED
SERIES C PAR VALUE $.01 ADDITIONAL OPERATION TO
-------------------------- PAID-IN COMMON
SHARES AMOUNT CAPITAL STOCKHOLDERS
------------ ------------ ------------ -----------------
<S> <C> <C> <C> <C>
Issuance of shares pursuant to
merger of dreamlife, inc. and
CYL - $ - $ 4,169 $ (1,239)
Issuance of shares to members
of CYL pursuant to merger - - (1) -
Issuance of shares in private
placement, net of expenses - - 15,064 -
Issuance of shares to acquire
Concept Development, Inc. 50,000 1 4,499 -
Issuance of shares pursuant to
exclusive license agreement 5,745 - 517 -
Exercise of stock options - - (3) -
Issuance of common stock
options - - 14,362 -
Deferred compensation expense - - - -
Conversion of Convertible
Preferred Stock Series B - - (16) -
Conversion of Convertible
Preferred Stock Series C (55,745) (1) (4) -
Distribution of discontinued
operations - - (1,239) 1,239
Conversion of Convertible
Preferred Stock Series A - - (306) -
Net loss for the period from
April 21, 1999 (date of
inception) to
December 31, 1999 - - - -
------------ ------------ ------------ -----------------
Balance at December 31, 1999 - $ - $ 37,042 $ -
Cancellation of stock options* - - (3,476) -
Deferred compensation expense* - - - -
Issuance of warrants* - - 833 -
Net loss for the six months*
ended June 30, 2000 - - - -
------------ ------------ ------------ -----------------
Balance at June 30, 2000* - $ - $ 34,399 $ -
============ ============ ============ =================
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
DEFERRED
COMPENSATION
AND OTHER ACCUMULATED
CHARGES DEFICIT TOTAL
------------ ------------- -------------
<S> <C> <C> <C>
Issuance of shares pursuant to
merger of dreamlife, inc. and
CYL $ - $ - $ 3,000
Issuance of shares to members
of CYL pursuant to merger - - -
Issuance of shares in private
placement, net of expenses - - 15,066
Issuance of shares to acquire
Concept Development, Inc. - - 4,500
Issuance of shares pursuant to
exclusive license agreement - - 517
Exercise of stock options - - -
Issuance of common stock
options (14,362) - -
Deferred compensation expense 8,572 - 8,572
Conversion of Convertible
Preferred Stock Series B - - -
Conversion of Convertible
Preferred Stock Series C - - -
Distribution of discontinued
operations - - -
Conversion of Convertible
Preferred Stock Series A - - -
Net loss for the period from
April 21, 1999 (date of
inception) to
December 31, 1999 - (14,704) (14,704)
------------ ------------- -------------
Balance at December 31, 1999 $ (5,790) $ (14,704) $ 16,951
Cancellation of stock options* 3,476 - -
Deferred compensation expense* 1,634 - 1,634
Issuance of warrants* (833) - -
Net loss for the six months*
ended June 30, 2000 - (9,609) (9,609)
------------ ------------- -------------
Balance at June 30, 2000* $ (1,513) $ (24,313) $ 8,976
============ ============= =============
</TABLE>
* Indicates unaudited amounts.
See accompanying notes to financial statements.
6
<PAGE>
dreamlife, inc.
(A Development Stage Enterprise)
Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
PERIOD FROM APRIL 21, 1999 PERIOD FROM APRIL 21, 1999
SIX MONTHS ENDED (DATE OF INCEPTION) (DATE OF INCEPTION)
JUNE 30, 2000 TO JUNE 30, 1999 TO JUNE 30, 2000
---------------- -------------------------- --------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (9,609) $ (4,638) $ (24,313)
Adjustments to reconcile net loss to
net cash used in operating activities:
Noncash compensation expense 1,634 3,982 10,206
Depreciation and amortization 1,404 202 2,872
Changes in:
Accounts receivable (7) -- (7)
Prepaid expenses and other 298 (202) (281)
Cash held in escrow 100 (125) --
Accounts payable and accrued expenses 396 319 1,451
---------------- -------------------------- --------------------------
Net cash used in operating activities (5,784) (462) (10,072)
---------------- -------------------------- --------------------------
Cash flows from investing activities:
Acquisition of property and equipment (414) -- (1,319)
Deferred costs (75) -- (75)
Acquisition of Concept Development, Inc. -- (2,110) (2,113)
Payment of security deposits -- (271) (277)
---------------- -------------------------- --------------------------
Net cash used in investing activities (489) (2,381) (3,784)
---------------- -------------------------- --------------------------
Cash flows from financing activities:
Net proceeds from sale of Series B Convertible
Preferred Stock -- 15,066 15,066
Cash acquired pursuant to merger of dreamlife,
inc. and Change Your Life.com -- 3,000 3,000
Payments under capital lease obligations (51) -- (75)
---------------- -------------------------- --------------------------
Net cash (used in) provided by
financing activities (51) 18,066 17,991
---------------- -------------------------- --------------------------
Net (decrease) increase in cash
and cash equivalents (6,324) 15,223 4,135
Cash and cash equivalents at
beginning of period 10,459 -- --
---------------- -------------------------- --------------------------
Cash and cash equivalents at
end of period $ 4,135 $ 15,223 $ 4,135
================ ========================== ==========================
Supplemental information of noncash investing and
financing activities:
Common stock dividend to effect USN Spin-Off $ -- $ -- $ 1,239
================ ========================== ==========================
Computer equipment acquired under capital lease $ 17 $ 70 $ 208
================ ========================== ==========================
Issuance of Series C Convertible Preferred Stock
in acquisition of Concept Development, Inc. $ -- $ 4,500 $ 4,500
================ ========================== ==========================
Stock issued for exclusive license agreement $ -- $ 517 $ 517
================ ========================== ==========================
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
dreamlife, inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
(A) ORGANIZATION AND BASIS OF PRESENTATION
dreamlife, inc. (a development stage enterprise) (the "Company" or
"dreamlife") commenced development stage activities in April 1999
that included plans for an online network to focus on personal and
professional improvement. The Company launched its website
www.dreamlife.com on February 12, 2000.
The interim financial statements of the Company as of and for the
six months ended June 30, 2000, are unaudited. Certain information
and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules
and regulations of the SEC relating to interim financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation of the financial position and the results of
operations and cash flows have been included in such unaudited
financial statements. The results of operations for the six months
ended June 30, 2000, are not necessarily indicative of the results
to be expected for any future interim period or for the year
ending December 31, 2000.
(B) USE OF ESTIMATES
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(C) RECOGNITION OF REVENUE
Revenue derived from interactive services, such as online courses,
is recognized when the service is provided.
Revenue derived from electronic commerce is recognized when the
products are delivered.
Advertising revenues are recognized as the advertisement is
displayed, provided that no significant company obligations
remain.
(2) RELATED PARTY TRANSACTIONS
A director of the Company was paid consulting fees during the six-month
period ended June 30, 2000 of $84,000.
8
<PAGE>
dreamlife, inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(3) COMMITMENTS
In December 1999, the Company entered into a Content License Agreement
with Yahoo! Inc. whereby the Company's content will be placed within
Yahoo!'s web site for one year. As of June 30, 2000, under the terms of
the Content License Agreement and a media insertion order, the Company is
obligated to pay Yahoo! an additional $1,000,000 through December 2000.
In April 2000, the Company entered into a one-year engagement letter with
Wit SoundView Corporation whereby Wit SoundView Corporation and Wit
Capital Corporation will act as the Company's exclusive financial
advisors. In connection with this engagement letter, the Company has
agreed to pay a monthly retainer fee and to compensate Wit SoundView in
connection with specified business and financing transactions involving
dreamlife. The Company has also agreed to issue to Wit SoundView a
five-year warrant to purchase 400,000 shares of common stock at $7.00 per
share. The fair value of the warrants, amounting to $833,000, has been
recorded as a deferred charge, reflected as a reduction to stockholder's
equity in the balance sheet, pending the consummation of the related
transaction.
In July 2000, the Company entered into a content and distribution
agreement with America Online, Inc. whereby the Company will provide
content aimed at small business users to AOL and Netscape Netcenter for
eighteen (18) months, in addition to receiving promotion across several
AOL properties. As of June 30, 2000, the Company is obligated to pay
America Online $1.0 million through December 2001.
(4) LOSS PER SHARE
Basic loss per share excludes dilution and is computed by dividing the
loss available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted loss per share reflects
the potential dilution that could occur if potentially dilutive
securities such as convertible preferred stock, stock options and
warrants were exercised or converted into common stock. Basic and diluted
loss per share were the same for the period April 21, 1999 (date of
inception) through June 30, 2000 since the effect of all potential
dilutive common stock equivalents was antidilutive. As of June 30, 2000
and December 31, 1999, there were options and warrants exercisable into
4,526,250 and 4,503,750 shares of common stock, respectively.
9
<PAGE>
dreamlife, inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(5) SEVERANCE COSTS
In May 2000, the Company entered into a Retention and Severance Agreement
with Beth Polish, dreamlife's then President and Chief Operating Officer,
whereby, in addition to adjustments in stock option compensation,
dreamlife paid to Ms. Polish a bonus of $50,000 and agreed to pay to Ms.
Polish severance in the amount of $300,000 in semi-monthly installments
through May 2001. As of June 30, 2000, unpaid severance costs of
$275,000 are included in accrued liabilities.
(6) EMPLOYMENT AGREEMENT
In July 2000, the Company finalized the compensation arrangement with
Peter A. Lund, dreamlife's new Chief Executive Officer. Under the
agreement between Mr. Lund and dreamlife, Mr. Lund will receive an annual
base salary of $300,000, subject to change at the discretion of the Board
of Directors. The agreement also provides for a discretionary bonus that
may be granted as determined by the Board of Director's and a guaranteed
deferred bonus of up to $3,000,000 payable in a lump sum on May 22, 2003.
The deferred bonus is subject to vesting requirements, based on continued
employment and is therefore being expensed over the vesting period. Mr.
Lund also received stock option grants under the Company's 1999 Stock
Option Plan and from a principal shareholder.
(7) STOCK OPTIONS
On June 29, 2000, the shareholders approved an increase in the number of
shares reserved for issuance under the 1999 Employee Stock Option Plan to
6,500,000 shares.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Plan of Operations
FORWARD-LOOKING STATEMENTS
Certain statements in this report constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). The words or phrases "can be",
"expects", "may affect", "may depend", "believes", "estimate", "project", and
similar words and phrases are intended to identify such forward-looking
statements. Such forward-looking statements are subject to various known and
unknown risks and uncertainties and dreamlife, inc. ("dreamlife") cautions you
that any forward-looking information provided by or on our behalf is not a
guarantee of future performance. Our actual results could differ materially from
those anticipated by such forward-looking statements due to a number of factors,
some of which are beyond our control, including those discussed under "Risk
Factors" in our Annual Report on Form 10-K for the year ended December 31, 1999
(filed with the Securities and Exchange Commission on March 30, 2000), including
without limitation, (i) the volatile and competitive nature of the Internet
industry, (ii) changes in domestic and foreign economic and market conditions,
(iii) the effect of federal, state and foreign regulation on our business, (iv)
our ability to attract and maintain relationships with content providers, (v)
intellectual property and other claims, (v) our ability to successfully
implement and execute our e-commerce or advertising sales and sponsorship
strategy and (vi) our ability to maintain our relationships with our customers
in addition to the risks described below, as well as those discussed in our
other public filings. All such forward-looking statements are current only as of
the date on which such statements were made. We do not undertake any obligation
to publicly update any forward-looking statement to reflect events or
circumstances after the date on which any such statement is made or to reflect
the occurrence of unanticipated events.
"dreamlife", the dreamlife logo and "Quick Coach" are service marks of
dreamlife, inc. Other marks are the property of their respective owners.
OVERVIEW
We officially launched our web site, www.dreamlife.com, in February
2000. We believe our web site will enable our members to reach personal and
professional goals by assessing, defining and pursuing their aspirations through
the use of technology, coaching, communities, courses, education tools and an
interface with experts and peer support.
Our web site is undergoing continuing development. We have, therefore,
not yet fully implemented our marketing plan. Over the next several months, as
additional courses and features are added to the site, we expect to increase our
online and offline marketing and promotional activities.
11
<PAGE>
We plan to derive revenues from sponsorships, electronic commerce,
advertising and fees for interactive products and services. During the six
months ended June 30, 2000, we began to generate an immaterial amount of
revenues through the sale of online courses to our users and through the sale of
related products, such as books and tapes, through our affiliate program with
barnesandnoble.com inc. We have not generated any advertising or sponsorship
revenues to date. We believe we will begin to generate advertising and
sponsorship revenues by the end of 2000 as we increase our marketing activities
and build our membership base.
We do not expect to generate significant revenues until 2001. Our
ability to continue to develop our web site and related functionalities will
directly affect the timing of future revenues. As with any development stage
enterprise, unforeseen difficulties may arise.
RESULTS OF OPERATIONS
No comparison of prior periods is presented below as we did not conduct
operations prior to May 27, 1999.
REVENUES AND COST OF REVENUES
We began to generate an immaterial amount of revenue during the first
six months of 2000. Revenues for the six months ended June 30, 2000 and the
three months ended June 30, 2000 were $28,000 and $13,000, respectively, and
were primarily a result of the sale of online courses to our users. Cost of
revenues were $18,000 for the six months ended June 30,2000 and $12,000 for the
three months ended June 30, 2000, comprised of revenue share amounts due to our
content providers and service fees due to our digital commerce service provider.
INTEREST INCOME
We earned interest of approximately $202,000 on our cash balances for
the six months ended June 30, 2000. For the three months ended June 30, 2000, we
earned interest of $82,000 on our cash balances.
EXPENSES
Our operating expenses for the six months ended June 30, 2000 totaled
$9.8 million, of which $2.8 million related to non-cash items including $1.6
million of compensation expense for compensatory stock options granted to our
employees and directors and $1.2 million related to the amortization of
intangible assets acquired in the Concept Development and The Learning Annex
transactions (see Note 4 to dreamlife's audited financial statements in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999). The
remaining $6.7 million of expenses primarily consisted of expenses relating to
internal salaries, continuing development of our web site, advertising and
promotional expenses, and expenses related to the acquisition and development of
content.
For the three months ended June 30, 2000, our operating expenses
totaled $4.9 million, of which $1.1 million related to non-cash items including
$0.5 million of compensation expense for compensatory stock options granted to
our employees and directors and $0.6 million related to the amortization of
intangible assets as described above. The remaining $3.5 million of expenses
consisted of expenses relating to internal salaries, advertising and promotional
expenses, continuing development of our web site, and expenses related to the
acquisition and development of content. We believe that the general and
administrative and advertising and marketing expenses will significantly
increase as we continue to acquire staff and equipment and that the amortization
of intangibles may increase depending on the amount and nature of future content
acquisitions.
12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
We had $4.1 million in cash and cash equivalents at June 30, 2000.
For the six months ended June 30, 2000, cash used in operating
activities was $5.8 million, of which internal salaries and benefits expenses
totaled approximately $2.3 million, advertising and promotional expenses totaled
$1.5 million, web site development and content development expenses totaled $0.8
million and other operating expenses totaled $1.5 million.
For the six months ended June 30, 2000, cash used in investing
activities was $489,000 primarily for the acquisition of property and equipment.
Cash used in financing activities was approximately $50,000 for
payments under capital lease obligations.
We believe that we will continue to incur operating losses through at
least 2001. We expect that cash and cash equivalents at June 30, 2000 will
adequately fund initial significant technology hardware and software
expenditures necessary to develop our business and allow us to meet our
operating needs through September 2000. We expect the number of employees
devoted to our Internet business to increase slightly from 50 at June 30, 2000
to approximately 55 at September 30, 2000. We believe existing cash will fund
increased costs related to our anticipated hirings through at least September
30, 2000. To the extent that such increased costs exceed existing resources and
the acquisition or development of content and/or marketing requires significant
cash consideration, we anticipate the need to obtain additional financing before
September 30, 2000. We cannot assure you that we will be able to secure
additional financing or that such financing, if any, will be available on
favorable terms.
In December 1999, we entered into an agreement with Yahoo! Inc. whereby
our content will be placed within Yahoo!'s web site for one year. As of June 30,
2000, under the terms of such agreement and a media insertion order, we are
obligated to pay Yahoo! an additional $1.0 million through December 2000.
In April 2000, we entered into a one-year engagement letter with Wit
SoundView Corporation whereby Wit SoundView Corporation and Wit Capital
Corporation will act as our exclusive financial advisors. In connection with
this engagement letter we have agreed to pay a monthly retainer fee and to
compensate Wit SoundView in connection with specified business and financing
transactions involving dreamlife. We have also agreed to issue to Wit SoundView
a five-year warrant to purchase 400,000 shares of our common stock at $7.00 per
share.
In May 2000, we entered into a Retention and Severance Agreement with
Beth Polish, dreamlife's then President and Chief Operating Officer, whereby, in
addition to adjustments in stock option compensation, dreamlife paid to Ms.
Polish a bonus of $50,000 and agreed to pay to Ms. Polish severance in the
amount of $300,000 in semi-monthly installments through May 2001.
SUBSEQUENT EVENTS
In July 2000, we entered into an agreement with America Online, Inc.
whereby we will provide content aimed at small business users to AOL and
Netscape Netcenter for 18 months, in addition to receiving promotion across
several AOL properties. As of June 30, 2000, we are obligated to pay America
Online $1.0 million through December 2001.
In July 2000, we finalized our compensation arrangement with Peter A.
Lund, our new Chief Executive Officer. Under an agreement between Mr. Lund and
dreamlife, Mr. Lund will receive an annual base salary of $300,000, subject to
change at the discretion of the Board of Directors. The
13
<PAGE>
agreement also provides for a discretionary bonus that may be granted as
determined by the Board of Directors and a guaranteed deferred bonus of up to
$3,000,000 payable in a lump sum on May 22, 2003. The deferred bonus is subject
to vesting requirements based on continued employment and is therefore being
expensed over the vesting period. Mr. Lund also received stock option grants
under our 1999 Stock Option Plan and from a principal shareholder.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including derivative instruments
embedded in other contracts, and for hedging activities. In June 1999, the FASB
issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of SFAS No. 133," which deferred the
effective date of SFAS No. 133. SFAS No. 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. We are analyzing the
impact of SFAS No. 133 on our financial statements.
On December 3, 1999, the SEC staff issued Staff Accounting Bulletin No.
101, "Revenue Recognition in Financial Statements" (SAB 101). SAB 101 summarizes
certain of the staff's views in applying generally accepted accounting
principles to revenue recognition in financial statements. On March 24, 2000,
the SEC issued SAB 101A which amends the transition guidance for SAB 101. Under
the revised guidance, the staff will not object if registrants that have not
applied the accounting requirements in SAB 101 do not restate prior financial
statements provided they report a change in accounting principle in accordance
with APB Opinion No. 20, "Accounting Changes". The staff believes that the
change must be reported no later than the first fiscal quarter of the fiscal
year beginning after December 15, 1999, except that registrants with fiscal
years that begin between December 16, 1999 and March 15, 2000 may report a
change in accounting principle no later than their fourth fiscal quarter of the
fiscal year beginning after December 15, 1999. If a registrant with a fiscal
year beginning between December 16, 1999 and March 15, 2000 elects to avail
itself of this delay, the change must be reported in accordance with FASB
Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements".
We believe the adoption of SAB 101 will not have a significant effect on our
financial statements.
In March 2000, FASB Interpretation No. 44 - "Accounting for Certain
Transactions involving Stock Compensation, an interpretation of APB Opinion No.
25" (FIN 44) was issued. FIN 44 clarifies the application of APB No. 25
regarding (a) the definition of EMPLOYEE for purposes of applying APB No. 25,
(b) the criteria for determining whether a plan qualifies as a noncompensatory
plan, (c) the accounting consequence of various modifications to the terms of a
previously fixed stock option or award, and (d) the accounting for an exchange
of stock compensation awards in a business combination. FIN 44 does not address
the application of the fair value method of Statement No. 123. This
Interpretation is effective July 1, 2000, but certain conclusions in this
Interpretation cover specific events that occur after either December 15, 1998,
or January 12, 2000. To the extent that this Interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effects of applying this
Interpretation are recognized on a prospective basis from July 1, 2000. We have
not yet assessed the impact of FIN 44.
14
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PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
AMENDMENT NO. 2 TO 1999 EMPLOYEE STOCK OPTION PLAN
By Written Consent in Lieu of a Meeting dated June 29, 2000, holders
representing 30,708,396 shares of our common stock approved Amendment No. 2 to
our 1999 Employee Stock Option Plan. The amendment (i) increases, by 3,212,500,
the number of shares of common stock reserved for issuance under the 1999
Employee Stock Option Plan, from 3,287,500 shares to 6,500,000 shares, and (ii)
increases, by 1,100,000, the maximum number of shares of common stock underlying
options that can be granted to employees from their date of hire through the end
of the remaining fiscal year, from 1,300,000 shares to 2,400,000 shares. The
shares voting in favor of the amendment represented 76.1% of our outstanding
voting stock on the record date for such consent.
On July 25, 2000, we sent an Information Statement to our stockholders
describing Amendment No. 2 to the 1999 Employee Stock Option Plan in compliance
with Delaware law and Rule 14c-2 promulgated under the Securities Exchange Act
of 1934. In accordance with Rule 14c-2, the amendment will take effect on August
14, 2000. Amendment No. 2 is being made in light of the expansion of our
workforce to enable us to continue to provide incentives to our employees to
advance our interests and to enable us to continue to attract qualified new
employees in a competitive marketplace. Please read our definitive Information
Statement on Form 14C dated and filed with the Securities Exchange Commission on
July 25, 2000 for more information on the 1999 Employee Stock Option Plan and
Amendment No. 2.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
(a) Exhibits
Exhibit
Number Description and Method of Filing
--------- -------------------------------------------
<S> <C>
3(i).1 Restated Certificate of Incorporation (1)
3(i).2 Certificate of Amendment to Certificate of Incorporation dated June 18, 1987
(2)
3(i).3 Certificate of Amendment to Certificate of Incorporation dated November 17,
1989 (3)
3(i).4 Certificate of Amendment to Certificate of Incorporation filed November 3,
1999 (4)
3(i).5 Certificate of Amendment to Certificate of Incorporation filed December 13,
1999 (5)
3(ii) Amended and Restated By-Laws (6)
10.1 Retention and Severance Agreement made as of May 23, 2000 by and between Beth
Polish and dreamlife, inc. (7)
10.2 Offer letter by and between Peter A. Lund and dreamlife, inc. dated July 24,
2000 (8)
10.3 Letter agreement regarding registration rights by and between Peter A. Lund
and dreamlife, inc. dated July 24, 2000 (8)
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.4 Interactive Services Agreement by and between America Online, Inc. and
dreamlife, inc. dated July 17, 2000 (9)
27 Financial Data Schedule
99 Press Release issued May 25, 2000 (7)
</TABLE>
----------------------------
(1) Incorporated by reference from Exhibit 3.1 to the
registrant's Registration Statement No. 33-4532-W on
Form S-18.
(2) Incorporated by reference from Exhibit 3(b) to the
registrant's 1987 Annual Report on Form 10-K.
(3) Incorporated by reference to Exhibit 3(c) to the
registrant's 1988 Annual Report on Form 10-K.
(4) Incorporated by reference to the registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1999.
(5) Incorporated by reference to the registrant's Annual
Report on Form 10-K for the year ended December 31,
1999.
(6) Incorporated by reference to the registrant's Form
8-K/A dated May 27, 1999 and filed with the Securities
and Exchange Commission as of June 11, 1999.
(7) Incorporated by reference to the registrant's Form 8-K
dated May 23, 2000 and filed with the Securities and
Exchange Commission as of May 26, 2000.
(8) Incorporated by reference to the registrant's Form 8-K
dated July 24, 2000 and filed with the Securities and
Exchange Commission as of July 25, 2000.
(9) This agreement has been redacted in part as
confidential treatment has been requested for certain
portions. A full copy of the agreement is being filed
with the Securities and Exchange Commission.
(b) Report on Form 8-K
On May 26, 2000, dreamlife filed a report on Form 8-K dated May 23,
2000 under Item 5 (Other Events) in connection with the naming of Peter A. Lund
as Chief Executive Officer and the execution of a Retention and Severance
Agreement with our former President and Chief Operating Officer, Beth Polish.
16
<PAGE>
SIGNATURES
In accordance with 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 thereunto duly authorized.
dreamlife, inc.
Dated: August 14, 2000 By: /s/ Peter A. Lund
---------------- ----------------------------------
Peter A. Lund
Chief Executive Officer
By: /s/ Philicia G. Levinson
---------------------------------
Philicia G. Levinson
Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer
17
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Number Description and Method of Filing
--------- ----------------------------------------
<S> <C>
3(i).1 Restated Certificate of Incorporation (1)
3(i).2 Certificate of Amendment to Certificate of
Incorporation dated June 18, 1987 (2)
3(i).3 Certificate of Amendment to Certificate of
Incorporation dated November 17, 1989 (3)
3(i).4 Certificate of Amendment to Certificate of
Incorporation filed November 3, 1999 (4)
3(i).5 Certificate of Amendment to Certificate of
Incorporation filed December 13, 1999 (5)
3(ii) Amended and Restated By-Laws (6)
10.1 Retention and Severance Agreement made as of
May 23, 2000 by and between Beth Polish and
dreamlife, inc. (7)
10.2 Offer letter by and between Peter A. Lund and
dreamlife, inc. dated July 24, 2000 (8)
10.3 Letter agreement regarding registration
rights by and between Peter A. Lund and
dreamlife, inc. dated July 24, 2000 (8)
10.4 Interactive Services Agreement by and between
America Online, Inc. and dreamlife, inc.
dated July 17, 2000 (9)
27 Financial Data Schedule
99 Press Release issued May 25, 2000 (7)
</TABLE>
--------------------------------------------------------------------------------
(1) Incorporated by reference from Exhibit 3.1 to the registrant's
Registration Statement No. 33-4532-W on Form S-18.
(2) Incorporated by reference from Exhibit 3(b) to the registrant's 1987
Annual Report on Form 10-K.
(3) Incorporated by reference to Exhibit 3(c) to the registrant's 1988
Annual Report on Form 10-K.
(4) Incorporated by reference to the registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999.
(5) Incorporated by reference to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1999.
(6) Incorporated by reference to the registrant's Form 8-K/A dated May 27,
1999 and filed with the Securities and Exchange Commission as of June
11, 1999.
(7) Incorporated by reference to the registrant's Form 8-K dated May 23,
2000 and filed with the Securities and Exchange Commission as of May 26,
2000.
(8) Incorporated by reference to the registrant's Form 8-K dated July 24,
2000 and filed with the Securities and Exchange Commission as of July
25, 2000.
(9) This agreement has been redacted in part as confidential treatment has
been requested for certain portions. A full copy of the agreement is
being filed with the Securities and Exchange Commission.
<PAGE>
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS
AGREEMENT. OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.]
CONFIDENTIAL
INTERACTIVE SERVICES AGREEMENT
This Interactive Services Agreement (this "Agreement"), effective as of
[*] (the "Effective Date"), is made and entered into by and between America
Online, Inc. ("AOL"), a Delaware corporation, with its principal offices at
22000 AOL Way, Dulles, Virginia 20166, and dreamlife, Inc.("Interactive Content
Provider" or "ICP"), a Delaware corporation, with its principal offices at 425
West 15th Street, Suite 3R, New York, New York 10011 (each a "Party" and
collectively the "Parties").
INTRODUCTION
AOL and ICP each desires that AOL provide access to the Customized Site
and Customized Programming through the AOL Network, subject to the terms and
conditions set forth in this Agreement. To the extent this Agreement requires
performance by a subsidiary of AOL, AOL, in its capacity as stockholder of such
subsidiary, shall cause such subsidiary to perform in accordance with this
Agreement. Capitalized terms used but not otherwise defined in this Agreement
shall be as defined on Exhibit B attached hereto.
TERMS
1. DISTRIBUTION; PROGRAMMING
1.1 PROMOTION AND DISTRIBUTION. Beginning on a mutually agreed
upon date(s) after the Effective Date, AOL shall provide ICP
with the placements set forth on Exhibit A-1. The placements
described on Exhibit A-1 and any other placements or
promotions provided by AOL to ICP shall be referred to as the
"Placements." The Placements shall link to the Customized Site
and/or Customized Programming.
1.2 PROGRAMMING AND CONTENT. The Customized Site and Customized
Programming shall consist of the Content described on the
programming plan attached as Exhibit A-2 (the "Programming
Plan"). The inclusion of any additional Content (other than
advertisements, links or promotions permitted under Section 5)
within the Customized Site and/or Customized Programming
(including, without limitation, any features, functionality or
technology) not expressly described on Exhibit A shall be
subject to AOL's prior written approval, which will not be
unreasonably delayed. ICP shall ensure that the Licensed
Content within the Customized Site and Customized Programming
is, in the aggregate, equal to or better than the Content
distributed by ICP through any other ICP Interactive Site in
all material respects, including without limitation, quality,
breadth, depth, timeliness, functionality, features, prices of
products and services and terms and conditions; provided that
any changes to the Customized Site, Customized Programming or
the Licensed Content necessary to comply with this sentence
shall be subject to AOL's review and approval, which will not
be unreasonably delayed. Notwithstanding the foregoing, ICP
shall not be required to comply with the immediately preceding
sentence to the extent such compliance would require ICP to
violate another provision of this Agreement.
1.3 LICENSE. Subject to the terms and conditions of this
Agreement, ICP hereby grants AOL a worldwide license to use,
market, license, store, distribute, reproduce, display, adapt
in accordance with the Programming Plan, communicate, perform,
translate, transmit, and promote the Customized Site, the
Customized Programming and the Licensed Content (or any
portion thereof) through the AOL Network as AOL may determine
in its sole discretion including without limitation the right
to integrate Content from the Customized Site and/or
Customized Programming by linking to specific areas thereon,
provided that the link to any such Content on the AOL Network
shall conform to the specifications of an ICP Presence.
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<PAGE>
1.4 MANAGEMENT.
1.4.1 ICP MANAGEMENT OBLIGATIONS. ICP shall design, create,
edit, manage, review, update (on a daily basis or as
otherwise specified herein), and maintain the
Customized Site, Customized Programming and the
Licensed Content in a timely and professional manner
and in accordance with the terms of this Agreement
and shall use its commercially reasonable efforts to
keep the Licensed Content current, accurate and
well-organized at all times. Except as specifically
provided for herein, AOL shall have no obligations of
any kind with respect to the Customized Site or
Customized Programming. ICP shall be responsible for
any hosting or communication costs associated with
the Customized Site and Customized Programming.
1.4.2 COMPLIANCE. In the event ICP fails to comply with any
material term of this Agreement, including without
limitation ICP's obligations under this Section 1.4,
its promotional obligations under Section 2, the
customization and integrity requirements of Section
5, or its obligations to provide the Content set
forth on the Programming Plan, AOL will have the
right (in addition to any other remedies available to
AOL hereunder) to decrease the carriage and promotion
it provides to ICP hereunder and/or to decrease or
cease any other contractual obligation of AOL
hereunder until such time as ICP corrects its
non-compliance, in which event AOL will be relieved
of the proportionate amount of any carriage,
promotional and/or Impressions commitments made to
ICP by AOL hereunder corresponding to such decrease
in carriage and promotion. Prior to decreasing the
carriage and promotion it provides to ICP hereunder,
AOL shall notify ICP, which notice requirement shall
be satisfied by AOL's sending of an email to ICP,
without regard to the confirmation of receipt of such
email. As soon as practicable after receiving notice
from ICP of ICP's cure of a breach hereunder, AOL
shall restore the carriage and promotion previously
decreased, provided that to AOL's reasonable
satisfaction, such breach has indeed been cured.
1.5 CARRIAGE FEE. ICP shall pay AOL One Million Eleven Thousand
and Sixty Dollars ($1,011,60) as follows: (i) [*] on the
Effective Date, (ii) $[*] on September 1, 2000 and (iii) [*]
quarterly payments of [*] each beginning on October 1, 2000.
In the event of an ICP financing event of [*] or greater, the
last quarterly payment of [*] shall accelerate and become
immediately due and payable.
1.6 IMPRESSIONS TARGET. AOL shall provide ICP with at least [*]
Impressions from placement of ICP Presences on the AOL Network
(the "Impressions Target"), provided that only ICP Presences
that contain a [*] to the [*] or [*] will count against the
Impressions Target. In the event that the Impressions Target
is not met (or will not, in AOL's reasonable judgment, be met)
during the Term, then as ICP's sole remedy, at AOL's option
either (a) the Term (including the permanent Placements) shall
be extended for up to six (6) months without additional
carriage fees payable by ICP[*], (b) AOL shall, from time to
time, provide ICP with the remaining Impressions in the form
of advertising space within the AOL Represented Advertising,
as mutually agreed upon by the Parties, of comparable value to
the undelivered Impressions (as reasonably determined by AOL),
or (c) some combination thereof.
1.7 MEMBER BENEFITS. ICP will generally promote through the
Customized Site any special or promotional offers made
available by or on behalf of ICP generally through the
Generally Available Site. In addition, ICP shall promote
through the Customized Site on a regular and consistent basis
special offers exclusively available to AOL Members ("AOL
Exclusive Offers"). ICP shall, at all times, feature at least
one AOL Exclusive Offer for AOL Members (except as
2
<PAGE>
otherwise mutually agreed upon by the Parties). The AOL
Exclusive Offer made available by ICP shall provide a
substantial member benefit to AOL Members, either by virtue of
a meaningful price discount, product enhancement, unique
service benefit or other special feature. ICP will provide AOL
with reasonable prior notice of AOL Exclusive Offers and other
special offers so that AOL can, in its editorial discretion,
market the availability of such offers.
2. CROSS-PROMOTION
2.1 COOPERATION. Each Party shall cooperate with and reasonably
assist the other Party in supplying material for marketing and
promotional activities.
2.2 INTERACTIVE SITE.
2.2.1 On the first screen of the Generally Available Site
([*]), ICP shall include two prominent actionable
graphical promotional buttons (at least 90 x 30
pixels or 70 x 70 pixels in size) promoting the AOL
Service (or other AOL product or service designated
by AOL[*]) (the "AOL Promo") and the Netscape
browser, respectively (the "Netscape Promo" and,
collectively with the AOL Promo, the "Site Promos"),
as follows:
(a) AOL will provide the creative content to be used
in the Site Promos. ICP shall post (or update, as the
case may be) the creative content supplied by AOL
within the spaces for any Site Promo within five (5)
days of its receipt of such content from AOL. In the
event that AOL elects to serve the either or both
Site Promos to the ICP Interactive Site from an ad
server controlled by AOL or its agent, ICP shall take
all reasonable operational steps necessary to
facilitate such ad serving arrangement, including,
without limitation, inserting HTML code designated by
AOL on the pages of the ICP Interactive Site on which
such Site Promo will appear.
(b) In addition, ICP may, at it's option, participate
in the AOL Affiliate Network marketing program, in
which event, ICP shall receive the standard partner
bounties under the AOL Affiliate Network marketing
program in connection with AOL Member acquisition
through the AOL Promo. The terms and conditions of
the AOL Affiliate Network marketing program are as
set forth at
http://affiliate.aol.com/affiliate/welcome.html. At
ICP's option, ICP may participate in the Netscape
Affiliate browser distribution program, in which
event ICP shall receive the standard bounties under
the Netscape Affiliate browser distribution program
in connection with the sale of Netscape browser
software through the Netscape Promo. The terms and
conditions of the Netscape Affiliate browser
distribution program are as set forth at
http://www.netscape.com/affiliate/welcome.html.
2.2.2 In addition, within each ICP Interactive Site, (i)
[*] ICP shall permit AOL Members to utilize AOL's
screenname authentication functionality in connection
with each registration or similar process on the ICP
Interactive Site and such functionality shall be
displayed at least as prominently as any other method
of registration, and (ii) to the extent ICP offers or
promotes any instant messaging and/or any third party
calendaring products or services, ICP shall provide
equal or greater promotions for such AOL-designated
products.
2.3 OTHER MEDIA. In ICP's television, radio, print and "out of
home" (e.g., buses and billboards, point of purchase and other
"place-based" promotions) advertisements and in any
publications, programs, features or other forms of media over
which ICP exercises editorial control [*] and in which an ICP
Interactive Site or ICP's online Content is referenced,
mentioned or promoted (including, without limitation, by
listing the "URL" thereof), ICP will include specific
references or mentions of the availability of the Customized
Site through the AOL Network by including a
3
<PAGE>
listing of the AOL "keyword" for the Customized Site, which
listing shall conform to the keyword guidelines and logo usage
guidelines attached hereto as Exhibit E. All such references
or mentions of AOL, and the use of AOL's trademarks, trade
names and service marks in connection therewith, shall be in
accordance with Section II of Exhibit C.
2.4 Preferred Access Provider. ICP shall not promote any other
Interactive Service more prominently than it promotes AOL.
3. REPORTING; PAYMENT.
3.1 AOL Usage Reporting. AOL shall make available to ICP a monthly
report specifying for the prior month aggregate usage and
Impressions with respect to ICP's presence on the AOL Network,
which are similar in substance and form to the reports
provided by AOL to other content partners similar to ICP.
3.2 AOL ADVERTISEMENTS REPORTING. AOL shall make available to ICP
a quarterly report specifying for the prior quarter activity
relating to the calculation of Advertising Revenue. Such
reporting shall be available within sixty (60) days of the end
of the quarter in which such amounts were collected by AOL.
3.3 CUSTOMIZED SITE REPORTING. ICP will supply AOL with monthly
reports which reflect total impressions by AOL Members to the
Customized Site during the prior month, the number of and
dollar value associated with the transactions involving AOL
Members and any registration information obtained from AOL
Members at the Customized Site during the period in question.
ICP represents that all URLs related to the Customized Site
are listed on Exhibit A-2 and ICP shall provide AOL with an
update of such list promptly upon any change thereto. In
addition, ICP shall comply with the reporting requirements for
AOL.com, Netscape Netcenter set forth on Exhibit F.
3.4 Promotional Commitments. ICP shall provide to AOL a monthly
report documenting its compliance with any promotional
commitments it has undertaken pursuant to this Agreement,
which report shall include the type of promotion, date of the
promotion, duration and circulation of the promotion and any
other mutually agreed upon information.
3.5 PAYMENT SCHEDULE. Except as otherwise specified herein, each
Party agrees to pay the other Party all amounts received and
owed to such other Party as described herein on a quarterly
basis within sixty (60) days of the end of the quarter in
which such amounts were collected by such Party. The first
quarter for which payment is to be made shall (i) begin on the
first day of the month following the month of execution of
this Agreement and (ii) include the portion of the month of
execution following the Effective Date (unless this Agreement
was executed on the first day of a month, in which case the
quarter shall be deemed to begin on the first day of such
month.
3.6 WIRED PAYMENTS. All payments by ICP hereunder shall be paid in
immediately available, non-refundable U.S. funds wired to the
"America Online" account, Account Number [*] at the[*], or
such other account of which AOL shall give ICP written notice.
ICP shall include in each wired payment a reference to ICP and
ICP's customer number provided by AOL and a brief description
of the purpose of the payment (e.g., "first quarterly payment
pursuant to Interactive Services Agreement dated _____"). ICP
shall provide AOL, at the time of ICP's first payment to AOL
under this Agreement, with the name, title, address, telephone
number, fax number and e-mail address of the officer of ICP
who will serve as AOL's point-of-contact for any billing
questions.
4. ADVERTISING AND MERCHANDISING
4.1 AOL NETWORK ADVERTISING INVENTORY. AOL owns all right, title
and interest in and to the advertising and promotional spaces
within the AOL Network including, without limitation, the AOL
Frames and shall have the right to all revenues therefrom. The
specific advertising inventory
4
<PAGE>
within any AOL forms or pages, including such AOL Frames,
shall be as reasonably determined by AOL.
4.2 SALE OF ADVERTISEMENTS THROUGH CUSTOMIZED SITE. AOL owns all
right, title and interest in and to the advertising and
promotional spaces within the Customized Site. ICP may not
incorporate or link to any Advertisement or other commercial
elements without AOL's prior written approval. AOL will pay
ICP [*] of Advertising Revenues received by AOL. AOL will not
specifically target the competitors of ICP listed on Exhibit H
for placement in any such advertising or promotional space. In
addition, AOL will not knowingly provide any such advertising
promotional space: (a) in violation of any law, regulation or
third party right, (b) to any site containing, or person or
entity promoting, pornographic or adult material, or (c) to
any site, person or entity encouraging or promoting illegal
activity,
4.3 INTERACTIVE COMMERCE. Any merchandising permitted hereunder
through the Customized Site and/or Customized Programming
shall be subject to (i) the then-current requirements of AOL's
merchant certification program as set forth at AOL Keyword:
Merchants under the "Anchor and Gold Tenants" section, and
(ii) approval by AOL of all products, goods and services to be
offered through the Customized Site or the Customized
Programming. ICP will [*] conform its promotion and sale of
Products through the Customized Site and Customized
Programming to the then-existing technologies identified by
AOL which are optimized for the AOL Service including, without
limitation, any "quick checkout" tool which AOL may implement
to facilitate purchase of Products by AOL Members through the
Customized Site.
5. CUSTOMIZED PROGRAMMING AND CUSTOMIZED SITE
5.1 PRODUCTION; PERFORMANCE. ICP shall [*] optimize all Customized
Programming and the Customized Site for distribution hereunder
according to AOL specifications and guidelines (including,
without limitation, any HTML publishing guidelines)
communicated to ICP by AOL and the Operating Standards set
forth on Exhibit D attached hereto.
5.2 CUSTOMIZATION. ICP shall customize all Customized Programming
and the Customized Site for AOL Members as follows:
(a) CO-BRANDING AND NAVIGATION. ICP shall customize and
co-brand a version of the Customized Site for distribution
over each of the AOL Properties listed in Exhibit A-1 by
displaying on each page of the Customized Site framing,
branding for and links to the applicable AOL Property, and
other navigational and promotional spaces, each as described
for each such AOL Property on Exhibit G.
(b) CERTAIN LINKS AND PROMOTIONS. ICP shall ensure that AOL
Members accessing the Customized Programming or linking to
the Customized Site do not receive advertisements,
promotions or links (i) for any entity reasonably construed
to be in competition with AOL or the applicable AOL
Property, (ii) in a category in which AOL or the applicable
AOL Property has an exclusive or other preferential
relationship, or (iii) otherwise in violation of the
applicable AOL Property's then-standard advertising
policies. ICP shall ensure that all Advertisements sold by
ICP or its agents comply with all applicable federal, state
and local laws and regulations. In addition, ICP shall
ensure that no promotions, advertisements or links for any
Internet browser (other than Netscape browsers) appear
within any Customized Programming displayed to AOL Members
accessing Netscape Netcenter or within the version of the
Customized Site that is customized and co-branded for
Netscape Netcenter.
(c) AOL TOOLS. Within the Customized Site, ICP shall use
and/or feature solely AOL's tools and technology for the
following utilities and functionality: instant messaging,
chat,
5
<PAGE>
personalized news service, calendaring (including
"click-to-add event" functionality associated therewith),
web page community services, message boards, and
commerce/content aggregation services (e.g., Shop@AOL and
local content) ("AOL Tools"). If any such AOL Tool is not
made available for use on the Customized Site within a
reasonable time upon ICP's request, ICP shall be permitted
to utilize on the Customized Site similar tools and
technology provided by a third party, provided that such
tools and technology are not branded by such third party and
no links or promotions for such third party appear on the
Customized Site and, provided, further that ICP will use
commercially reasonable efforts to convert such tools and
technology over to the corresponding AOL Tool once such AOL
Tool is made available. In addition, the Customized Site
shall not (x) provide or promote any email service, or (y)
use or feature the tools or technology of any Interactive
Service other than AOL. With respect to chat and message
boards only, ICP shall have until [*] to complete
integration of AOL Tools and until such time, ICP may
utilize its own or a third party's tools and technology on
the Customized Site, provided however, that (i) such tools
and technology are not branded by a third party, and no
links or promotions for such third party appear on the
Customized Site (except for the copyright notice as it
appears on the ICP Interactive Site as of the Effective
Date, which shall not link to third party content), and (ii)
ICP will maintain prominent links to AOL's chat and message
boards.
(d) DOMAIN NAME. ICP shall host all pages of each version of
the Customized Site and the Customized Programming under a
domain name co-branded with the applicable AOL Property
(i.e., icp.aol.com, icp.netscape.com, etc.). Upon the
expiration or earlier termination of this Agreement, unless
the Parties otherwise agree, ICP shall (i) discontinue
hosting the Customized Site under the co-branded domain
name, and (ii) for a period of six (6) months thereafter,
such co-branded domain name will be re-directed to a jump
page hosted by AOL, which jump page will contain equally
prominent navigation and branding to ICP and AOL. shall be
co-branded with each Party's brands and shall contain
prominent navigation to both the Generally Available Site
and AOL.
(e) CONTENT. ICP shall customize the Content on each version
of the Customized Site to the extent the Programming Plan
requires specific Content for particular AOL Properties.
(f) REGISTRATION. AOL Members shall not be subject to a
registration process (or any similar process) in order to
access and use the Customized Programming or the top level
of the Customized Site, but the Customized Site may require
registration or similar processes for the specific features
or functionality expressly described on Exhibit A and other
types of features and functionality generally consistent
with those set forth on Exhibit A provided that any
registration or similar process on the Customized Site (x)
is no more burdensome than any other registration or similar
process on another ICP Interactive Site and (y) permits AOL
Members to utilize AOL's screenname authentication
functionality and displays such functionality as prominently
as any other method of registration. In addition, any
registration or similar process on the version of the
Customized Site that is customized for distribution through
Netscape Netcenter shall be integrated with Netscape's
then-current registration system.
5.3 INTEGRITY OF AOL NETWORK. The Parties will work together on
mutually acceptable links (including links back to the AOL
Network) within the Customized Site in order to create a
robust and engaging AOL member experience and the Customized
Site may include reasonable editorial links that are
contextually related to the Content described on the
Programming Plan subject to the terms of this Agreement,
including Section 5.2 (b) and the following:
(a) ICP shall take reasonable efforts to ensure that AOL
traffic is generally either kept within the Customized Site or
channeled back into the AOL Network. If AOL notifies ICP in
writing that, in AOL's reasonable judgment, links from the
Customized Site cause an excessive amount of AOL
6
<PAGE>
traffic to be diverted outside of the Customized Site and the
AOL Network in a manner that has a detrimental effect on the
traffic flow of the AOL audience, then ICP shall immediately
reduce the number of links out of the Customized Site. In the
event that ICP cannot or does not so limit diverted traffic
from the Customized Site, AOL reserves the right to terminate
any links from the AOL Network to the Customized Site.
(b) ICP shall ensure that the Customized Site does not contain
any permanent or semi-permanent links to third party Content
outside of the Customized Site, except as expressly described
in the Programming Plan. In addition, ICP shall ensure that
the Customized Site does not contain any rotational links
(including, without limitation, banner advertisements) to
aggregated Content within the same Content category or AOL
Property channel as ICP's Content, except as expressly
described in the Programming Plan.
(c) Any links from the Customized Site to other Content shall
be directed to Content within the AOL Network or within the
customized sites of other AOL interactive Content providers to
the extent such Content is available within such areas.
(d) Any Advertisements purchased by ICP within the sites of
other AOL interactive Content providers or interactive
marketing partners shall link to the Customized Site.
5.4 LINKS WITHIN CUSTOMIZED PROGRAMMING. The Customized
Programming shall not contain any links or pointers to any
other area on or outside of the AOL Network without AOL's
prior written consent, except as expressly described in the
Programming Plan.
5.5 SITE AND CONTENT PREPARATION. Subject to the provisions of
this Agreement, ICP shall achieve Site and Content Preparation
by[*]. "Site and Content Preparation" shall mean that ICP
shall have completed all necessary production work for the
Customized Site, all Customized Programming and any other
related areas or screens (including programming all Content
thereon); customized and configured the Customized Site, and
all Customized Programming in accordance with this Agreement;
and completed all other necessary work (including, without
limitation, undergone all AOL site testing set forth on
Exhibit D) to prepare the Customized Site, all Customized
Programming and any other related areas or screens to launch
on the AOL Network as contemplated hereunder. In the event ICP
has not achieved Site and Content Preparation by[*], then in
addition to any other remedies available, the Impressions
Target set forth in Section 1.6 shall be reduced on a pro rata
basis based on the number of days after [*] that ICP achieves
Site and Content Preparation divided by[*]. In the event ICP
has not achieved Site and Content Preparation by[*], then in
addition to any other remedies available, AOL shall have the
right to terminate this Agreement by giving ICP written notice
thereof. If ICP is delayed in achieving Site and Content
Preparation solely due to a failure by AOL to perform its
obligations under this Agreement and ICP notifies AOL in
writing of such failure and the resulting delay, then the
dates referenced in this Section shall each be extended by the
amount of time of ICP's delay solely attributable to such
failure by AOL. Prior to ICP's achieving Site and Content
Preparation, the Placements will link to the Generally
Available Site, provided that the Generally Available Site,
with the exception of any co-branding requirements, and except
as provided in Section 5.2(c), otherwise complies with all
terms and conditions of the Agreement.
5.6 REVIEW. Upon reasonable notice, ICP shall allow appropriate
AOL personnel to have reasonable remote access to all
Customized Programming and the Customized Site from time to
time for the purpose of reviewing such sites to determine
compliance with the provisions of this Section 5, in a manner
not unreasonably disruptive of ICP's business operations.
6. TERM, TERMINATION, PRESS RELEASES.
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<PAGE>
6.1. TERM. Unless earlier terminated as set forth herein, the
initial term of this Agreement shall commence on the Effective
Date and expire [*] from the Effective Date. AOL shall have
the right to extend this Agreement for two (2) successive one
(1) year periods (each, an "Extension Term"). Each such
Extension Term shall be on the same terms and conditions
contained herein, except that ICP shall no longer be required
to [*] and AOL shall no longer be required to provide any[*].
AOL shall exercise its option to extend this Agreement by
providing ICP with written notice of such election no later
than thirty (30) days prior to the expiration of the initial
term or the then-current Extension Term, as the case may be.
Upon the expiration or earlier termination of this Agreement,
AOL may, at its discretion, continue to promote one or more
"pointers" or links from the AOL Network to the Generally
Available Site and continue to use ICP's trade names, trade
marks and service marks in connection therewith (collectively,
a "Continued Link"). In addition, during the Term and for the
one (1) year period after the expiration or termination
thereof, ICP shall allow AOL Members to access and use the
Generally Available Site on terms and conditions no less
favorable than the terms and conditions available to other
users of the Generally Available Site.
6.2 TERMINATION FOR BREACH. Either Party may terminate this
Agreement at any time in the event of a material breach by the
other Party which remains uncured after thirty (30) days
written notice thereof.
6.3 TERMINATION FOR BANKRUPTCY/INSOLVENCY OR CHANGES IN BUSINESS.
Either Party may terminate this Agreement immediately
following written notice to the other Party if the other Party
(i) ceases to do business in the normal course, (ii) becomes
or is declared insolvent or bankrupt, (iii) is the subject of
any proceeding related to its liquidation or insolvency
(whether voluntary or involuntary) which is not dismissed
within ninety (90) calendar days or (iv) makes an assignment
for the benefit of creditors.
6.4 PRESS RELEASES. Each Party will submit to the other Party, for
its prior written approval, which will not be unreasonably
withheld or delayed, any press release or any other public
statement ("Press Release") regarding the transactions
contemplated hereunder. Notwithstanding the foregoing, either
Party may issue Press Releases and other disclosures as
required by law, rule, regulation or court order or as
reasonably advised by legal counsel without the consent of the
other Party and in such event, the disclosing Party will
provide at least five (5) business days prior written notice
of such disclosure, if practicable. The failure to obtain the
prior written approval of the other Party required hereunder
shall be deemed a material breach of this Agreement. Because
it would be difficult to precisely ascertain the extent of the
injury caused to the non-breaching Party, in the event of such
material breach, the non-breaching Party may elect either to
(a) terminate this Agreement immediately upon notice to the
other Party, or (b) elect, as liquidated damages, to modify
the Impressions commitment hereunder by ten percent (10%)
(i.e., either an increase in the Impressions commitment if AOL
has violated this provision or a decrease in the Impressions
commitment if ICP has violated this provision). The Parties
agree that the liquidated damages set forth in the preceding
sentence are a reasonable approximation of the injury that
would be suffered by the non-breaching Party.
7. TERMS AND CONDITIONS. The terms and conditions set forth on the
Exhibits attached hereto are hereby made a part of this Agreement.
8
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
AMERICA ONLINE, INC. dreamlife, inc.
By:/s/ [*] By: /s/ Philicia G. Levinson
------------------------------ -----------------------------
Print Name: [*] Print Name: Philicia G. Levinson
---------------------- ---------------------
Title: [*] Title: Senior Vice President
and CFO
-------------------------- --------------------------
Date: 7/18/00 Date: 7/17/00
--------------------------- ---------------------------
Tax ID/EIN#: 52-1373960
--------------------
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EXHIBIT A
Exhibit A-1
I. Netscape [*] Integration
<TABLE>
<CAPTION>
--------------------------- ------------------------ -------------------------------- -----------------------
CHANNEL/TAB SCREEN/AREA PLACEMENT PARTNER CONTENT
--------------------------- ------------------------ -------------------------------- -----------------------
--------------------------- ------------------------ -------------------------------- -----------------------
<S> <C> <C> <C>
[*] [*] Expert Photo (50 x 61 GIF), if Tip of the Day Page-
applicable, Text (15 to 20 Customized Site
word tip of the day ) and Text
Link*
--------------------------- ------------------------ -------------------------------- -----------------------
--------------------------- ------------------------ -------------------------------- -----------------------
[*] [*] Text Link** Experts Page -
Customized Site
--------------------------- ------------------------ -------------------------------- -----------------------
--------------------------- ------------------------ -------------------------------- -----------------------
[*] [*] Branded Interactive Graphic - Wheel of Balance -
Above the Fold** Customized Site
--------------------------- ------------------------ -------------------------------- -----------------------
</TABLE>
*Launch approximately [*] or such later date as AOL determines in its sole
discretion.
**Launch upon the date ICP has achieved Site and Content Preparation, as set
forth in Section 5.5, which shall be no later than [*] or such later date as AOL
determines in its sole discretion.
II. Carriage Plan
<TABLE>
<CAPTION>
----------------------------------------------------------------------- -------------------------------------
PROPERTY DESCRIPTION
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
<S> <C>
[*] PROMOTIONS [*] IMPRESSIONS
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
AOL Service-Trade Show Central 234*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
AOL Service- Workplace Professionals- Writing and Publishing 88*31 Button Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
AOL Service- [*] - AOL- Run of Site 468*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
AOL Service- Run of Workplace Channel 468*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 141*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 468*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 194*45 Rotating GIF
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 141*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 468*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 468*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 194*45 Rotating GIF
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] 194*45 Rotating GIF
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] PROMOTIONS [*] IMPRESSIONS
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
Search 2000- Search Terms 468*60 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] PROMOTIONS [*] IMPRESSIONS
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
NSCP- Lifestyles- relationships Sponsorship 141*60 Button Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
NSCP- Homepage (to be used one week per month) 100*70 Button Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
[*] PROMOTIONS [*] IMPRESSIONS
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
AOL Service- Email Inbox 175*45 Banner Rotation
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
----------------------------------------------------------------------- -------------------------------------
</TABLE>
10
<PAGE>
All necessary artwork for banner advertisements ("Banner Ads") must be provided
by ICP at least three (3) business days prior to the start date for such Banner
Ads. AOL may alter or shorten the flight dates for the Banner Ads if advertising
materials are not provided in a timely manner.
In the event guaranteed Impressions for the Banner Ads, or for any specific
Banner Ad, are reached prior to the expiration of the Term, AOL may, at its
option, discontinue display at such earlier time. AOL reserves the right to
alter ICP flight dates to accommodate trafficking needs or other operational
needs. In such cases, AOL will make available to ICP reasonably equivalent
flight(s).
Subject to ICP's reasonable approval, AOL shall have the right to fulfill its
promotional commitments with respect to the Banner Ads by providing ICP with
comparable placements of the Banner Ads in alternative areas of the AOL Network.
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<PAGE>
Exhibit A-2: Programming Plan:
ICP shall deliver and update on a regular and consistent basis the following
products, services, programming and other Content for use in the Customized
Site. AOL's provision of the Placements shall be contingent on ICP providing the
following relevant Content.
I. Implementation Plan
(A) Timing
1. Any subsequent changes to the Programming Plan after the
Effective Date must be implemented by ICP within thirty (30) days
after the parties have mutually agreed.
II. Placements within the Netscape [*] Tab:
(A) Tip of the Day
1. ICP will deliver leads into each of their available Tips of the
Day to be published daily from Monday through Thursday of each
week.
2. Such ICP tips will consist of no more than fifteen (15) words and
will have a `Read more' link at the end of each tip , which will
link into the relevant Tip of the Day Page within the Customized
Site (described further under Item III-B below). AOL reserves the
right to edit (i.e. shorten in length) any such Tip of the Day
provided by ICP.
3. ICP will create an editorial calendar of AOL selected Tips of the
Day from ICP's archives for use by AOL in AOL's sole discretion.
This calendar will have two (2) weeks worth of selections in
place by July 19, 2000.
4. ICP will provide all requested information on featured experts to
AOL seven (7) business days prior to implementation. This
information may include, but is not limited to, GIFs of all
experts (50 x 61, transparent background), if available,
biography, and other articles by the expert.
(B) Wheel of Balance
1. ICP will provide AOL with a replica of the ICP Wheel of Balance
for placement at AOL's discretion. Additionally, ICP will provide
AOL with "My dreamlife" and "My Journal" selections for placement
at AOL's discretion.
2. The Wheel will be linked to a co-branded page within the
Customized Site (described further under Item III-C below).
3. ICP, at its sole expense, will adapt its registration system to
accept the transfer of the Netscape [*] registration. A Netscape
[*] registered user will never be asked to register on the
Customized Site.
III. Customized Site, to be created, managed and hosted by ICP under a
co-branded URL (e.g. www.dreamlife.netscape.com). The Customized Site
will be co-branded according to the then-current AOL co-branding
specifications and shall consist of the following elements.
(A) General Terms
1. The Customized Site will be a cul-de-sac'd site, co-branded
according to the then current co-branding specifications and
cleansed of any and all ICP partner logos, links unless otherwise
permitted under this Agreement, and competitive offerings.
2. AOL reserves the right to have final approval over all pages
within the Customized Site.
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<PAGE>
(B) Tip of the Day Pages
1. A user arrives at the co-branded Tip of the Day Pages by clicking
on a `Read more' link at the end of a tip of the day lead.
2. Each such page will display (i) the full text of the article
corresponding to the lead; (ii) navigational links to the ICP
channels displayed in a horizontal format across the top of the
page; and (iii) other content and/or links to be mutually agreed
upon by both parties.
3. These pages will be co-branded and hosted by ICP. However, AOL
reserves the right to host any pages of the Customized site at
any time with thirty (30) calendar days notice.
4. These pages must support the advertisements as specified in
Exhibit G attached hereto..
(C) Wheel of Balance Page
1. A user arrives at the Wheel of Balance Page through clicking on
the Wheel of Balance (described in Item II-B above).
2. From the Wheel of Balance Page, a user will be able to use the
Wheel of Balance program to complete the Assess Your Life Create
a dreamlife Plan, and My dreamlife Plan steps. In addition, if
during any of these steps there is an opportunity for any
merchandising, ICP will comply with Section 4.3 of this
Agreement, including but not limited to conforming promotion and
sale of Products to any "quick checkout" tool which AOL may
implement to facilitate purchase of Products by AOL Members
through the Customized Site.
3. In addition, each such page will include a horizontal
navigational bar as described in Item III.B.2 above.
4. Within the My dreamlife Plan (Step 3), ICP will remove the
Support Buddy's Email box.
5. These pages will be co-branded and hosted by ICP. However, AOL
reserves the right to host any pages of the Customized Site at
any time with thirty (30) calendar days notice.
6. This page must support the advertisements as specified in
Exhibit G attached hereto.
(D) ICP Channels Pages
1. A user arrives at the ICP Channel Page through clicking on the
appropriate button or text link within the horizontal
navigational bar as described in Item III.B.2 above.
2. Each such page will display (i) biographical leads of a featured
expert and other experts on that subject (ii) a section on
"Courses and Free Forums" relevant to the subject, (iii)
"dreamlife Recommends" section with links to purchase relevant
books and other media, (iv) a listing of "Live Programming"
events, and (v) a horizontal navigational bar as described in
Item III.B.2 above.
3. ICP will redirect any "dreamlife Recommends" links to the
appropriate AOL strategic partner co-branded site.
4. ICP will incorporate relevant online courses, book
recommendations, other products, and live programming on each of
the Channels Pages. If ICP uses a third party for fulfillment or
links to a third party for interactive commerce opportunities,
AOL reserves the right to direct sales to the appropriate AOL
strategic partner co-branded site. In addition, ICP will ensure
that any merchandising permitted hereunder complies with Section
4.3 of this Agreement, including but not limited to conforming
promotion and sale of Products to any "quick checkout" tool which
AOL may implement to facilitate purchase of Products by AOL
Members through the Customized Site.
5. ICP's Live Programming on the Customized Site must be conducted
with the AOL chat tool. In addition, all other community features
to the site must be conducted with AOL approved tools. ICP will
use commercially reasonable efforts to ensure that the Customized
Site has comparable community events as ICP's generally available
site. In addition, ICP will provide AOL with seven (7) business
days notice of any community event scheduled to occur on the
generally available site and at
13
<PAGE>
AOL's sole discretion, ICP will include a link to such event from
the Customized Site for solely the period of time in which such
event occurs.
6. AOL reserves the right to add other community features to the
Customized Site.
7. AOL, at its sole discretion, may request ICP to remove certain
content or features from the Customized Site. Any request by AOL
must completed within ten (10) business days.
8. These pages will be co-branded and hosted by ICP. However, AOL
reserves the right to host any pages of the Customized Site at
any time with thirty (30) calendar days notice.
9. These pages must support the advertisements as specified in
Exhibit G attached hereto.
(E) Expert Pages
1. A user arrives at either the Other Experts pages by clicking on
the text link which will appear below the `Read More' link that
corresponds with the Tip of the Day. .
2. Each such page will display (i) a link to a community tool where
users can submit questions and comments to the expert, (ii)
transcripts of any live events hosted by the expert, (iii)
headline links to full text articles written by the expert (as
described in Item III.B above), (iv) links to any upcoming "Live
Programming" events, and a horizontal navigation bar as described
in Item III.B.2 above.
3. ICP will frame with the appropriate co-branding all expert pages
in which ICP links to from the Customized Site. In addition, ICP
will ensure that users can navigate back to the pages within the
Customized Site from which the user originated.
4. At AOL's request, ICP will redirect any links to expert pages to
the appropriate AOL strategic expert partner co-branded site.
5. These pages will be co-branded and hosted by ICP. However, AOL
reserves the right to host any pages of the Customized Site at
any time with thirty (30) calendar days notice.
6. These pages must support the advertisements as specified in
Exhibit G attached hereto. .
(F) Other Content Pages
1. Other Content Pages include (i) the "Live Programming" chat rooms
and other community tools, (ii) transcripts of any live events,
(iii) Online Courses and Free Forums, and (iv) dreamlife
Recommends pages.
2. Each of these pages will include (i) the relevant functionality
and (ii) a horizontal navigation bar as described in Item III.B.2
above.
3. These pages will be co-branded and hosted by ICP. However, AOL
reserves the right to host any pages of the Customized Site at
any time with thirty (30) calendar days notice.
4. These pages must support the advertisements as specified in
Exhibit G attached hereto.
IV. Additional Requirements
(A) Integration by ICP of other AOL content partners:
1. AOL may request ICP integrate additional AOL content partners (no
more than ten (10) unique content partners total) into and/or
through the ICP tools, so as to enable the AOL partners' content
to be fed and displayed on various AOL Properties and the
Customized Site.
2. Any request for integration made by AOL must be completed within
forty-five (45) calendar days after such request is made.
(B) Integration of ICP into other AOL tools and/or AOL content partners'
tools:
14
<PAGE>
1. At the sole discretion of AOL, ICP will provide AOL with a list
of all URLs for the Customized Site. This list may be used by AOL
or an AOL strategic partner to facilitate search capability in
the Netscape [*].
2. At AOL's request, ICP will provide a three (3) column spreadsheet
setting forth (i) keywords associated with ICP's Content, (ii)
description of the Content which features such keywords, and
(iii) exact URL to the corresponding page within the Customized
Site.
15
<PAGE>
EXHIBIT B -- DEFINITIONS
DEFINITIONS. The following definitions shall apply to this Agreement:
ADVERTISEMENTS. Promotions, advertisements, links, pointers, sponsorships,
Content integration and similar services or rights.
ADVERTISING REVENUES. Aggregate cash amounts collected and recognized as revenue
under generally accepted accounting principles by AOL arising from the license
or sale of Advertisements on the Customized Site, less applicable Advertising
Sales Commissions and net of any cancellations.
ADVERTISING SALES COMMISSION. Actual amounts paid as commission to third party
agencies in connection with sale of the Advertisement, not to exceed 15% or, if
sold directly by AOL, 15%.
AFFILIATE. Any agent, distributor or franchisee of AOL, or an entity that,
directly or indirectly, controls, is controlled by, or is under common control
with AOL, including any entity in which AOL holds, directly or indirectly, at
least a nineteen percent (19%) equity interest.
AOL REPRESENTED ADVERTISING. Advertising inventory within any AOL Property(ies)
or third party Internet site(s) on which AOL sells advertising.
AOL SERVICE. The standard narrow-band U.S. version of the America
Online-Registered Trademark-brand service, specifically excluding (a)
AOL.com-SM- and any other AOL Interactive Site, (b) the international
versions of an America Online service (e.g., AOL Japan), (c) the
CompuServe-Registered Trademark- brand service and any other CompuServe
products or services, (d) Netscape Netcenter-TM- and any other
Netscape-Registered Trademark-products or services, (e) "ICQ-SM-," "AOL
Search," "AOL Instant Messenger-SM-," "Digital City-SM-," "AOL NetMail-SM-,"
"Real Fans-SM-", "Love@AOL-SM-", "Entertainment Asylum-SM-," "AOL
Hometown-SM-" or any similar independent product, service or property which
may be offered by, through or with the U.S. version of the America
Online-Registered Trademark- brand service, (f) any programming or content
area offered by or through the U.S. version of the America Online-Registered
Trademark- brand service over which AOL does not exercise complete
operational control (including, without limitation, Content areas controlled
by other parties and member-created Content areas), (g) any yellow pages,
white pages, classifieds or other search, directory or review services or
Content offered by or through the U.S. version of the America
Online-Registered Trademark- brand service, (h) any property, feature,
product or service which AOL or its affiliates may acquire subsequent to the
Effective Date and (i) any other version of an America Online service which
is materially different from the standard narrow-band U.S. version of the
America Online brand service, by virtue of its branding, distribution,
functionality, Content or services, including, without limitation, any
co-branded version of the service and any version distributed through any
broadband distribution platform or through any platform or device other than
a desktop personal computer.
AOL PROPERTY. Any product, service or property owned, operated, marketed,
distributed, or authorized to be distributed by or through AOL or its
Affiliates, including, without limitation, the AOL Service and Netscape
Netcenter.
AOL LOOK AND FEEL. The elements of graphics, design, organization, presentation,
layout, user interface, navigation, trade dress and stylistic convention
(including the digital implementations thereof) within the AOL Network and the
total appearance and impression substantially formed by the combination,
coordination and interaction of these elements.
AOL MEMBER(S). Any user of the AOL Network, including authorized users
(including any sub-accounts under an authorized master account) of the AOL
Service and/or the CompuServe Service.
AOL NETWORK. (i) The AOL Service, Netscape Netcenter and (ii) any other product,
service or property owned, operated, distributed or authorized to be distributed
by or through AOL or its Affiliates worldwide (and including those products,
services and properties that are excluded from the definitions of the AOL
Service, AOL.com or any other AOL Property). It is understood and agreed that
the rights of ICP relate solely to particular AOL Properties as expressly set
forth in this Agreement and not generally to the AOL Network.
CHANGE OF CONTROL. (a) The consummation of a reorganization, merger or
consolidation or sale or other disposition of substantially all of the assets of
a party or (b) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either (i) the then outstanding
shares of common stock of such party; or (ii) the combined voting power of the
then outstanding voting securities of such party entitled to vote generally in
the election of directors.
CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the course
of this Agreement, which is, or should be reasonably understood to be,
confidential or proprietary to the disclosing Party, including, but not limited
to, the material terms of this Agreement, information about AOL Members,
technical processes and formulas, source codes, product designs, sales, cost and
other unpublished financial information, product and business plans, projections
and marketing data. "Confidential Information" shall not include information (a)
already lawfully known to or independently developed by the receiving Party, (b)
disclosed publicly in published materials, (c) generally known to the public, or
(d) to AOL's knowledge, lawfully obtained without obligation of confidentiality
from any third party authorized to disclose such information without
restriction.
CONTENT. Text, images, video, audio (including, without limitation, music used
in time relation with text, images, or video), and other data, products,
services, advertisements, promotions, URLs, keywords and other navigational
elements, links, pointers, technology and software.
CUSTOMIZED PROGRAMMING. Any (a) area within the AOL Network or outside the AOL
Network but exclusively available to AOL Members, which area is developed,
programmed, and/or managed by ICP, in whole or in part, pursuant to this
Agreement and all Content thereon (including, without limitation, message
boards, chat and other AOL Member-supplied content areas contained therein and
including any sites or areas linked thereto) including, without limitation, any
co-branded site or page, but excluding the Customized Site and (b) Content
provided to AOL by ICP pursuant to this Agreement for distribution on or through
the AOL Network other than on the Customized Site, including any Content
appearing in the Placements.
CUSTOMIZED SITE. Collectively, each version of the Generally Available Site that
is customized for distribution through the AOL Network in accordance with this
Agreement.
GENERALLY AVAILABLE SITE(S). The Internet site and Content, currently located
at URL:http://www.dreamlife.com and all related URLs and successor sites, which
are managed, maintained or owned by ICP or its agents.
KEYWORD-TM- SEARCH TERMS. (a) The Keyword online search terms made available on
the AOL Service, combining AOL's Keyword online search modifier with a term or
phrase specifically related to ICP (and determined in accordance with the terms
of this Agreement) and (b) the "Go Word" online search terms made available on
the CompuServe Service, combining CompuServe's Go Word online search modifier
with a term or phrase specifically related to ICP (and determined in accordance
with the terms of this Agreement).
ICP INTERACTIVE SITE. Any interactive site or area (other than Customized
Programming), including any mirrored site or area, which is managed, maintained
or owned by ICP or its agents or to which ICP provides and/or licenses
information, content or other materials, including, by way of example and
without limitation, (i) an ICP site on the World Wide Web portion of the
Internet or (ii) a channel or area delivered through a "push" product such as
the Pointcast Network, an interactive environment such as Microsoft's Active
Desktop, an interactive television service such as WebTV, a wireless handheld
device, or any other interactive medium or platform.
ICP PRESENCE. Any (a) ICP trademark or logo, (b) headline or picture from ICP
Content, (c) teaser, icon, or link to the Customized Site or Customized
Programming and/or (d) other Content which originates from, describes or
promotes ICP or ICP's Content.
IMPRESSION. User exposure to a page or screen containing an ICP Presence, as
such exposure may be reasonably determined and measured by AOL in accordance
with its standard methodologies and protocols. Each ICP Presence on any such
page or screen will count as a separate Impression.
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INTERACTIVE SERVICE. An entity offering one or more of the following: (i) online
or Internet connectivity services (e.g., an Internet service provider); (ii) an
interactive site or service featuring a broad selection of aggregated third
party interactive content (or navigation thereto) (e.g., an online service or
search and directory service) and/or marketing a broad selection of products
and/or services across multiple interactive commerce categories; (iii) a
persistent desktop client; or (iv) communications software capable of serving as
the principal means through which a user creates, sends or receives electronic
mail or real time or "instant" online messages (whether by telephone, computer
or other means).
LICENSED CONTENT. All Content offered through the Customized Site pursuant to
this Agreement or otherwise provided by or on behalf of ICP or its agents in
connection herewith (e.g., offline promotional content or online Content for
distribution through the AOL Network), including without limitation all
Customized Programming.
NETSCAPE NETCENTER. Netscape Communications Corporation's primary Internet-based
Interactive Site marketed under the "Netscape Netcentersm" brand, specifically
excluding (a) the AOL Service and the CompuServe Service, (b) AOL.com and
CompuServe.com, (c) any international versions of such site, (d) "ICQ," "AOL
Search," "AOL Instant Messenger," "AOL NetMail," "AOL Hometown," "My News,"
"Digital City," or any similar independent product or service offered by or
through such site or any other AOL Interactive Site, (e) any programming or
Content area offered by or through such site over which AOL does not exercise
complete operational control (including, without limitation, Content areas
controlled by other parties and member-created Content areas), (f) any
programming or Content area offered by or through the U.S. version of the
America Online brand service which was operated, maintained or controlled by the
former AOL Studios division (e.g., Electra), (g) any yellow pages, white pages,
classifieds or other search, directory or review services or Content offered by
or through such site or any other AOL Interactive Site, (h) any property,
feature, product or service which AOL or its affiliates may acquire subsequent
to the Effective Date and (i) any other version of an AOL or Netscape
Communications Corporation Interactive Site which is materially different from
Netscape Communications Corporation's primary Internet-based Interactive Site
marketed under the "Netscape Netcenter-TM-" brand, by virtue of its branding,
distribution, functionality, Content or services, including, without limitation,
any co-branded versions and any version distributed through any broadband
distribution platform or through any platform or device other than a desktop
personal computer (e.g. Custom NetCenters built specifically for third parties).
PRODUCT. Any product, good or service which ICP (or others acting on its behalf
or as distributors) offers, sells, provides, distributes or licenses to AOL
Members directly or indirectly through (i) the Customized Site (including
through any Interactive Site linked thereto) or Customized Programming, (ii) any
other electronic means directed at AOL Members (e.g., e-mail offers), or (iii)
an "offline" means (e.g., toll-free number) for receiving orders related to
specific offers within the Customized Site or Customized Programming requiring
purchasers to reference a specific promotional identifier or tracking code,
including, without limitation, products sold through surcharged downloads (to
the extent expressly permitted hereunder).
TERM. The period beginning on the Effective Date and ending upon the expiration
or earlier termination of this Agreement.
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EXHIBIT C -- STANDARD LEGAL TERMS AND CONDITIONS
CONTENT. ICP represents, warrants and covenants that all Content contained
within the Customized Site and Customized Programming, all Licensed Content, and
to the best of ICP's knowledge all Content provided by third parties (i) does
and will conform to the Terms of Service for the applicable AOL Property, the
terms of this Agreement and any other standard, written policy of AOL and any
applicable AOL Property (including without limitation AOL's kids policies to the
extent applicable), (ii) does not and will not infringe on or violate any
copyright, trademark, U.S. patent, rights of publicity or privacy, moral rights
or any other third party right, including without limitation, any music
performance or other music related rights, and (iii) does not and will not
contain any Content which violates any applicable law or regulation ((i), (ii)
and (iii) collectively, the "Rules"). In the event that AOL notifies ICP in
writing that any such Content, as reasonably determined by AOL, does not comply
or adhere to the Rules, or AOL reasonably believes that further display of such
Content will expose AOL to liability or other adverse consequences, then ICP
shall use its commercially reasonable efforts to block access by AOL Members to
such Content. In the event that ICP cannot, through its commercially reasonable
efforts, block access by AOL Members to such Content in question, then ICP shall
provide AOL prompt written notice of such fact. AOL may then, at its option,
either (i) restrict access from the AOL Network to the Content in question using
technology available to AOL or (ii) in the event access cannot be restricted,
direct ICP to remove any such Content. ICP will cooperate with AOL's reasonable
requests to the extent AOL elects to implement any such access restrictions.
AOL NETWORK DISTRIBUTION. [*] ICP shall not specifically authorize or permit any
third party to distribute any Content of ICP through the AOL Network absent
AOL's prior written approval, which shall not be unreasonably withheld or
delayed. The distribution, placements and/or promotions described in this
Agreement or otherwise provided to ICP by AOL shall be used by ICP solely for
its own benefit, will promote solely the Licensed Content within the Customized
Site or Customized Programming expressly described on Exhibit A and will not be
resold, traded, exchanged, bartered, brokered or otherwise offered or
transferred to any third party or contain any branding other than ICP's
branding. Further, the Content of all such distribution, placements and
promotions shall be subject to AOL's policies relating to advertising and
promotion, and to AOL's exclusivity commitments and other contractual
preferences to third parties.
CHANGES TO AOL PROPERTIES. AOL reserves the right to redesign or modify the
organization, structure, "look and feel," navigation and other elements of the
AOL Network at any time, including without limitation, by adding or deleting
channels, subchannels and/or screens and/or by outsourcing to a third party the
programming responsibility for any channel, subchannel, screen or portion
thereof. If such redesign or modification substantially modifies the nature of
the distribution provided under this Agreement in a material adverse fashion, or
if AOL is otherwise unable to deliver any particular Placement, AOL will work
with ICP in good faith to provide ICP, as its sole remedy, with comparable
distribution.
KIDS AND TEENS POLICIES. At all times, ICP shall comply with the applicable AOL
Property's then-standard policies regarding "child designated content." As used
herein, "child designated content" means Content that is designed for: (i) Kids
(children 12 and under), (ii) Young Teens (children ages 13-15), (iii) Mature
Teens (children ages 16-17), and (iv) any combination of Kids, Young Teens, and
Mature Teens. ICP shall ensure that all child designated content (including all
advertising in child designated content areas) distributed on or through the ICP
complies with any relevant written AOL policy (Kids, Young Teens, Mature Teens)
that is provided in writing to ICP, including any obligations that such child
designated content be marked or tagged so that it may operate properly in
connection with viewing restriction functionality provided to AOL Members.
Without limiting the generality of the foregoing or any other provision of this
Agreement, ICP shall notify AOL in writing whenever it intends to distribute
child designated content for these age groups on or through the ICP to ensure
proper age restriction categorization.
CONTESTS. ICP shall ensure that any contest, sweepstakes or similar promotion
conducted or promoted through the Customized Site and/or Customized Programming
(a "Contest") complies with all applicable laws and regulations. ICP shall
provide AOL with (i) at least thirty (30) days prior written notice of any
Contest and (ii) upon AOL's request, an opinion from ICP's counsel confirming
that the Contest complies with all applicable federal, state and local laws and
regulations.
DISCLAIMERS. ICP agrees to include within the Generally Available Site (to the
extent such site is linked to from the AOL Network), the Customized Site and
Customized Programming a disclaimer (the specific form and substance to be
mutually agreed upon by the Parties) indicating that all Content (including any
products and services) is provided solely by ICP and not AOL, and any
transactions are solely between ICP and AOL Members using or purchasing such
Content and AOL is not responsible for any loss, expense or damage arising out
of the Licensed Content or services provided through the Customized Site or
Customized Programming (e.g., "In no event shall AOL nor any of its agents,
employees, representatives or affiliates be in any respect legally liable to you
or any third party in connection with any information or services contained
herein and AOL makes no warranty or guaranty as to the accuracy, completeness,
correctness, timeliness, or usefulness of any of the information contained
herein"). ICP shall not in any manner state or imply that AOL recommends or
endorses ICP or its Content.
EXPERT/SPECIALIST CONTENT. If any of the Licensed Content professes to provide
expert, professional or other specialty advice or Content (such as, without
limitation, medical or psychological, religious, financial, etc.), ICP shall
ensure that all such Licensed Content is prepared or reviewed by qualified (and
where applicable, licensed and insured) practitioners/professionals in such
field with expertise on the particular topic and such Licensed Content complies
with applicable standards of the applicable profession and all applicable laws
and regulations. Upon request by AOL from time to time, ICP shall provide AOL
with evidence reasonably satisfactory to AOL of proper licensure (where
applicable) and compliance with the foregoing sentence.
INSURANCE. At all times during the Term, ICP shall maintain, with a carrier
having an AM Best financial rating of A- or better and in the size category of
VII or higher, an insurance policy or policies adequate in amount to insure ICP
against all liability associated with the Customized Site and the Licensed
Content, including at least $3,000,000 combined single limit coverage for
copyright and trademark infringement and defamation and negligent disclosure of
information. ICP shall include AOL as an additional insured party on such policy
or policies. ICP shall provide AOL with a copy of such policy or policies or a
certificate of insurance evidencing the same within thirty (30) days after the
Effective Date, failing which, in addition to all other available remedies, AOL
shall be entitled to delay the launch of the Licensed Content on the AOL Network
(and reduce AOL's promotional obligations proportionately). ICP shall provide
AOL with sixty (60) days advance notice of any cancellation, non-renewal or
material change in coverage associated with such policy or policies, and AOL
shall have the right to restrict access from the AOL Network to any or all of
the Licensed Content (and reduce AOL's promotional obligations proportionately)
until such insurance coverage is reinstated. Insurance required hereunder shall
in no way reduce or limit ICP's actual obligations to indemnify AOL under this
Agreement.
REWARDS PROGRAMS. ICP shall not offer, provide, implement or otherwise make
available on the Customized Site or Customized Programming any promotional
programs or plans that are intended to provide customers with rewards or
benefits in exchange for, or on account of, their past or continued loyalty to,
or patronage or purchase of, the products or services of ICP or any third party
(e.g., a promotional program similar to a "frequent flier" program), unless such
promotional program or plan is provided exclusively through AOL's "AOL Rewards"
program, accessible on the AOL Service at Keyword: "AOL Rewards."
NAVIGATION. In cases where an AOL Member performs a search for ICP through any
search or navigational tool or mechanism that is accessible or available through
the AOL Network (e.g., Placements, promotions, Keyword Search Terms, navigation
bars or any other promotions or navigational tools), AOL shall have the right to
direct such AOL Member to the Customized Site, or the Generally Available Site
determined by AOL in its reasonable discretion. ICP shall ensure that navigation
back to the AOL Network from the Customized Site (and from any other ICP
Interactive Site linked to from the AOL Network), whether through a particular
pointer or link, the "back" button on an Internet browser, the closing of an
active window, or any other return mechanism, shall not be interrupted by ICP
through the use of any intermediate screen or other
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device not specifically requested by the user, including without limitation
through the use of any html pop-up window or any other similar device.
CLIENT ALTERATIONS. ICP shall not include on the Customized Site or Customized
Programming any downloadable software or other mechanism that allows users to
alter the navigation, user interface, look and feel, or any other element of any
AOL or AOL Affiliate client software or software that is bundled therewith
(including, without limitation, the Internet browsers).
AOL LOOK AND FEEL. ICP acknowledges and agrees that AOL shall own all right,
title and interest in and to the AOL Look and Feel. In addition, AOL shall
retain editorial control over the portions of the AOL pages and forms which
frame the Customized Site or Customized Programming (the "AOL Frames"). AOL may,
at its discretion, incorporate navigational icons, links and pointers or other
Content into such AOL Frames.
OPERATIONS. AOL shall be entitled to require reasonable changes to the
Customized Site and Customized Programming, and/or cease or decrease the
Placements, to the extent such site will, in AOL's good faith judgment,
adversely and significantly affect operations of the AOL Network.
CLASSIFIEDS, AUCTIONS AND CLUBS. ICP shall not implement or promote any
classifieds listing features through Customized Programming or Customized Site
without AOL's prior written approval. Such approval may be conditioned upon,
among other things, ICP's conformance with any then-applicable service-wide
technical or other standards related to online classifieds. ICP shall not
conduct any merchandising through the Customized Site or Customized Programming
through auctions, clubs or any method other than a direct sales format without
AOL's prior written consent.
MESSAGE BOARDS; CHAT ROOMS AND COMPARABLE VEHICLES. Any Content submitted by ICP
or its agents within message boards, chat rooms or any comparable vehicles will
be subject to the license grant relating to submissions to "public areas" set
forth in the AOL Terms of Service, which license shall survive the completion,
expiration, termination or cancellation of this Agreement. ICP acknowledges that
it has no rights or interest in AOL Member submissions to message boards, chat
rooms or any other vehicles through which AOL Members may make submissions
within the AOL Network.[*]. ICP will refrain from editing, deleting or altering,
without AOL's prior approval, any opinion expressed or submission made by an AOL
Member within Customized Programming except in cases where ICP has a good faith
belief that the Content in question violates an applicable law, regulation,
third party right or the applicable AOL Property's Terms of Service.
DUTY TO INFORM. ICP shall promptly inform AOL of any information of which it
becomes aware related to the Customized Site, Customized Programming or the
Licensed Content which could reasonably be anticipated to lead to a claim,
demand or liability of or against AOL and/or its Affiliates by any third party.
RESPONSE TO QUESTIONS/COMMENTS; CUSTOMER SERVICE AND TAXES. ICP shall use
commercially reasonable efforts to respond promptly and professionally to
questions, comments, complaints and other reasonable requests regarding the
Customized Site, Customized Programming or the Licensed Content by AOL Members
or on request by AOL, and shall cooperate and assist AOL in promptly answering
the same. ICP shall have sole responsibility for customer service (including,
without limitation, order processing, billing, shipping, etc.) and AOL shall
have no responsibility with respect thereto. ICP shall comply with all
applicable requirements of any federal, state or local consumer protection or
disclosure law. ICP will collect and pay and indemnify and hold AOL harmless
from, any sales, use, excise, import or export, value added or similar tax or
duty arising from or related to the Licensed Content or any merchandising on the
Customized Site, including any penalties and interest, as well as any costs
associated with the collection or withholding thereof, including attorneys fees.
STATEMENTS THROUGH AOL NETWORK. ICP shall not make, publish, or otherwise
communicate through the AOL Network any deleterious remarks concerning AOL or
its Affiliates, directors, officers, employees, or agents (including, without
limitation, AOL's business projects, business capabilities, performance of
duties and services, or financial position) which remarks are based on the
relationship established by this Agreement or information exchanged hereunder.
This section is not intended to limit good faith editorial statements made by
ICP based upon publicly available information, or information developed by ICP
independent of its relationship with AOL and its employees and agents.
PRODUCTION WORK. Unless expressly provided for elsewhere in this Agreement, AOL
shall have no obligation to provide any creative, design, technical or
production services to ICP ("Services"). Delivery by AOL of any such Services
shall be subject to (i) AOL's availability to perform the requested work, (ii)
execution by both parties of a separate work order specifically outlining the
Services to be provided and the fees to be paid by ICP for such Services and
(iii) payment in advance by ICP of such fees. To the extent ICP elects to retain
a third party provider to perform any such production work, work produced by
such third party provider must generally conform to AOL's production standards
available at Keyword "Styleguide." The specific production resources which AOL
allocates to any production work to be performed on behalf of ICP shall be as
determined by AOL in its sole discretion. With respect to any routine
production, maintenance or related services that arise due to ICP's failure to
comply with Section 1.4 of the Agreement, and which AOL reasonably determines
are necessary for AOL to perform in order to support the proper functioning and
integration of the Customized Programming and the Customized Site ("Routine
Services"), ICP will pay the then-standard fees charged by AOL for such Routine
Services.
PRODUCTION TOOLS. AOL shall determine in its sole discretion, which of its
proprietary publishing tools (each a "Tool") shall be made available to ICP in
order to develop and implement the Licensed Content during the Term. ICP shall
be granted a nonexclusive license during the Term to use any such Tool, which
license shall be subject to: (i) ICP's compliance with all rules and regulations
relating to use of the Tools, as published from time to time by AOL, (ii) AOL's
right to withdraw or modify such license at any time, and (iii) ICP's express
recognition that AOL provides all Tools on an "as is" basis, without warranties
of any kind.
TRAINING AND SUPPORT. AOL shall make available to ICP standard AOL training and
support programs necessary to produce any AOL areas hereunder. ICP can select
its training and support program from the options then offered by AOL. ICP shall
be responsible to pay the fees associated with its chosen training and support
package. In addition, ICP will pay travel and lodging costs associated with its
participation in any AOL training programs (including AOL's travel and lodging
costs when training is conducted at ICP's offices).
LAUNCH DATE. In the event that any terms contained herein relate to or depend on
the launch date of the Customized Site or other property contemplated by this
Agreement, which launch date is later than the Effective Date, then it is the
intention of the Parties to record such launch date in a written instrument
signed by both Parties promptly following such launch date; provided that, in
the absence of such a written instrument, the launch date shall be as reasonably
determined by AOL based on the information available to AOL.
KEYWORDS; SEARCH TERMS. Any Keyword Search Terms to be directed to the
Customized Site shall be (i) subject to availability for use by ICP and (ii)
limited to the combination of the Keyword-TM- or "go word" search modifier
combined with a registered trademark of ICP. AOL reserves the right to revoke at
any time ICP's use of any Keyword Search Terms which do not incorporate
registered (or in the process of being registered) trademarks of ICP. ICP
acknowledges that its utilization of a Keyword Search Term will not create in
it, nor will it represent it has, any right, title or interest in or to such
Keyword Search Term, other than the right, title and interest ICP holds in ICP's
registered (or in the process of being registered) trademark independent of the
Keyword Search Term. Without limiting the generality of the foregoing, ICP will
not: (a) attempt to register or otherwise obtain trademark or copyright
protection in the Keyword Search Term; or (b) use the Keyword Search Term,
except for the purposes expressly required or permitted under this Agreement. To
the extent ICP is purchasing an Advertisement related to a "search" term, ICP
represents and warrants that ICP has the legal rights necessary to utilize such
search term in connection with the Advertisement. This Section shall survive the
completion, expiration, termination or cancellation of this Agreement.
ACCOUNTS. To the extent AOL has granted ICP any accounts on the AOL Service, ICP
will be responsible for the actions taken under or through its accounts, which
actions are subject to AOL's applicable Terms of Service and for any surcharges,
including, without limitation, all premium charges, transaction charges, and any
applicable communication surcharges incurred by any account issued to ICP, but
ICP will not be liable for charges incurred by any account relating to AOL's
standard monthly usage fees and standard hourly charges, which charges AOL will
bear. Upon the termination of this Agreement, all accounts, related screen names
and any associated usage credits or similar rights, will automatically
terminate. AOL will have no liability for loss of any data or content related to
the proper termination of any such account.
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II. TRADEMARKS
TRADEMARK LICENSE. In designing and implementing any marketing, advertising,
or other promotional materials (expressly excluding Press Releases) related
to this Agreement and/or referencing the other Party and/or its trade names,
trademarks and service marks (the "Promotional Materials") and subject to the
other provisions contained herein, ICP shall be entitled to use the following
trade names, trademarks and service marks of AOL: the "America
Online-Registered Trademark-" brand service, "AOL-TM-" service/software and
AOL's triangle logo and, in connection therewith, ICP shall comply with the
AOL styleguide available at keyword: "style guide"; and AOL and its
Affiliates shall be entitled to use the trade names, trademarks and service
marks of ICP provided by ICP hereunder solely for the purposes stated herein
(collectively, together with the AOL marks listed above, the "Marks");
provided that each Party: (i) does not create a unitary composite mark
involving a Mark of the other Party without the prior written approval of
such other Party and (ii) displays symbols and notices clearly and
sufficiently indicating the trademark status and ownership of the other
Party's Marks in accordance with applicable trademark law and practice. This
Section shall survive the completion, expiration, termination or cancellation
of this Agreement[*].
RIGHTS. Each Party acknowledges that its utilization of the other Party's Marks
will not create in it, nor will it represent it has, any right, title or
interest in or to such Marks other than the licenses expressly granted herein.
Each Party agrees not to do anything contesting or impairing the trademark
rights of the other Party.
QUALITY STANDARDS. Each Party agrees that the nature and quality of its products
and services supplied in connection with the other Party's Marks shall conform
to quality standards communicated in writing by the other Party for use of its
trademarks. Each Party agrees to supply the other Party, upon request, with a
reasonable number of samples of any Materials publicly disseminated by such
Party which utilize the other Party's Marks. Each Party shall comply with all
applicable laws, regulations and customs and obtain any required government
approvals pertaining to use of the other Party's Marks.
PROMOTIONAL MATERIALS. Each Party will submit to the other Party, for its prior
written approval, which shall not be unreasonably withheld or delayed, any
Promotional Materials; provided, however, that after initial public announcement
of the business relationship between the Parties in accordance with the approval
and other requirements contained herein, either Party's subsequent factual
reference in Promotional Materials to the existence of a business relationship
between AOL and ICP, including, without limitation, the availability of the
Licensed Content through the AOL Network, or use of screen shots relating to the
distribution under this Agreement (so long as the AOL Network is clearly
identified as the source of such screen shots) for promotional purposes shall
not require the approval of the other Party. Once approved, the Promotional
Materials may be used by a Party and its affiliates for the purpose of promoting
the distribution of the Licensed Content through the AOL Network and reused for
such purpose until such approval is withdrawn with reasonable prior notice. In
the event such approval is withdrawn, reasonable quantities of existing
inventories of Promotional Materials may be depleted.
INFRINGEMENT PROCEEDINGS. Each Party agrees to promptly notify the other Party
of any unauthorized use of the other Party's Marks of which it has actual
knowledge. Each Party shall have the sole right and discretion to bring
proceedings alleging infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide the other Party,
at such other Party's expense, with its reasonable cooperation and assistance
with respect to any such infringement proceedings.
III. REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the other Party that: (i) such Party has
the full corporate right, power and authority to enter into this Agreement, to
grant the licenses granted hereunder and to perform the acts required of it
hereunder; (ii) the execution of this Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not and
will not violate any agreement to which such Party is a party or by which it is
otherwise bound; (iii) when executed and delivered by such Party, this Agreement
will constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms; (iv) such Party's
Promotional Materials will neither infringe on any copyright, U.S. patent or any
other third party right nor violate any applicable law or regulation and (v)
such Party acknowledges that the other Party makes no representations,
warranties or agreements related to the subject matter hereof which are not
expressly provided for in this Agreement.
IV. CONFIDENTIALITY/ NONSOLICITATION
Each Party acknowledges that Confidential Information may be disclosed to the
other Party during the course of this Agreement. Each Party agrees that it will
take reasonable steps, at least substantially equivalent to the steps it takes
to protect its own proprietary information, during the term of this Agreement,
and for a period of three years following expiration or termination of this
Agreement, to prevent the disclosure of Confidential Information of the other
Party, other than to its employees, or to its other agents who must have access
to such Confidential Information for such Party to perform its obligations
hereunder, who will each agree to comply with this section. Notwithstanding the
foregoing, either Party may issue a press release or other disclosure containing
Confidential Information without the consent of the other Party, to the extent
such disclosure is required by law, rule, regulation or government or court
order or as reasonably advised by legal counsel. In such event, the disclosing
Party will provide at least five (5) business days prior written notice of such
proposed disclosure to the other Party. Further, in the event such disclosure is
required of either Party under the laws, rules or regulations of the Securities
and Exchange Commission or any other applicable governing body, such Party will
(i) redact mutually agreed-upon portions of this Agreement to the fullest extent
permitted under applicable laws, rules and regulations and (ii) submit a request
to such governing body that such portions and other provisions of this Agreement
receive confidential treatment under the laws, rules and regulations of the
Securities and Exchange Commission or otherwise be held in the strictest
confidence to the fullest extent permitted under the laws, rules or regulations
of any other applicable governing body.
During the Term and for a period of twelve (12) months thereafter, ICP shall not
hire or attempt to hire any Restricted Employee and shall not, directly or
indirectly, solicit, induce, or in any manner attempt to influence any
Restricted Employee to terminate his or her employment with AOL, or to modify
such relationship in a manner that is adverse to the interests of AOL; provided,
however, that ICP may employ any person who (a) initially contacts ICP without
solicitation, directly or indirectly, by ICP or (b) responds to any general
media solicitation of employment or engagement by ICP or to any solicitation or
inquiry from a recruiter retained by ICP provided that such person is not
specifically identified or targeted by ICP for such solicitation or inquiry.
"Restricted Employee" shall mean any person employed by AOL who is or was
involved in the negotiation, implementation, or administration of this Agreement
and/or any activity contemplated hereunder.
V. RELATIONSHIP WITH AOL MEMBERS
SOLICITATION OF SUBSCRIBERS. (a) During the term of this Agreement and for a two
year period thereafter, ICP will not use the AOL Network (including, without
limitation, the e-mail network contained therein) to solicit AOL Members on
behalf of another Interactive Service. More generally, ICP will not send
unsolicited, commercial e-mail (i.e., "spam") or other online communications
through or into AOL's products or services, absent a Prior Business
Relationship. For purposes of this Agreement, a "Prior Business Relationship"
will mean that the AOL Member to whom commercial e-mail or other online
communication is being sent has voluntarily either (i) engaged in a transaction
with ICP or (ii) provided information to ICP through a contest, registration, or
other communication, which included clear notice to the AOL Member that the
information provided could result in commercial e-mail or other online
communications being sent to that AOL Member by ICP or its agents. In addition,
subject to the terms of this Agreement, ICP may contact any AOL Member whose
contact information has been submitted by a user of ICP's online referral
service. Any commercial e-mail or other online communications to AOL Members
which are otherwise permitted hereunder will (x) include a prominent and easy
means to "opt-out" of receiving any future commercial communications from ICP
and (y) shall also be subject to AOL's then-standard restrictions on
distribution of bulk e-mail (e.g., related to the time and manner in which such
e-mail can be distributed through or into the AOL product or service in
question).
(b) ICP shall ensure that its collection, use and disclosure of information
obtained from AOL Members under this Agreement ("Member Information") complies
with (i) all applicable laws and regulations and (ii) AOL's standard privacy
policies, available on the AOL Service at the keyword term "Privacy" (or, in the
case of the Customized Site, ICP's standard privacy policies so long as such
policies are prominently published on the site and provide adequate notice,
disclosure and choice to users regarding ICP's collection, use and disclosure of
user information). ICP will not disclose Member Information collected hereunder
to any third party in a manner that identifies AOL Members as end users of an
AOL product or service or use Member Information collected under this Agreement
to market another Interactive Service.
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EMAIL NEWSLETTERS. Any email newsletters sent to AOL Members by ICP or its
agents shall (i) be subject to AOL's policies on use of the email functionality,
including but not limited to AOL's policy on unsolicited bulk email, (ii) be
sent only to AOL Members requesting to receive such newsletters, (iii) not
contain Content which violates AOL's Terms of Service, and (iv) not contain any
advertisements, marketing or promotion for any other Interactive Service.
AOL MEMBER COMMUNICATIONS. To the extent ICP is otherwise permitted to send
communications to AOL Members (in accordance with the other requirements
contained herein): in any such communications to AOL Members on or off the
Customized Site (including, without limitation, e-mail solicitations), ICP will
limit the subject matter of such communications to those categories of products,
services and/or content that are specifically contemplated by this Agreement and
will not encourage AOL Members to take any action inconsistent with the scope
and purpose of this Agreement, including without limitation, the following
actions: (i) using an Interactive Site other than the Customized Site for the
purchase of Products, (ii) using Content other than the Licensed Content; (iii)
bookmarking of Interactive Sites; or (iv) changing the default home page on the
AOL browser. Additionally, with respect to such AOL Member communications, in
the event that ICP encourages an AOL Member to purchase products through such
communications, ICP shall ensure that (a) the AOL Network is expressly promoted
as the primary means through which the AOL Member can access the Customized Site
(including without limitation by stating the applicable Keyword Search Term and
including direct links to specific offers within the Customized Site) and (b)
any link to the Customized Site will link to a page which indicates to the AOL
Member that such user is in a site which is affiliated with the AOL Network.
VI. TREATMENT OF CLAIMS
LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES
(EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES),
ARISING FROM BREACH OF THIS AGREEMENT, THE USE OF OR INABILITY TO USE ANY
CONTENT, CUSTOMIZED SITE, GENERALLY AVAILABLE SITE, ICP INTERACTIVE SITE, THE
AOL NETWORK OR ANY OTHER PROVISION OF THIS AGREEMENT OR IN CONNECTION WITH ANY
OF ITS SUBJECT MATTER, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR
ANTICIPATED PROFITS OR LOST BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES");
PROVIDED THAT EACH PARTY SHALL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT
ANY DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO
INDEMNIFICATION BELOW. EXCEPT AS PROVIDED BELOW IN THE "INDEMNITY" SECTION,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR MORE THAN THE AGGREGATE
AMOUNTS PAYABLE HEREUNDER IN THE YEAR IN WHICH THE EVENT GIVING RISE TO SUCH
LIABILITY OCCURRED; PROVIDED THAT EACH PARTY SHALL REMAIN LIABLE FOR THE
AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY UNDER THE
PROVISIONS OF THIS AGREEMENT.
NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE LICENSED
CONTENT, THE AOL NETWORK, THE AOL TOOLS, OR ANY AOL PUBLISHING TOOLS, INCLUDING
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY SPECIFICALLY
DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY OF THE AOL NETWORK OR THE
CUSTOMIZED SITE.
INDEMNITY. Each Party will defend, indemnify, save and hold harmless the other
Party and the officers, directors, agents, affiliates, distributors, franchisees
and employees of the other Party from any and all third party claims, demands,
liabilities, costs or expenses, including reasonable attorneys' fees
("Liabilities"), resulting from the indemnifying Party's material breach or
alleged breach of any obligation, representation, or warranty of this Agreement.
In addition, ICP will defend, indemnify, save and hold harmless AOL and AOL's
officers, directors, agents, affiliates, distributors, franchisees and employees
from any and all Liabilities to the extent arising out of the Licensed Content.
If a Party entitled to indemnification hereunder (the "Indemnified Party")
becomes aware of any matter it believes is indemnifiable hereunder involving any
claim, action, suit, investigation, arbitration or other proceeding against the
Indemnified Party by any third party (each an "Action"), the Indemnified Party
shall give the other Party (the "Indemnifying Party") prompt written notice of
such Action. Such notice shall (i) provide the basis on which indemnification is
being asserted and (ii) be accompanied by copies of all relevant pleadings,
demands, and other papers related to the Action and in the possession of the
Indemnified Party. The Indemnifying Party shall have a period of ten (10) days
after delivery of such notice to respond. If the Indemnifying Party elects to
defend the Action or does not respond within the requisite ten (10) day period,
the Indemnifying Party shall be obligated to defend the Action, at its own
expense, and by counsel reasonably satisfactory to the Indemnified Party. The
Indemnified Party shall cooperate, at the expense of the Indemnifying Party,
with the Indemnifying Party and its counsel in the defense and the Indemnified
Party shall have the right to participate fully, at its own expense, in the
defense of such Action. If the Indemnifying Party responds within the required
ten (10) day period and elects not to defend such Action, the Indemnified Party
shall be free, without prejudice to any of the Indemnified Party's rights
hereunder, to compromise or defend (and control the defense of) such Action. In
such case, the Indemnifying Party shall cooperate, at its own expense, with the
Indemnified Party and its counsel in the defense against such Action and the
Indemnifying Party shall have the right to participate fully, at its own
expense, in the defense of such Action. Any compromise or settlement of an
Action shall require the prior written consent of both Parties hereunder, such
consent not to be unreasonably withheld or delayed.
ACKNOWLEDGMENT. AOL AND ICP EACH ACKNOWLEDGES THAT THE PROVISIONS OF THIS
AGREEMENT WERE NEGOTIATED TO REFLECT AN INFORMED, VOLUNTARY ALLOCATION BETWEEN
THEM OF ALL RISKS (BOTH KNOWN AND UNKNOWN) ASSOCIATED WITH THE TRANSACTIONS
CONTEMPLATED HEREUNDER. THE LIMITATIONS AND DISCLAIMERS RELATED TO WARRANTIES
AND LIABILITY CONTAINED IN THIS AGREEMENT ARE INTENDED TO LIMIT THE
CIRCUMSTANCES AND EXTENT OF LIABILITY. THE PROVISIONS OF THIS SECTION VI SHALL
BE ENFORCEABLE INDEPENDENT OF AND SEVERABLE FROM ANY OTHER ENFORCEABLE OR
UNENFORCEABLE PROVISION OF THIS AGREEMENT.
VII. ARBITRATION
(a) The Parties shall act in good faith and use commercially reasonable efforts
to promptly resolve any claim, dispute, controversy or disagreement (each a
"Dispute") between the Parties or any of their respective subsidiaries,
affiliates, successors and assigns under or related to this Agreement or any
document executed pursuant to this Agreement or any of the transactions
contemplated hereby. If the Parties cannot resolve the Dispute within such
timeframe, the Dispute shall be submitted to the Management Committee for
resolution. For ten (10) days after the Dispute was submitted to the Management
Committee, the Management Committee shall have the exclusive right to resolve
such Dispute; provided further that the Management Committee shall have the
final and exclusive right to resolve Disputes arising from any provision of this
Agreement which expressly or implicitly provides for the Parties to reach mutual
agreement as to certain terms. If the Management Committee is unable to amicably
resolve the Dispute during the ten (10) day period, then the Management
Committee will consider in good faith the possibility of retaining a third party
mediator to facilitate resolution of the Dispute. In the event the Management
Committee elects not to retain a mediator, the Dispute will be subject to the
resolution mechanisms described below. "Management Committee" shall mean a
committee made up of a senior executive from each of the Parties for the purpose
of resolving Disputes under this Section and generally overseeing the
relationship between the Parties contemplated by this Agreement. Neither Party
shall seek, nor shall be entitled to seek, binding outside resolution of the
Dispute unless and until the Parties have been unable to amicably resolve the
dispute as set forth in this paragraph (a) and then, only in compliance with the
procedures set forth in this Section.
(b) Except for Disputes relating to issues of (i) proprietary rights, including
but not limited to intellectual property and confidentiality, and (ii) any
provision of this Agreement which expressly or implicitly provides for the
Parties to reach mutual agreement as to certain terms (which shall be resolved
by the Parties solely and exclusively through amicable resolution as set forth
in paragraph (a)), any Dispute not resolved by amicable resolution as set forth
in paragraph (a) shall be governed exclusively and finally by arbitration. Such
arbitration shall be conducted by the American Arbitration Association ("AAA")
in Washington,
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D.C. and shall be initiated and conducted in accordance with the Commercial
Arbitration Rules ("Commercial Rules") of the AAA, including the AAA
Supplementary Procedures for Large Complex Commercial Disputes ("Complex
Procedures"), as such rules shall be in effect on the date of delivery of a
demand for arbitration ("Demand"), except to the extent that such rules are
inconsistent with the provisions set forth herein. Notwithstanding the
foregoing, the Parties may agree in good faith that the Complex Procedures shall
not apply in order to promote the efficient arbitration of Disputes where the
nature of the Dispute, including without limitation the amount in controversy,
does not justify the application of such procedures.
(c) The arbitration panel shall consist of three arbitrators. Each Party shall
name an arbitrator within ten (10) days after the delivery of the Demand. The
two arbitrators named by the Parties may have prior relationships with the
naming Party, which in a judicial setting would be considered a conflict of
interest. The third arbitrator, selected by the first two, shall be a neutral
participant, with no prior working relationship with either Party. If the two
arbitrators are unable to select a third arbitrator within ten (10) days, a
third neutral arbitrator will be appointed by the AAA from the panel of
commercial arbitrators of any of the AAA Large and Complex Resolution Programs.
If a vacancy in the arbitration panel occurs after the hearings have commenced,
the remaining arbitrator or arbitrators may not continue with the hearing and
determination of the controversy, unless the Parties agree otherwise.
(d) The Federal Arbitration Act, 9 U.S.C. Secs. 1-16, and not state law, shall
govern the arbitrability of all Disputes. The arbitrators shall allow such
discovery as is appropriate to the purposes of arbitration in accomplishing a
fair, speedy and cost-effective resolution of the Disputes. The arbitrators
shall reference the Federal Rules of Civil Procedure then in effect in setting
the scope and timing of discovery. The Federal Rules of Evidence shall apply in
toto. The arbitrators may enter a default decision against any Party who fails
to participate in the arbitration proceedings.
(e) The arbitrators shall have the authority to award compensatory damages only.
Any award by the arbitrators shall be accompanied by a written opinion setting
forth the findings of fact and conclusions of law relied upon in reaching the
decision. The award rendered by the arbitrators shall be final, binding and
non-appealable, and judgment upon such award may be entered by any court of
competent jurisdiction. The Parties agree that the existence, conduct and
content of any arbitration shall be kept confidential and no Party shall
disclose to any person any information about such arbitration, except as may be
required by law or by any governmental authority or for financial reporting
purposes in each Party's financial statements.
(f) Each Party shall pay the fees of its own attorneys, expenses of witnesses
and all other expenses and costs in connection with the presentation of such
Party's case (collectively, "Attorneys' Fees"). The remaining costs of the
arbitration, including without limitation, fees of the arbitrators, costs of
records or transcripts and administrative fees (collectively, "Arbitration
Costs") shall be born equally by the parties. Notwithstanding the foregoing, the
arbitrators may modify the allocation of Arbitration Costs and award Attorneys'
Fees in those cases where fairness dictates a different allocation of
Arbitration Costs between the Parties and an award of Attorneys' Fees to the
prevailing Party as determined by the arbitrators.
(g) Any Dispute that is not subject to final resolution by the Management
Committee or to arbitration under this Section or law (collectively,
"Non-Arbitration Claims") shall be brought in a court of competent jurisdiction
in the Commonwealth of Virginia. Each Party irrevocably consents to the
exclusive jurisdiction of the courts of the Commonwealth of Virginia and the
federal courts situated in the Commonwealth of Virginia, over any and all
Non-Arbitration Claims and any and all actions to enforce such claims or to
recover damages or other relief in connection with such claims or to enforce a
judgment rendered in an arbitration proceeding.
VIII. MISCELLANEOUS
AUDITING RIGHTS. Each Party shall maintain complete, clear and accurate records
of all expenses, revenues, fees, transactions and related documentation
(including agreements) in connection with the performance of this Agreement
("Records"). All such Records shall be maintained for a minimum of five (5)
years following termination of this Agreement. For the sole purpose of ensuring
compliance with this Agreement, either Party shall have the right, at its
expense, to direct an independent certified public accounting firm subject to
strict confidentiality restrictions to conduct a reasonable and necessary
copying and inspection of portions of the Records of the other Party that are
directly related to amounts payable to the other Party pursuant to this
Agreement. Any such audit may be conducted after twenty (20) business days prior
written notice, subject to the following. Such audits shall not be made more
frequently than once every twelve months. No such audit of either Party shall
occur during the period beginning on June 1 and ending October 1. In lieu of
providing access to its Records as described above, either Party shall be
entitled to provide the other Party with a report from an independent certified
public accounting firm confirming the information to be derived from such
Records.
EXCUSE. Neither Party shall be liable for, or be considered in breach of or
default under this Agreement on account of, any delay or failure to perform as
required by this Agreement as a result of any causes or conditions which are
beyond such Party's reasonable control and which such Party is unable to
overcome by the exercise of reasonable diligence.
INDEPENDENT CONTRACTORS. The Parties to this Agreement are independent
contractors. Neither Party is an agent, representative or partner of the other
Party. Neither Party shall have any right, power or authority to enter into any
agreement for or on behalf of, or incur any obligation or liability of, or to
otherwise bind, the other Party. This Agreement shall not be interpreted or
construed to create an association, agency, joint venture or partnership between
the Parties or to impose any liability attributable to such a relationship upon
either Party.
NOTICE. Any notice, approval, request, authorization, direction or other
communication under this Agreement will be given in writing and will be deemed
to have been delivered and given for all purposes (i) on the delivery date if
delivered by electronic mail on the AOL Network (to screenname "[*]" in the case
of AOL) or by confirmed facsimile; (ii) on the delivery date if delivered
personally to the Party to whom the same is directed; (iii) one business day
after deposit with a commercial overnight carrier, with written verification of
receipt; or (iv) five business days after the mailing date, whether or not
actually received, if sent by U.S. mail, return receipt requested, postage and
charges prepaid, or any other means of rapid mail delivery for which a receipt
is available. In the case of AOL, such notice will be provided to both the
Senior Vice President for Business Affairs (fax no.[*]) and the Deputy General
Counsel (fax no.[*]), each at the address of AOL set forth in the first
paragraph of this Agreement. In the case of ICP, except as otherwise specified
herein, the notice address shall be the address for ICP set forth in the first
paragraph of this Agreement, with the other relevant notice information,
including the recipient for notice and, as applicable, such recipient's fax
number or AOL e-mail address, to be as reasonably identified by AOL.
NO 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 shall 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 shall be
and remain in full force and effect.
RETURN OF INFORMATION. Upon the expiration or termination of this Agreement,
each Party shall, upon the written request of the other Party, return or destroy
(at the option of the Party receiving the request) all confidential information,
documents, manuals and other materials specified by the other Party.
SURVIVAL. Sections IV, V, VI, VII and VIII of this Exhibit C, shall survive the
completion, expiration, termination or cancellation of this Agreement. In
addition, all payment terms of this Agreement and any provision that expressly
states that it shall survive or which, by its nature, should reasonably survive
the completion, expiration, termination or cancellation of this Agreement, shall
survive the completion, expiration, termination or cancellation of this
Agreement.
ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and supersedes
any and all prior agreements of the Parties with respect to the transactions set
forth herein. Neither Party shall be bound by, and each Party specifically
objects to, any term, condition or other provision which is different from or in
addition to the provisions of this Agreement (whether or not it would materially
alter this Agreement) and which is proffered by the other Party in any
correspondence or other document, unless the Party to be bound thereby
specifically agrees to such provision in writing.
AMENDMENT. No change, amendment or modification of any provision of this
Agreement shall be valid unless set forth in a written instrument signed by the
Party subject to enforcement of such amendment.
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FURTHER ASSURANCES. Each Party shall take such action (including, but not
limited to, the execution, acknowledgment and delivery of documents) as may
reasonably be requested by the other Party for the implementation or continuing
performance of this Agreement.
ASSIGNMENT. ICP shall not assign this Agreement or any right, interest or
benefit under this Agreement without the prior written consent of AOL.
Assumption of this Agreement by any successor to ICP (including, without
limitation, by way of merger, consolidation or sale of all or substantially all
of ICP's stock or assets) shall be subject to AOL's prior written approval.
Further, AOL shall have the right to terminate this Agreement upon written
notice to ICP in the event of (i) any Change of Control of ICP or other
transaction, in either case which results in ICP controlling, being controlled
by, or being under common control with, an Interactive Service, or (ii) any
Change of Control of AOL. Subject to the foregoing, this Agreement shall be
fully binding upon, inure to the benefit of and be enforceable by the Parties
hereto and their respective successors and assigns.
SUBCONTRACTORS. To the extent ICP desires to utilize consultants or
subcontractors to perform a material portion of its obligations under this
Agreement, utilization of such consultants and/or subcontractors shall be
subject to AOL's prior written approval, which will not be unreasonably withheld
or delayed, and ICP shall provide AOL with direct contact information for the
employees of such consultants and/or subcontractors who are responsible for
performing such obligations, which employees shall be available during business
hours for consultation with AOL. ICP shall be responsible for ensuring that all
consultants and subcontractors comply with this Agreement and ICP shall be
liable for any breaches of this Agreement caused by any consultant or
subcontractor.
CONSTRUCTION; SEVERABILITY. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed or if any
such provision is held invalid by a court with jurisdiction over the Parties to
this Agreement, (i) such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the Parties in accordance with
applicable law, and (ii) the remaining terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect.
REMEDIES. Except where otherwise specified, the rights and remedies granted to a
Party under this Agreement are cumulative and in addition to, and not in lieu
of, any other rights or remedies which the Party may possess at law or in
equity.
APPLICABLE LAW. This Agreement shall be interpreted, construed and enforced in
all respects in accordance with the laws of the Commonwealth of Virginia except
for its conflicts of laws principles.
EXPORT CONTROLS. Both parties shall adhere to all applicable laws, regulations
and rules relating to the export of technical data and shall not export or
re-export any technical data, any products received from the other Party or the
direct product of such technical data to any proscribed country listed in such
applicable laws, regulations and rules unless properly authorized.
HEADINGS. The captions and headings used in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document. Signatures sent by facsimile shall be deemed original
signatures.
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EXHIBIT D
TECHNICAL OPERATING STANDARDS
1. CUSTOMIZED SITE INFRASTRUCTURE. ICP will be responsible for all
communications, hosting and connectivity costs and expenses associated with
the Customized Site. ICP will provide all hardware, software,
telecommunications lines and other infrastructure necessary to meet traffic
demands on the Customized Site from the AOL Network. ICP will use
commercially reasonable efforts to design and implement the network between
the AOL Service and Customized Site such that (i) no single component
failure over which ICP exercises control will have a materially adverse
impact on AOL Members seeking to reach the Customized Site from the AOL
Network and (ii) no single line under material control by ICP will run at
more than 70% average utilization for a 5-minute peak in a daily period. In
the event that ICP elects to create a custom version of the Customized Site
in order to comply with the terms of this Agreement, ICP will bear
responsibility for all aspects of the implementation, management and cost
of such customized site.
2. OPTIMIZATION; Speed. ICP will use commercially reasonable efforts to ensure
that: (a) the functionality and features within the Customized Site are
optimized for the client software then in use by AOL Members; and (b) the
Customized Site is designed and populated in a manner that minimizes delays
when AOL Members attempt to access such site. At a minimum, ICP will use
commercially reasonable efforts to ensure that the Customized Site's data
transfers initiate within fewer than fifteen (15) seconds on average. Prior
to commercial launch of any material promotions described herein, ICP will
permit AOL to conduct performance and browser compatibility testing of the
Customized Site (in person or through remote communications), with such
commercial launch not to commence until such time as AOL is reasonably
satisfied with the results of any such testing.
3. USER INTERFACE. ICP will maintain a graphical user interface within the
Customized Site that is competitive in all material respects with
interfaces of other similar sites based on similar form technology. AOL
reserves the right to review and approve the user interface and site design
prior to launch of the Placements and to conduct focus group testing to
assess compliance with respect to such consultation and with respect to
ICP's compliance with the preceding sentence.
4. TECHNICAL PROBLEMS. ICP agrees to use commercially reasonable efforts to
address material technical problems (over which ICP exercises control)
affecting use by AOL Members of the Customized Site (an "ICP Technical
Problem") promptly following notice thereof. In the event that ICP is
unable to promptly resolve an ICP Technical Problem following notice
thereof from AOL (including, without limitation, infrastructure
deficiencies producing user delays), AOL will have the right to regulate
the promotions it provides to ICP hereunder until such time as ICP corrects
the ICP Technical Problem at issue.
5. MONITORING. ICP will ensure that the performance and availability of the
Customized Site is monitored on a continuous (24 X 7) basis. ICP will
provide AOL with contact information (including e-mail, phone, pager and
fax information, as applicable, for both during and after business hours)
for ICP's principal business and technical representatives, for use in
cases when issues or problems arise with respect to the Customized Site.
6. TELECOMMUNICATIONS. Where applicable the ICP will utilize encryption
methodology to secure data communications between the Parties' data
centers. The network between the Parties will be configured such that no
single component failure will significantly impact AOL Users. The network
will be sized such that no single line over which the ICP has material
control runs at more than 70% average utilization for a 5-minute peak in a
daily period.
7. SECURITY. ICP will utilize Internet standard encryption technologies (e.g.,
Secure Socket Layer - SSL) to provide a secure environment for conducting
transactions and/or transferring private member information (e.g. credit
card numbers, banking/financial information, and member address
information) to and from the Customized Site. ICP will facilitate periodic
reviews of the Customized Site by AOL in order to evaluate the security
risks of such site. ICP will promptly remedy any security risks or breaches
of security as may be identified by AOL's Operations Security team.
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8. TECHNICAL PERFORMANCE.
i. ICP will design the Customized Site to support the AOL-Client embedded
versions of the Microsoft Internet Explorer 4.XX and 5.XX browsers
(Windows and Macintosh), the Netscape Browser 4.XX and make
commercially reasonable efforts to support all other AOL browsers
listed at: "http://webmaster.info.aol.com."
ii. To the extent ICP creates customized pages on the Customized Site for
AOL Members, ICP shall develop and employ a methodology to detect AOL
Members (e.g., examine the HTTP User-Agent field in order to identify
the "AOL Member-Agents" listed at: http://webmaster. info.aol.comand
referenced under the heading "Browser Detection."
iii. ICP will periodically review the technical information made available
by AOL at http://webmaster.info.aol.com.
iv. ICP will design its site to support HTTP 1.0 or 1.1 as defined in RFC
1945 and to adhere to AOL's parameters for refreshing or preventing
the caching of information in AOL's proxy system as outlined in the
document provided at the following URL: http://webmaster.info.aol.com.
ICP is responsible for the manipulation of these parameters in web
based objects so as allow them to be cached or not cached as outlined
in RFC 1945.
v. Prior to releasing material, new functionality or features through the
Customized Site ("New Functionality"), ICP will use commercially
reasonable efforts to either (i) test the New Functionality to confirm
its compatibility with AOL Service client software and (ii) provide
AOL with written notice of the New Functionality so that AOL can
perform tests of the New Functionality to confirm its compatibility
with the AOL Service client software. Should any new material, new
functionality or features through the Customized Site be released
without notification to AOL, AOL will not be responsible for any
adverse member experience until such time that compatibility tests can
be performed and the new material, functionality or features qualified
for the AOL Service.
9. AOL INTERNET SERVICES PARTNER SUPPORT. AOL will provide ICP with access to
the standard online resources, standards and guidelines documentation,
technical phone support, monitoring and after-hours assistance that AOL
makes generally available to similarly situated web-based partners. AOL
support will not, in any case, be involved with content creation on behalf
of ICP. Support to be provided by AOL is contingent on ICP providing to AOL
demo account information (where applicable), a detailed description of the
Customized Site's software, hardware and network architecture and access to
the Customized Site for purposes of such performance and the coordination
load testing as AOL elects to conduct.
10. CUSTOMIZED PROGRAMMING. The terms and conditions of this Exhibit applicable
to the Customized Site shall apply equally to any Customized Programming
that is (a) programmed in HTML or (b) web-based.
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EXHIBIT E
KEYWORD GUIDELINES
PRINT/GRAPHIC
- Required treatment: (AOL Triangle appears) America Online Keyword:dreamlife
or
America Online Keyword: dreamlife
- America Online must be spelled out
- Capitalization - listing shall appear in initial caps only Note: K of
Keyword must always be capitalized
- Font, Font style and Size must all be consistent
- Listing size must be of equal prominence to that of any/all other URLs
featured o Equal prominence applies to size, voice-over support and length
of listings o Listings must be no less than 1/4 inch in height
TELEVISION/RADIO
- "America Online Keyword" must be announced fully
Example voiceover would read:
"For more information, please visit America Online Keyword: dreamlife"
- Television listing must represent at least 28 scan lines
- Radio mention must be at least :03 in length
- PRIOR TO USAGE, AOL MUST APPROVE ALL CREATIVES[*].
Logo Usage Guidelines
Not Allowed
--) No color gradients
--) No "filled" icons (must be solid)
--) No different colors for triangle and the copy (must be all the same color)
--) No words/copy on top of the logo or triangle
--) No script writing of "America Online" used alone without triangle
--) No adaptations of the icon or logo (i.e., don't turn it into a mountain or
Xmas tree)
--) No America Online or AOL in all lower case letters (either use initial
caps. or all caps.)
--) No turning logo on its side, upside down, etc.
--) No changing the proportion of the logo
--) No "deforming" the logo (stretching it out or making it "skinny")
--) No giving the logo structural dimension or "blurring" the logo
--) No reconfiguring the elements logo (i.e., don't put "America" on the left
of the triangle & "Online" on the right)
REGISTRATION MARKS
--) Must have small registration marks (-Registered Trademark-) at the
right-hand tip of the triangle and at the tip of the "e" in "Online"
APPROVED COLORS:
--) black
--) (reversed-out) white
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--) PMS 534 blue (NOTE: this is AOL's corporate color)
--) PMS 286 blue
--) Reflex blue
--) PMS 123 yellow
--) PMS 2617 purple
NOTE: the entire logo (triangle and type) must always be 100% of the same
color
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EXHIBIT F
NETSCAPE NETCENTER USAGE REPORTING REQUIREMENTS
AOL may, from time to time, modify (e.g., replace, add or delete): (a) the
format of the reports required, (b) the frequency of the reports, or (c) the
data required therein, upon reasonable advance notice to ICP.
All of the foregoing usage reports shall be delivered separately for each
Territory.
DEFINITIONS
For purposes of this Exhibit, definitions are as follows:
Page Views
Page Views are units of measurement that represent the number of requests for a
page of content. A page of content is, but is not limited to, a static page such
as an HTML document or a dynamically generated page such as from a CGI script.
Exception: Pages containing framesets should not be counted and only the pages
within the frameset containing principle content should be counted.
Total Page Views
The sum of all Page Views for all co-branded content hosted by the ICP.
Unique Visitors
The number of different Visitors who access a site within a specific time period
as determined by AOL. To identify unique users, Web sites need a unique
identifier, which may be obtained through some form of user registration or
identification system. AOL may change the definition of "unique visitors" from
time to time upon notice to ICP.
Visitor
An individual who interacts with a Website.
Visits
A series of page requests by a Visitor without a specified period of inactivity
(usually 30 consecutive minutes). If a Visitor leaves the site and comes back
within that specified period of inactivity, it is counted as part of the same
Visit.
1. REPORT FREQUENCY
The report frequency is weekly. The weekly report period is Thursday to
Wednesday, with weekly reports due the following day, Thursday by noon PST.
2. REPORT DELIVERY
The report shall be emailed to ([email protected]) and any other
email address designated by AOL in the Weekly Report Format.
3. REPORT SPECIFICATIONS: THE REPORT MUST COVER THE FOLLOWING INFORMATION:
3.1. Breakdown of Total Page Views by day for the entire co-branded site; daily
Total Page Views for each area within the site and, if applicable and if daily
Page Views exceed 200,000 per day, then the break down of individual Page Views
shall be provided daily in each area.
3.2. Breakdown of registration numbers.
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3.3. Breakdown of Visits by day, if online reporting is required.
3.4. Optional: Unique Visitors by day, week and month, if applicable.
4. ICP INFORMATION
ICP provides to AOL Report Team the following information upon
execution/signature of contract:
- ICP Name
- ICP Contact Name
- ICP phone number and e-mail
- ICP technical contact phone, pager and e-mail
- location of online ICP traffic reports (if applicable)
--) URL location
--) Login/password
--) Does AOL need a Static IP address for access
- Channel/directory names
- subchannel/subdirectory names
5. WEEKLY REPORT FORMAT
The following example is received weekly by NOON Thursdays via e-mail to:
[email protected](and/orother email address designated by AOL):
Subject: Partner Traffic Report for (ICPname) from (mm-dd-yyyy) through
(mm-dd-yyyy)
date,mm-dd-yyyy,mm-dd-yyyy,mm-dd-yyyy,mm-dd-yyyy,mm-dd-yyyy,mm-dd-yyyy,
mm-dd-yyyy
Total Page Views, x1,x2,x3,x4,x5,x6,x7
channelname1, y1,y2,y3,y4,y5,y6,y7
channelname2,y1,y2,y3,y4,y5,y6,y7
channelname1:sub-channelname1,z1,z2,z3,z4,z5,z6,z7
channelname1:sub-channelname2,z1,z2,z3,z4,z5,z6,z7
etc....
Definitions
date = mm-dd-yyyy
channelname = an alphanumeric string excluding colons (:), or commas (,).
Spaces are allowed.
subchannelname = an alphanumeric string excluding embedded colons
(:), or commas (,), separated from a channel by a colon. Spaces are
allowed.
x1,x2,x3... = the actual number of Page Views for each date.
y1,y2,y3... = the actual number of channelname Page Views for
each date.
z1,z2,z3... = the actual number of sub-channelname Page Views for
each date.
Example
Subject: Partner Traffic Report for Classified2000 from
09-03-1998 through 09-09-1998
date,09-03-1998,09-04-1998,09-05-1998,09-06-1998,09-07-1998,08-03-1998,
09-09-1998
Total Page Views,271652,254771,140885,153994,289143,301992,278666
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home page,78948,75321,43999,52917,79434,85019,67554 computers,34958,37988,22908,
24958,40984,43959,32093
autos,747,857,343,565,867,949,767 computers:apples,2938,5954,4349,3876,7433,
8578,7657
computers:pcs,32020,32034,18559,21082,33551,35381,24436 etc...
6. ACCESS LOGS
Access logs will be subject to review or audit by I/Pro at AOL's request on a
quarterly basis in addition to the audit requirements set forth in the
Agreement.
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EXHIBIT G
CO-BRANDING SPECS
ICP will comply with AOL's and its affiliates' then generally applicable
customization standards and design guideline templates for each applicable
business brand with respect to headers, footers, co-branding and URLs, by way of
example as set forth below. Except as otherwise expressly stated in this
Agreement, each distinct version of the Customized Site shall be designed as a
"cul de sac" site containing no links outside of the Customized Site other than
to (a) the applicable AOL business brand or other AOL or third party Content
determined by AOL. AOL shall have the right to change or modify its generally
applicable design guideline templates and co-branding requirements during the
Term, to conform to general changes made to the AOL Network or portions thereof.
Such customization shall further include, without limitation: the inclusion of
an AOL (or its applicable affiliated business brand, e.g., CompuServe)
co-branded toolbar, running the full width of the page, at the top and bottom of
each page of the Customized Site, which, among other things, will provide
navigation back to the AOL Network, and which shall contain an AOL search box
(e.g., Netfind) and two (2) promotional spaces to be programmed by AOL (the
parameters, specifications and format of which such toolbars are further
displayed on the mock-up below); displaying a "C-frame" left-side menu bar on
each page along the left side using the then-current navigation bar of the
applicable AOL business brand; various additional co-branding elements as
reasonably specified in writing; and the creation of links in connection with
communication services on the Customized Site to the corresponding or equivalent
communication services or areas of the Customized Site of the appropriate AOL
Property.
At AOL's option, AOL may elect to serve the framing, in whole or in part, for
any or all versions of the Customized Site in which event ICP shall take all
reasonable operational steps to facilitate such serving arrangement, including,
without limitation, inserting HTML code designated by AOL on the pages of the
Customized Site.
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EXHIBIT H
ICP COMPETITORS
YouAchieve.com
YourPotential.com
NotHarvard.com
DreamHuge.com
Learn.com
Exp.com
Learn2.com
Hungryminds.com
TrueYou.com
About.com
WiseBear.com
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